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How much is lifetime medical worth?
Old 10-28-2007, 07:57 AM   #1
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How much is lifetime medical worth?

As a federal employee, I will qualify for lifetime medical in two years. My BC/BS premiums will be the same in retirement as they are for government employees who are still working, and when I get Medicare Part A, that Medicare will be primary and my lifetime BC/BS will be secondary. Medicare Parts B and D are considered to be pretty much redundant so I would not get them. I believe that currently Part A is free. I am 59 and at age 61 I can retire with lifetime medical.

The petty bickering and office politics at my job are stressing me out a whole lot (and the other type of politics just adds to the mix, ugh). Guess I am getting "short" (a short-timer). I am wondering if it is even worth working for the next two years. I am eager to get out of the working world. Right now I am enjoying a three-day weekend and I am dreading going back in tomorrow.

I would have enough money to ER right now, though with the U.S. medical system so "up in the air" I have no idea what I would be getting myself into, as far as insurance premiums from 59 to 65 or even Medicare after 65. If I did not have the lifetime medical, at 65 I could get Medicare Parts B & D instead (if it still exists).

So how much is lifetime medical worth to you? How much money would you trade for lifetime medical of this sort?

I probably will do the "sensible thing" and not retire now, but I would sure feel stupid if it turns out that I could have done so.

I do have about six weeks of vacation time accumulated so maybe I just need a vacation.
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Old 10-28-2007, 08:09 AM   #2
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I don't know what lifetime medical would be worth in $, but I'm sure it would be a significant amount. What do know is it would be worth a lot to me in terms of the peace of mind/sleep at night factor. Even though it goes against my philosophy to recommend to someone who is probably FI to continue working, you are so close to getting lifetime medical it seems a shame to pull the plug now.

However, if continuing to work will ruin your mental/physical health, the medical coverage isn't worth it.

Doctor REW recommends you take a two week vacation and call the forum once you return.
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Old 10-28-2007, 08:13 AM   #3
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I don't know what lifetime medical would be worth in $, but I'm sure it would be a significant amount. What do know is it would be worth a lot to me in terms of the peace of mind/sleep at night factor. Even though it goes against my philosophy to recommend to someone who is probably FI to continue working, you are so close to getting lifetime medical it seems a shame to pull the plug now.

However, if continuing to work will ruin your mental/physical health, the medical coverage isn't worth it.

Doctor REW recommends you take a two week vacation and call the forum once you return.
ROFL!!! Thanks for the good advice. Frank and I are planning to take a ten day vacation over Thanksgiving anyway (have already got the time off approved). We are tentatively planning to drive up to our planned ER location and spend the time there. Maybe I will feel better after that. If not, I can use some more leave over Christmas.

My job is really better than most. I am just extremely tired of working and dealing with the BS. The other thing is that although I could afford to retire now, the extra $$$ that would accumulate over the next two years would provide a nice cushion and some small luxuries.
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Old 10-28-2007, 08:36 AM   #4
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It depends a lot on the details. What are the copayments and deductibles? Is it only until age 65, or are there continued benefits after 65? How much of the cost do you have to share in premiums (presumably deducted from the pension)?

If you're healthy, you could price individual policies with roughly the same copay/deductible parameters and use that as a rough estimate (perhaps increasing by 5-6% a year moving forward to account for real health insurance inflation), at least until you turn 65. At age 59, it's probably worth around $5,000 a year for a healthy individual with no "red flags" that would make private insurance more costly or unobtainable, maybe more if it's very comprehensive and low-deductible -- and definitely more if you have conditions that would be very expensive to insure on the individual market.
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Old 10-28-2007, 09:09 AM   #5
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It depends a lot on the details. What are the copayments and deductibles? Is it only until age 65, or are there continued benefits after 65? How much of the cost do you have to share in premiums (presumably deducted from the pension)?

If you're healthy, you could price individual policies with roughly the same copay/deductible parameters and use that as a rough estimate (perhaps increasing by 5-6% a year moving forward to account for real health insurance inflation), at least until you turn 65. At age 59, it's probably worth around $5,000 a year for a healthy individual with no "red flags" that would make private insurance more costly or unobtainable, maybe more if it's very comprehensive and low-deductible -- and definitely more if you have conditions that would be very expensive to insure on the individual market.
The co-pays and deductibles are the same as for federal employees, depending on the plan selected. I selected the most expensive BC/BS plan offered, which has a $15 co-pay for doctor visits and (I think?) a $250 deductible when the co-pay doesn't apply. It's either $200 or $250. I also have a drug card so I pay 20% for prescriptions. For this, I pay $58 bi-weekly, which would be $126/mo. After 65, the payments and benefits are the same but Medicare Part A is the primary.

My health has been good but I am on Vytorin for high cholesterol and triglycerides, and I am fighting off diabetes, high blood pressure, and similar problems that are age, weight, and stress related. The last time I went to my doctor I had been "knocking myself out" at the gym for six months, and trying unsuccessfully to lose weight, and all my blood values and BP were under control and satisfactory to my doctor (barely). But I know that if I just let things slide, I would be in big trouble really fast.

I would imagine that once you get a private insurance policy, if your health declines then they raise the rates (?) Or do they have to continue at the same rates? $5000/year is a lot. That would be $417/mo. Ugh.
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Old 10-28-2007, 10:49 AM   #6
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The good thing about lifetime medical thru the government is they can't cancel you and the service and prices are great as compared to buying it on your own .I have heard real horror stories from my friends late 50's early 60's about the cost of their medical .I think $5,000 is a low estimate for what the goverments blue cross / blue shield offers .
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Old 10-28-2007, 11:00 AM   #7
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Yeah I just got done watching Sicko (Michael Moore) and while I'm not so sure about socialized medicine, Private Insurance policyholders seem to get screwed more.
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Old 10-28-2007, 11:08 AM   #8
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Yeah I just got done watching Sicko (Michael Moore) and while I'm not so sure about socialized medicine, Private Insurance policyholders seem to get screwed more.
No, private insurance policyholders pay their way. Government and employer paid policies are subsidized by the employer. There is no way an individual could buy a $250 deductible policy that WTR has for the price she pays.

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Old 10-28-2007, 11:44 AM   #9
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The petty bickering and office politics at my job are stressing me out a whole lot (and the other type of politics just adds to the mix, ugh).
You're asking how much insurance coverage is worth in dollar terms, but if you're really stressed, you might want to ask a different question. How much does chronic stress cost you in terms of health?

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Old 10-28-2007, 01:27 PM   #10
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I can't directly answer the 'cost' question, you probably actually need to go cost it out for yourself and your situation, and consider a high deductible policy.

But, I agree with the others - if you are stressed out enough that this is weighing on you, use that vacation time! What are you saving it for?


About a year prior to my ER, the company issued a 'use it or lose it' policy for banked vacation. I had quite a bit, so I just started working it off. The policy change was the push I needed.

It was great - take off a week each month for a few months. It's a bit easier facing the grind knowing that in just a few weeks I would be off for a solid week again, and that would repeat for a while.

Or take off every Friday for a month, and make one of those a Thurs/Friday. That gives you 5 days off in four weeks. That's like a holiday weekend every week of the month. It took a huge load off. You could do that for six months! So nice to say, well, I would be in for that meeting on Friday, but you know I HAVE to use this vacation!

Worst case, you had an easier 6 months, got six months more savings and then you are out of there. Or, it helps you to hang in there for the benefits. At least take the three weeks vacation, maybe you would want to stretch the remaining three weeks, but use some of it for your mental health.

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Old 10-28-2007, 01:50 PM   #11
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Would Frank also be able to retire now ? It helps to have a playmate in retirement .
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Old 10-28-2007, 02:31 PM   #12
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Would Frank also be able to retire now ? It helps to have a playmate in retirement .
No. He definitely has to wait until he is 55 so that he can get early retirement, and that will be at least until August, 2009. I guess I was just getting carried away with my fantasies! It really makes no sense for a worrier like me, to retire now instead of two years from now. I think I was just feeling "pouty" about having to go back to work in the morning!

Thanks to everyone for bringing me back to reality. And Twaddle, although the stress has been horrendous, I think I can stay ahead of it for that long by really hitting the gym more (I have lapsed in the past month), and trying more meditation and solitude. In the past month, my mother has died, my daughter has had weight loss surgery against my advice, my 90-year-old uncle narrowly escaped the Rancho Bernardo fire, and the sobs at work have got me down with their back stabbing. I will hit the gym hard for the next three weeks, cut back on the caffeine so that I at least have a prayer of sleeping, and then I'll be off over Thanksgiving.

I had been saving up vacation time so that upon retirement, I could cash it in. It is now as high as it can be without use or lose before the end of the year. But at the maximum, cashing it in would only give me $10K or so after taxes. I think taking the vacation time would be money well spent, for me at this point.
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Old 10-28-2007, 02:44 PM   #13
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My MIL is 93 and has health insurance from the state of MD. She has virtually no health issues but the insurance is awesome and adds tremendously to her safety net (she has no assets and a very low income) and her peace of mind.

You are in a tough spot because your pre-existing conditions could be very problematic for purchasing individual health insurance but you don't want to destroy your long term health by staying for the guaranteed health insurance that will make your retirement much less stressful and successful.

Good luck!
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Old 10-28-2007, 03:51 PM   #14
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Its a tough call. Seems to me that if health care gets any more expensive, nobody will be able to afford it and there'll be a lot of doctors standing around with their hands in their pockets looking for something to do. On the other hand, its just a matter of time before we have at least basic socialized health care for most or all americans. If nothing else the inevitable price increases will cause that to happen. The drug and insurance companies arent smart enough to slack off of hiking the prices until someone regulates them.

Some of the cost increases may also result in the cutting back or elimination of these guaranteed benefits. You'll still have something, but it may come with a lot of exclusions, a high deductible, and high co-pays.

So its probably an expensive, valuable benefit for 3, 4 or 5 years. Maybe worthless after that.
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Old 10-28-2007, 05:11 PM   #15
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I think CFB nailed it - the value of "healthcare for life" depends on who's "life" we're talking about, your life or the life of the present healthcare system.

If you really want to know the value of healthcare for life under the present system, I'd suggest using the standard formula for computing NPV, where n is the number of periods until you are Medicare eligible, i is your inflation rate per period, pmt is the amount you'd pay for comparable coverage on your own, etc.

As I just finished posting on another thread, I expect the labor force participation rate to drop dramatically over the next 5 years as the higher tax regime required to pay for our upcoming "free" health care system hits the tax code. Face it, an awful lot of people 50+ are only working to get health care. They aren't satisfied with, or engaged by their jobs, they just need the insurance. Now, if its provided it outside the workforce system (not to mention that the marginal utility of wage income goes way down thanks to higher taxes) I suspect people are going to be leaving the workforce en masse.

Which continues us down the present spiral of fewer workers to support society as a whole, but alas the law of unintended consequences always seems to prevail!
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Old 10-28-2007, 06:04 PM   #16
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I am not sure what rules apply for FERS but you might want to check out leave without pay since you can afford to be retired anyway. Under CSRS you can take up to six months in any calendar year (which would permit a full year - June to June) and still get credit for retirement and continue your health insurance. Then you could go back to work to finish the remainder of your sentence required time. At a certain point you get stuck paying both your portion of health insurance and the government's (that gets pricey) but I can't remember when that kicks in.

You would need a cooperative agency or a very helpful doctor to get the time off. Also, make sure the LWOP doesn't impact the requirement to have your last 5 continuous years covered under the health benefits program -- I don't believe it does.
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Old 10-28-2007, 06:19 PM   #17
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Which continues us down the present spiral of fewer workers to support society as a whole, but alas the law of unintended consequences always seems to prevail!
They'll just increase sales and property taxes to replace lost income tax.

Which is why I'm hesitant to convert any of my IRA's to Roths. Income tax may not be our biggest problem 20-30+ years from now.
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Old 10-28-2007, 06:24 PM   #18
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CFB and FG, another factor is the fact that so far, I have consistently had some outstandingly rotten luck in life. It would be just my luck for me to work the extra two years and THEN have universal health care put into place so that I didn't need it (or have my health care downgraded as CFB suggests). FG, the idea of all those boomers tied to their jobs by insurance suddenly quitting is pretty sobering if we are now teetering on the brink of recession.

DonHeff, you really know your stuff, and thanks for the idea. To be honest, I hadn't thought of LWOP for this. I won't even consider it unless I can be sure that it won't affect my FEHB, though. Thanks again, and I'll check into it.
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Old 10-28-2007, 08:28 PM   #19
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If you're FERS you may as well use that sick leave up too. No benefit for keeping it. Take some mental health days on Fridays and Mondays.
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Old 10-28-2007, 08:46 PM   #20
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If you're FERS you may as well use that sick leave up too. No benefit for keeping it. Take some mental health days on Fridays and Mondays.
Well, there is no benefit for keeping it but I still feel I should be sick to use it. I used a couple of hours last week, but the stress was making me feel so ill I was feeling nauseous. So, I went home a little early rather than staying and throwing up on my desk.

On the other hand, my supervisor told me once in confidence that she uses sick hours/FFL to pick up her kid. Hmm. But then, just because another employee does it, does that mean that I believe it is ok for me to do? I like to think I have higher standards.

It may seem odd, but this thread is really helping me to see my situation objectively. It's apparent to me that I need to make some effort to reduce my stress at work instead of just being buffeted by it. It's ridiculous because I know that I JUST DON'T CARE (since I am just a couple of years short of retiring, and doing what I believe to be a fine job even so), but despite that the backstabbing and gameplaying has been getting to me.
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