Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Retiree Health plan with Medicare?
Old 11-17-2015, 03:24 PM   #1
Recycles dryer sheets
fosterscik's Avatar
 
Join Date: Jun 2013
Posts: 182
Retiree Health plan with Medicare?

I'm very close to FIRE and have to seriously consider what I'm going to do about medical insurance. I work for a state and am eligible to opt for their BCBS administered self-insured plan. Rates have been stable for a number of years (amazing with all the stories I've seen here over the last few days). It subscribes to the blue card program (so I have in-network access when out of state and when travelling overseas). It's not cheap at $430/person/month but a reasonable deal (In network: $1,000 deductible, 20% copay until $2,500 reached). If I opt out of the plan, I can never opt back in . I plan to keep this coverage for me and my wife for the period between FIRE and medicare.

My question really concerns what I do when I hit medicare eligibility age. At 65 the plan becomes secondary and effectively mandates I maintain medicare A,B and D coverage (prescription benefits vanish when I hit medicare age). The monthly rate for my retiree coverage drops to $180/person/month (plus, of course, the medicare premiums). I would maintain international travel insurance, but I'm not sure what other benefits I would get and whether they would be worth paying for.

What do others do in a similar circumstance? Why would I not drop retiree coverage at 65? Any insight or advice would be appreciated.
__________________

__________________
fosterscik is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-17-2015, 03:35 PM   #2
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,076
I am currently in a similar situation that for 2016 I have signed up to my ex employer retiree healthcare at $700/mo for the 2 of us as it is a PPO with wide network including overseas. I'll be eligible for Medicare in 2020 which, in insurance price hikes and changes to the retiree, is a long way in the distance so I'm going to simply wait and see what the position is in 2017, 2018, ......
__________________

__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 11-17-2015, 03:48 PM   #3
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,407
Quote:
Originally Posted by fosterscik View Post

My question really concerns what I do when I hit medicare eligibility age. At 65 the plan becomes secondary and effectively mandates I maintain medicare A,B and D coverage (prescription benefits vanish when I hit medicare age). The monthly rate for my retiree coverage drops to $180/person/month (plus, of course, the medicare premiums). I would maintain international travel insurance, but I'm not sure what other benefits I would get and whether they would be worth paying for.

What do others do in a similar circumstance? Why would I not drop retiree coverage at 65? Any insight or advice would be appreciated.
Can you get a description of the secondary coverage? If so, you can compare it with a Medigap plan and see if it makes sense to continue with the $180 retiree option.
__________________
MichaelB is online now   Reply With Quote
Old 11-17-2015, 04:00 PM   #4
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,494
Quote:
Originally Posted by fosterscik View Post
If I opt out of the plan, I can never opt back in .
This would be a huge red flag to me that it is probably a good thing to stay with it, and I'd be VERY careful to fully understand what the alternatives are before dropping it.

I stayed with my former employer's BCBS PPO plan that became secondary to Medicare at 65. It is now just over $600/month for me and DW (she is not yet 65) and in January will go up ~$112/month, almost all of that for prescription coverage. That's only for the 30% of the premium that I pay and includes prescription coverage in which co-pays are pretty low. Since I'd otherwise have some heavy-duty prescription costs I'll keep it.

Yes other plans secondary to Medicare would be cheaper, but they have much higher deductibles/co-pays and given some recent health issues for me I'd be crazy to drop this plan.

If I drop it I can still get back in but there are some lengthy waiting periods before some things are covered so I have no plans to drop it.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 11-17-2015, 04:14 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,451
Quote:
Originally Posted by fosterscik View Post
My question really concerns what I do when I hit medicare eligibility age. At 65 the plan becomes secondary and effectively mandates I maintain medicare A,B and D coverage (prescription benefits vanish when I hit medicare age). The monthly rate for my retiree coverage drops to $180/person/month (plus, of course, the medicare premiums). I would maintain international travel insurance, but I'm not sure what other benefits I would get and whether they would be worth paying for.

What do others do in a similar circumstance? Why would I not drop retiree coverage at 65? Any insight or advice would be appreciated.
Because you want something that covers the "gap" - the 20% coinsurance that Medicare doesn't pay. You need a medigap plan or equivalent.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Old 11-17-2015, 04:22 PM   #6
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,076
Quote:
Originally Posted by audreyh1 View Post
Because you want something that covers the "gap" - the 20% coinsurance that Medicare doesn't pay. You need a medigap plan or equivalent.
Exactly. I had dinner last week with an old work colleague who has been on the same retiree plan as myself, except he and his wife are now in their 70's. In response to this year's big price hike, from $381 to $697 for a couple, decided to drop it and go with a much cheaper Medigap plan he bought through an insurance agent. (The company also stopped paying the Medicare Part B for all retirees, so his price hike was over $500/mo).
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is offline   Reply With Quote
Old 11-17-2015, 04:51 PM   #7
Recycles dryer sheets
fosterscik's Avatar
 
Join Date: Jun 2013
Posts: 182
I obviously need to understand medigap policies (but like Alan, I have time to sort all this out). As Walt notes, I really need to understand what I'm doing given the irrevocable decision I make if I drop coverage, but unlike Walt I definitely lose all prescription coverage once I become medicare eligible.

Thanks for all the feedback. I now know what I need to google!
__________________
fosterscik is offline   Reply With Quote
Old 11-17-2015, 04:57 PM   #8
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,069
Quote:
Originally Posted by MichaelB View Post
Can you get a description of the secondary coverage? If so, you can compare it with a Medigap plan and see if it makes sense to continue with the $180 retiree option.
+1

This is key. Compare the price and coverage your former employer policy provides vs. the various medigap policies available to you. Plenty of time to learn what your options are between now and when you have to make a decision.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 11-17-2015, 06:33 PM   #9
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,392
If it was me I would opt in for now (the prices for coverage you are stating are great for the deductibles and OOP you mention). You can consider the Medicare issue when you get closer to Medicare.
__________________
Katsmeow is offline   Reply With Quote
Old 11-18-2015, 06:34 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,634
Quote:
Originally Posted by Katsmeow View Post
If it was me I would opt in for now (the prices for coverage you are stating are great for the deductibles and OOP you mention). You can consider the Medicare issue when you get closer to Medicare.
+1 When you approach 65, if the plan turns out to be better than medigap plans offer keep it until you can do better on your own.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 11-18-2015, 07:47 AM   #11
Full time employment: Posting here.
 
Join Date: Jan 2014
Posts: 661
Quote:
Originally Posted by fosterscik View Post
I plan to keep this coverage for me and my wife for the period between FIRE and medicare.
+1 The BlueCard Program is a valuable benefit. The MD Anderson Cancer Ctr in Houston is in its network. Hope for the best but prepare for the worst.

Quote:
Originally Posted by MichaelB View Post
Can you get a description of the secondary coverage? If so, you can compare it with a Medigap plan and see if it makes sense to continue with the $180 retiree option.
+1 Keep in mind the $180 retiree secondary plan premium may be group (aka community) rated. Medigap premiums in your area may use attained-age, low at 65 but high at 80+. If so, you would need to use an average in your comparison.
__________________
MBSC is offline   Reply With Quote
Old 11-18-2015, 10:33 AM   #12
Recycles dryer sheets
fosterscik's Avatar
 
Join Date: Jun 2013
Posts: 182
Thanks MBSC. I hadn't considered the potential age-related Medigap problem. Another thing to check out. My secondary premium is definitely a group rate and not age dependent so that may well be the most important aspect.

The wife and I may well move after retirement to be nearer our son and/or our daughter. Where will that be? Hard to predict the future. Young folks tend to move around a lot. The portability the blue card program will be extremely valuable to us until Medicare. After medicare, the age-related benefit mentioned above may well dictate we stay with our ex-employer's plan (both of us have individual coverage).
__________________

__________________
fosterscik is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Safe car part of health plan and/or retirement plan Buckeye Health and Early Retirement 21 07-10-2016 03:58 PM
Medicare & Federal Retiree Cassie Health and Early Retirement 35 09-15-2015 03:41 PM
Retiree Medical Coverage/Medicare Question(s) frayne FIRE and Money 21 07-14-2015 12:23 PM
P&G early retiree health plan problems nafddur1 Health and Early Retirement 5 03-21-2011 09:38 AM
Medicare+Medigap vs. Medicare Advantage haha FIRE and Money 2 02-01-2006 09:16 PM

 

 
All times are GMT -6. The time now is 09:30 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.