New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Charting Hidden Medical Costs: Essential Insights for Arconic Employees

“For Arconic employees approaching retirement, proactively incorporating a 10–15% buffer for less-obvious medical expenses—such as prescription gaps, out-of-network care, and concierge fees—can help preserve long-term financial stability.”– Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

“Arconic employees can strengthen their retirement preparedness by using health savings accounts, annual supplemental plan reviews, and strategic budgeting to cover prescription, out-of-network, and concierge medicine costs.”– Patrick Ray, senior financial advisor at The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

The rising costs of prescription drugs
Challenges of care accessibility in secondary homes
The impact of concierge medicine memberships

Among the biggest and most erratic retirement expenses are health care expenditures. For Arconic employees approaching or in retirement, these costs can pose unique planning challenges. According to Fidelity Investments, a retired couple will spend about $330,000 on health care during their retirement—or $165,000 per individual. ¹ However, this estimate frequently ignores a number of important spending categories that can raise lifetime medical costs by tens of thousands of dollars.

Costs of Prescription Drugs

Although many prescription drugs are covered by Medicare Part D, out-of-pocket costs can mount quickly for Arconic retirees. Known as “donut holes,” coverage gaps could expose beneficiaries to the full cost of specific therapies. Without complete insurance, specialty drugs—especially those used to treat long-term illnesses like multiple sclerosis or rheumatoid arthritis—can cost more than $5,000 a month. ² Depending on formulary tiers and supplementary plan designs, seniors who take multiple prescriptions may have annual drug expenses ranging from $2,000 to over $10,000. ³

Care Accessibility in Secondary Homes

Medicare Advantage plans sometimes limit coverage to a single geographic service region, yet many Arconic retirees divide their time between primary and seasonal residences. If a retiree spends summers near family in another state or winters in warmer locations, their plan’s provider networks may not cross state lines. Regular specialists or emergency services rendered outside the network may therefore be charged at full fees—often thousands of dollars per incident. A single out-of-network emergency department visit, for instance, may cost more than $2,500 before any insurance reimbursement. ⁴

Memberships for Concierge Medicine

Over the past five years, seniors seeking quick access to doctors have increased their use of concierge medicine. Depending on the degree of access and services offered, annual fees for these individualized practices average between $2,000 to $5,000 per person. ⁵ Concierge care can improve continuity and reduce wait times, but neither Medicare nor most employer-sponsored retiree plans cover these fees, making them an extra ongoing cost that may need to be factored into a retirement budget.

The Value of Thorough Planning

According to Wealth Enhancement senior financial advisor Patrick Ray, “standard retirement forecasts often fail to capture the cumulative impact of these less-visible costs.” He notes that patients often show astonishment when their medical expenses surpass initial estimates by as much as 15% to 20%. Arconic staff can reduce the risk of early asset depletion by building a cautious buffer into long-term income strategies—adding 10% to 15% to expected yearly medical expenses.

Techniques for Mitigating Risk

To help maintain financial stability in retirement, Arconic employees should:

Compare Supplemental Plans Every Year: Review Medicare Supplement (Medigap) products and Part D formularies each autumn to obtain the best coverage and costs.
Use Health Savings Accounts (HSAs): If you have an HSA balance upon retiring, these tax-advantaged funds can cover qualified medical expenses—including premiums for long-term care insurance—tax-free.
Plan for Travel-Related Care: Consider multi-state or national network plans, such as certain Medicare Advantage PPO options, to keep out-of-pocket costs lower when spending time away from your primary residence.
Examine Concierge Options Carefully: Before enrolling, estimate how many enhanced services you’ll actually use to decide whether membership fees are worthwhile.

Retirement health care expenditures are not only significant but also highly unpredictable. By identifying and budgeting for prescription medication gaps, out-of-network services, and concierge fees, Arconic retirees can preserve their financial resources and maintain control over their medical decisions.

Learn how to make the most of HSAs, compare supplemental plans annually, and safeguard savings from rising medical bills. You can also uncover hidden retirement health care costs, such as Medicare Part D prescription gaps, out-of-network expenses in secondary residences, and concierge medicine fees—all critical areas for Arconic employees to consider.

Featured Video

Articles you may find interesting:

Sources:

1. Fidelity Investments. ' Fidelity Investments Releases 2024 Retiree Health Care Cost Estimate as Americans Seek Clarity Around Medicare Selection .' 8 Aug. 2024.

2. MedCity News. ' Managing the Specialty Drug Cost Challenge: Is Your Pharmacy Benefits Strategy Ready for 2025? ' by Stanley Crittenden. 19 Nov. 2024.

3. USA Today. ' Medicare caps seniors drug expenses: What you need to know ,' by Ken Alltucker. 7 Jan. 2025.

4. GoodRx. ' Using the ER for Non-Emergencies Is Expensive - Here Are Other Options ,' by Geoff Williams. 23 Mar. 2023.

5. PartnerMD. ' Concierge Medicine Costs: What You'll Pay and What to Expect ,' by Melissa Gifford. 1 May 2025.

Other Resources:

1. Centers for Medicare & Medicaid Services. Understanding Medicare Advantage Plans . Publication no. 12026, 19 Feb. 2025, www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/downloads/12026-stateavgadj2010.pdf .

2. Hallie Levine. “What to Know About Concierge Medicine.” AARP , 15 Apr. 2019, www.aarp.org/health/medicare-insurance/info-2019/concierge-medicine.html .

3. Internal Revenue Service. Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans . 19 Jan. 2025, www.irs.gov/pub/irs-pdf/p969.pdf .

4. Kaiser Health News. “Doughnut Hole Is Gone, But Medicare’s Uncapped Drug Costs Still Bite into Budgets.” Kaiser Family Foundation , 17 Jan. 2018, www.kff.org/medicare/issue-brief/doughnut-hole-is-gone-but-medicares-uncapped-drug-costs-still-bite-into-budgets/ .

5. Trish, Erin, and Sean Dickson. “National Health Expenditures in 2023: Faster Growth As Insurance Coverage Expands.” Health Affairs , 5 Dec. 2024, www.healthaffairs.org/content/forefront/national-health-expenditures-in-2023-faster-growth-as-insurance-coverage-expands .

What retirement benefits and options are available to employees of Arconic Corporation under the Arconic Corp. Pension Plan A, and how do these benefits change based on factors such as age, service length, and retirement category? Employees of Arconic Corporation should understand their eligibility requirements for normal retirement, early retirement, and disability benefits as outlined in the company's pension plan documentation.

The Arconic Corp. Pension Plan A provides retirement benefits based on a formula that considers average earnings and service length, with normal retirement eligibility at age 65 and at least five years of service. Early retirement is available at age 55 with 10 years of service, with benefits reduced based on actuarial assumptions. Disability benefits are available after 10 years of service, and preretirement death benefits offer 50% of accrued benefits to surviving spouses(Arconic Corporation_ Ja…).

How does the frozen state of benefits and service accruals impact current and future retirees at Arconic Corporation? Employees should evaluate how the freeze, effective April 1, 2018, affects their retirement planning and what measures they can take based on their individual circumstances to optimize their retirement benefits.

The frozen state of benefits and service accruals, effective April 1, 2018, means no new service credits or compensation increases are factored into pension calculations for current employees. This freeze affects retirement planning as employees must now rely on frozen benefits and other savings plans to meet retirement needs. It’s important for employees to reassess their financial goals and consider additional investments to optimize retirement benefits(Arconic Corporation_ Ja…).

In what ways can Arconic Corporation employees ensure they meet the requirements for spousal benefits outlined in the pension plan, especially regarding preretirement and postretirement scenarios? Understanding the specifics of eligibility and benefits, such as the surviving spouse benefit calculations, is crucial for employees planning for retirement.

To ensure eligibility for spousal benefits, employees need to meet certain requirements. Preretirement surviving spouse benefits require at least five years of service, and postretirement spousal benefits reduce the participant’s monthly benefit by 5%, with 50% of the reduced amount paid to the spouse if the participant dies first. Employees should understand these provisions to plan for their family’s financial security in retirement(Arconic Corporation_ Ja…).

What are the implications of the actuarial assumptions used by Arconic Corporation in valuing its pension obligations, and how do these assumptions affect the funding of the retirement plan? Arconic Corporation employees should examine how changes in interest rates and mortality tables influence the company's ability to meet its pension obligations.

Actuarial assumptions used in Arconic Corp.’s pension valuations, such as interest rates and mortality tables, directly impact the funding of retirement plans. Changes in these assumptions can affect the pension plan’s obligations and the amount of required contributions, making it important for employees to understand how these factors influence the stability and sufficiency of their retirement benefits(Arconic Corporation_ Ja…).

Can you explain the process by which Arconic Corporation employees can appeal decisions related to their pension benefits, and what support does the company provide during this process? Understanding the proper channels for appeals and the types of documentation required can be vital for employees facing issues with their pension benefits.

Employees can appeal pension benefit decisions through Arconic Corporation’s formal process, which includes submitting an appeal with supporting documentation. The company provides guidelines on what documentation is required, and employees should follow these closely to ensure their case is reviewed thoroughly. The support provided can include detailed responses to clarify benefit calculations and decisions(Arconic Corporation_ Ja…).

What resources are available to Arconic Corporation employees to help them make informed decisions about their retirement benefits, and how can they access these resources efficiently? Employees should know where to find comprehensive materials and support services concerning their retirement plans.

Arconic Corporation offers various resources to assist employees in making informed decisions about their retirement benefits. Employees can access comprehensive plan documents, financial planning tools, and counseling services through the company’s HR department and retirement plan administrators to ensure they fully understand their options(Arconic Corporation_ Ja…).

How does the Arconic Corporation define "average earnings" for calculating retirement benefits, and what methodologies are in place to ensure accuracy in these calculations? Understanding the basis for average earnings will allow employees to better project their pension benefits and prepare for retirement.

Average earnings, used in calculating retirement benefits, are defined as the average of the five highest consecutive calendar years of compensation within the last ten years for most participants. For certain participants, different rules apply based on service and plan conditions. Employees can review their earnings history to ensure accurate calculations and projections for retirement planning(Arconic Corporation_ Ja…).

What criteria does Arconic Corporation use to determine eligibility for deferred vested benefits, and how can employees maximize their advantages in this area? Employees need to be aware of the vesting schedule and how to plan for potential career transitions while maintaining their benefits.

Eligibility for deferred vested benefits in Arconic Corporation’s plan requires five years of service, and benefits can commence as early as age 55, with reductions based on actuarial calculations. Employees should plan career transitions carefully to maximize their vested benefits, especially when considering leaving the company before retirement(Arconic Corporation_ Ja…).

How can Arconic Corporation employees prepare for the potential tax implications of their pension benefits upon retirement, especially in light of IRS regulations for 2024? Being informed about tax strategies related to retirement income can significantly enhance retirees' financial wellbeing.

Employees preparing for retirement should understand the tax implications of pension benefits, particularly in light of IRS regulations for 2024. Strategies such as tax deferral and proper timing of distributions can help minimize the tax burden on retirement income, significantly enhancing financial outcomes(Arconic Corporation_ Ja…).

What contact methods does Arconic Corporation provide for employees wishing to learn more about their pension plan details, and how can employees best utilize these methods to get their queries resolved? Understanding the effective ways to communicate with the company for assistance is key for employees navigating their retirement benefits.

Arconic Corporation provides multiple contact methods for pension-related inquiries, including direct access to HR representatives and pension plan administrators. Employees are encouraged to utilize these resources effectively by preparing questions in advance and keeping detailed records of their communications for follow-up and clarity(Arconic Corporation_ Ja…).