Medical Expense Changes

[Willers]

I'm working on fine-tuning my post-retirement budget and am hoping to get some opinions on healthcare expenses. Right now I don't have expenses decreasing at any point, but I'm not sure that's right.

What I'd like to know is how your costs have changed as you hit 65 and Medicare kicked in. I know there are still supplemental policies and other costs. I'm trying to gauge how much my spending will decrease, if at all.

I know that every situation is different, but with some info at least I'll have a more educated number.

Thanks for any info you can give me!!!

[Bamaman]

I've been buying very good healthcare coverage since retiring thru my company. When I went on Medicare, my supplement is also coming through them. My out of pocket expenses went down about $250. My wife's been on Medicare with their supplement for years.

I'm actually coming out ahead for both of us. Where it gets you is if you use a bunch of name brand meds, and you get in "the gap." My wife went there 8/2014, and it cost us a bunch of $ until year end.

Just hope any ailments can be treated with old, generic meds of lower cost.

[MBSC]

You may be interested in this ER thread: http://www.early-retirement.org/foru...ate-77404.html

[Rich_by_the_Bay]

If it is available, fund a health savings account as heavily as you can. Even if your health is perfect you can use it for Medicare premiums, LTC, vision, dental. I wish I had funded mine more than I did. The HSA accounts can be self-directed.

[W2R]

Quote:

Originally Posted by Willers I'm working on fine-tuning my post-retirement budget and am hoping to get some opinions on healthcare expenses. Right now I don't have expenses decreasing at any point, but I'm not sure that's right. What I'd like to know is how your costs have changed as you hit 65 and Medicare kicked in. I know there are still supplemental policies and other costs. I'm trying to gauge how much my spending will decrease, if at all. I know that every situation is different, but with some info at least I'll have a more educated number. Thanks for any info you can give me!!!

I am a federal retiree, and our retiree health insurance is a very good deal. It costs the same before Medicare and with Medicare (and before and after retirement, too). It covers drugs, so no Medicare Part D. All I have to pay that is extra, is Part B which comes to slightly under $105/month. Drugs cost the same as before retirement.

I am also pretty healthy for my age, according to my doctor. Here are my actual medical costs, including retiree health insurance, Medicare Part B, prescriptions, and so on. This includes dental and optical. In 2013 I had a dental implant and got new glasses, so that is why the cost was so high that year. The 2015 costs are through April only; root canal this year.

Medicare has been in place since my 65th birthday, in June, 2013.

Year . .	Medical Cost	My Age
2010	$2619	61-62
2011	$3242	62-63
2012	$3922	63-64
2013	$7936	64-65
2014	$4972	65-66
2015	$2500	66

I think this is probably a "best case" scenario.

[Willers]

Thanks for the detail. It confirms that I probably shouldn't plan for big reductions.


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[ERhoosier]

Quote:

Originally Posted by Willers ......probably shouldn't plan for big reductions.....

True for most folks. Particularly for those FIRE's now getting subsidy for their HI from Exchange plan. Those ACA subsidies do not apply after going on Medicare. Depending on MAGI, total OOP HC costs could INcrease dramatically with premiums for Part B & supplement plan, copays, etc. And most do not get healthier as we age

[Walt34]

I'm in about the same position as W2R and the retirement system I'm under closely parallels the federal system. When Medicare started a few months ago my premium dropped a bit and it (BCBS) became secondary to Medicare A&B. I still get the same prescription coverage so no part D, a discount (but not insured) eye care, and routine dental care.

When I retired there were a couple of options on HI. While I was working I paid 20% of the HI group insurance and could leave it at that but it would only cover for one year in retirement for each year of service, in my case 29 years. Or I could pay 30% of the premium and keep it for life for me and DW. That one was a no-brainer, I pay the 30%.

[ABQ2015]

I realize that you are asking for our own experiences but one of our forum members posted some charts from this JP Morgan Asset Management publication ("Healthcare Costs in Retirement") on another forum and I thought it informative.

https://www.jpmorganfunds.com/blobco...ment_final.pdf

To summarize median healthcare costs at age 65 were $4400 and high healthcare costs at that age were $6900, the difference due to Medicare Part D and out of pocket costs (e.g., prescriptions). The charts assumed Medicare Part B, Part D, and a Medigap Plan F.

Like W2R, I plan to have FEHB and Part B at age 65 unless things change in five years. The FEHB (probably BCBS) will substitute for the Part D and Medigap.

[Willers]

Thanks everyone. The information and the links helped.

I'll leave my plan as is, with no decreases at 65.

It makes me wonder how many people that aren't paying attention to these costs mistakenly assume that once they hit Medicare age their costs go to zero. Couple that with a lack of savings and they're in for an unpleasant surprise.


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[pb4uski]

I anticipate that our costs will be about the same once we are on Medicare.

We currently pay $456/month for health insurance (for 2 people) for a catastrophic plan. Out deductible/OOP were nil last year but in a more normal year about $3,000 and about $8,500 a year most years.

My Mom's Medicare costs (parts A, D and Medigap) are about $4,260/year (for 1 person) so they are in the ball park with what we pay now.