Retirement is often painted as a golden era of relaxation and freedom, but let’s be real — there’s a lot more to it than sipping margaritas on a beach. One of the biggest concerns retirees face is healthcare. And no, we’re not just talking about the occasional doctor’s visit. We’re talking about a lifetime of medical expenses that could rival the cost of a small yacht.
According to Fidelity Investments, the average 65-year-old couple retiring today needs at least $315,000 just to cover healthcare costs during retirement. Other estimates, such as Milliman’s 2024 Retiree Health Cost Index, place the figure at nearly $400,000. That’s not including long-term care, which can easily be another six-figure tab.
The biggest factor determining where you fall on that range is where you live. The quality of healthcare varies dramatically across the United States, and some states are simply better equipped to handle the unique needs of retirees. From access to top-notch medical facilities to affordable insurance options and innovative wellness programs, certain states stand out as havens for those looking to retire comfortably and healthily.
Retirement should be about living your best life, not stressing over money. To help you navigate the labyrinth of healthcare costs, we’ve narrowed down the top five states with exceptional healthcare for retirees. These states are creating an environment where retirees can thrive, both physically and financially. Whether you’re planning your retirement or just dreaming about it, this guide will help you make an informed decision about where to spend your golden years.
Choosing the Best State for Healthcare in Retirement
Where you retire can make or break your financial plan. Sure, warm weather and a low cost of living are nice, but if the local healthcare system is subpar, you might end up spending more time battling medical bills than enjoying your golden years.
For instance, states like Minnesota and Hawaii are healthcare rockstars, offering world-class medical facilities, innovative wellness programs, and affordable insurance options. However, these states also boast higher costs of living, including healthcare — your insurance coverage and budget for out-of-pocket medical costs matter more in these states.
The bulk of your healthcare costs in retirement will come from three main categories:
- Medicare Premiums: These account for up to 81% of annual healthcare expenses for most retirees. While Medicare is a lifesaver, it’s not free. You’ll need to budget for premiums, deductibles, and possibly a Medigap or Medicare Advantage plan to cover what Original Medicare doesn’t.
- Out-of-Pocket Expenses: These include everything from copays and deductibles to services not covered by Medicare, like dental, vision, and hearing aids. These costs can add up quickly, especially if you have chronic conditions or require specialized care.
- Prescription Drugs: Medications are another major expense, particularly for retirees managing chronic conditions. While Medicare Part D helps, it doesn’t cover everything, and the costs can vary depending on the drugs you need and the plan you choose.
But it’s not just about the quality of care; it’s also about accessibility. States with robust telemedicine programs, like Montana, are making it easier for retirees in rural areas to access top-notch healthcare without having to travel long distances. Meanwhile, states like Vermont and Colorado are leading the charge in community health programs and wellness initiatives, helping retirees stay healthy and active.
How to Minimize Healthcare Costs
Regardless of the state you choose to enjoy your retirement, there are key things you can do to manage or minimize healthcare costs. These include some common-sense health advice and tidbits of financial wisdom you may hear from a financial advisor.
Having experts on your side can alleviate much of the stress of managing healthcare. Speak with doctors and fitness experts on what you can do to avoid common health pitfalls that come with age. Also, match with a financial advisor and start a wealth management plan today that’ll set you up for retirement. Here are some tips to avoid worrying about healthcare costs.
- Maximize Your Health Savings Account (HSA): If you’re still working and have a high-deductible health plan, an HSA is a tax-advantaged way to save for future healthcare costs. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free.
- Factor in Healthcare Inflation: Healthcare costs tend to rise faster than general inflation, so make sure your retirement plan accounts for this. A good rule of thumb is to assume a 5% to 6% annual increase in healthcare expenses.
- Consider Long-Term Care Insurance: While it’s not cheap, long-term care insurance can help cover the costs of nursing homes, assisted living, or in-home care, which aren’t covered by Medicare.
- Choose Your Retirement Location Wisely: States like Vermont and Alaska are known for their lower personal healthcare spending, making them attractive options for budget-conscious retirees.
- Stay Healthy: It might sound obvious, but maintaining a healthy lifestyle can significantly reduce your healthcare costs in retirement. Regular exercise, a balanced diet, and preventive care can go a long way in keeping you out of the doctor’s office.
Healthcare is one of the most critical — and expensive — factors to consider when planning your retirement. The good news is that with proper planning and a bit of research, you can mitigate these costs and enjoy a comfortable, stress-free retirement. Whether it’s choosing a state with top-notch healthcare, maximizing your HSA contributions, or investing in long-term care insurance, there are plenty of ways to prepare for the inevitable.
So, as you sip your morning coffee and dream about your retirement years, take a moment to think about your healthcare plan. Because while you can’t predict the future, you can certainly plan for it. And trust us, your future self will thank you.
Now let’s go through five states with the best healthcare for retirees. These states not only have the best healthcare, but they will also give you the best bang for your buck. Every dollar you spend on your health in these states will stretch farther, which is why folks who retire in these five states enjoy the highest quality of life in the country.
1. Minnesota
Minnesota stands out as a top-tier state for retirees seeking a balance of high-quality and affordable healthcare. Renowned for its healthcare excellence, the state is home to world-class institutions like the Mayo Clinic, a global leader in medical innovation and specialized care. This facility alone attracts top medical talent and offers cutting-edge treatments, making Minnesota a haven for retirees with complex health needs. Beyond the Mayo Clinic, the state boasts a high concentration of specialized healthcare providers, ensuring retirees have access to a wide range of expert services tailored to their needs.
Preventive care is a cornerstone of Minnesota’s healthcare system, with robust programs designed to maintain senior health and manage costs. The Minnesota Senior Health Options (MSHO) program integrates Medicare and Medicaid benefits, offering $0 premiums and copays for in-network services, along with comprehensive coverage for long-term care and home-based services. This program simplifies healthcare management for retirees while ensuring affordability.
Minnesota also excels in accessibility, thanks to its advanced telemedicine infrastructure. This system allows retirees, particularly those in rural areas, to access healthcare services remotely, including mental health support and audio-only consultations for those without video technology. Additionally, the state’s competitive insurance market helps keep healthcare costs manageable, though some residents still face challenges with high deductibles and out-of-pocket expenses.
With its combination of top-notch medical facilities, innovative care programs, and a focus on affordability, Minnesota offers retirees a healthcare environment that supports both their physical well-being and financial peace of mind.
2. Hawaii
Hawaii’s healthcare system is a shining example of how quality and affordability can coexist, making it a top choice for retirees. The state consistently ranks among the best in the nation for healthcare quality, access, and outcomes, with the Commonwealth Fund and U.S. News & World Report placing it at the top of their rankings. This is no small feat, considering Hawaii’s unique geographic challenges.
The state’s advanced telemedicine infrastructure ensures that retirees, even on remote islands, can access specialized care without extensive travel. From tele-stroke services to remote consultations, Hawaii’s healthcare system leverages technology to bridge gaps in access.
Hawaii’s emphasis on preventive care is another standout feature. Programs like the Healthy Aging Partnership and community wellness initiatives encourage seniors to stay active and manage chronic conditions effectively. This proactive approach contributes to Hawaii’s high life expectancy, which is 3.7 years above the national average. Additionally, the state’s robust network of senior-focused care providers ensures personalized treatment and easy access to specialists.
Despite Hawaii’s high cost of living, healthcare remains relatively affordable. The Hawaii Prepaid Health Care Act and a strong employer-based insurance tradition keep premiums among the lowest in the country. Retirees also benefit from tax advantages, as Social Security and many pensions are not taxed, allowing more financial flexibility for healthcare expenses.
With its world-class medical facilities, innovative policies, and focus on holistic well-being, Hawaii offers retirees a healthcare environment that supports both longevity and quality of life. Despite being a true paradise for those prioritizing health in their golden years, affordability in this high-cost-of-living state can be a challenge. Connect with a financial advisor for free to create a retirement plan that makes the aloha lifestyle feasible.
3. New Hampshire
New Hampshire’s healthcare system is a standout for retirees. The state consistently ranks among the top in national healthcare assessments, placing third overall in the Commonwealth Fund’s 2023 Scorecard on State Health System Performance. This high ranking reflects the state’s strengths in access, preventive care, and treatment quality — a super reliable choice for retirees.
One of New Hampshire’s key advantages is its high physician-to-patient ratio, which ensures retirees receive personalized attention and shorter wait times. Top-tier facilities like Dartmouth-Hitchcock Medical Center and Catholic Medical Center provide specialized geriatric care, ensuring retirees have access to expert treatment.
Affordability is another highlight. While healthcare costs in New Hampshire can be higher than the national average, the state offsets this with measures like the NHRS Medical Subsidy, which helps retirees cover insurance premiums. Additionally, New Hampshire’s lack of a general sales or income tax allows retirees to stretch their budgets further.
For rural retirees, mobile health units and telemedicine services bridge gaps in access, bringing care directly to underserved areas. Preventive care programs and wellness initiatives, such as the REAP program, further support seniors in maintaining their health and independence.
With its strong healthcare infrastructure, senior-focused programs, and affordability measures, New Hampshire offers retirees robust, accessible, and economical healthcare.
4. Vermont
Vermont’s healthcare system is a model of balancing quality care and affordability that’s hard to beat. The state has turned its rural challenges into opportunities, creating an extensive network of community health centers that ensure even the most remote areas have access to essential medical services. For retirees, this means fewer barriers to care and more peace of mind.
One of Vermont’s standout features is its commitment to aging-in-place initiatives. Programs like Choices for Care allow seniors to receive long-term care in their homes or communities, promoting independence and reducing the need for institutional care.
Mobile health units and telehealth services complement Vermont’s initiatives by bringing timely medical attention to retirees in remote areas without requiring extensive travel. Preventive care is another cornerstone, with programs designed to maintain health and prevent chronic conditions, saving retirees from costly medical interventions down the line.
Affordability is a key focus. Vermont’s Medicaid options — the Choices for Care and Medicaid for the Aged, Blind, and Disabled programs — provide comprehensive coverage for low-income seniors. Financial counseling services further help retirees navigate insurance options and manage costs effectively. Additionally, Medicare supplement plans and standalone Part D options ensure retirees can tailor their coverage to meet their needs.
Vermont’s integration of mental health services and community-based programs like Meals on Wheels and the SASH initiative reflects its holistic approach to senior care. By prioritizing accessibility, affordability, and quality, Vermont offers retirees a healthcare system that supports both their physical and financial well-being.
5. Colorado
Colorado’s healthcare system is a shining example of how innovation and accessibility can coexist, making it a top contender for retirees seeking quality care without breaking the bank. The state is home to world-class medical research facilities, such as the University of Colorado Anschutz Medical Campus, which leads in cutting-edge treatments and geriatric care.
Retirees benefit from comprehensive programs like the Elderly, Blind, and Disabled Waiver, which supports aging in place through home care services, and the Programs of All-Inclusive Care for the Elderly (PACE), which provides holistic medical and social support.
Colorado’s advanced telemedicine capabilities are a game-changer, particularly for retirees in rural areas. These services, supported by initiatives like the Office of eHealth Innovation, ensure that even remote communities have access to quality care. However, challenges like broadband access in rural areas remain a hurdle.
The state also excels in wellness-focused care, integrating outdoor activities into treatment plans to promote physical and mental health — aligning well with the state’s fitness-focused culture. This approach leverages Colorado’s natural beauty to encourage active lifestyles, which is particularly appealing to retirees.
Affordability is another strong suit. Programs like the Colorado Option and the state’s reinsurance initiative help lower insurance premiums, while the Health Insurance Affordability Enterprise provides subsidies for those not eligible for federal assistance. These measures make healthcare more accessible for retirees on fixed incomes.
With its blend of high-quality care, innovative programs, and affordability measures, Colorado offers retirees a healthcare environment that supports both longevity and financial well-being.
How Healthcare Access Impacts Retirees
As retirees transition to fixed incomes, the ability to access affordable, high-quality healthcare becomes critical. Rising medical costs can strain retirement budgets, making access to cost-effective care essential.
Medicare serves as the primary coverage for most retirees, but it often leaves gaps in areas like prescription drugs, vision, and dental care. Supplemental plans, such as Medigap and Part D, are vital for managing out-of-pocket expenses. For low-income retirees, Medicaid acts as a safety net, covering long-term care and other essential services.
However, challenges persist. Rural retirees often face limited provider availability and transportation barriers, while high healthcare costs remain a concern nationwide. States addressing these issues through innovative programs, cost management initiatives, and community-based care models are better positioned to support retirees.
Ultimately, healthcare access has a direct impact on retirees’ health outcomes, financial security, and overall satisfaction. This underscores the importance of living in places with comprehensive, affordable, and accessible healthcare systems.
Working with a Financial Advisor for Healthcare Planning
Smart retirement planning requires expert guidance, and financial advisors are the masters of navigating the maze of medical costs, coverage options, and long-term care strategies. Their expertise ensures retirees can balance quality care with affordability, safeguarding both health and financial stability.
- Medicare Coverage and Enrollment: Advisors help retirees understand Medicare’s various parts, determine the best supplemental plans, and ensure timely enrollment to avoid penalties.
- Long-Term Care Strategies: They evaluate options for long-term care insurance and other financial plans to cover assisted living or in-home care needs.
- Cost-Saving Opportunities: Financial advisors identify ways to minimize healthcare expenses, including tax-advantaged accounts like HSAs, and recommend cost-effective prescription drug plans.
- Coordination with Healthcare Providers: Advisors facilitate seamless communication between retirees and providers to ensure accurate billing, maximize insurance benefits, and avoid unnecessary expenses.
Medicare
Medicare decisions can be particularly challenging, and one of the primary roles of advisors is guiding retirees through Medicare’s complexities. Advisors help clients understand the various parts of Medicare (A, B, C, and D), select the best supplemental plans, and enroll on time to avoid penalties.
Advisors analyze factors such as income-related premium adjustments and provide strategies to minimize costs. They also guide retirees in managing required minimum distributions (RMDs) to avoid unexpected tax impacts on Medicare premiums. They also analyze income-related premium adjustments and strategize to minimize costs, ensuring retirees don’t overpay for coverage.
Long-term Care
Long-term care is another critical area where advisors shine. They evaluate options for long-term care insurance, hybrid policies, or Medicaid eligibility, helping retirees prepare for potential assisted living or in-home care needs. This foresight can prevent financial devastation from unexpected care expenses.
Advisors also identify cost-saving opportunities, such as leveraging Health Savings Accounts (HSAs) for tax-free medical expenses or recommending cost-effective prescription drug plans. These strategies can significantly reduce out-of-pocket costs.
Insurance and Medical Billing
Beyond insurance, financial advisors coordinate with healthcare providers to ensure accurate billing and maximize insurance benefits, avoiding unnecessary expenses. They also integrate healthcare planning into broader financial strategies, creating tailored budgets that account for current and future medical needs. This holistic approach empowers retirees to maintain their quality of life while protecting their savings.
Moreover, financial advisors offer tailored healthcare budgeting plans, ensuring retirees have a clear roadmap for current and future expenses. Ultimately, financial advisors provide retirees with clarity, confidence, and a roadmap to manage healthcare costs effectively, ensuring a secure and enjoyable retirement. Their expertise helps retirees achieve both immediate healthcare needs and long-term security, empowering them to confidently enjoy their retirement years.
Consulting a financial advisor ensures strategic planning and allows you to confidently embrace your golden years in healthcare-friendly destinations. Use our free tool to match with a financial advisor who will guide you through ensuring a happy and healthy (and hopefully wealthy) retirement.
FAQs
Q1. Which states offer the best healthcare for retirees? According to recent evaluations, states like Minnesota, Hawaii, New Hampshire, Vermont, and Colorado consistently rank among the top for healthcare quality and accessibility for retirees. These states offer excellent medical facilities, comprehensive senior care services, and innovative healthcare delivery systems.
Q2. How does healthcare access impact retirement planning? Healthcare access significantly influences retirement planning by affecting both health outcomes and financial stability. Retirees with better healthcare access tend to have improved health outcomes and more predictable medical expenses. It’s crucial to consider factors like provider availability, insurance options, and proximity to medical facilities when choosing a retirement location.
Q3. What role do financial advisors play in retirement healthcare planning? Financial advisors are instrumental in retirement healthcare planning. They help project future healthcare costs, optimize Medicare coverage, identify cost-saving opportunities, and develop strategies for long-term care expenses. Their expertise ensures that retirees can maintain quality healthcare access while protecting their retirement savings.
Q4. What are some key features of top-ranked healthcare systems for retirees? Top-ranked healthcare systems for retirees typically offer a combination of specialized geriatric care, comprehensive preventive services, advanced medical technologies, and strong telemedicine capabilities. They also tend to have well-distributed networks of medical facilities and emphasize patient-centered care approaches.
Q5. How do healthcare costs vary across different states for retirees? Healthcare costs can vary significantly across states due to factors like insurance regulations, provider competition, and cost of living. Some states, like Minnesota and Vermont, have implemented programs to help manage healthcare costs for seniors. Retirees need to research and compare healthcare expenses in potential retirement destinations as part of their planning process.
