How much do you budget for Medicare prems?

[vince]

Are you familiar with the IRMAA? Higher income people pay a lot more in Medicare premiums both for Part B and Part D.

Medicare costs jump significantly when income exceeds $170K per couple, and there are several steps above that with large increases in the monthly rate each step.

It jumps to $189.60 each at around 170k/MFJ.

 

[audreyh1]

It jumps to $189.60 each at around 170k/MFJ.

You can find the full table here: https://www.cms.gov/newsroom/fact-sheets/2019-medicare-parts-b-premiums-and-deductibles

By the time a couple reaches $320K in income they are each paying $433 monthly in Medicare Part B premiums plus another $71 each above their Part D premiums.

Taking out the 135.5 base Medicare part B premium. The couple is paying an extra $369 each, $738 total in Medicare premiums.

Just something to keep in mind when you are budgeting and/or planning Roth conversions.

 

[Spanky]

Well - it’s an attempt to pay for Medicare having high income folks shoulder a larger burden. Medicare has to be paid from somewhere. Would you rather the shortfall come from the general fund, and people not yet receiving Medicare pay for more of it?

Not sure who should cover the shortfall. Maybe the policy makers responsible for the shortfall should pay for it or find ways to lower the cost. It is ridiculous to see record profits of healthcare insurers year after year.

It does not seem right to pay more for the same service regardless of income. I am not in the high income bracket. Thus, IRMAA does not impact me personally.

 

[dixter]

so my total montly for medicare is as follows... it totals to be $715.45/mo

breakdown:

Medicare B - $433.40
Medicare D - $70.90
BCBS - $161.00
Metlife Dental - $29.75
Humanna Drug-$20.40

Total $715.45/month

and NO I am not a high income guy... what happened was at 64 I decided to sell some rental property and pay off some items before retirement.. it was a one time deal... so the medicare folks decided I was a high income guy and dinged me with those rates...

and a lesson, it could happen to anybody just think for a moment if you decide to perform a Roth IRA conversion... that will trigger the medicare folks to raise the rates too.... the lower limit in case you don't know is for single tax payer $85K and for married tax payers $170K... according to medicare they can go back 3 years if they want...
so even though I wasn't even on medicare in 2017 they dinged me in 2018 when I signed up for medicare.... so budget properly if you have those limits or above... thats a big chunk of your SS check you wont' ever see again...

 

[W2R]

[…]and NO I am not a high income guy... what happened was at 64 I decided to sell some rental property and pay off some items before retirement.. it was a one time deal... so the medicare folks decided I was a high income guy and dinged me with those rates...

and a lesson, it could happen to anybody just think for a moment if you decide to perform a Roth IRA conversion... that will trigger the medicare folks to raise the rates too.... the lower limit in case you don't know is for single tax payer $85K and for married tax payers $170K... according to medicare they can go back 3 years if they want...
so even though I wasn't even on medicare in 2017 they dinged me in 2018 when I signed up for medicare.... so budget properly if you have those limits or above... thats a big chunk of your SS check you wont' ever see again...

I had a similar thing happen when I miscalculated and sold too much of my taxable investment portfolio in 2015, when I was buying my house in cash. I went over the line just barely (OOPS), making my AGI just $2K too high that year. So I ended up paying $187.50/month for Medicare Part B in 2017 for that reason.

I thought I was stuck with higher payments for good, and was thrilled when they went back down after a year. When your income goes back down, they automatically lower your Medicare to the appropriate amount for your lower income. I didn't even have to contact them.

 

[rk911]

It is a shame, but it would appear they are paying around ~$108 higher each month for Part B due to MAGI being over 170k.
So it goes back to the concept of should higher income "earners" in retirement pay more medicare taxes?

closer to $112 if memory served. and yes, they should. ain’t nuthin free in this world. we’re not complaining.

 

[audreyh1]

so my total montly for medicare is as follows... it totals to be $715.45/mo

breakdown:

Medicare B - $433.40
Medicare D - $70.90
BCBS - $161.00
Metlife Dental - $29.75
Humanna Drug-$20.40

Total $715.45/month

and NO I am not a high income guy... what happened was at 64 I decided to sell some rental property and pay off some items before retirement.. it was a one time deal... so the medicare folks decided I was a high income guy and dinged me with those rates...

and a lesson, it could happen to anybody just think for a moment if you decide to perform a Roth IRA conversion... that will trigger the medicare folks to raise the rates too.... the lower limit in case you don't know is for single tax payer $85K and for married tax payers $170K... according to medicare they can go back 3 years if they want...
so even though I wasn't even on medicare in 2017 they dinged me in 2018 when I signed up for medicare.... so budget properly if you have those limits or above... thats a big chunk of your SS check you wont' ever see again...

Yes, your tax return from two years before your turn 65, will be used to determine your IRMAA status, so the year you turn 63, you need to be careful about extra taxable income as it may have an impact.

Fortunately this is calculated every year from two years earlier. So if your income returns to normal, so will your Medicare part B and D rates two years later.

 

[braumeister]

closer to $112 if memory served. and yes, they should. ain’t nuthin free in this world. we’re not complaining.

Not exactly. Basic Medicare is $135.50/month now.
It's 40% higher if your MAGI is over the first limit ($170K for MFJ)
It's 100% higher when you go over the second limit ($214K for MFJ)

As you say, it's still a good deal.

 

[rk911]

Not exactly. Basic Medicare is $135.50/month now.
It's 40% higher if your MAGI is over the first limit ($170K for MFJ)
It's 100% higher when you go over the second limit ($214K for MFJ)

As you say, it's still a good deal.

just looked at the 2019 SS Benefit statement. $135.50 for tge Pt B premium, $54.10 for the IRMAA adjustment for a total of $189.60 plus $12.40 deduction for Part D. grand total $202. i was conflating the $12.40 with $112. age.

 

[Katsmeow]

DH is 71.

His Part B is $135.50 per month (there was a year or two early on where his premiums were higher due to IRMAA). He has Plan F AARP/UHC supplement which is currently around $213 a month. His former employer pays his Part D premium. He takes no prescriptions. In the last 5 years he has had only a few prescriptions. Total cost over the 5 years has been about $100. He does take some OTC vitamins that his eye doctor recommends.

We pay $44 a month for dental insurance through his former employer. The only other health costs he has had over the last 5 years have been a few vision exams and new glasses (about every two years for glasses). He has had no other out of pocket costs at all. He had rotator cuff surgery and physical therapy a few years ago and had zero out of pocket costs.

My mother died last year at 94. Her Medicare premiums were the basic ones (I think it was $134 last year). She had Plan G Medicare supplement and at 94 was paying $367.52 per month. Her prescription plan was $43 a month.

Her main costs were prescriptions...about $150 a month on average. But, she had a lot of health problems so took a lot of prescriptions.

I will be going on Medicare in a few months. My premium will be $135.50 a month. I will probably be getting AARP/UHC Plan G which will start at about $139 a month. My Part D will be about $30 a month. I take one prescription which be no cost as it is a Tier I generic. I will be getting an HRA from DH's former employer that will cover a little over $2000 a year of my costs. I do get glasses about every two years.

 

[marko]

Not exactly. Basic Medicare is $135.50/month now.
It's 40% higher if your MAGI is over the first limit ($170K for MFJ)
It's 100% higher when you go over the second limit ($214K for MFJ)

As you say, it's still a good deal.

Back when I was paying $13K a year for BCBS (just for myself) I was puzzled when a friend said: "Well, you know that Medicare isn't free don't you?".

I told him that dropping from $1100 a month to about $200 a month was free enough for me.

 

[Souschef]

The thing that gripes me is part of the MAGI is the 85% of what I get from SS
Also, my RMD makes up a large portion of my MAGI.

 

[Telly]

The thing that gripes me is part of the MAGI is the 85% of what I get from SS
Also, my RMD makes up a large portion of my MAGI.

I think that's referred to as "The Gift of the MAGI"... a little different than what O. Henry had in mind back in '05

 

[jasg]

Like others in this thread, I chose to buy separate Part D and a MediGap plan to cover the 20% co-insurance.

Since 2014, the cost increases have surprised me.

104.90 -> 135.50 for Part B
12.80 -> 26.60 for Part D
70.00 -> 89.00 for High Deductible Plan F (2018 price, I expect it to increase)

 

[Global Wizzo]

Medical cost planning

One thing you need to consider is insurance costs if you plan to travel.

Medicare does not provide coverage outside the US.

We travel frequently domestically and internationally so I carry a GeoBlue policy for medical coverage and back that up with a MedJet Express membership for hospital to hospital transportation.

Policy prices vary but annually I’m in the 1K range for both covering DW and me.

Look at the various options, but some limit coverage as you age and some won’t write new policies past certain ages.

My mother is 96, has private medical and no Medicare. Her coverage is still good worldwide with no restrictions. Took her on a Europe trip last year and verified prior to traveling.

If you are into “high risk” travel/sports, costs and coverage vary tremendously.

Do your research based on your expected lifestyle and don’t get surprised.

Writing this an hour from landing in DTW coming from Beijing. My 5th China trip in 4 months. Tucson next week, Italy in March. Fifteen countries last year and some of those several times.

Regardless, have fun and enjoy life. Tomorrow is not guaranteed.

 

[FREE866]

seems like prescription drug costs are a big% of peiples plans...just curious--what are the afflictions that require so much medication?

 

[rk911]

diabetes, high blood pressure, high cholesterol, cancer, heart disease...should i go on?

unlike the medicare supplement plans which differ only in premium my experience with Part D plans is quite different. i'm presuming that each provider reach individual pricing agreements with the drug companies resulting in different premiums and co-pays. if premium costs are a concern it pays to shop. i've also discovered that the GoodRX app (and website) has better pricing on some drugs than many Part D insurers. we use GoodRX (no sign up, no premium payments, etc) for some drugs not covered by our Part D plans as well as for some drugs that are.

 

[FREE866]

diabetes, high blood pressure, high cholesterol, cancer, heart disease...should i go on?

sure..if there's more..thx

 

[statsman]

If your income is high, you will have to pay IRMAA adjustments on Parts B and D. Those adjustments can be quite large. Take a look at these tables.

https://secure.ssa.gov/poms.nsf/lnx/0601101020

If you are not high income and don't have to pay IRMAA, premiums for supplemental policies do increase with age. Selecting a low cost provider helps, as the cost spread is high. I'm just starting out with Medicare, so I pay Part B, about $135, UHC Plan F, about $128, And the lowest cost Aetna Plan D, about $19. Total for premiums alone is $282.

Wife (66) is paying around $290 monthly for Part B, Plan F, and Plan D this year. My retiree medical plan subsidizes $75 per month of that, so $215 monthly. Not great, but better than nothing.

Unfortunately, we sold our 23+ year Bay Area house in California last October, and our taxable income for last year exceeds $750K. So, next year's Plan B and Plan D costs are going to balloon for her. It will be a one-time hit, albeit a nasty one for all of 2020. After that, we'll easily be below $170K MAGI (easily below $100K MAGI).

 

[rk911]

sure..if there's more..thx

my question was rhetorical. i'm certain you get the idea.