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IRMAA...Does the Money Grab Never End?
Old 10-07-2016, 08:12 PM   #1
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IRMAA...Does the Money Grab Never End?

I knew about the IRMAA for Medicare and we're stuck paying 200% of the base Medicare premium. Unfortunately, or fortunately, depending on how you look at it, our income will most likely increase during retirement when DH turns 70 next year and takes SS as well as RMDs so no relief there.

We just received notice that our IRMAA for his Part D is 300% of the program's base premium. DH takes a cheap generic costing $14/mo. w/o RX insurance. His monthly premiums including the IRMAA is $52/mo. I guess he's the young buck paying for the oldsters.

I was under the impression our medical costs would decrease somewhat once we're Medicare eligible and off the company insurance...no such luck. Rant over.
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Old 10-07-2016, 10:59 PM   #2
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Old 10-08-2016, 05:57 AM   #3
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If it really bugs you you can just not buy Part D or switch to a Medicare Advantage plan that includes drug coverage.

https://www.mymedicarematters.org/20...art-d-a-guide/

Quote:
Enrolling in original Medicare (Parts A and B) is mandatory, while prescription drug coverage (Part D) is optional. You can also enroll in an optional Part C/Medicare Advantage plan instead of Parts A, B and D, as it covers the mandatory Parts A and B (and usually includes drug coverage as well).
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Old 10-08-2016, 06:15 AM   #4
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Originally Posted by pb4uski View Post
If it really bugs you you can just not buy Part D or switch to a Medicare Advantage plan that includes drug coverage.
+1

You may not find a lot of sympathy here about paying more for health insurance due to having a high income in retirement. Try to look at it a small cost of financial success.
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Old 10-08-2016, 06:24 AM   #5
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Ah feel yore pain. When I have to go off Obamacare and the huge subsidies, I'll get "hammered" by Medicare premiums and copays and higher max out of pocket. Medicare will be the end of Nirvana, not the start.
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Old 10-08-2016, 06:25 AM   #6
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Yeah, that stinks, especially when you take into account the fact that people paying the IRMAA most likely paid far more in payroll-based Medicare premium over their working lives than the average worker. We got stuck with IRMAA when I was still employed and DH was on Medicare.

The other "money grab": I see a ton of FB memes every year whining about how SS recipients didn't get a COL increase in SS. I know the inflation measure they use somehow tends to understate the COL increases most of us experience. They are, however, protected from having their SS go down due to higher Medicare B premiums being deducted. Fictional example: Your monthly check is $1,500 but $200 is deducted for Part B so you get $1,300. Next year you get a COL increase which would raise it to $1,550 gross but your Medicare B premium goes to $300. While that would give you a new net SS payment of $1,250, your payment actually stays at $1,300. So, in this example, $50 of the increase in Medicare B is "forgiven".

This "hold harmless" provision does not apply if you pay IRMAA. New recipients also pay the full Part B premium. I am not looking forward to that.
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Old 10-08-2016, 06:40 AM   #7
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The un-subsidized total cost for health care insurance for someone age 65 or older is in the range of $1000 - $1200 per person per month. The unsubsidized cost for an exchange policy with similar coverage at age 64 is probably around $1500. Group employer coverage is less, around $750 or so, but that is because group insurance does not price for age difference. If it did price for age that $750 would at least double.

The cost of health care insurance does decrease once we reach Medicare age, and it is subsidized, so no one pays full price. The subsidy, however, declines as income increases, and this gives the appearance of higher prices.

The reality is health care in the US is expensive.
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Old 10-08-2016, 07:34 AM   #8
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Since you can't do much about it, perhaps it may lessen the pain to think about it differently. Instead of thinking about it as paying 200% of a significant expense and 300% of a smaller one, since it is AGI-based, think about it as paying 10% more in income taxes or perhaps as 3.7K/yr more or 1.5% more of AGI.
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Old 10-08-2016, 07:35 AM   #9
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I don't understand. Insurance costs drop when you go on Medicare compared to individual policies even paying for all "parts" plus deductibles are much lower. If your income is low enough to get a good subsidy under Obamacare, you shouldn't be paying 2X Medicare premiums.

If your income is going up because of additional income from Social Security and RMDs - oh, well! Still - deductibles are much lower.

Maybe I'm missing something.......

(No subsidized health insurance for us!)

Maybe it's going from company health care to Medicare.....
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Old 10-08-2016, 08:29 AM   #10
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I'm on the other side of this coin - and thrilled that DH will be going on medicare.

If I ignore the ACA premium tax credits for DH - his medical insurance will cost less and significantly improve when he goes on medicare in Jan. Because of a glitch/feature of Covered CA we can't get the premium tax credit up front - and get it back at tax time... This is because DH is on a different policy/carrier than DS's and I.

Unsubsidized current insurance $580/month for a HDHP. We pay 100% of charges for first $4500/year.

Medicare Part A, B, D, and F will run a lot less - cover a lot more (no high deductible) offer a wider network (all doctors that take medicare), etc. We'll be exchanging a crappy plan for a much more Cadillac plan and paying less.

Even when we factor in the smaller subsidy for the rest of the family - we're still a few hundred dollars ahead per month.
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Old 10-08-2016, 09:14 AM   #11
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Quote:
Originally Posted by audreyh1 View Post
I don't understand. Insurance costs drop when you go on Medicare compared to individual policies even paying for all "parts" plus deductibles are much lower. If your income is low enough to get a good subsidy under Obamacare, you shouldn't be paying 2X Medicare premiums.

If your income is going up because of additional income from Social Security and RMDs - oh, well! Still - deductibles are much lower.

Maybe I'm missing something.......

(No subsidized health insurance for us!)

Maybe it's going from company health care to Medicare.....
Yep, going from company health care to Medicare for DH:

Company insurance (cadillac plan):

$1,800 employee premium costs
3,000 OOP
4,800 per year max.

Medicare:

$2,940 Part B @ $245/mo.
2,000 Plan F (can't remember the exact amt, but annual premium was >$2K
624 Rx premium (cheapest plan out there now)
$5,564 per year + donut hole/potential Rx co-pays/better Rx plan premiums

I suspect our Medicare costs will increase when I have to take RMDs. IIRC IRMAA doesn't stop at 200%. The upside is that my health care costs will drop substantially once I'm Medicare eligible as I'm paying full freight for my retiree company health plan which totals about $11K/yr. taking OOP into account.
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Old 10-08-2016, 12:05 PM   #12
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Your part D (drug) plan seems high. I'm looking at the Humana/Walmart plan - $17/month or $204/year. 1/3 the price
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Old 10-08-2016, 12:11 PM   #13
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Quote:
Originally Posted by rodi View Post
Your part D (drug) plan seems high. I'm looking at the Humana/Walmart plan - $17/month or $204/year. 1/3 the price
Op said the new cost was 3X the base amt:
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Originally Posted by TrvlBug View Post
We just received notice that our IRMAA for his Part D is 300% of the program's base premium.
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Old 10-08-2016, 12:26 PM   #14
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Oops - missed that. Thanks for clarifying REWahoo
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