Healthcare costs when transitioning to Medicare

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tapper

Recycles dryer sheets
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imoldernu had the following comment in a recent post:
imoldernu said:
Age 53 to age 65 was tough from the health insurance angle... Even then, before medicare kicked in @ age 65, we paid about $11,000/yr... BTW... medicare is not free... we still pay about $8,000/yr (2 persons) for medicare and supplement, and another thousand for basic Pharma.
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I was interested in other people's experiences with healthcare costs when transitioning to Medicare.

At age 46 our health insurance last year was $10227, dental insurance was $1670, and out of pocket expenses were $6891 which produced a total health care expense of $18788. It sucks having a couple members of the household being chronically ill with no one knowing what causes the diseases and no one knowing how to cure them.

Anyway, since healthcare is a large part of my budget I'm trying to get a grasp on how going on medicare will affect the total. This will hopefully allow me to better model my healthcare spending.
 
I RE'd last December at age 56. DW is 56 as well. When I RE'd I set up an LLC for any consulting that I might do. The LLC joined our local chamber of commerce and the state chamber of commerce offers a small group health insurance program through BC/BS. We have a high deductible health insurance plan ($5,950 each) and pay ~$6,700 a year in premiums (for me and DW) and also get access to BC/BS negotiated rates with local docs and hospitals. This was about 40% less than what I had in my retirement budget (which was based on MegaCorp's COBRA) and about 25% less than individual plans with similar deductibles, so all-in-all it has been a pleasant surprise but only because I was so conservative in my retirement budget.

In addition we also have dental coverage via COBRA for ~$840 a year but will probably drop that once DW gets a crown she needs put in.

Medicare will still be costly. I have a great-aunt in a nursing home and I handle her finances and between Medicare, Medigap and prescription drug coverage premiums she pays about $4,800 a year (for one person).
 
Medicare is about $1200/yr. Medigap/Rx plan can be $1800/yr or more or less for total of 3K/person or more/less. If you have a Medicare Advantage plan instead, cost now could be the Medicare cost alone in a few areas tho that could change w/ the new health laws.
 
tapper said:
I was interested in other people's experiences with healthcare costs when transitioning to Medicare.

At age 46 our health insurance last year was $10227, dental insurance was $1670, and out of pocket expenses were $6891 which produced a total health care expense of $18788. It sucks having a couple members of the household being chronically ill with no one knowing what causes the diseases and no one knowing how to cure them.

Anyway, since healthcare is a large part of my budget I'm trying to get a grasp on how going on medicare will affect the total. This will hopefully allow me to better model my healthcare spending.
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DW and I are looking at health insurance cost as she turns 65 this year with me following next year. And we are finding out that the "raise" that we were hoping for when we go on Medicare just is not there. We are currently paying almost $1k/month for Medical COBRA and retiree dental and vision for both of us. When DW goes on Medicare with supplemental plan and the lowest cost prescription plan D, and I continue on COBRA, and we continue to carry our retiree dental and vision, our cost drops to $815/month. And then, when I go on Medicare next year, our insurance cost will go down to $645/month. It is lower than the current 1K/month, but not what I hoped for. Now, that is just the insurance cost. Prescription, dental and vision deductibles are additional expenses.

There is a period between my COBRA running out and my Medicare qualification that I will have to look for an individual health insurance. Our health insurance cost will then exceed $1K/month.
 
tapper said:
At age 46 our health insurance last year was $10227, dental insurance was $1670, and out of pocket expenses were $6891 which produced a total health care expense of $18788.
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Just curious. How much would you normally be spending on dental expenses without dental insurance? This sounds like a high, unsubsidized premium cost. It's been my experience that dental insurance not subsidized by an employer is usually a bad deal, especially given the usual low annual maximum benefit. Now if you have a chronic dental or periodontic condition that costs $1000 a year to manage, it might be effective, but not in most typical cases.
 
ziggy29 said:
Just curious. How much would you normally be spending on dental expenses without dental insurance? This sounds like a high, unsubsidized premium cost. It's been my experience that dental insurance not subsidized by an employer is usually a bad deal, especially given the usual low annual maximum benefit. Now if you have a chronic dental or periodontic condition that costs $1000 a year to manage, it might be effective, but not in most typical cases.
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In 2011 the dental charges were $3193 of which we paid $912 so insurance covered $2281 through direct payments and discounted pricing. 2010 was similar and 2012 should be similar as well. The DW has been having some dental work done lately trying to maximize our insurance benefits.

The coverage is for two adults and one child.
 
If you are served by Kaiser Perm. NW they offer an excellent Medicare Advantage Plan with the option of dental coverage if you sign up for dental coverage initially. I think they are the only Kaiser region with a dental practice.

I am a retired Federal employee and am in OPM's health insurance program. The total cost of Medicare Part B + OPM health insurance family coverage + dental insurance for 2 exceeds Medicare Part B + Kaiser NW Medicare Advantage with dental insurance for the both of us. In theory I can request a suspension of my OPM health insurance program if I go that route but until I know that suspension is viable I won't risk it.
 
If I wait 4 more years I can get a non deductible policy through what would the be my ex employer for the same cost as current employees. Right now I pay $ 100/month. If I was to ER right now I could get a 2k/5k plan for $400 a month and be guaranteed coverage as I live in MA. Finally I could move back to the UK and pay nothing for NHS care.
 
You are paying for health care in the UK via their various taxes. Nothing is for free.
 
Brat said:
You are paying for health care in the UK via their various taxes. Nothing is for free.
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It's free at the point of service.......also my tax bill will be less in the UK than in the US, so that route would be a win win for me.
 
If I could take advantage of such a situation I would do so.
 
I’m in my 50s, buying individual BlueCross insurance (“Blue Options HSA") for $240/month with max annual out-of-pocket $5,000. It doesn’t really cover anything, most of my healthcare bills go “against my deductible”. Besides “deductible”, they also use other BS terms designed to confuse, such as “co-pay” and “co-insurance”. The care is inferior and I’ve noticed incredible arrogance among healthcare providers, hospitals and insurance people. In theory I’m also covered while I’m in Europe but “out of network” costs would be much higher, I’d have to pay everything out-of-pocket and file complicated paperwork to get my money back. My alternative: go back home to Canada where healthcare is much better and free. I’m giving this another year, hoping that healthcare reform fixes things.
 
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Free_at_49 said:
....In theory I’m also covered while I’m in Europe but “out of network” costs would be much higher, I’d have to pay everything out-of-pocket and file complicated paperwork to get my money back.
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I am also with a BCBS PPO and before I went to the UK last year for an extended stay, I called and they told me that I'd be covered and need to pay first unless I went to one of their network providers. I was able to go on the BCBS website and put in the city I was going to be staying in and it gave me hospitals close by that would take my insurance. Fortunately we did not have the need to see how it worked.
 
Medicare Costs

One more provision of the Affordable Healthcare Act that's not getting much press:

"The per person Medicare Part B insurance premium will increase from the present monthly fee of $96.40, rising to $104.20 in 2012, $120.20 in 2013, and $214.00 in 2014"

[mod edit]
 
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Not yet retired. Also worry about the gap b/t ER and Medicare more than affording a supplemental to Medicare or Medicare changes. If I understand HSA's correctly, you can shelter money from taxes on monies not generated from work (ie, dividends, withdrawal from tax deferred accounts, etc). If the Affordable Care Act does not change this, it would seem that a high deductible plan with an HSA would be a good option?
 
Notmuchlonger said:
Ha! Yeah I was amazed at the basic costs for thing when I visited.
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I've done a detailed comparison between my ER costs in the US and the UK. My total tax bill in the UK would be slightly less assuming my income level is around $40k a year. Those UK taxes would also be used to fund the NHS, and I would have no "out of pocket health care" costs. So if I were to ER in the UK I would save the $400/month premium I'm budgeting for health insurance prior to Medicare. Also I would ER to a place in England well outside of London (the capital is very expensive) and even with the UK's value added tax the cost of living looks as if it will be lower than I have in New England.
 
Health care costs are exploding. I started getting health insurance in 2001 for under $100/month. That same policy, this year, when I am 64 is $827/month. So extrapolating OP, it looks like your health care costs could well be in the $100,000/year range when you get to be 64. This is of course crazy. I expect the health care system to break down in a few years because of these financial issues.
 
GlennN said:
One more provision of the Affordable Healthcare Act that's not getting much press:

"The per person Medicare Part B insurance premium will increase from the present monthly fee of $96.40, rising to $104.20 in 2012, $120.20 in 2013, and $214.00 in 2014"

[mod edit]
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And the reason the above information isn't getting much press is that it isn't accurate: snopes.com: Medicare Premium Increases
 
Well, we know the Medicare Part B premium this year is $99.90, it can be seen here Medicare Part B premiums for 2012 lower than projected, so the claimed 2012 number is incorrect. The 2013 premium won’t be announced until late October, and of course the 2014 premium a year after that, so no one can know what the premium will be.

Some people (around 5%) already pay slightly higher premiums due to income means testing. Medicare calls this “Income Related Adjustment”. It was expanded as part of the PPACA. The numbers for 2012 can be found here MEDICARE PREMIUMS AND DEDUCTIBLES FOR 2012 It kicks in when couples declare AGI above $170K, single filers above $85K.

There are many changes brought about by the PPACA. I find the best place to check them is at the Kaiser Family Foundation Implementation Timeline - Kaiser Health Reform
 
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