L3Harris Employees: Expect to Live a Long Time? Plan For Rising Healthcare Costs.

Healthcare Provider Update: Healthcare Provider for L3Harris L3Harris Technologies typically provides its employees with healthcare benefits through employer-sponsored insurance plans. The exact healthcare provider may vary based on location and specific employee circumstances, but major insurers commonly used include UnitedHealthcare, Anthem, and Cigna. Potential Healthcare Cost Increases in 2026 In 2026, L3Harris and similar employers are facing significant healthcare cost increases. Reports indicate a projected rise of approximately 8.5% in employer-sponsored insurance costs due to multiple inflationary pressures, including rising medical expenses and increased claims. Additionally, if the federal premium subsidies under the Affordable Care Act expire without renewal, employees may see a drastic rise in their out-of-pocket expenses, compounding the financial impact on both the company and its workforce. Employers are likely to respond by shifting more healthcare costs to employees, necessitating a proactive approach to managing these anticipated changes. Click here to learn more

'Healthcare costs continue to rise at a rate faster than inflation so that L3Harris employees should actively plan ahead for future medical requirements, including the purchase of Medigap or long-term care insurance, as part of their retirement planning according to Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.'

'Employees of L3Harris companies should consider the long-term implications of medical expenses on their retirement since medical cost inflation is expected to outpace general price inflation according to Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.'

In this article, we will discuss:

1. Furthermore, retirees increase their consumption of healthcare as they age, which turns out to become more and more expensive with time.

2. CEO of HealthView Services Ron Mastrogiovanni claims a representative of The Retirement Group, a division of Wealth Enhancement Group, that “longevity is the big driver of healthcare costs, not conditions.”

3. A healthy 65-year-old woman who is expected to live until 89 will incur an estimated $175,000 more in lifetime healthcare costs than her counterpart with type 2 diabetes who dies at 81.

The following are three bullet points for the introduction and further discussions: Healthcare costs, specifically prescription drugs and healthcare premiums. Financial risks of relying on Medicare and the importance of considering supplemental coverage. The cost of long-term care insurance as part of retirement planning.

L3Harris employees may have realized how falling sick in this country can become considerably expensive. Pharmaceutical companies raised list prices of 983 arthritis, cancer, and other prescription drugs by an average of 5.6% at the start of this year. Furthermore, CalPERS announced an average rate increase of 7% for basic products. Although healthcare itself may seem costly, it can be even more expensive to be healthy over the long term. The reasoning behind the statement is the increase in medical prices at a higher pace than inflation.

Here are three bullet points for the introduction and further discussions: Rising healthcare costs, prescription drug price hikes, and healthcare premiums. The financial risks of relying on Medicare and the importance of considering supplemental coverage. Retirement planning and the cost of long-term care insurance. It is not uncommon that Americans have realized how expensive it is to be ill in this country.

The list prices of 983 arthritis, cancer, and other prescription drugs rose by an average of 5.6 percent at the beginning of the year. Furthermore, CalPERS announced an average rate increase of 7% for basic products. Although healthcare itself may seem costly, it can be even more expensive to be healthy over the long term. In fact, the reason for this is the growth of prices in medical services higher than inflation. However, the fact that retirees spend more on healthcare as they age and the costs keep on rising makes it even more challenging. According to Ron Mastrogiovanni, the CEO of HealthView Services, “It’s longevity that’s the big driver of healthcare costs, not conditions.” For instance, a healthy 65-year-old woman who is expected to live up to 89 years will spend an estimated $175,000 more on her lifetime healthcare costs than her counterpart with type 2 diabetes who dies at 61.

Medicare Isn’t a Solution

Medicare Part A costs have increased by an average of 3% for 2023 although this is lower than the previous year’s increase. Most people think that healthcare costs will decrease after enrolling in Medicare, but this is not the case. Although Medicare offers good coverage, most people think it is cheaper than it actually is. New to Medicare and joining the L3Harris retiree population must know that there are many parts to it. As of 2023, Medicare Part B premium costs $164.90, and to consult a doctor or visit a hospital, there are copayments, deductibles, and coinsurance. In essence, this means that although Medicare reduces the costs of healthcare for people, it does not make it free. Taking into account this, L3Harris retirees may find Medigap coverage useful. Medicare supplement insurance helps pay for the rest of thousands of people on Medicare when they face high medical costs.

This flexibility allows seniors to budget for those costs and not receive multiple complex bills from their doctors and hospitals. Medigap provides coverage for the major out-of-pocket costs of Medicare, such as deductibles, coinsurance, and copayments. Medigap coverage enables elderly persons and disabled or handicapped Medicare beneficiaries to budget their medical costs and avoid the confusion and inconvenience of paying for many medical bills. Those who have Medicare Supplement coverage are less likely to have problems paying medical bills than those who do not have such coverage, three times over. Those covered by Medicare Supplement actually had fewer issues paying medical bills than their counterparts without coverage.

If you want to know whether your COBRA plan is expensive, you should know that COBRA usually costs 102% of the total premium. However, there is one thing that L3Harris employees should know: Workers generally pay between 20 – 30% of total premiums. The Kaiser Family Foundation revealed that a high-deductible silver plan for a 60-year-old couple may cost up to $1,900 every month starting 2023. Due to increases in healthcare costs, early retirees may consider claiming Social Security benefits at the age of 62 in order to have more money available prior to becoming eligible for Medicare at 65. What L3Harris employees should consider, however, is that selecting those reduced benefits to have money available early on may end up winding up shortchanging you in late retirement. This is because the permanently reduced payments cannot be able to support the constantly increasing medical costs. People born in 1960 or later should note that delaying Social Security claims until age 70 will result in 124% of what they would receive at their full retirement age of 67 that is 100% of their earned benefit; this percentage is even higher for people born before that age.

As we mentioned earlier, Social Security does not pay enough for most retirees to live on alone, but it does give them some money to live on. It serves as a form of longevity insurance, with the largest payments going to those who wait the longest to claim. Those born in 1960 or later should consider delaying their claim until they are 70, as they will receive 124% of their normal benefit at age 67, which is 100% of their earned benefit. People born before that receive an even higher percentage. Beyond that, annuities can be a good option. According to a study by The Phoenix Companies, almost three-quarters (71%) of Americans have considered purchasing annuities to get a steady income in retirement or to protect inheritances or money for health and chronic care expenses. According to the Phoenix Companies, 53 percent of them are “not familiar with annuities,” and only 20 percent have plans to use an annuity to convert retirement savings into a set income stream.

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Carolyn McClanahan, the founder of Life Planning Partners in Jacksonville, Florida, and a Certified Financial Planner and medical doctor, typically recommends fixed income annuities to her clients who are likely to deplete their assets faster than they die. This determination is based more on the spending requirement than the total amount. A couple who has $200,000 in annual expenses will need to worry about running out of money, according to McClanahan, even with $3 million in assets plus Social Security benefits.

Fixed-income annuities are the simplest type:

An insurance policy in which consumers pay a lump sum to a carrier in return for guaranteed income for the rest of their lives or a specified period of time. The longer you wait, the higher the payout. For a single life policy in Florida with a cash refund (so that cash is returned to the beneficiaries in the event of death before the end of the policy term) and a $100,000 premium, a 65-year-old man would receive $585 as monthly income as of late 2022, while a 70-year-old would receive $648 and an 80-year-old would receive $842 according to Cannex Financial Exchanges, a provider of annuity data, for the same premium. A woman would receive a slightly lower amount due to her longer expected lifespan. Some people use an annuity to supplement other sources of income in retirement, for instance, drawing down a portfolio of stocks and bonds from a retirement account.

There are many types of annuities available. When investors have annuities explained to them, particularly the variety of annuities designed to protect income for specific purposes in retirement, for example, long-term health care costs, people show a great deal of interest according to Mark Fitzgerald. “The annuities available today are not your grandfather’s annuity.” According to the Phoenix study, about 50% of respondents wanted to buy annuities to create an income stream. Forty-one percent said they would use an annuity as an inheritance vehicle, and 36 percent said they’d use an annuity to establish reserves for health-care expenses.

A quarter of respondents said they would not consider purchasing an annuity for any reason. According to McClanahan, clients in good health should buy an annuity only in their 80s. If cash is an issue, she tells them to work as long as they can, even if it’s just at a part-time job. Clients in the average health might buy an annuity in their 70s. According to McClanahan, he may buy more than one annuity and then ladder them to make the purchases at different times to get a higher payout each year.

An Analysis of Long-Term Care Insurance

According to the National Center for Health Statistics 2019 study, there are about 65,600 regulated long-term care facilities in the United States. These establishments compile combined resident totals to more than 8.3 million people in the following ways: 286,300 in day care, 1,347,600 in nursing homes, and 811,500 in assisted living facilities. The number of residents in every one of these facilities is expected to increase significantly in the next ten years. According to the current trends, it is projected that the number of nursing home residents may rise up to double by 2030. This could lead to overstretching the current network of long-term care facilities and increase the already rising healthcare costs for people over 65. The problem with this is that Medicare does not pay for long-term care regardless of the place of receipt.

It will pay for example for a rehabilitative stay in a care facility after a hip replacement, but it will not pay for the kind of help that many older Americans eventually need: washing, dressing, and feeding itself. A person turning 65 today has a 70% chance of needing some long-term care in his or her lifetime, with an average duration of 2.2 years for men and 3.7 years for women. Josh Strange, a Certified Financial Planner with Good Life Financial Advisors of NOVA in Alexandria, says that his clients will often try to avoid the topic when he brings it up with them. “They say, ‘Someone will take me behind the woodshed and shoot me,’ I have never actually seen it happen,” Strange said. Because of its high cost, common wisdom holds that long-term care insurance is most appropriate for the mass affluent, defined as individuals with $500,000 to $2 million in investable assets. Less than that, and you might run out of money before you even need long-term care. More than about $2 million, and you can afford to self-insure against potential long-term care costs. However, Strange disputes this notion and recommends that even high-net-worth clients purchase coverage. He likes hybrid life and long-term care products that have a death benefit and long-term care coverage. They are easier to sell to many consumers than traditional long-term care insurance where the premiums are lost if there is no claim like home or auto insurance.

This coverage will typically defray just a portion of the costs if care is needed. (Note: The insurance company defines the eligibility criteria, not the family; usually, the policyholder must demonstrate the need for assistance with at least two of the six activities of daily living.) If care isn’t required, it becomes a way to transfer wealth tax-free to heirs. This paper will also explain why it is important for Americans to consider the prior iterations of hybrid life and long-term care policies that optimized the death benefit with small long-term care riders, but some policies today prioritize the long-term care benefit. One example is the MoneyGuard Fixed Advantage by Lincoln Financial Group which has an average claim age of 83 according to the company.

At that age, a married woman who bought a $100,000 policy at age 55 would have a long-term care pool of $916,607, a death benefit of $123,872, and a surrender value (the amount you get if you cancel your policy at any time) of $70,000 according to an illustration sent to Barron’s. These policies are medically underwritten, which means that the carrier will assess your health status before deciding on your coverage. That is why it is advisable to consider these policies in your early 50s when you are more likely to be in good health. Whether you end up buying coverage or not, it’s important to consider your options when it comes to long-term care. With approximately 267 million life insurance policies in the United States, it is important that L3Harris employees seek professional financial advice whenever they are in doubt as to what decision to make.

It is possible that you will be interested in the following article: If you want to contact The Retirement Group, you may be able to get a free cash flow analysis that will help you understand which option is best for you.

Sources:

1. Fidelity Investments.  'Fidelity's 2024 Estimate Indicates That a 65-Year-Old Retiring This Year Can Expect to Spend an Average of $165,000 on Healthcare and Medical Expenses.'  Fidelity Newsroom , 8 Aug. 2024.  https://newsroom.fidelity.com/pressreleases/fidelity-investments--releases-2024-retiree-health-care-cost-estimate-as-americans-seek-clarity-arou/s/7322cc17-0b90-46c4-ba49-38d6e91c3961?utm_source=chatgpt.com .

2. Milliman.  'Retiree Health Cost Index 2024.'  Milliman , 2024.  https://www.milliman.com/en/insight/retiree-health-cost-index-2024?utm_source=chatgpt.com .

3. Centers for Medicare & Medicaid Services.  '2025 Medicare Costs.'  Medicare.gov , Dec. 2024.  https://www.medicare.gov/publications/11579-medicare-costs.pdf?utm_source=chatgpt.com .

4. Kaiser Family Foundation.  'Analysis of Medicare's Benefit Value.'  Kaiser Family Foundation , Sept. 2008.  https://en.wikipedia.org/wiki/Medicare_%28United_States%29?utm_source=chatgpt.com .

5. AARP.  'Advocating for Lower Prescription Drug Costs.'  AARP , ongoing.  https://en.wikipedia.org/wiki/AARP?utm_source=chatgpt.com .