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If 55-64 are allowed to buy into medicare
Old 12-09-2009, 10:33 AM   #1
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If 55-64 are allowed to buy into medicare

If it happenned as proposed by the Senate. How much do we expect to pay for an individual policy?
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Old 12-09-2009, 10:40 AM   #2
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And another question is, what will happen to Megacorp-provided medical benefits for folks over 55? Will they just give these employees the money to buy into Medicare, or will there be anti-discrimination laws to prevent this?
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Old 12-09-2009, 10:47 AM   #3
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As one senator said--it's like letting a bunch of people board a sinking ship.

To Ziggy's point: I think employers and providers of retiree benefits will do whatever is cheapest that meets their obligations. It will probably cost less to let eligible employees go on Medicare and pay for a supplemental policy. And, once on Medicare, some retirees will find it possible to quit the workforce, so they won't be paying in to SS or Medicare anymore, thus making these programs go further into the red.

Well, it's only money.
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Old 12-09-2009, 12:27 PM   #4
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I saw a report last night mentioning a cost around $550 mo.
I can't seem to pull anything up on the Internet with the cost mentioned right now though.
A question that popped in my mind was, what about this 55 year old person's family? I mean if a guy needs coverage and had to buy a policy for himself and then another to cover his family, he has gained nothing? Right?
I'm not referring to myself or my family in this, just saying/asking/thinking out loud.
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Old 12-09-2009, 12:34 PM   #5
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I worry about the "adverse selection" aspect of it. I suspect that if 55 year olds *can* sign up for Medicare but private insurance options are still available, Medicare will get all the folks who are the most costly to insure, for whom private insurance is cost-prohibitive if available at all.
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Old 12-09-2009, 12:56 PM   #6
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I worry about the "adverse selection" aspect of it. I suspect that if 55 year olds *can* sign up for Medicare but private insurance options are still available, Medicare will get all the folks who are the most costly to insure, for whom private insurance is cost-prohibitive if available at all.
Having worked in the actuarial field for 23 years, this was my first thought, too. Otherwise, wouldn't Medicare's finances be helped by supposedly younger and healthier people (than the older ones now in the program) enrolling?
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Old 12-09-2009, 01:06 PM   #7
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I haven't found any hard numbers in the proposals for the cost, but as a 'buy-in' I'd expect the cost to be similar to the current buy-in for someone who has not accumulated any credits (quarters of work making at least some threshold of Medicare tax payment).

That would put the hospital-only coverage (Part A) at just over $400/month, and unsubsidized doctor visit, etc coverage (Part B) at a bit over $300/month.

Call it around $700-$750/month for a fairly low deductible and copay medical plan. That's not too terribly different from what such a plan costs a 55 year old in excellent health. That 'in excellent health' is the gotcha, of course.
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Old 12-09-2009, 01:10 PM   #8
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I worry about the "adverse selection" aspect of it. I suspect that if 55 year olds *can* sign up for Medicare but private insurance options are still available, Medicare will get all the folks who are the most costly to insure, for whom private insurance is cost-prohibitive if available at all.
Yah. I'd sort of expect the "Medicare Effect" to show up here, with almost all plans for those 55 and older being replaced with plans resembling Medicare Advantage or similar supplemental plans, forcing Medicare to be used for primary coverage, at least for hospitalization (Part A coverage).
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Old 12-09-2009, 01:23 PM   #9
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And another question is, what will happen to Megacorp-provided medical benefits for folks over 55? Will they just give these employees the money to buy into Medicare, or will there be anti-discrimination laws to prevent this?
For me (and my DW) that is the question. We're about to turn 62 - three years away from traditional Medicare.

I'm retired (my DW still wo*ks) but is on my policy and I pay a monthly preimum to my former company as co-pay to their retirement plan. In addition, they currently certifiy that if I stay with their plan (post-Medicare), my benefit (also requiring a small co-pay preimum) is better than going to Medicare Part B, along with Part D (drug).

A lot of things to be watching as this unfolds, IMHO...
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Old 12-09-2009, 02:00 PM   #10
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I worry about the "adverse selection" aspect of it. I suspect that if 55 year olds *can* sign up for Medicare but private insurance options are still available, Medicare will get all the folks who are the most costly to insure, for whom private insurance is cost-prohibitive if available at all.
I imagine they will make it universal (other than age), just like Medicare part B is now so that adverse selection is not an issue. Supplemental insurance will boom, IMHO.

I'm interested in hearing what unfolds with this initiative. Could be good for a lot of ERs.
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Old 12-09-2009, 02:04 PM   #11
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I imagine they will make it universal (other than age), just like Medicare part B is now so that adverse selection is not an issue. Supplemental insurance will boom, IMHO.
If they did that, it would presumably solve the "adverse selection" concern.

But I think it would create even more cost-shifting to private insurance, cash payers and those who aren't subject to Medicare's reimbursement rates.

And if that's the case, then it's not a matter of being "allowed to buy in" to Medicare, but rather expanding Medicare down to age 55.
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Old 12-09-2009, 02:47 PM   #12
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I worry about the "adverse selection" aspect of it. I suspect that if 55 year olds *can* sign up for Medicare but private insurance options are still available, Medicare will get all the folks who are the most costly to insure, for whom private insurance is cost-prohibitive if available at all.
And so you have perfectly highlighted the concept of unintended consequences that flow from most decisions the Federal Government makes...
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Old 12-09-2009, 03:26 PM   #13
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So, for those who want to retire early but can't get HI, here is the plan:
Quit megacorp at 53.5, use cobra until you turn 55
At 55, used medicare.
TJ
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Old 12-09-2009, 04:30 PM   #14
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One big deal on medicare eligibility for us younger ERs - portable health care! Most of us with individual insurance can't move across state lines, because we would have to reapply for health insurance and right now there is too much risk in being denied or whatever. The older you get, the harder this is - until you reach medicare age!

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Old 12-09-2009, 04:33 PM   #15
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For comparison, here are some numbers for 2010 from the Medicare website for those over 65 who buy into Medicare:

Part A: $461 per month

Part B: $110.50 per month (assuming you don't have to pay the higher means-tested amount).

Additionally, a comprehensive Supplemental policy (e.g. Plan F) and a Part D drug policy will add about $150 or so per month (depending upon where you live), for a total of about $720 per month per person. This would give you essentially complete coverage except for drug copays.

For two people, this is still over 17K per year, which ain't exactly "chump change", even for full coverage. So unless it is made mandatory for all 55-65 year-old's, there will likely be many "healthy" retirees who will elect to purchase high-deductible individual coverage or HSA's, which could lead to the adverse selection problem Ziggy mentioned.

I guess it all boils down to the fact that good healthcare is expensive no matter how you slice it.
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Old 12-09-2009, 05:59 PM   #16
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I wonder how many people in that age group would retire today and let someone else have their job if this happens ? I know I would. There are so many people here where I live that are just getting by because one in the family has lost a job. If I were to retire someone who really needs to work would take my job. I will be over 65 if it does pass so it would not effect me but it would my wife. I hope they pass it. oldtrig
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Old 12-10-2009, 07:29 AM   #17
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I hope they pass it too. You cannot assume you are going to be healthy up to the point of eligibility. As many of you know I was unfortunate enough to get cancer this year. I have great insurance now. I want to retire next year. My employer said it's only staying in the insurance game until 2013. Assuming I live that long how do I buy health insurance with a pre-existing condition? IMHO this is the most important aspect of any national health insurance program.
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Old 12-10-2009, 07:38 AM   #18
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A potential problem is that MC now reimburses at a rate that is about .9 the cost of providing the service -- the provider loses 10% of his/her charges every encounter (per an NPR segmentlast evening). This is made up for by commercial carrier and out-of-pocket payments, along with emphasizing certain services that for some reason are amply reimbursed under Medicare.

Increasing numbers of doctors may opt out of MC if this passes, at a time when there is a looming shortage of primary care doctors. Still, I support the initiative for the greater good with careful attention to making allowable charges sustainable.
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Old 12-10-2009, 08:03 AM   #19
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Originally Posted by FIRE'd@51 View Post
For comparison, here are some numbers for 2010 from the Medicare website for those over 65 who buy into Medicare:

Part A: $461 per month

Part B: $110.50 per month (assuming you don't have to pay the higher means-tested amount).

Additionally, a comprehensive Supplemental policy (e.g. Plan F) and a Part D drug policy will add about $150 or so per month (depending upon where you live), for a total of about $720 per month per person. This would give you essentially complete coverage except for drug copays.

For two people, this is still over 17K per year, which ain't exactly "chump change", even for full coverage. So unless it is made mandatory for all 55-65 year-old's, there will likely be many "healthy" retirees who will elect to purchase high-deductible individual coverage or HSA's, which could lead to the adverse selection problem Ziggy mentioned.

I guess it all boils down to the fact that good healthcare is expensive no matter how you slice it.
God I hope we will be able to keep our individual plan. My high ded plan cost me $207/mo.
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Old 12-10-2009, 08:45 AM   #20
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God I hope we will be able to keep our individual plan. My high ded plan cost me $207/mo.
It's going to be very, very interesting to see how the responsibility of paying shifts among citizens as all this "reform" manifests itself. Even if the optimistic pundits are correct and our total aggregate cost of health care is not increased by the proposed changes (which I doubt), there will be changes regarding who is paying how much.

Right now, I'm giving my FIRE status a big bear hug and holding on for dear life. We've been enjoying a nice RE lifestyle for 3.5 yrs now, despite the recession. But if our current subsidized health coverage is changed for the worse or if Medicare costs significantly more (when we get there) than it does now, it doesn't bode well for continuing to enjoy today's level of discretionary spending.

I'm all for my fellow citizens having access to health care given that they conduct themselves responsibly. But please, please, Mr Govt don't do anything to screw up the youbet family current health insurance situation or increase our Medicare costs in the future.......
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