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What is your Health Insurance budget now and going forward/
Old 02-08-2013, 08:30 AM   #1
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What is your Health Insurance budget now and going forward/

Just wondering about HC budget going forward. Since I just turned 65 and now on Medicare our insurance premiums have really dropped, My wife is now 63 so I still have two years before she goes on Medicare. Right now our monthly premium for both is $460 per month not counting prescriptions or office visits. DW deductible is $3800 per year. We currently only have one prescription between us which is $60 per month. I realize the prescriptions are what really cost you now since drug coverage is not that great. Going forward how due you budget? I do not think normal inflation charge is enough. Does anyone set a higher budget and if you do not spend it save it for the next year? When I first retired 3.5 years we paid $1150 per month plus!
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Old 02-08-2013, 08:54 AM   #2
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Right now my budget projection escalates medicare part B premiums and my retiree medical insurance premiums at 2x assumed inflation rate of 2.5% per year. I escalate dental and vision insurance premiums at 1x inflation rate. I budget the deductible and the maximum out of pocket at 1x inflation. In addition I budget and escalate at 1x the average out of pocket cost for non-covered health expenses.
Due to DW's disability we always spend the maximum out of pocket amount of $10k/year.
This is for family of 4.

Current budget:
DW Medicare Part B premiums: $ 1,762.80
Retiree Medical Premium: $ 4,044.00
Retiree Dental Premium: $ 642.72
Retiree Vision: $ 123.24
Medical Maximum out of pocket $10,000.00
Oth non covered $ 2,425.00
Total $18,997.76

When I go on Medicare, I expect the Retiree medical insurance premium to drop to about $1,700.00
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Old 02-08-2013, 09:00 AM   #3
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Right now, my HI premiums and flexible spending contributions combined are about $700 a month. We have very little out of pocket, that is until we run out of flexible spending $$$, which normally happens in the fall, and may be early summer this year since the limit went down this year.

My < 65 retiree medical premiums (as of now) are about $800 a month, and that's a much less generous HI plan than I have now. This is why I'm planning to w*rk until DH turns 65, which is ~5 years. He has a pre-existing condition which, as of now, makes it impossible for me to get anything on the open market.

My financial advisor thinks my employer premiums are high, particularly the retiree medical, and are hoping the next few years will bring opportunities for more competitive pricing.

We'll see what the future brings.
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Old 02-08-2013, 02:09 PM   #4
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The most expensive Medicare Supplement insurance in my state would be $3,300/yr for two people, both aged 65. Medicare Part B is about $2,400/yr for two people. I figure the two of them would cover about all our major medical expenses. (I actually buy the lowest priced MedSupp, but I should budget for deductibles and coinsurance.)

The MedSupp would be $6,700 this year if we were over 80, so that's a measure of how much the cost will go up due to aging only. Medical inflation is on top of that.

We also have dental, vision, an hearing aide (soon) expenses. I'm taking a wild guess at a total medical of $10,000 the first year we're both on Medicare.

I figure as medical expenses go up, we'll slow down and probably spend less money on other things (mostly travel).
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Old 02-08-2013, 05:36 PM   #5
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We currently pay $334/mo for healthcare ins. I'm on Medicare, my husband is not - yet. Next year he will be 65.

He has a HDHP with a $1400 deductible. I have a supplementary plan that is also HDHP. Since Medicare pays for 80% of most of my bills, I don't envision ever getting to the high deductible, but the ins, for me, is cheap at $56/mo. And it includes prescription coverage. We spend about $25/mo on his pres meds. I don't take any.

I am contributing the max to his HSA which we use to pay for LTCi premiums ($3800/yr for both of us).

I keep about $1000 in reserve for out of pocket expenses and am working to build that reserve up to about $2500.

I don't try to forecast further out than a year at a time. In Dec, when we find out what our premiums will be for the coming year, I sit down with the budget and figure it out then.
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Old 02-08-2013, 05:50 PM   #6
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To answer your question, I do not have a HC budget per se. I have an overall budget to include everything, per year.

Quote:
Originally Posted by golfersailor View Post
Going forward how due you budget? I do not think normal inflation charge is enough. Does anyone set a higher budget and if you do not spend it save it for the next year? When I first retired 3.5 years we paid $1150 per month plus!
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Old 02-08-2013, 06:14 PM   #7
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I am starting Medicare this year, and plan to take on Part B expenses which I gather is around $104.90/month.

The way my federal retiree health insurance works, is that we pay the same whether before or after Medicare. So, right now that is $186.14/month.

Total of these two is $3492.48/year. Then, I will have dental costs, an occasional pair of glasses, and my share of prescription costs, so I am thinking about $4500-$5000/year should cover everything as long as I am neither sick nor injured and probably even if I am. Being basically healthy that is unknown territory for me.

As for the increases in costs as I grow older, well, this is one of the reasons why I don't think I will be spending less in old age than I spend now. My spending will just shift from the "fun stuff" into medical costs and devices to help me cope with my diminishing health and capabilities.
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Old 02-08-2013, 06:19 PM   #8
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Using Fido's RIP, when setting a budget prior to ER I had $15k/year as a line item.

I've been keeping a close track of health spending (one of the few items I do track) and so far in 3 years of retirement the costs have been:

2010 $3.1k
2011 $3.7k
2012 $3.8k
2013 thru today is already $4.8k (includes 12 months of much higher premiums)

My costs include eye care and dental, but not OTC pills such as ibuprofen etc
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Old 02-08-2013, 06:27 PM   #9
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Having not turned 50 yet, I still sometimes catch myself thinking only in terms of meds and health which are very good, so costs are nothing. But even if that continues, one most always think of healthcare in terms of eyes, ears, and teeth, also. Those repair bills could send you to the hospital with a coronary by themselves. I hope the HSA limit rules do not change in 2014, because I will shovel the max in every year until 65 to pay for these inevitable costs.
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Old 02-08-2013, 06:32 PM   #10
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Quote:
Originally Posted by golfersailor View Post
... and if you do not spend it save it for the next year?
I didn't answer this in my response above. We spend what we save in healthcare, mostly on outdoor vacations to keep us fit.

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Old 02-08-2013, 06:38 PM   #11
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At 63 our combined Keizer health insurance is $1206/month. We go well beyond that in health & dental expenses each year and are grateful for the resources that allow us to do that.
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Old 02-08-2013, 07:14 PM   #12
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On an annual basis, I pay $1260 for Medicare Part B, $636 for a High-Deductible Plan F Medicare Supplement policy, and $222 for a Plan D (prescriptions) plan. So that's a total of $2118 annually in premiums.

Then I project a worst case scenario on my deductibles: $2110 for the Plan F and $325 for the Plan D policies. So that's a total of $2435 in deductibles before the insurance company actually has to start covering the 20% of expenses that Medicare does not, and begins covering some of the drug costs I might have.

That brings my total annual worst case scenario on the first $10,550 of health expenses -- if I get sick enough -- to $4553. After that, all my medical and hospital costs are covered. Prescription costs are something one can't predict.

I'm pretty happy with that setup. It sets up a $5000 per year cap on potential medical expenses for me (at age 65).

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Old 02-08-2013, 07:18 PM   #13
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My place of employment self-insures. As a soon-to-be retiree I can continue under the plan until age 65 if I pay half the premium. Using today's premium amounts, my share (i.e. half) is $2850 annually. Unfortunately, my employer just announced yesterday, that due to higher than normal claims last year, the premium will be increasing 16% in April 2013 (the month I intend to retire), thereby increasing my half to $3306.

I have enough in a 'slush fund' to deal with the increase and, hopefully, any future increases, such that the date of my ER is not affected.
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Old 02-08-2013, 08:53 PM   #14
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My budget is $20k ANNUALLY.
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Old 02-08-2013, 09:01 PM   #15
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Currently:

$479 a month retiree health insurance from DH's former employer covers the kids and me. This premium more than doubled from last year to this year! This is a high deductible plan with a $3000 deductible. Most of the spending on that is for the kids. My medical bills the last few years have been very low.

DH just went on medicare recently. We had some high withdrawals from the IRA the last 2 years related to the sale and purchase of property which means he has to pay the higher income premiums for this year and next at which point those should go away. His supplement (Plan F) is about $149 a month. His retiree coverage pays his prescription door plan. He doesn't take much medication so I don't really expect him to have much out of pocket except stuff that isn't covered such as glasses.

Retiree dental is $39 a month. Has a relatively low annual maximum which we occasionally exceed but most years don't.

I can stay on DH's retiree coverage until I'm 65 and the kids till they are 26. Of course, I guess at some point with the new law next year that could impact this. I won't be eligible for Medicare for another 6 years or so (assuming no changes in law).
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Old 02-08-2013, 09:19 PM   #16
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$6500 a year here. I am on Medicare but my wife has one more year. Mine has been great. I have been to many doctors in the last 6 months and so far not paid anything. I have United Health Care Supplement and the wife BCBS. I also included what SS takes from my check which I think is $104.90 .Oldtrig
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Old 02-08-2013, 09:28 PM   #17
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Here in Ohio, our HDHP/HSA annual premium for 2013 is $4,300 with an $11,000 deductible for me (52), DW (61), and DS (18). The premium was $3,300 in 2011 and $3,670 in 2012).

So we budget $14,300, but we only paid $3,600 OOP in 2011 and $460 OOP in 2012, so the actual spending is much lower. Still, if something happens then we'll be fine - especially since we've built up our HSA nicely.

Sadly, there's a fair chance that this type of plan will be killed off. But we're hopeful it stays around in a somewhat recognizable form.

We pay dental out of pocket (we even did this when offered dental "coverage" back before retirement because we had been paying more for the coverage than if we had paid for the biannual visits directly).
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Old 02-09-2013, 09:24 AM   #18
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FWIW, the SmartMoney Retirement Calculator lets you specify different rates of inflation for some categories (including medical expenses). See the Advanced Settings.
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Old 02-09-2013, 09:40 AM   #19
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Our current annual budget for health care insurance coverage (for 2 people) is $7,900. Our budget for health care expenses not covered by insurance is $4,000. I am 61 yrs old and my DH is 60.

We both retired 3 years ago, and my DH was unable to get private health insurance because of his pre-existings, so he went back to school and is covered under the university's student health care insurance. Taking just enough credit hours to keep the insurance coverage he will end up with a second master's degree and second PhD (both in digital forensics) by the time he gets on Medicare in five years. Even though he will be able to purchase health insurance in 2014, we are guessing that the cost will probably be more than what we are paying for his current coverage, including the college tuition.
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Old 02-09-2013, 10:15 AM   #20
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I am still in my 40's and single. My budget line item for health care is $6.5K which covers both my planned HDHP/HSA annual premium (currently on employer plan but have checked rates recently) and deductible, if needed, for next year. I am taking the budgeting one year at a time, adjusting as needed.

I plan to spend the remainder on travel if not used to cover the deductible.
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