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What's Your Ratio of Health Care Expenses to Income?
Old 01-27-2016, 03:48 PM   #1
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What's Your Ratio of Health Care Expenses to Income?

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?
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Old 01-27-2016, 05:09 PM   #2
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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.
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Old 01-27-2016, 05:11 PM   #3
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1-2% for two of us, but we live in Canada. I am 65 DS is 58.
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Old 01-27-2016, 05:21 PM   #4
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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.
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Old 01-27-2016, 05:42 PM   #5
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0.15%
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Old 01-27-2016, 05:47 PM   #6
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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.
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Old 01-27-2016, 06:02 PM   #7
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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.)
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Old 01-27-2016, 06:21 PM   #8
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Roughly 10% for me.
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Old 01-27-2016, 06:51 PM   #9
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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.
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Old 01-27-2016, 06:59 PM   #10
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0.15%
either you have a ton of income or almost no medical expenses. 99.85% goes to non-medical expenses.
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Old 01-27-2016, 07:01 PM   #11
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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!
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Old 01-27-2016, 07:16 PM   #12
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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.
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Old 01-27-2016, 08:37 PM   #13
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Just very good coverage. Thanks ACA!
Yeah.....thanks ACA.
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Old 01-27-2016, 08:39 PM   #14
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On COBRA: something like 17%, but cheaper than using ACA with better coverage.
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Old 01-27-2016, 08:40 PM   #15
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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.
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Old 01-27-2016, 08:52 PM   #16
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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%
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Old 01-27-2016, 09:03 PM   #17
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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.
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Old 01-27-2016, 09:33 PM   #18
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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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Old 01-27-2016, 10:18 PM   #19
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Old 01-27-2016, 10:57 PM   #20
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Average over the last nine years has been 14% of spending.

Target for this year is 9%.
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