Will Medicaid Cuts Derail Your Retirement Plans?
Peter Reagan

What happens when healthcare costs rise… but your safety net shrinks? Millions of retirees could face tough choices if Medicaid cuts move forward. Here’s what you need to know – and how to protect yourself…

There’s an old saying that the only certain things in life are death and taxes, and while there’s a lot of truth to that statement, there are a number of things that, while not “certain,” are certainly likely.

One of those things is that you will almost certainly spend more on your healthcare costs as you age.

I don’t say that due to any prophetic insight on my part (I’ll leave that to Daniel and Isaiah, thank you). I can say that because the nature of reality includes that the human body tends to wear out and break down the longer that we’ve been here on this earth.

So, between needing more medical care and the natural progression of inflation, healthcare costs are likely to increase in your retirement years (and in mine, too).

That’s why a proposal by Republicans in Congress has many Americans concerned...

What did they do?

The good news is that, as of the time of this writing, they haven’t done anything. Yet.

But they’re going to do something soon because they’re trying to get legislation passed, and, currently, they’re trying to include changes in Medicaid in one of the big pieces of legislation.

Now, if you’ll remember, Medicaid is to provide medical care for lower income Americans, and that includes many retirees. 

And Congressional Republicans’ proposal? Lisa Mascaro with The Associated Press writes,

House Republicans have unveiled the cost-saving centerpiece of President Donald Trump’s “big, beautiful bill,” at least $880 billion in cuts largely to Medicaid to help cover the cost of $4.5 trillion in tax breaks.

Stoking fears about what these proposed cuts would do…

“A preliminary estimate from the nonpartisan Congressional Budget Office said the proposals would reduce the number of people with health care by 8.6 million over the decade.”

Right now, Medicaid provides health coverage to some 12 million people. 

To be fair to Republicans, they argue that “they are simply rooting out ‘waste, fraud and abuse’ to generate savings with new work and eligibility requirements,.” which sounds like a continuation of the DOGE thinking of making government more efficient and not wasting tax dollars.

Obviously, we’ll have to see if those cuts make it into the legislation and, if so, how that will actually affect things. At this point, we simply have one side arguing that they’re trying to save Americans money without cutting benefits to anyone who should be receiving them, and the other side is arguing that Republicans want to see Grandma deprived of needed medical care.

Typical partisan bickering.

But for those concerned about losing medical coverage in their (potentially) impoverished retirement years, there is this lifeline of hope…

Trump on prescription drug costs

Next time that you go to a pharmacy to get a prescription, see if you can get an idea of how much the cost of that prescription actually is (what you pay plus what the pharmacy charges to your insurance). 

You’ll likely be shocked. 

Prescription drugs are big business, and many Americans, especially retirees, struggle to deal with the cost for those drugs that are, many times, life saving.

Imagine being a Type II diabetic who can’t afford insulin, or imagine having to skip some other life-saving drug such as blood pressure medication or something for your thyroid.

At the very least (in the mildest of cases), not having those medications could place a serious damper on quality of life. On the other end of the spectrum, skipping those medications means death, sometimes very unpleasantly.

In light of these things, Trump took action on the costs of prescription drugs. Rebecca Falconer and Adriel Bettelheim with Axios write,

President Trump signed an executive order Monday morning that he said Sunday would cut prescription drug and pharmaceutical prices "almost immediately, by 30% to 80%."

That’s great news for many people, especially retirees who are often on a fixed budget. Lowering those costs could bring some breathing room to their household budget which might allow them to visit their grandkids yearly or eat Chick-Fil-A an extra time a month.

I wouldn’t get too excited, though, because…

How much do we really spend on prescriptions?

At least not for retirees.

See, while pharmaceuticals are a noticeable part of many retirees’ budgets, it’s less of an issue than other things. For example, the Center for Retirement Research at Boston College notes that “retirees spend less on medications as other medical costs rise.”

That’s not to say that reducing drug costs won’t help retirees’ budgets (after all, “death by a thousand cuts” is a valid metaphor when applied to this situation). I’m just saying that, in many cases, focusing on prescription drug prices is majoring on what, for many people, is the miners.

Yes, in your retirement years, you should look for ways to use your money wisely so that you can stretch your dollars as far as they can go.

That same thinking is just as important in your pre-retirement years as you plan for retirement. You need to make sure that your money will be there when you are no longer receiving income from your current job or business. 

So, using long-term thinking, it may be time to take up that exercise routine (with your doctor’s approval, of course) that you’ve been thinking about so that you can, hopefully, minimize your healthcare costs in your retirement years.

Beyond that, though, you need to apply long-term thinking to your retirement planning.

If you’ll remember that I said earlier that your healthcare costs are likely to increase in your retirement years because most people need more medical care and due to “the natural progression of inflation.”

Unlike your overall health, you can’t control the overall trajectory of inflation in our economy (unless, maybe, your name is Jerome Powell and you work at the Fed). 

What you can do, though, is to diversify a portion of your retirement planning funds into stores of wealth that are inflation-resistant so that your purchasing power during your retirement years isn’t diminished by inflation’s impact.

And what is the best inflation-resistant store of wealth? In my mind, it is precious metals. You can find out more about why you should consider physical precious metals and, if their benefits appeal to you, get your free 2025 Precious Metals Information Kit.

 

 

Peter Reagan is a seasoned financial market strategist at Birch Gold Group with over 15 years of experience in the precious metals industry. He has been featured in several leading publications, including Newsmax and Zerohedge. At Birch Gold Group, Peter leverages his deep market insights to help educate customers on how they can diversify their savings into gold and other precious metals. His commitment to education has made him a trusted thought leader in the field. In addition to the Birch Gold website, you can follow Peter on LinkedIn.

 

www.birchgold.com