Securing Your Health in Retirement: A Washington Public Employee's Guide to Smart Healthcare Planning

As a former city employee turned financial advisor, I've seen firsthand how healthcare costs can catch retirees off guard. I’ve learned that successful retirement planning requires a deep understanding of healthcare costs and coverage options. Don’t let your retirement be derailed by unexpected medical expenses.
The Reality of Healthcare Costs in Retirement
Recent data shows that a 65-year-old retiring today should expect to spend approximately $165,000 in healthcare costs throughout retirement [8]. This figure can be particularly concerning for Washington State public employees transitioning from active service to retirement.
The Washington State Advantage
One unique aspect of being a Washington State public employee is access to the Public Employee Benefits Board (PEBB) program. While private sector employees often face uncertainty about post-retirement healthcare options, Washington public servants have a structured system designed to provide continued coverage. However, understanding how to maximize these benefits requires careful planning and consideration.
Understanding Your PEBB Benefits: The Foundation of Your Healthcare Security
Eligibility Requirements
To qualify for Public Employees Benefits Board (PEBB) retiree coverage, you must:

• Submit your enrollment within 60 days of your retirement
• Be vested in a Washington state-sponsored retirement plan
• Ensure continuous coverage during the transition period

Planning Your Coverage Timeline
The transition from active employment to retirement requires careful timing. I recommend starting your planning process at least 12 months before your intended retirement date. This gives you ample time to:

• Review all available health plan options
• Calculate coverage costs for you and any dependents
• Understand how your benefits coordinate with Medicare
• Prepare for potential coverage gaps

2025 Coverage Options and Costs
The cost often takes soon to be retirees off guard. Let’s spend some time going over the 2025 healthcare plan options. If you’re going to retire in 2026, the costs will likely be higher than this.
Non-Medicare Coverage
Single subscriber monthly premiums for popular plans:

• Kaiser Permanente WA Classic: $893.00
• UMP Classic: $898.12
• UMP Select: $847.52 [1]

Understanding these base premiums is just the starting point. Your actual costs will depend on various factors, including:

• Whether you cover dependents
• Your choice of dental and vision coverage
• Any applicable surcharges
• Your expected healthcare utilization

Additional Considerations

• Tobacco use surcharge: $25 per account
• Spouse coverage surcharge: $50 if applicable [1]
• Optional life insurance premiums
• Prescription drug coverage considerations

Dental Coverage Options
Monthly premiums for 2025:

• DeltaCare: $41.50
• Uniform Dental Plan: $52.23 [1]

Making Strategic Coverage Decisions
When selecting your coverage, consider:

• Your current health status and family medical history
• Prescription medication needs
• Preferred healthcare providers and facilities
• Geographic access to medical care
• Future travel plans that might affect coverage needs

Medicare Coordination: A Critical Transition
When you reach 65, your coverage structure undergoes significant changes:

• You must enroll in Medicare Parts A and B
• PEBB becomes secondary to Medicare
• Monthly premiums are reduced by a state-funded contribution of up to $183 or 50% of the plan rate per retiree per month [1]

Medicare Enrollment Timeline
Missing Medicare enrollment deadlines can result in permanent penalties. Key dates to remember:

• Initial enrollment period begins 3 months before your 65th birthday and extends for 3 months after your birthday month.
• Special enrollment period exceptions for active employees
• Coordination with PEBB coverage transitions

Long-Term Care Planning: The WA Cares Fund
Washington State has implemented WA Cares, providing qualifying residents with up to $36,500 (adjusted for inflation) for long-term care costs, funded by a 0.58% payroll tax [5]. This program can be a supplement to your retirement healthcare planning. However, this is just a fraction of long-term care costs, additional planning must be done to ensure you’re covered if you need long-term care.
Supplemental Long-Term Care Considerations
Consider whether you need additional long-term care coverage based on:

• Family health history
• Personal risk factors
• Desired level of care
• Geographic location of potential care facilities

Check out the Genworth Cost of Care Calculator to help you estimate costs.
Beyond Basic Coverage: Emergency Planning
Having seen the impact of unexpected medical expenses – I cannot stress enough the importance of building an emergency medical fund. While PEBB provides excellent coverage, having additional savings can provide peace of mind and financial flexibility.
Building Your Healthcare Emergency Fund
Consider setting aside funds for:

• Out-of-pocket maximums
• Non-covered medical expenses
• Dental and vision care
• Potential long-term care needs
• Medical equipment and home modifications

Generally speaking, in retirement, I encourage retirees to save 10% of their retirement income for emergencies.
Action Steps for a Secure Healthcare Future

1. Schedule a PEBB consultation at least six months before retirement
2. Calculate your expected monthly healthcare premiums using 2025 rates
3. Review your pension and other retirement income sources
4. Build an emergency medical fund
5. Create a bridge strategy if retiring before Medicare eligibility
6. Consider supplemental insurance options for gaps in coverage

Common Misconceptions
Let's address some frequent misunderstandings I've encountered while advising public employees:
Myth: "PEBB coverage automatically continues into retirement." Reality: You must actively enroll within 60 days of your employer-paid coverage ending.
Myth: "Medicare replaces PEBB coverage at age 65." Reality: Medicare and PEBB work together, with Medicare becoming primary and PEBB secondary.
Myth: "Healthcare costs are fixed in retirement." Reality: Costs typically increase with age, and premiums adjust annually.
Proactive Planning Makes the Difference
One of the most valuable lessons I’ve learned is that early planning leads to better outcomes. Those who start planning their healthcare coverage early often have more options and fewer surprises in retirement.
Looking Ahead
Healthcare planning for retirement is complex, but as Washington State public employees, you have access to valuable benefits and resources. The key is understanding and optimizing these benefits while building additional financial safeguards.
Get Started Today
Ready to take control of your retirement healthcare planning? Here are your next steps:

1. Contact the PEBB Program for specific retirement healthcare options
2. Review the 2025 premium rates and calculate your expected costs
3. Consider scheduling a consultation with a financial advisor who specializes in public employee benefits

Successful retirement planning is about more than just saving money – it’s about creating a comprehensive strategy that protects your health and financial well-being throughout your retirement years.

Sources:
[1] https://www.hca.wa.gov/assets/pebb/51-0275-retiree-premiums-2025.pdf
[2] https://www.hca.wa.gov/assets/pebb/51-0275-retiree-premiums-2024.pdf
[3] https://wssra.org/view/download.php/about-wrssa/retirement-planning/retirement-planning-guide
[4] https://www.hca.wa.gov/employee-retiree-benefits/retirees/medical-plans-and-benefits
[5] https://wacaresfund.wa.gov/how-it-works
[6] https://wssra.org/view/download.php/misc-downloads/retirement-planning-guide
[7] https://hr.uw.edu/benefits/retirement-plans/nearing-retirement/insurance-during-retirement/
[8]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
[9] https://kingcounty.gov/en/legacy/audience/employees/benefits/retirement
[10] https://www.plansponsor.com/health-care-retirement-will-cost-average-315000/

-Seth Deal