What's Your Ratio of Health Care Expenses to Income?

[ocdokie]

DH and I both retired in 2010 (he was 59, I was 52). Since then, our health care expenses -- consisting of insurance premiums, deductibles, doctor visit co-pays, lab tests, and drugs -- i.e., our out-of-pocket costs, have held steady at 33% of income.

DH goes on Medicare this year, and from estimates given him by Medicare.gov, it doesn’t look as if our health care expenses will diminish much, if any. I am curious whether other ER board members’ health care expenses changed -- or didn’t -- once Medicare kicked in. Anyone want to share their experience?

 

[W2R]

In my case, I don't have dental or optical insurance but I included those expenses too because it's all health to my way of thinking.

In June of 2013 I went on Medicare and kept my federal retiree BCBS Standard.
In June of 2014 I went on SS, increasing my income.

My health expenses including everything you mentioned, plus dental & optical, has been:

2012: 10% of income
2013: 21% of income
2014: 10% of income
2015: 16% of income
AVERAGE: 14% OF INCOME

As you can see, it varies wildly from year to year depending on my health that year. Some years nothing much happens, other years are not so good. Medicare has been helpful but my health hasn't cooperated.

 

[Danmar]

1-2% for two of us, but we live in Canada. I am 65 DS is 58.

 

[aaronc879]

In 2015 my total healthcare costs were $700 in premiums and $500 MOOP for a total of $1200 thanks to a heavy subsidy and cost sharing. My AGI was ~$14,000 so that's around 8.5% going to HC.

 

[jim584672]

0.15%

 

[hnzw_rui]

DH and I both retired in 2010 (he was 59, I was 52). Since then, our health care expenses -- consisting of insurance premiums, deductibles, doctor visit co-pays, lab tests, and drugs -- i.e., our out-of-pocket costs, have held steady at 33% of income.

Yikes, I'm pretty shocked to see percentages that high.

Still working and covered by employer insurance plan so mine is 1.7% of AGI or 1.4% of gross income (pretty much just my FSA contributions). I reckon 80% of the FSA was used for dental and eyeglasses.

 

[M Paquette]

Yikes, I'm pretty shocked to see percentages that high.

Still working and covered by employer insurance plan so mine is 1.7% of AGI or 1.4% of gross income (pretty much just my FSA contributions). I reckon 80% of the FSA was used for dental and eyeglasses.

Don't be. That's pretty typical of the pre-ACA cost for early retiree families.

Our rate ran 25-30% for several years, for a family of three. Careful use of a Health Savings Account helped, by making all non-insurance expenses immediately deductible as the HSA contribution for the year, and if we qualify for the ACA subsidy that takes the cost down substantially. If we qualify for the subsidy this year the cost for insurance and medical care (including the HSA contribution, which will be mostly spent) should run about 13% this year. Without an ACA subsidy, but including the full HSA contribution the cost should run about 34% this year.

(The mathematically inclined can reverse-engineer our MAGI from that. Yes, the year's insurance premiums are a fifth of our MAGI.)

 

[Dawg52]

Roughly 10% for me.

 

[athena53]

About 10%. A realtor friend who had to liquidate much of her 401(k) to survive the financial meltdown said becoming Medicare-eligible was "a godsend".

I think DH and I pay about the same in premiums- he has Medicare plus a supplement and I have a private BCBS policy- but I've got a $5k deductible. Huge coverage difference.

 

[bingybear]

0.15%

either you have a ton of income or almost no medical expenses. 99.85% goes to non-medical expenses.

 

[jim584672]

either you have a ton of income or almost no medical expenses. 99.85% goes to non-medical expenses.

Just very good coverage. Thanks ACA!

 

[lemming]

Less then 7.5% which is when expenses can beused as an itemized deduction.
*now 10% for those under 65
Consider getting a medicare supplement policy if you have a lot of on going medical issues.

 

[Dawg52]

Just very good coverage. Thanks ACA!

Yeah.....thanks ACA.

 

[Options]

On COBRA: something like 17%, but cheaper than using ACA with better coverage.

 

[NYEXPAT]

0 for me (62)
0 for wife (34)
2 children 10 and 10 months, HC runs about .018 percent of income.
We live in Peru and have free insurance which we do not use. Wife works at an Internationally recognized private clinic but I do not go to doctors (never sick).
My children have Cadillac health plans in case of cancer, transplants etc but for routine stuff they get treated for free by the countries leading pediatricians.

Other than a few grand to Dentists over the past 20 years, I have not spent a penny on Doctors or insurance or condoms for myself and nothing to speak of on my Wife of 11 years. I guess I could be terminally ill or worse and not know it.

 

[nun]

I get my insurance from my ex-employer..it's "Cadillac" for in network and has a $2k/$5k setup for out of network doctors.

Premiums/MAGI = 44%

After application of the premium assistance checks I get.

(Premiums - assistance checks)/MAGI = 6%

When my retiree pension and health insurance starts the premium assistance checks will stop, my premiums will be reduced and my income will go up and

Premiums/MAGI = 4%

 

[rodi]

Premiums plus OOP in a very expensive year - 27%
But I'm getting back a chunk of the premiums in the form of tax credits/tax refund. That brings it down to 18%

I'm hoping this coming year is less... I've made it 27 days in with no kids hospitalized, broken bones, etc. I think at this point last year I'd had a hospitalization of one kid, and a broken elbow on the other. Knock wood.

 

[Mulligan]

Until Obamacare kicked in and dropped me from my underwritten plan, I actually made money every year in retirement on health insurance due to HSA deduction. This past year with new plan medical expenses were about 4% after HSA deduction. All of it was premiums with no medical costs. Not on Medicare yet....


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[Fedup]

About 4-5%


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[braumeister]

Average over the last nine years has been 14% of spending.

Target for this year is 9%.

 

[Bryan Barnfellow]

Results for this poll are a bit different here in Switzerland, but for the record (based on gross income):

11.1 % Health Insurance for 2 of us (300 Swiss francs deductible each for doctor visits, tests,
all meds, and 6,500 hospitalization deductible)
1.1 Co-pays
------
12.2 %

We also reserve 1.6% annually to self insure dental expenses.
Note: Health insurance at basic level is mandatory for everyone here. However, it is paid throughout one's life by each individual. No government program, except subsidies for those falling below minimum incomes.


-BB

 

[Golden sunsets]

5.9% of income here not including interest, dividends and Capital gains. Not including LTC premiums which is another chunk I lump into a different category. We are both on Medicare with OPM subsidized BCBS Basic as secondary plus dental and eye. Occasionally that percentage goes out of whack if a dental implant or crown is needed. Normally we have no OOP, so the % is for premiums only. That percentage will drop to 4.7% when I finally claim SS at 70. Still it's quite a lot of money despite heavy OPM subsidy.

 

[pb4uski]

23.4% of income (interest, dividends and capital gains).... 5.8% of tax return income (including Roth conversions).

 

[John Galt III]

for 2015, my premiums were $20.32 per mo times 12 = $243.84 for the year. Deductible was $100 all of which I used, so add $100 to $243 = $343.

Add in eight $5 copays which is $40, and I get $383 annual medical expense.

Never got close to my max oop of $500, luckily.

Income was engineered up to $15,300 with Roth conversion both to avoid Medicaid and to qualify for a subsidized ACA policy.

$383 / $15,300 = 2.5 %

If I were brave enough to go on Medicaid I suppose I'd be right in around 0.1 %.

 

[Tom52]

Last year total expenses for medical, dental, prescriptions, contacts, insurance premiums was approx. 8% of all income due the fact that we had very little in expenses. Unfortunately, we have a high deductible plan thru ACA that has about a $13,000 annual deductible. If we would happen to have any kind of hospitalization stay with this insurance, the percentage would jump to more like 40% of yearly income. That is real scary so we are doing our best to stay healthy. Thank goodness that Medicare is 2 years away for me and 3 years away for DW.