This story is not meant to scare you, though some of what you will learn may do that. It is intended to give you a clear picture of the state of U.S. pensions, social security, health insurance and Medicare, and what that means to your health and wellbeing in your retirement years. So if you are intending to retire in the next 20 years, pay attention. And if you're not intending to, pay attention anyway. The impact of the current retirement and healthcare systems will reach far beyond the Baby Boomer generation.

To set the scene, let's recount a portion of a story told by Jim Jubak (financial guru) about his father.

The voice on the other end of the phone was angry. There's something wrong with my retirement check, the man said. His monthly pension check, which had netted him $350 a month for years, was suddenly just $180 -- a drop of nearly 50%. Coping with the incredible shrinking retirement; Jubak's Journal, March 26, 2004

That excerpt was from a phone call between Jubak his father a few years ago. It seems the company his father had worked for for many years, and from which he had retired, had increased the amount Jim's father had to pay for health insurance by $170 a month - WITH NO NOTICE! That increase cut his monthly pension nearly in half! AND there was no promise from his former employer that that would be the last increase in payout he would see!

It's a despicable way to treat anyone. But it serves as a perfect example of what IS happening to many retirees today, and what promises to happen even more (given the state of healthcare in the U.S.).

But that is not all. Healthcare for retirees is getting hit from all possible angles. While employers are targeting pensions and health insurance payouts for BIG cost cutting measures, the federal government is lowering Medicare funds and shrinking social security checks (meaning social security payments are not staying in step with inflation). And to top it all off, healthcare costs are on the rise again. Consumer group Families USA estimates that the prices of drugs used most by the elderly have climbed nearly 3.5X faster than inflation between January 2002 and January 2003.*

Pfizer's (PFE, news, msgs) Celebrex pain killer is up 23% while their cholesterol drug, Lipitor, is up 19%.**

Any way you look at it, you are and will-continue-to pay more for healthcare, and get far less back far into your retirement years.

Jubak's advice to retirees, his father included (I assume) was to fortify your investment portfolio to hedge against the downturn in pension and social payments (payments that will be outpaced by inflation) and the upturn in YOUR CONTRIBUTION to medical care.

If you want further investment advice, click over to Jubak's column. But if you want to find out what you can do immediately to supplement missing health services or to get a lower rate on individual services, keep reading.

There are options besides Medicare and private health insurance. They are called Consumer Driven Health programs. And what it amounts to is free trade in healthcare.

Consumer Driven Health works like this. For a small monthly fee, far less than insurance company rates (monthly fee run as low as $19.95 per month and may cover your entire household), you receive discounted rates on the very health services insurance companies are cutting. And the discounts are sizable. One company reports up to 80% savings to its members for dental care alone. What's more, anyone can join. No one is turned down for any reason, including preexisting health or dental conditions.

So if your health and wellbeing are important to you, look into CDH to find out what you can do to take care of your health long into retirement, regardless of the changes that occur with government programs and your employer retirement benefits and pension funds.

*Coping with the incredible shrinking retirement; Jubak's Journal, Jim Jubak, March 26, 2004. **Coping with the incredible shrinking retirement; Jubak's Journal, Jim Jubak, March 26, 2004.