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Medicare; what will it cost when I get there?
Old 08-06-2019, 10:49 AM   #1
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Medicare; what will it cost when I get there?

I am almost 63, retired at 56 and have health care coverage under my employer I retired under. I currently pay $107 a month through a pension deduction for my and DW's medical coverage. It's a very good coverage with $20 copays for Dr. visits and prescriptions. Out of pocket costs have been under $1,000 a year for the both of us combined and that includes one broken wrist and a torn rotator cuff surgery. Also covered $7,000 worth of hearing aides for me, no co-pay on durable goods, as well as vision exams. (But not glasses or contacts)

My past employer will have me apply for Medicare at 65, of course, and will continue my current health care that Medicare doesn't cover. I assume it's behind-the-scenes paperwork to manage the billing, but basically I don't expect I'll see any difference in how I use medical care. I do expect that Medicare will cost me out-of-pocket above and beyond what I already am paying for my retirement medical plan through my old employer. Anyone have any idea what I should expect to pay? I'm assuming the employer will have it as a deduction on my pension like they do for my current medical coverage.
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Old 08-06-2019, 11:00 AM   #2
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Old 08-06-2019, 11:08 AM   #3
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Thanks joeea. As I understand it, the monthly premium will be $135 each for DW and me at 65 and it will be deducted from our Social Security check. So I can expect to see an increase of $270 a month for health care in a couple more years. Bummer.


Next question;

If congress passes a law for single payer health care and my private coverage through my employer goes away, would that coverage value be applied towards my medicare premium expense?

Who knows, right? But I'd hate to see what was thought to be a lifetime benefit, a pretty significant part of my retirement package, just cease to exist without some sort of offset.
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Old 08-06-2019, 11:47 AM   #4
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Originally Posted by skipro33 View Post
Thanks joeea. As I understand it, the monthly premium will be $135 each for DW and me at 65 and it will be deducted from our Social Security check. So I can expect to see an increase of $270 a month for health care in a couple more years. Bummer.


Next question;

If congress passes a law for single payer health care and my private coverage through my employer goes away, would that coverage value be applied towards my medicare premium expense?

Who knows, right? But I'd hate to see what was thought to be a lifetime benefit, a pretty significant part of my retirement package, just cease to exist without some sort of offset.
I have retiree medical, and live with the fear they could take it away at any time. It's truly a benefit they provide out of the 'goodness of their heart' and when their hearts grow cold after shareholders b*tch about earnings, they can cancel it. It happens all the time. There's no PBGC for retiree medical. I'm counting the days until I'm on Medicare.
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Old 08-06-2019, 12:14 PM   #5
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Also, keep in mind there is no guaranty that Medicare will still be $135.50 by the time you reach 65. It usually goes up each year, but not always. It is currently projected to go to $144.30 for 2020, but we won't know for sure until a couple of more months.

https://www.wsj.com/articles/medicar...se-11555978694
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Old 08-06-2019, 12:16 PM   #6
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Also, keep in mind there is no guaranty that Medicare will still be $135.50 by the time you reach 65. It usually goes up each year, but not always.
Also worth making yourself familiar with the IRMAA thresholds, as that is often overlooked.
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Old 08-06-2019, 12:20 PM   #7
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I'm with SumDay on this. Same fear. And as an early retiree with only 25 yrs of service, I pay currently 750 per month at age 58, but actually am grateful as the ACA coverage I've researched would be the same premium but with a much higher deductible and very limited Dr network. Of course, i knew this going in, including the inflation factor on the premiums.

I'm sorry, but expecting an "offset' from whatever source, including single payer should we ever get there in our lifetimes, is unrealistic. You are fortunate to have the coverage you do now, and will continue to be fortunate, even on medicare. I do understand this may be hard to accept, given what you have been enjoying.
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Old 08-06-2019, 12:26 PM   #8
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Also worth making yourself familiar with the IRMAA thresholds, as that is often overlooked.
+1

Even if one does not expect income to reach those levels, it's worth being aware of the subsidy in the premium, as that could be reduced or withdrawn, and the planning horizon is pretty long.
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Old 08-06-2019, 12:33 PM   #9
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It really depends on where you live. My sister is paying 600/month for all of her Medicare supplements. Right now I only have Parts A and B until my husband reaches 65 and then we have to leave my retiree insurance. It’s expensive at 1k/month. Ugh!
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Old 08-06-2019, 12:42 PM   #10
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Weíre on retiree health care with my former employer, but we have to pay the full premium of $1735/mo, not counting dental or vision. We both just turned 63 and will see substantial savings once on Medicare.
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Old 08-06-2019, 02:29 PM   #11
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Originally Posted by skipro33 View Post
If congress passes a law for single payer health care and my private coverage through my employer goes away, would that coverage value be applied towards my medicare premium expense?
Don't worry about what you can't control. Playing the "what if congress passes a law with terms I don't like" is a losing game.

Be patient, all will be revealed...

Quote:
Who knows, right? But I'd hate to see what was thought to be a lifetime benefit, a pretty significant part of my retirement package, just cease to exist without some sort of offset.
Maybe your employer will give you the cash instead. Because they are nice.
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Old 08-06-2019, 02:42 PM   #12
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Maybe your employer will give you the cash instead. Because they are nice.
Didn't happen to my brother, who retired from a sub of Berkshire. He just got a letter saying, "As of 1/1/2018 we will no longer provide retiree health insurance". End of story.

A previous employer (unfortunately I didn't retire from there) "froze" what they were paying for retiree health insurance at the current level- maybe it was 2014- and said from the on all they'd do was give you 90% of what they were paying in 2014 to buy your own coverage. At least it was something but that was a company in the insurance business, which in my experience has always had better-than-average benefits.
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Old 08-06-2019, 03:00 PM   #13
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.... My past employer will have me apply for Medicare at 65, of course, and will continue my current health care that Medicare doesn't cover. I assume it's behind-the-scenes paperwork to manage the billing, but basically I don't expect I'll see any difference in how I use medical care. I do expect that Medicare will cost me out-of-pocket above and beyond what I already am paying for my retirement medical plan through my old employer. Anyone have any idea what I should expect to pay? I'm assuming the employer will have it as a deduction on my pension like they do for my current medical coverage.
You really need to check out the details of what I have bolded. There are so many variants of retiree medical coverage while on Medicare, I would want the specifics. And also confirm the cost, as I have seen some (through friends) where the retiree share increases greatly when on Medicare.

In my case, the retiree plan, on Medicare, will give us $1,200 each to apply to a supplement purchased through VIA (formerly Towers Watson, I think). I am happy with that, but my planning always assumed this would disappear, and it very well might. It seems I am currently retired from a company that did not exist when I retired 3 years ago (mergers/spin offs), and jettisoning the costs for people who never worked there would not be a surprise.
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Old 08-06-2019, 03:04 PM   #14
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Originally Posted by MissMolly View Post
Also, keep in mind there is no guaranty that Medicare will still be $135.50 by the time you reach 65. It usually goes up each year, but not always. It is currently projected to go to $144.30 for 2020, but we won't know for sure until a couple of more months.
I wished it only went up to $144.30 next year for my wife. Unfortunately, we sold our house last year when we moved out of state, and we saw a good sized capital gains tax bill for 2018 (yes, beyond the exemption for house sales).

Making that much on the sale of the house was the good news. The bad news is that income level will be applied for 2020, so for one year, my DW's Medicare monthly premium is going to spike in 2021. Thankfully, it will be a one year event. Something to think about regarding Medicare costs as you headed into retirement and are considering a downsize to your house you may have owned for a long time.
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Old 08-06-2019, 03:09 PM   #15
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Basic info here:

https://www.medicare.gov/your-medica...ts-at-a-glance

There's a lot more to it than just the SS deduction... The rules and limits are worthwhile knowing. Recommend keeping the link, for understanding what and how much will be covered.
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Old 08-06-2019, 03:12 PM   #16
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Didn't happen to my brother, who retired from a sub of Berkshire. He just got a letter saying, "As of 1/1/2018 we will no longer provide retiree health insurance". End of story.
Well, that wasn't very nice!

Quote:
A previous employer (unfortunately I didn't retire from there) "froze" what they were paying for retiree health insurance at the current level- maybe it was 2014- and said from the on all they'd do was give you 90% of what they were paying in 2014 to buy your own coverage. At least it was something but that was a company in the insurance business, which in my experience has always had better-than-average benefits.
That's not very nice either!
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Old 08-06-2019, 07:17 PM   #17
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Didn't happen to my brother, who retired from a sub of Berkshire. He just got a letter saying, "As of 1/1/2018 we will no longer provide retiree health insurance". End of story.
Same thing happened to me. There one day, gone the next. Full stop. It happened the year after they froze the pension. So it was the gift that keeps on giving...or, well, taking, I guess.

I calculated it was a loss of about a million dollars worth of benefits, when you figure I planned to work about 10 more years from that point. Those 10 years would no longer be credited years of service for the previous defined benefit pension which reduced my projected pension annuity by $33k per year. Dividing back by 4% SWR, that equates to about $800k, right? On the medical side, if I retire at 55 Iíll now foot the bill for 10 years of coverage instead of being on megaís group subsidized plan.

Iíve come to peace wiith all this and feel more empowered not having any reason whatsoever to feel loyal to them. So I agree with the points above- donít count on anything and donít expect any consolation gifts if they do cancel plans.
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Old 08-06-2019, 09:32 PM   #18
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Medicare premiums are very expensive when adding in the various parts and supplemental. I'm loosely planning $500/mo for just me, which is 10X what I'm currently paying for good health insurance and more than double ACA marketplace premiums that I have calculated when factoring in the premium tax credit.

Due to escalating health care costs at a much faster increase than inflation, I'm actually thinking about kicking my estimate up another $100 to $600/mo, so that's $7200/yr for one person in today's dollars.
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Old 08-06-2019, 09:43 PM   #19
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Medicare premiums are very expensive when adding in the various parts and supplemental. I'm loosely planning $500/mo for just me...
FWIW, your number is a bit more than twice what DW and I are each paying for all our Medicare various parts and supplemental. Combined we pay $458/mo.
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Old 08-07-2019, 07:55 PM   #20
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I checked my mother-in-lawís medical premium amounts. $486 a month, including medicare parts B & D and supplemental. Single widow, 91 years old. The supplemental is through her previous employer.
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