My husband is still working but is eligible for Medicare now. I am under his insurance now but will be eligible for Medicare next year. I have been looking in to how much we will have to budget for our healthcare costs when we retire. I can't believe what I am reading!! After spending many, many hours reading many, many web sites, it seems that no matter which plan we choose, we can EACH expect to have a maximum yearly out-of-pocket of $5,000-$6,000 for doctors and hospitals PLUS a maximum yearly out of pocket of $5,000-$6,000 for prescriptions medications. That's a combined outlay of $20,000-$24,000 per year, every year. We might not hit the max every year for doctors, but for drugs we certainly will.
Am I missing something here??!! Can this be true? My husband and I have both worked all our lives. We're not rich, not poor (about $75,000/yr income). We've saved and invested for retirement for many years and our 401ks are now about $350,000 (which is twice the national average). We will have Social Security (total about $3,000/mo) and nothing else except our 401ks.
The only other person I have any detailed financial information about is my 92-year-old mother. She has an employer-subsidized Medicare supplement plan, which is very rare these days. Her deductible is $500/yr with a maximum out-of-pocket of $1500/yr. Yes $1,500 PER YEAR! So I was expecting something like that but a little higher-- maybe $2500/yr. Ha!!
What are you other boomers doing? If this turns out to be true then-- between living expenses and medical expenses-- we will run out of money within 5 years. Then we will be poor and have to go on Medicaid. So I figure if we are going to end up on Medicaid, anyway, we might as well spend our retirement money as fast as we can and have a hell of a good time while we can. Then the rest of our retirement will be miserable.
>>no matter which plan we choose, we can EACH expect to have a maximum yearly out-of-pocket of $5,000-$6,000 for doctors and hospitals PLUS a maximum yearly out of pocket of $5,000-$6,000 for prescriptions medications. That's a combined outlay of $20,000-$24,000 per >>
The question is - ARE you going to use up the maximum deductible every year? Certain preventive tests and an annual check-up are free under Medicare, I believe. Does this insurance also cover vision and dental, or are those additional costs you must consider?
My spouse and I aren't in the greatest of health, but neither one of us uses up $5K/yr for med and $5K/yr for prescriptions. We have only exceeded the medical $5K on the 3x we have had to enter the hospital, in which case $5K was only a portion of the overall bill. For example, my spouse had a stroke so was in for 4 days, had some physical therapy, and now takes 3 generic medications (the total cost of his pills wouldn't exceed $600/yr even if we had to pay it all). But patented medications can be much more expensive, so you might actually exceed that $5-6K threshold.
Now, if you DO think you will be putting out the maximum for out-of-pocket, then you'll need the highest level plan, whether a Medicare Gap policy or a Medicare Advantage policy. Your choice; they cost the most but it's primo coverage. The rule is to check every year during Open Enrollment to make sure your carrier covers your specific medications under its Part D. Companies change their lists of covered medications all the time so it's necessary to check every year that you're paying for prescription coverage tailored to your needs.
Another cost to factor in: doctor visits and medications pale compared to long-term care costs. Medicare does not pay for it (they have strict limits on convalescent care); LTC is up to you to pay. Want to stay in your home and use home healthcare? That's a cost to you as well. There are programs to help, but it's a patchwork by many agencies and you often have to "jump through hoops" to qualify for financial assistance.
Just so you know, $350K in savings for two people, on a 3.5% distribution, is approx $1,021/mo. It might be sufficient if you are in a low-cost labor area.
BTW, most medium- and large-sized companies, once you're fully vested, buy an annuity for retirees that is paid out, usually at age 65. This is something I have NEVER, EVER, had any HR Dept. remember to tell me! This is separate from your 401k, and subs for the old-fashioned pension plan. In my 35-yr career, there were 3 companies I worked for where I was fully vested. One had an old-fashioned pension, so I knew there was a (very) small amt coming to me at age 65. But when I turned 55, I got a letter from not one company, but all three! Good thing I hadn't moved so that they could find me, in fact. Instead of a single tiny $200/mo pension, I'll be receiving two annuities purchased on my behalf by the other companies, for a much nicer total of $1K/mo.
Thank you for your reply, Jkom. This whole question started because I was trying to figure out how much we pay for everything medical now versus how much we should expect to pay after we retire. As you say, are we going to hit the maximum every year for doctors and/or drugs or not? I must say that this is the most complicated and confusing bit of research that I have ever done (and I am a compulsive researcher!). It would be nice to be able to just assume that as we are both relatively healthy our medical costs will be manageable. Ha!
Take the drug/donut hole question. My husband and I are each taking a Tier IV drug with no generic equivalent. According to our current insurance company, the retail cost of his drug is $2053/mo and mine is $1035/mo, putting us both through the donut hole and into catastrophic coverage every year. However, when I started looking up Medicare Part D plans, different companies label and price drugs differently. My husband's drug at one company is Tier IV but $703/mo and my drug is a Tier III at $500/mo. This is crazy-making!! What do I have to do, look up every single drug we are taking or MIGHT take in every single plan web site, note the tier and the cost, and then calculate our personal expected out of pocket for drugs? Does anybody have a spreadsheet to do that?
Same for doctors' visits. I can calculate from our EOBs what our insurance company paid to doctors and what we paid. But when calculating our anticipated out of pocket, what will Medicare pay for the same services??
It sounds like a lot of people start out with the least expensive premium the first year and see how it goes. If you have to spend tens of thousands of dollars out of pocket, you pick a more expensive and extensive plan next year. Is that how it goes? But then I hear that if you are in one medigap plan and develop an expensive disease, you can be refused coverage in another medigap plan (i.e., you have to go through an insurance adjuster to change plans). Is that correct? If so, you'd better start out with the most expensive plan BEFORE you get really sick. Right?
As you can see, I am very confused, overwhelmed and frustrated. That is why I appreciate the advice of you more experienced retirees so much.
By the way, I plan to spend down our 401ks such that the balance will be $0 when the younger of us (me) gets to be 80. It has been my observation that by the time most people hit 80 their days of fancy vacations and major expenses are over. Through illness, widowhood or lack of stamina they're usually more comfortable staying home and letting the kids and grandkids come to them. So we plan to have a great time for 15 years and then, when we're too old and sick to raise hell, we'll be broke but we won't care.
For Medicare with the best supplemental plan and cheapest Part D coverage for all generic drugs, I totally agree with BoBraxton@.
I have extensive experience in complex software systems and my opinion is that Medicare has a fantastic system for finding the best plan for your supplemental and Part D drug needs. The subject isn't simple so the solution isn't simple either, but you can understand it and it gives excellent results. Find the supplemental plans in your state and Part D provider for YOUR SPECIFIC needs by going to MyMedicare.gov, plugging in your drugs needs and then look at the exact costs. You can save the drug list, edit it when it changes and redo the Part D provider search every year (and these plans change costs every year so the cheapest can become more expensive and vis-a-versa).
See, no pounding around on the Internet trying to figure out what one providers means versus another. MyMedicare.gov does it all for you. Expensive drugs with no generic can still be costly but look every year since expensive drugs do go generic. I had two expensive drugs go generic and now I can use mail order to get them at NO EXTRA COST beyond the Part D premium.
GOOD LUCK, Crysalis!!! :-)))
I agree (about stress of researching). We have begun our fourth year of retirement. Sometimes I feel these plans and details were and are designed to MAKE us ill. So much for "health."
Until tax year 2013 we (filing joint tax return) never tried itemizing Medical - however, now we have been paying the basic Medicare premiums (was our 3rd year in Medicare), supplement Medicare (about $450 per month premium) as well as dental premiums, deductibles, out of pocket -- it was a chunk big enough that we benefited when we itemized the medical for our first time.
Good point, Bo. I have tried many times to itemize deductions but it never did us any good. I guess if our medical expenses really are high, there will be a tax advantage. I guess you're somebody who really can make lemonade out of lemons, aren't you?
For what it is worth, here is my personal experience, am 79 years old on Medicare, have been taking blood pressure, diabetes, and cholesterol medication for ten years now plus eye drops for my onset glaucoma. I go to the gym 4-5 times per week, try for an hour each time. I do have Medicare A,B & D. I do not have supplemental insurance, so I pay any co-pay out of pocket.
Other than a prostate operation fifteen years ago ($3,600 out of pocket), an MRI for arthritis in my spinal column seven years ago, and a colonoscopy every three years, my out of pocket medical expenses (besides my medicare premiums) has been under $500 annually. My drugs were costing me about $2000 annually until the past couple of years, when they became generic, they now cost me less than $500 co-pay annually. So staying in shape has allowed me to budget around $2500 annually for my medical needs. I live by myself.
I try real hard to stay active because of heavy family history with heart disease and diabetes, but I think the time spent staying active is more important than budgeting extra monies for medical expenses.
I am not saying do as I do, just stating what one person's medical experience for the past 25 years has been (retired at 55).
I also think your physical and mental state of mind is your best guide as to what you should budget for medical expenses in your later years.
I appreciate what you have written here.
My husband went on Medicare this year when I retired. He had been on my (very expensive) health plan through my job (self insured and even though I worked for a hospital the rates were outrageous). I now buy health insurance through Healthcare.gov as I am not 65 yet. Our local area agency on aging is the designated resource to learn about Medicare and the different options. We had to attend a Medicare 101 class they hold monthly in our city. One caveat the instructor repeated frequently is 'be careful what you sign up for initially as it will impact what you can change to in the future'. For example, if you sign up for a cheap, non-comprehensive Medigap plan you may not be able to switch to a more comprehensive plan during open enrollment later in life. Also, if you sign up for a Medicare Advantage plan (HMO) you are stuck with Medicare Advantage and cannot switch to a Medigap plan. The book Medicare sends out every year is helpful but I do recommend talking with your state's designated 'educator' on Medicare. For my husband, we chose the most comprehensive medigap plan with a company we trust. He has had no co-pays for his doctor visits or rotator cuff surgery this year. The drug plan is a different story but still not bad.
MaineGal says: "One caveat the instructor repeated frequently is 'be careful what you sign up for initially as it will impact what you can change to in the future'. For example, if you sign up for a cheap, non-comprehensive Medigap plan you may not be able to switch to a more comprehensive plan during open enrollment later in life. Also, if you sign up for a Medicare Advantage plan (HMO) you are stuck with Medicare Advantage and cannot switch to a Medigap plan."
Your instructor is somebody I wish we had encountered. I was hot on getting an Advantage plan because it cost nothing beyond Medicare Part B. Fortunately, my clinic did not accept Advantage at the time so I went with a much more "expensive" Medigap plan. It took us a year or two to realize that the gotcha with Advantage or any other cheaper option is that you are really betting that your health will stay good. Good luck with that bet! Also, typically in Advantage plans you pay deductibles and large out-of-pocket, and each and every year they start over.
I don't think that it is true that once you start an Advantage plan that you cannot switch to a Medigap plan. I believe that the gotcha here which is no different than switching between Medigap plan options is that now the provider is allowed to bring you through underwriting which is an investigation of your health and future insurability. I am currently going through the process of switching from an obsolete, but grandfathered, Medigap plan that is getting expensive to Plan G with our provider. This involves underwriting. There is no guarantee but I cannot lose my old coverage in the process. However, the savings are quite good and will continue every year.
During the screening processes that I have encountered they ask about medical events that you have had even before they will submit an application. For example, if you have had heart trouble or similar in the last 2 years, they will not proceed with underwriting. You may have to wait another year or two if you had such problems before they will proceed with underwriting. I also got the strong impression that they want to see that you have substantially recovered from any such event.
So, yes, do NOT skimp on your initial plan beyond Medicare Part B when you first decide. Total cost and even future coverage are greatly dependent on how healthy you remain and going through underwriting is not a fun process. :-)))
This is helpful for me.
Thank you so much for all of your valuable experience and advice. As I said (and as some of you have confirmed) this has been a very confusing and stressful exploration. I feel very fortunate that my husband does not want to retire yet and we are both still covered under his (very good) employer's plan. However, it is important for me to use the next year or two to "learn the ropes" of Medicare because we are going to need it one of these days.
When all was said and done, we decided that this year he will sign up for Medicare Part A, which is free. We will also sign up for Medicare Plan D (drugs) for $20/mo with $0 deductible. What SHOULD happen is that my husband's insurance should be the primary and will cover our medications as usual. But then Medicare D should kick in as secondary insurer and pay most of our prescription co-pays. I talked to 10 people from our local pharmacist to by husband's HR department to Medicare itself and I got 10 different answers. Basically, nobody ever heard of anybody doing this (keeping their employers insurance and getting Plan D but NOT Plan B). According to the Medicare Handbook it should work, but who knows? We are investing $20 to do an experiment. But note that this is PRE-RETIREMENT coverage.
Other than that, as near as I can figure once we are both retired and both on Medicare our drugs will cost us $3000/yr each. That is half what I expected (primarily because of the lower "retail" price that Medicare uses) but it's still a lot. And I didn't have the stamina to look carefully at Part B costs (physicians, tests, equipment, etc). I'm still reeling from the "Medigap" "HMO" "Advantage" "Original" merry-go-round I just experienced. I'll take up Part B again at a later date.
By the way, I want to thank those of you who said "Stay healthy." I was offended at first because I thought you were being facetious. But the more I learned about Medicare the more I came to understand that if you don't need doctors, drugs or hospitals you are better off in many ways. So it is smart and economically prudent to put significant time, effort and money into a good diet, regular exercise and fun activities. I'm really trying to develop those healthy habits!
Thanks again, folks!
Wise words to all the wise (meant positively).
My wife and I are both 70 and have been retired 5 years. We have part A, B and D regular Medicare. We have a Plan G Medigap policy from Mutual of Omaha (United of Omaha Life Insurance Co.) We have budgeted $5,000 each (total of $10,000) each year to cover all premiums including Part B Medicare and out of pocket cost. I usually have some left over each year. I even bought a pair of hearing aids for $2500 one year on this budget.
Part B (about $104.00 each per month)
Part D is about $25 each a month. (I have changed Part D plans about every year. I enter all drugs in Gov. website and get the cheapest plan for each of us since we take different durgs, and they change sometimes). If you are not proficient with the internet, you can go to Walgreens and have them do this for you.)
Medigap premiums started out at age 65 at $100 a month each. Now after 5 years they are running about $140 per month each.
I can get an Advantage Plan maybe a little cheaper, but I don't know how long these are going to be viable options. The Affordable Care Act was suppose to reduce payments to these plans; therefore, increasing cost to insured. Depending on your health, you may not be able to buy a medigap plan if you decide to go back to regular medicare if the government decides to reduce payments to Advantage plans. You can always go to an advantage plan later if you decide that is better. The plan G medigap plan along with Medicare pays all Dr., lab, and Hospital costs except $145 deductible out of pocket each year for each of us. You can get a Plan F that pays that, but you will pay more than the $145 in higher premiums for that plan. I am one of those people that likes to know up front what my costs are going to be each year. You can get prices from United of Omaha Life Ins. Co. by calling them direct and you can buy directly from them with or without an agent.
I worked in the medical insurance business for about 30 years before retiring in Information Technology.
Hope this helps
Jim, I realize that the cost of one's coverage is totally dependent on your state, drug needs and provider plan, but in our state and our drug needs the cost for Part B, Medigap and Part D is closer to half of your $10,000 estimate for the best Medigap Plan G (if I pass underwriting and can switch to their Medigap Plan G). For instance, all of the drugs that we need are now generics so the cheap Humana/Walmart Part D drug plan at about $15/month and, if we use the mail order option, there are no additional costs beyond this premium.
A few years ago I wanted to get a shingles vaccination (my mother had severe shingles for several years). My doctor did not want me to pay the $250 fee, so he suggested I join a Medicare Advantage Plan with GHI, and sign-up season was in effect. So I joined GHI, got my free shot, but found that if I ever was out of area (I have kids in AL and MD that I visit quite often), GHI would only cover emergency care, so I could not go to a doctor but had to be admitted to a hospital.
Needless to say I did not like that, so when GHI abruptly cancelled coverage the following year in my State, I was glad to return to Medicare. I find Medicare to be the best thing since sliced bread. They run interference for you, cut the doctor bills and lab fees to size, so the co-pay becomes more than manageable.
I have not abused the system, so I have no idea what to expect if I spend more than the allotted time in a hospital, or if I am treated in such institutions without being admitted under an emergency situation.
Your health is important, and at the risk of being repetitive, I do everything I can to stay that way, after that let the chips fall where they may.
I like your perspective.
I began my "computer programming" career 1974 - 1985 at a large insurance company, mostly Dental (Group) Insurance claims processing. I moved to another tech job a year after we moved to Virginia where we have lived three decades by now.
Thank you for this perspective.
My own experience over the past several years has been that Part D plans change *A*LOT*. I've had to change plans three times so far. Each time I've input all the details about my actual prescriptions into the government website in order to find the best plan relatively painlessly, and each time the answer has been totally different. The premiums and copays have changed wildly. My current plan didn't even exist two years ago. My current plan has a very low premium and very high copays, such that I basically never fulfill the deductible; at the end it took about six months to fulfull my previous plan's deductible, at the beginning fulfilling the deductible on that same plan took only a little over two months. I've seen particular drugs go from Tier I to Tier III. With such wild differences, the thing that's changed least (believe it or not:-) has been my net out of pocket total for a whole year ...and even that has changed quite a bit.
(Even the "donut" itself is rather unpredictable. There was a lot of legislative carping that it shouldn't have existed at all, and the legislature may eventually change it. It's not yet clear how the ACA ["Obamacare"] will affect it. And with the results of the midterm elections and the upcoming Supreme Court decision and the furor over Gruber's comments, it's not even clear the ACA will continue to exist at all in anything like it's present form.)
My takeaways are:
1) Go back to the website every couple of years and ask it all over again what plans are cheapest for you ...and expect to get a different answer fairly often.
2) Just staying with "the same old plan" for a long long time is likely to cost you a substantial amount of money in the end.
3) The expenses are rather unpredictable no matter how much and how careful your research. Probably the best guide to how much it could cost is to check how much it actually cost you last year, then triple that (partly to provide a "margin of error" to absorb unpredictable changes, but mostly to account for inevitably becoming less healthy than now).
Your personal approach makes a lot of sense. In our case, my spouse is a retired Pastor / minister, PC(USA) and the denomination has its own combined Retirement and Health (Medical) plan, part of which is Medicare Supplement. We pay monthly (for the two of us) and I do not check other plans (ours includes the Part D) because even if we are over-paying, the benefits presumably go to others like us who may need it more than we do ourselves. I have arranged for the same person to prepare our joint Income Tax (Federal) returns for 2014 - the same person who has done so for a full three decades, since we moved to Old Dominion (Virginia).
"My takeaways (Re: Part D) are:
3) The expenses are rather unpredictable no matter how much and how careful your research."
Your post was confusing me given my experience with Part D and the www.medicare.gov web site, at least until I read your takeaways. My experience has been that "every couple of years and ask it all over again what plans are cheapest for you" is incorrect and can be costly. You have to check your Part D provider costs EVERY YEAR and be prepared to change to the cheapest one. I have had a drug provider go from the cheapest to not the cheapest the next year and then back to cheapest the year after that. That's the "game", Chuck9.
You are correct that staying with your old plan can cost you. I suggest that you look in at my thread "A penny saved is a penny earned." to see how I rationalize the effort and even have fun doing it.
I do NOT agree that expenses are "unpredictable ". And if you do your drug research every year at the Medicare web site they are absolutely predicable FOR THE NEXT YEAR.
On your comments about drugs jumping around in tiers, just like you can change your drug provider, each provider gets to change how they treat your drug requirements. That's the "game", Chuck9.
So, play the game every year. The Medicare web site, although complicated due to a complicated issue, is in my opinion excellent and very accurate. So now that you are retired, Chuck9, play the game, save some money and have some fun. You have the time now. :-)))
PS: To make the game easier, store your drug list on the Medicare site and just edit it for any changes each year.
I need to add two cent's worth, Jerry, from my experience, drugs that are not tier 1 or 2, can have significant price increases during the year, I had that with Lipitor and Diovan before they went generic.
Second, it is true, some drugs even cheap ones are not necessarily covered in the cheapest plan, caveat emptor, as you said you need to do your research. Also you may get back stabbed if perchance your medic prescribes a new drug during the year.
Third, while Medicare Part D had saved me a lot of money, my druthers would be to have Medicare do mass purchases of drugs and hereby get significant discounts from the manufacturers and pass those discounts to us, seniors. Instead we are faced with having to choose among several plans based on Medicare software, which is not necessarily perfect, read Govt. Program.
Blame it on lobbyists. Lobbyists are a necessary evil, they do open the eyes of our clueless lawmakers as to what is happening regarding the bill being sponsored, however, they expect payback and the result is this mess, ( that Bush Jr. in his infinite wisdom of letting market forces work for us) we are stuck with, instead of as I stated earlier, have Medicare get massive discounts for senior prescription drugs.
The only other solution is stay as healthy as possible and avoid taking drugs at all, if you do not have to, that is.
"Instead we are faced with having to choose among several plans based on Medicare software, which is not necessarily perfect, read Govt. Program."
It is easy to stereotype things, especially government provided things, for example the ACA health sites (Obamacare). Whereas I would be the last person to ever say that any piece of software is "perfect", I will say that in my professional opinion as a person who developed extremely complex software for a living that the Part D and Medipak tools provided by Medicare are indeed excellent. They take a massive amount of complex health coverage data and reduce it down so that one can make intelligent and cost effective decisions on coverage.
For drug coverage they don't only tell you which provider is the cheapest, they tell you the EXACT cost given your drug plan and further distribute it across the next coverage year so that you can plan expenses, if required. Not only did their site inform me of the cheapest provider, it also told me that they offered a mail order option and then showed me that it was cheaper yet. I AM IMPRESSED!! :-)))
It was less work when all I had to do was "go to work."
We have Medicare with Kaiser, pay a co pay of 10 to 30 dollars for each dr. visit. Medicines are generic but I was reading how generic meds have doubled and tripled in price due to profit motive.
When worried about expenses, it is hard to anticipate the future but the best is to go by the past costs.
Ask your employer how much they pay for your insurance. This may give you a good idea of your future costs.
Of course, best to just stay healthy, eat right and exercise!
Or become a Christian Scientist and stay away from doctors.
Much of your expenses may depend on genetics...how long do most people in your family live? what illnesses have they had before dying?
We have always paid for our own eye care and glasses .which only amounts to a few hundred $ a year.
Always have paid for our own dentist..go every 4 months for teeth cleaning and now have pretty good teeth at age 70.
Cost yearly for teeth over the years has been several thousand dollars a year for the two of us.
As for medicines...depending on what you always take,...could be expensive or not. My dad paid 0 for hospital or surgeries as he had worked for the gov. but did pay $300 a month supplemental and about $300 a month for medicines. That was 20 years ago.
Figure that what you are paying now is similar to what you will pay on Medicare. We pay less than we used to before Kaiser.
But as time goes on you may need more medications and doctor visits, surgery, etc.
Aging (folks like us) must be an incredibly lucrative Profit Center.
My experience in California when I went on Medicare last year was this:
Searched for best Medicare supplement Plan F and Part D plan
Went with AARP United Health Care.
Medicap was $122 this past year and will go up to $134 this coming year.
Part D was $47 per month but will go up to $57 per month.
So far I have a surgery(out patient) and another procedure (out patient) and emergency room visit, several doctor office visits and have had zero bills.
I do pay for four generic Rx and one name brand Rx. The prices have been very reasonable. I did run the yearly figures on part D and found that the plans in my area are fairly similar. I pay a higher monthly charge but have zero deductible.
I do pay more for part B and D due to joint income being high. That should go down once my wife retires this coming year.
With plan F I get to choose my own doctors and the co pay is covered. Also covers me for out of the country travel.
If I move from California I would stay with a Plan F but might have to switch companies since AARP might not be the best in that new state. (Thinking of Florida where I would gain by no income tax but the Medigap D would I expect to be more than where I live in California in the Central Valley i.e. not LA or SF).
So.... adding up Part B , Medigap, Part D my yearly cost is about $3700 or $308 a month.
Co pays on Rx will be about $1,000 for the year.
Thanks gba, very interesting reading about your personal experiences, I was not aware though that your Medigap policy with AARP will cover out of country travel; since Medicare does not cover such costs, does your policy reimburse you in full, or partially, and for how long can you stay out of country? I imagine you have to keep residence in the USA.
Sorry to hear that you are on so many meds at your age, as far as AARP Medigap, the premiums will unfortunately increase with time, I do not have a Medigap policy, but a friend of mine has one with AARP and she pays $227.50/mos, lives In NY State and is 78 years old. Like you, her Medigap covers all co-pays and deductible, we also have Humana - Walmart Part D, and it is only $15.70/mos for 2015. Been with Humana several years now, and they are real good if you take generics; Interestingly enough the Humana Plan did not charge me a drug deductible this year. I am curious to see if it will be the same for 2015.
As an aside, it is interesting how Social Security retirement age has gone up, but apparently Medicare eligibility age stays the same at 65. Go figure!
That's why I got Plan F Medigap. It is a limited total but pretty fair coverage (you pay upfront , get copies of the bills and submit when you get back) considering medical costs are usually much cheaper outside of the US. I get the same full coverage for the expenses. Not sure on the length of time out of the country but we are not looking for residency outside of USA just vacations. Thanks for info on Humana and Walmart etc. I will look into Part D each year from now on just to compare. Supposedly AARP Plan D and Walgreen's have an agreement for the best price but I am not sure that's the case. For me at this point the extra cost for the plans are worth it so I don't have to hassle with any bills and can choose any doctor (who accepts Medicare) and any hospital even outside of Ca.
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The Republicans in Congress have floated the idea a couple of times of raising the age for medicare or privatizing it. When the numbers are crunched, raising the age to full retirement age causes hardship without really changing the budget very much. Privatizing medicare would be a disaster IMO. I'm in my 60s and not quite old enough for it yet, hope it doesn't get yanked away.
GBA, your information is very helpful to me. Thank you.
The cost you mention-- $3700 + $1000-- I assume that is just for you. Your wife is not on Medicare yet. Is that correct?
Yes. Just for myself. Expect wife's to be similar. Figuring with hers it will be about 7% of our income which is reasonable at this point. Will increase as we age but our expenses will drop too.
Spouse is older than me. I worked until 64. Spouse signed up for Medicare A at 65 and waived Medicare B while we were covered by my work plan. When I retired, we selected COBRA for 18 months to get to Jan 2006 when Medicare D began. Even though we were on COBRA, we still had 7 months (?) to sign him up for Medicare B to get Medicare D. My former workplace pays for my Medigap (contributions during employment to retiree health care) and we pay for the best for spouse. Spouse was in a terrible accident = hospital for 11 out of 12 weeks = total cost $750,000 of which we would have been responsible for $150,000. Spouse would have to live an additional 60 years for the plan to break even. .
I have switched Medicare D plans for several years. The most expensive plans are not necessarily the best for individual needs. I use Medicare.gov and enter all of our drugs as though we were 1 person just do determine which few plans cover all of our prescriptions. Then the math and research come into play. Many drugs have moved up to higher tiers. The plan that we are currently entrolled has dropped 3 of our drugs for 2015. Please do your homework and when you make a decision to enroll in the plan of your choice and they ask for your drugs, you do not need to give them any data. If you give them any data, they will use that data to determine your eligibility. Four phone calls to date and they gave up and enrolled us. They state that we do not have to provide any information at the beginning of the conversation and then ask for our drug list to 'HELP'. Just my 2 cents.
Thank you for sharing your story and for the helpful information, PaulMac. I'm so glad your husband survived that terrible accident!
I do want to clarify one thing... to get Medicare Part D (drugs) you have to sign up for EITHER Part A OR Part B first. You do NOT have to enroll in Part B in order to get Part D. My husband just now signed up for Part A (free) and Part D ($20/mo with Silver Script) so I know it can happen.
I have heard from several people now that it is worth while to shop around for Part D coverage every year. It sounds like a pain in the neck but a smart thing to do. Thanks for the tip.
Please don't forget when selecting a plan, while the Medicare calculator is probably accurate, it does not take in account mid-year increases in drug costs, only prior year costs are factored in. Also your doctor may prescribe new drugs during the forthcoming year that you are not able to input into the model.
I personally feel it is more important to see what tier your actual drugs fall into, and if ALL your drugs are covered. I know some folks who have a great plan, and then find out later on that one particular drug is arbitrarily not covered, or the plan will make you take the generic, in spite of your doctor's specific recommendation for the name brand drug; this is important when the generic does not work as well as the brand name drug.
Again, I believe Seniors ought to convince Medicare to use its bulk buying power and negotiate better deals from the drug companies, then let the various carriers obtain their drug through such a central clearing house.
Create your drug list on medicare.gov and use it every year during enrollment to find the cheapest drug provider. It is NOT difficult. However, since Part D came after Part B, the providers are required to ask you a number of times if you "really"want to change plans. All I can figure is that some bureaucrat imagined that the poor old people are being abused by sales people fast-talking them into changing plans - example would be a similar scenario for elders with annuities.
You give such good advice.
Have you heard pros and cons of Kaiser or is there nothing comparable in your part of the country?
So many people in California rave about it for seniors.
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My experience living in several states is there's pretty much nothing like Kaiser in any other part of the country. Too bad. When I lived in San Francisco right after my undergraduate days, what Kaiser did was so obviously relevant and helpful I couldn't even conceive of the idea most of the rest of our country had nothing similar. Later when I lived in or visited other places and described Kaiser to the locals, they always seemed to think I was describing some weird fantasy just to pull their leg.
Guess that is why all my friends and family have Kaiser...not only do I have specialists, regular doctors, etc. but they offer classes on health, fitness, and dealing with different types of illness...ie.: classes heart disease, diabetes, weight, cancer, etc. And they have a support system. Sorry only California big cities have Kaiser.Hopefully they will ad Kaiser to smaller towns and cities like Santa Barbara in the future. Still California, though.
Sharon, thank you. I am not aware of any Kaiser option here. It's primarily a West Cost provider, no?
Yes Kaiser is mostly in California.
What is wonderful about it for seniors and others is how they communicate by reminding patients when to make appointments, when to get flu shots and what general tests they should have each year such as mammograms and prostrate cancer screening. They also share your record with ALL your doctors so they can work together to keep you healthy.
Some people like lots of privacy but I prefer my lung dr to know what my skin dr or allergy dr has prescribed.
If i only needed one doctor the rest of my life I might sign up for Blue Shield or another ins company but as you age you may need many different doctors. It is nice to have a plan where it is all connected.
I believe my parents have an HMO part B policy through Humana. They're in the South East.
You are correct. However, to qualify for Medigap we had to sign up for Medicare B and we are very happy that we did.
You are correct = I should have said that we needed Medicare B to get my company's Medigap coverage.
" ...when you make a decision to enroll in the plan of your choice and they ask for your drugs, you do not need to give them any data. If you give them any data, they will use that data to determine your eligibility. "
I was not aware that any Part D provider can basically put you through underwriting and reject you. Other than using medicare.gov and our drug lists then listing by cost then choosing, I have not encountered any provider questioning, but then again we use generics.
You are correct according to my research today. They can however delay your coverage for a while.
This has never been my experience. I have never had any Part D provider ask for my list of drugs. Nor have I ever had (nor even read about) any Part D provider "determining eligibility".
Then again, I absolutely refuse to perform any transaction that might involve making any decision over the telephone, because I know from sorry experience I can't think as fast as the person on the other end any more and so too often get sucked into something I have second thoughts about later. I do most transactions -including all my Part D changes- over the web, occasionally backed up by email or snail mail when necessary. If a salesperson calls me and it sounds interesting, I say "here's my address, please put it in writing", that way I can read it over and over and consult forums like this and "sleep on it" before making any decision. Mostly it's a great way to get rid of those pesky telemarketers:-)
(My guess is the related experience was not with any simple Part D-only option, but rather with some sort of Medigap-like coverage that included drug coverage.)
Have you had any problem with keeping your own doctors that you've had for years?
I can't really say for sure, because I've initiated doctor changes myself quite a few times. My impression though is Medicare parts A and B are i) pretty universally accepted and ii) don't have draconian "preferred provider" lists. (The prescription Part D doesn't seem to be tied to any doctor at all. And I've no relevant experience with any Medigap option nor any non-Medicare coverage:-)
Generally my medical bills come in the mail later (the calculations are too odd for a straightforward in-office copay) directly from my physician. Usually there's the (ridiculous) "full freight" cost at the top, a rather large deduction called "medicare adjustment" to get down below the real price, a payment called "medicare payment" ...and recently an additional small amount called "MDCR Sequestration". After all those deductions there's finally a "balance", which is my copay. It varies all over the place depending on the exact service (and maybe a deductible?), anywhere from just a few dollars to many tens of dollars. And of course it's only for "medical" care and is not relevant to either dental care or eyeglasses.
I left my job at almost full retirement agr because of health-- ovarian cancer and pancreatic cancer. I take lots of drugs for the pancreatic issue in particular. Like you, my script plan dropped three scripts and increased tiers for several others. After premiums, this year I paid mega amounts of money out of pocket for scripts. I am changing plans for 2015 but will still pay a great deal for meds. I have learned to live very frugally to afford this body.
Golly, Kaila, I'm sorry that you are having to go through such an ordeal! I wish you well and will pray for your complete recovery. God bless you, honey.
Just did the math. We spend just under $10K per year to stay alive. It would be $3K more per year if I had not contributed during working years toward a retirement health plan. My years of service made my copay $0 but new retirees have to pay 20% of the cost. Costs go up every year and the prescriptions go up every year. Budgeted $5K per year when I retired but I made a little error there. I am waiting for my state to tax the value of my copay someday if and when they ever think of it.
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