Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
How do you plan for change in Medicare?
Old 04-30-2011, 07:23 AM   #1
Dryer sheet aficionado
 
Join Date: Dec 2010
Posts: 37
How do you plan for change in Medicare?

Ok, I know this is WAY early and we don't know what will happen. But, I'm under 55 and one plan being kicked around would give me some amount of cash so I could "buy" my own health insurance instead of getting Medicare. So, now I'm thinking - gee how much money do I need to put into my retirement planning spreadsheet to cover the difference every year.

I certainly understand and applaud the efforts to reduce the deficit. And I'm willing to do my part. Of course, it's a lot easier if it doesn't affect me personally .
__________________

__________________
lark_L is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-30-2011, 07:51 AM   #2
Dryer sheet wannabe
 
Join Date: Jun 2009
Posts: 12
I think this blog post sums up my view

"I don't want to be left out, so here's my 2 cents: Boomers -- those are the people born between 1946 and 1964 -- are about 75 million strong. Unlike other segments of the population, they vote. That gives this proposal a snowball's chance on a July day in South Florida of passage."
__________________

__________________
Forrest is offline   Reply With Quote
Old 04-30-2011, 09:22 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,815
When I retired, I thought of the story about zebras and lions. To survive, a zebra doesn't have to be faster than the fastest lion. It's good enough to be faster than the slowest zebra.

So my thought was that the voters aren't going to let massive numbers of old folk die for the lack of normal medical care. I needed to have more money than the average retiree, so whatever the gov't does for the average will be good enough for me.

Of course, it's possible that I don't want to have a lot more than the average retiree because I don't want to lose too much to some future means test. But I assumed I could always find a way to spend that "extra" money if I saw that coming. I ended up retiring a little early (at 59) when we could comfortably spend more in retirement than we had while working, but not so much more that we'd end up wasting a lot.

In numbers, I thought that current Medicare enrollees spend about $5,000 per person per year on premiums and out of pocket expenses. If we planned for twice that we'd be okay.
__________________
Independent is offline   Reply With Quote
Old 04-30-2011, 10:01 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
It really depends on the changes that will be made.

Plan for your personal worst case scenario.

For majority of people that is the republican plan.

If you are rich... it is the dem plan... consider the higher taxes.


Either way... if you are middle class, the cost will go up one way or the other.
__________________
chinaco is offline   Reply With Quote
Old 04-30-2011, 11:01 AM   #5
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,428
Medicare or not, you should plan to pay for your own unsubsidized health care.
__________________
MichaelB is online now   Reply With Quote
Old 04-30-2011, 11:18 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by MichaelB View Post
Medicare or not, you should plan to pay for your own unsubsidized health care.
Which works out to be $11,743 per Medicare recipient annually, on average, according to the 2010 Medicare Trustee Report.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 04-30-2011, 11:24 AM   #7
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,428
Quote:
Originally Posted by Gone4Good View Post
Which works out to be about $10,400 per Medicare recipient annually, on average.
That sounds about right - as in the average unsubsidized yearly premium for a 65 year old.
__________________
MichaelB is online now   Reply With Quote
Old 04-30-2011, 11:52 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,382
Quote:
Originally Posted by MichaelB View Post
Medicare or not, you should plan to pay for your own unsubsidized health care.
Impossible in America, without great wealth.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 04-30-2011, 11:54 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,815
Quote:
Originally Posted by MichaelB View Post
Medicare or not, you should plan to pay for your own unsubsidized health care.
Quote:
Originally Posted by Gone4Good View Post
Which works out to be $11,743 per Medicare recipient annually, on average, according to the 2010 Medicare Trustee Report.
If I understand MichaelB's post, his numbe would be G4G's $11,743 plus the deductibles and copays that Medicare doesn't cover.

I'm not so cautious as to plan for the full amount. I figure the taxpayers will pick up some of my expense.
__________________
Independent is offline   Reply With Quote
Old 04-30-2011, 12:20 PM   #10
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by Gone4Good View Post
Which works out to be $11,743 per Medicare recipient annually, on average, according to the 2010 Medicare Trustee Report.
There's been a year and a half of medical inflation since then, and that's the group rate Medicare gets. Worst case is individual insurance, perhaps with the Ryan Plan subsidy as a 'worst case' Medicare defined contribution. In our region, a high deductible non-Medicare individual HMO plan for persons 65 and older runs $1054-1220 per month (Jan-June 2011 rates) with a $5000 deductible. It is HSA eligible so there's a place to put all that income from greeting folks at WalMart.

Figure $5000 deductible, plus $14,000/year inflated over the period til retirement at the medical inflation rate. I use 7.5% annually, which over 10 years puts the annual cost up to $29K/year. From that, subtract the basic Medicare A allocation of $4,800/year adjusted by GDP growth + 1% annually (call it 4%), which would be $7,100/year, as a possible level of Medicare subsidy for individual insurance.

That gives you a worst case target of $21,900/year + $5000/year deductible, or $26,900/year in personal obligation anticipated for a person currently age 55. A lot can happen in 10 years, and Medicare reforms may not shift quite as much cost onto individuals as the current 'worst case' (in terms of increased Medicare recipient financial burden; I realize some view this as a best case) proposal.
__________________
M Paquette is offline   Reply With Quote
Old 04-30-2011, 01:13 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by haha View Post
Impossible in America, without great wealth.

Ha
Everyone else should have worked harder.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Old 04-30-2011, 01:29 PM   #12
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,428
Quote:
Originally Posted by haha View Post
Impossible in America, without great wealth.

Ha
The cost is already there, and it is being paid by someone. When I think about scenarios, I assume our eligibility for Medicare will be at full rates with no subsidy, even though that option does not exist today. Anything additional to that (such as subsidy for others) will be paid through taxes.

We are all paying these rates today. The biggest subsidy is not in medicare, it is in untaxed healthcare benefit.
__________________
MichaelB is online now   Reply With Quote
Old 04-30-2011, 04:40 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,382
The biggest problem with our medical delivery system is not distributing the astronomical costs, it is that no politicain has the balls to chop some of those costs. And not just by denying care. The rest of the develpoed world manages this just fine, why not the land of the free and the home of the brave?

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 04-30-2011, 04:42 PM   #14
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,037
Without Medicare, what would a 70 year old at the onset of alzheimer pay for health insurance on the private market? As Ha said, unless one has great wealth, the cost would be prohibitive.
__________________
FIREd is online now   Reply With Quote
Old 04-30-2011, 06:48 PM   #15
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
I find it interesting that so many Obamacare supporters are up in arms about the Ryan-Rivlin proposal, which assumes that those on Medicare would take the "cash" and buy guaranteed-issue insurance from an exchange. Yet, this is precisely how Obamacare will work starting in 2014.

Additionally, it is also interesting that so many Obamacare opponents are in favor of converting Medicare to a subsidized exchange-based system.

We are headed toward "Obamacare for all".
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Old 04-30-2011, 06:49 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,878
Quote:
Originally Posted by haha View Post
........ The rest of the develpoed world manages this just fine, why not the land of the free and the home of the brave?

Ha
I'm surprised that this subject has never been discussed here.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 05-01-2011, 06:15 AM   #17
Dryer sheet aficionado
 
Join Date: Dec 2010
Posts: 37
Thanks for the responses. Gives me a lot to think about. With early onset alzheimer's common in my family and my wife's recent bout with cancer, it's pretty scary out there. Of course, I can always work a few more years and bank some more $$.

I was already planning on $1000/mo, as that's almost what my retiree medical costs. I didn't have this dropping off the plan. So, I may bump this up a bit. Thanks.
__________________
lark_L is offline   Reply With Quote
Old 05-01-2011, 06:50 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Quote:
Originally Posted by MichaelB View Post
Medicare or not, you should plan to pay for your own unsubsidized health care.

Ok... put back your $2mm health care reserve (i.e., some huge amount) so you can be self insured.

Without medicare... insurance companies would not insure you... because the older you get the higher risk of needing care (cost burden). You would have no access to the insurance pool.

If you got insurance at an older and got sick.. they would probably cancel your policy (not renew it)... you might get into a state high risk pool after a waiting period.

The problem: The American Private Insurance model (as it currently works) does not work for many people. No company has to insure you.
__________________
chinaco is offline   Reply With Quote
Old 05-01-2011, 07:48 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by FIRE'd@51 View Post
I find it interesting that so many Obamacare supporters are up in arms about the Ryan-Rivlin proposal
I agree. If Ryan and the Republicans are now in favor of guaranteed issue health insurance, with all that entails (proscribed coverage minimums, subsidies, and an individual mandate) then they should be willing to accept the framework for 'Obamacare' and work to improve it - rather than working to repeal and defund it.
__________________

__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Ryan-Rivlin Plan for Medicare & Medicaid Reform M Paquette FIRE Related Public Policy 127 04-07-2011 10:42 AM
Abandoning HSA, Considering Plan Change TromboneAl Health and Early Retirement 11 02-12-2010 08:48 PM
How to find the best Supplemental Medicare Plan? Orchidflower Health and Early Retirement 6 04-22-2009 09:49 PM
Medigap or Medicare Advantage Plan? modhatter Life after FIRE 1 04-30-2006 07:54 PM

 

 
All times are GMT -6. The time now is 09:26 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.