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Old 07-11-2015, 01:13 PM   #41
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Basic Medicare...
Medicare Part B $105
Medicare Part D $40
Medigap Policy $160
Total $305
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Old 07-11-2015, 01:22 PM   #42
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[QUOTE=daylatedollarshort;1613068]

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Originally Posted by daylatedollarshort View Post
Average benefit $1,220 a month per SSA here, $14,628 annual.
If we are talking about retirees, then I think you are using the wrong figure. The $1,220 a month averages every SS beneficiary: disabled people with a very short work history, spouses with no work history, dependents of retirees, etc. The correct average benefit check for retired workers is $1,334.21.
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Old 07-11-2015, 01:31 PM   #43
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Originally Posted by jim584672 View Post
Basic Medicare...
Medicare Part B $105
Medicare Part D $40
Medigap Policy $160
Total $305
Isn't Medigap optional? Hmm, I think my grandmother qualified for Medi-Cal as well. All I know is practically all her healthcare is paid for by government.

Unfortunately, she had no savings at all (and even got into debt) because she gave most of her income to support one of my uncles and one of his lazier children.

The debt, my mom eventually took over but my aunt had to monitor her finances to curtail her excessive giving.
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Old 07-11-2015, 03:10 PM   #44
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Originally Posted by samclem View Post
If we are talking about retirees, then I think you are using the wrong figure. The $1,220 a month averages every SS beneficiary: disabled people with a very short work history, spouses with no work history, dependents of retirees, etc. The correct average benefit check for retired workers is $1,334.21.
But not everyone who is over 65 will have been in the workforce. I should have probably used the $1,288 number, the the SSA average for retirement benefits. That adds $68 a month to the $1,220, though those are averages, and not floors, so many will have to live on less than average.

The Washington Post article states that many seniors are currently living in poverty:

"And despite having Medicare, many seniors struggle with out-of-pocket medical bills. As my colleague Michelle Singletary pointed out over the weekend, the Employee Benefit Research Institute has found Medicare only pays for about 60 percent of seniors' total health costs. Sarah has written about how out-of-pocket costs tend to pile up particularly at the end of seniors' lives."

Senior Poverty is Worse Than You Think
http://www.washingtonpost.com/blogs/...han-you-think/
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Old 07-11-2015, 09:15 PM   #45
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We have a national system that forces employees to make contributions and keeps retirees from becoming destitute and keeps them off pubic assistance--it is Social Security. That's enough.
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Old 07-11-2015, 09:30 PM   #46
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Those relatives likely have greater income/means than $13K per year then.

Afaik, $13K is already poverty level so someone making only that qualifies for more benefits such as food stamps, section 8 housing, etc. There's also the benefit of not having to pay federal and state income taxes. My grandmother's combined pension + SS was around $13K and iirc, her out of pocket for medical expenses was pretty low (pretty much just subsidized Part B premiums). I think her prescription co-pay was just $4-5 or something.
The 2015 Federal Poverty Level is $11,770 for singles and $15,930 for couples. Federal Poverty Level 2013 - 2015

The food stamp rule is that you should spend 30% of your income (after some deductions) on food. You get food stamps (SNAP) if the 30% of adjusted income is less than $180/mo per person. I'd guess that most people with $13k annual incomes do not get food stamps.

OTOH, most communities have subsidized senior housing. I think a typical rule is that they cap rent at 30% of gross income. So $13k will probably get you an apartment for $330/month.
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Old 07-12-2015, 12:01 AM   #47
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Quote:
Originally Posted by daylatedollarshort View Post
.....The Washington Post article states that many seniors are currently living in poverty:

"And despite having Medicare, many seniors struggle with out-of-pocket medical bills. As my colleague Michelle Singletary pointed out over the weekend, the Employee Benefit Research Institute has found Medicare only pays for about 60 percent of seniors' total health costs. Sarah has written about how out-of-pocket costs tend to pile up particularly at the end of seniors' lives."

Senior Poverty is Worse Than You Think
Senior poverty is much worse than you think - The Washington Post
I was guardian for both my grandmother and my great aunt and also manage my mother's finances and my experience is totally the opposite. Other than Rx co-pays which were modest, they had no medical bills that were not covered between Medicare and Medigap insurance and their monthly insurance costs were similar to those shown in post #41.

I wonder if the people referred to in the article skip Medigap. If so, then their large medical bills are a result of their own neglect.
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Old 07-12-2015, 12:42 AM   #48
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I was guardian for both my grandmother and my great aunt and also manage my mother's finances and my experience is totally the opposite. Other than Rx co-pays which were modest, they had no medical bills that were not covered between Medicare and Medigap insurance and their monthly insurance costs were similar to those shown in post #41.

I wonder if the people referred to in the article skip Medigap. If so, then their large medical bills are a result of their own neglect.
I don't have any experience myself with Medicare, but the EBRI article in the Washington Post link had this to say:

"A 65-year-old couple, both with median drug expenses, would need $163,000 in 2012 to have a 50 percent chance of having enough money to cover health care expenses (excluding long-term care) in retirement, $227,000 to have a 75 percent chance of covering those expenses, and $283,000 to have a 90 percent chance of doing so. These estimates are 12 percent lower than the savings targets estimated in 2011."

The EBRI article was from 2012, but not far off from the Fidelity health costs estimates for a retiring couple in 2014 at $220K:

Fidelity Analysis Reveals


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Old 07-12-2015, 08:54 AM   #49
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If "health care expenses" includes health insurance premiums as well as co-pays and deductibles, that seems a bit high. If it is just deductibles and co-pays, it is crazy high IME.

Using the $305/month that jim posted above times 12 months times 2 people divided by 4% WR (for a 65 year old) you would get ~$183k for the health insurance. Add in co-pays and deductibles and you're probably around $200k rather than $283k.

That is a great example of how a relatively modest $305/month/person health care cost can be manipulated to be a scary high number.
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Old 07-12-2015, 09:02 AM   #50
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Originally Posted by jim584672 View Post
Basic Medicare...
Medicare Part B $105
Medicare Part D $40
Medigap Policy $160
Total $305
Quote:
Originally Posted by daylatedollarshort View Post
I don't have any experience myself with Medicare, but the EBRI article in the Washington Post link had this to say:

"A 65-year-old couple, both with median drug expenses, would need $163,000 in 2012 to have a 50 percent chance of having enough money to cover health care expenses (excluding long-term care) in retirement, $227,000 to have a 75 percent chance of covering those expenses, and $283,000 to have a 90 percent chance of doing so. These estimates are 12 percent lower than the savings targets estimated in 2011."

The EBRI article was from 2012, but not far off from the Fidelity health costs estimates for a retiring couple in 2014 at $220K:

Fidelity Analysis Reveals
These numbers aren't so far apart. If the each spouse in the couple lives another 20 years, the $163,000 is a little over $4,000 per year.

Medicare Part D doesn't cover 100% of prescription costs, so add a little to Jim's numbers and $4,000 doesn't seem out of reach. Note that Medigap premiums vary by age.

Some of the increase for 75th percentile and 90th percentile costs result from longer life spans in the 75th and 90th percentile cases.
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Old 07-12-2015, 09:56 AM   #51
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Just to add... seniors in my state can get further drug price reductions by enrolling in EPIC which is a state run program.
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Old 07-12-2015, 10:51 AM   #52
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Quote:
Originally Posted by daylatedollarshort View Post
The EBRI article was from 2012, but not far off from the Fidelity health costs estimates for a retiring couple in 2014 at $220K:

Fidelity Analysis Reveals
That can't be a coincidence. I looked for but never found any Fidelity reference to methodology. The EBRI methodology is pretty straightforward, it is the sum of premiums for Medicare B+D + Medigap F, and then estimates for drug OOP at different levels of use.

That should make it pretty easy to break down and test how useful it is as a planning number.
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Old 07-12-2015, 03:31 PM   #53
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That can't be a coincidence. I looked for but never found any Fidelity reference to methodology. The EBRI methodology is pretty straightforward, it is the sum of premiums for Medicare B+D + Medigap F, and then estimates for drug OOP at different levels of use.

That should make it pretty easy to break down and test how useful it is as a planning number.
The Fidelity number comes includes their estimates for:

"As part of the estimate, Fidelity looked at monthly expenses associated with Medicare Part B and D premiums, co-payments, co-insurance and deductibles, such as for doctors' office visits and outpatient services. The estimate takes into account out-of-pocket costs for things such as vision and hearing exams, eyeglasses and hearing aids."

http://abcnews.go.com/Business/retir...ry?id=19185055
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Old 07-14-2015, 09:36 AM   #54
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The food stamp rule is that you should spend 30% of your income (after some deductions) on food. You get food stamps (SNAP) if the 30% of adjusted income is less than $180/mo per person. I'd guess that most people with $13k annual incomes do not get food stamps.

OTOH, most communities have subsidized senior housing. I think a typical rule is that they cap rent at 30% of gross income. So $13k will probably get you an apartment for $330/month.
Sounds about right. I know my grandmother paid around $300 for her apartment. Her utilities are also discounted/subsidized. Mind, food is fairly inexpensive in the US (at least relative to income) as long as you don't eat out at restaurants all the time. There's also going to be Medicaid for LTC. I reckon as long as housing and health care costs are under control, $1,000/mo would actually be livable as long as you economize. There's not going to be room for any luxuries but at least I don't think you'll have to live under a bridge rooting through garbage or something.
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