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Old 01-31-2010, 11:21 AM   #41
Thinks s/he gets paid by the post
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Back to the topic.

My personal plans assume that the Dem's health care bill isn't going to happen. Given the gridlock described above, I don't see any meaningful changes for the pre-65 group until we're out of that group 4 years from now. This means we'll be spending about $25,000 per year in premiums and deductibles for a few years.

Medicare Part A has a trust fund that's projected to go to zero in 2017
Under the intermediate assumptions the HI trust fund is projected to be exhausted in 2017, 2 years earlier than in last year’s report, reflecting much lower projected payroll tax income as a result of the recession.
When the trust fund goes to zero, the Secretary won't have the legal authority to write checks. I think both sides in Congress view that as a political disaster, but I'm expecting them to wait 3-4 years to deal with it, probably after the next prez election.

I'm guessing they'll expand means testing significantly. I think this attempt at health care reform has proved that there is no political support for anything else. That's a conservative assumption for me because I have above average means. From a pure financial standpoint, I'd defer SS as long as possible, thereby spending down assets. (However, health issues could trump that analysis.)

Looking at the other "parts" of Medicare:

Medicare Part B isn't officially as bad. However, that's because the official projections use current law on physician's pay, and Congress routinely does one-year overrides on the law. Therefore, I'm figuring that parts A&B are about the same.

Part C is Medicare Advantage plans. AFAIK, these plans cost the taxpayers more than traditional medicare - the Dem's bill reduced their support. This is one area where I could see R's & D's agreeing (reluctantly). So I'm not planning on using a Medicare Advantage plan when I get there.

Part D has no dedicated funding hence no trust fund. (It is funded by borrowing). There's political support for expanding it (reducing the donut hole), I think they're going to run out of money.

So I'm figuring all parts of Medicare will probably be hit about the same as Part A and I should plan on means testing for all of it.

It's hard to come up with numbers, but I'm taking a wild stab at a present value of $50,000 - $100,000.

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