Cancer and Medicare

[shotgunner]

A very good friend of mine is turning 61. He tends to be obsessive and compulsive. He always asks me for financial advice for most of our lives. He is currently working a good job with group health insurance. His wife, 53 unfortunately had a HA and while treating her they discovered she had lung cancer 2 years ago. She has been in treatment since, shortly after they found a spot on her lung, later they discovered it had metastasized to her brain, rib and a lymph node. I think it's a miracle she is still alive. My friend is wanting to leave his job this fall, 6 months before 62 and SS. He would get about $25,000 between his SS and his wife once he starts to collect. He has about $300K in savings and a 401K. He owns a home and tells me his living expenses are $20K a year, I believe he is shooting too low on that estimate, his property taxes alone are $5600. I don't believe he fully grasps how much his employer provided insurance is covering the cost of wife's treatment which includes immunotherapy. I don't believe Medicare will cover as much, his wife is eligible due to disability but not presently on it. I think he is taking a huge risk compared to his income and assets. I know there are Medicare supplements, advantage plans, medigap etc. I told him I would not leave my employment and group insurance until I had too. Does anyone have any advice or experience and what he should do as far as augmenting the Medicare coverage and what it might cost? He is definitely OCD and I believe his obsessive nature is clouding his good judgement, because his focus is on having more time off to go hunting. I think the fact I have been ER for the last 5 years is a factor for him, envy. Maybe I am wrong and ER is doable for him.

 

[SpinDoctorTX]

A very good friend of mine is turning 61. He tends to be obsessive and compulsive. He always asks me for financial advice for most of our lives. He is currently working a good job with group health insurance. His wife, 53 unfortunately had a HA and while treating her they discovered she had lung cancer 2 years ago. She has been in treatment since, shortly after they found a spot on her lung, later they discovered it had metastasized to her brain, rib and a lymph node. I think it's a miracle she is still alive. My friend is wanting to leave his job this fall, 6 months before 62 and SS. He would get about $25,000 between his SS and his wife once he starts to collect. He has about $300K in savings and a 401K. He owns a home and tells me his living expenses are $20K a year, I believe he is shooting too low on that estimate, his property taxes alone are $5600. I don't believe he fully grasps how much his employer provided insurance is covering the cost of wife's treatment which includes immunotherapy. I don't believe Medicare will cover as much, his wife is eligible due to disability but not presently on it. I think he is taking a huge risk compared to his income and assets. I know there are Medicare supplements, advantage plans, medigap etc. I told him I would not leave my employment and group insurance until I had too. Does anyone have any advice or experience and what he should do as far as augmenting the Medicare coverage and what it might cost? He is definitely OCD and I believe his obsessive nature is clouding his good judgement, because his focus is on having more time off to go hunting. I think the fact I have been ER for the last 5 years is a factor for him, envy. Maybe I am wrong and ER is doable for him.

While I'd prefer to stay out of it as much as possible, I too would be tempted to tell him to run some scenarios to find out just how broke they would be- and quite soon I'd wager. Any devastating illness will blow through 300k in no time. What if he gets something too? I think that they need outside advice by a CFP or the like.

All that said, OCD can cause people to make hasty decisions and create not well thought out plans. It did for me until I was diagnosed and began meds.

He could have a long time horizon ahead, so waiting until FRA or 70 would fund a better retirement by a long shot. Health insurance costs a fortune and theirs will have to have a high ceiling for cancer.

Good luck helping your friend. Maybe you can show him where/how he can model different scenarios using a handful of reliable websites (they are here for sure). I wouldn't help him do it though. This fella needs a financial education, and there is no time like the present to get started learning how money, budgets and investing work.

Perhaps you can gift him with what you think is the best book for retirement planning. Used books are cheap!

 

[shotgunner]

Thank you SpinDoctorTX I agree with all you said. I try to stay out of it and keep reiterating I don't think his choice to ER at this time is wise considering his situation, I have told him repeatedly it's his decision but I would not do it myself in his situation. He is a bright guy but again driven by OCD and I suspect some other issues. I think he is foolish in many ways as it relates to retirement, he has never had a physical or a colonoscopy. I have explained to him the value of preventative medicine, his behavior does not change. Given this I think the chance of him addressing his OCD is slim. I am not on Medicare yet and have no idea of what he is facing in terms of supplementing it and the costs that might be involved with his situation so I can't help much on that front other than knowing it will be significant. He has been a good friend for 40+ years but right now I feel like I am watching the steep descent of a plane that will most likely crash and I am yelling pull up, pull up to no avail. I have some of those books tucked away somewhere, I think I will dig them out and give them to him for what it is worth.

 

[ivinsfan]

You are mixing Medicare and Medicaid..they are two different things..The wife will be on Medicaid until 65. And quality of care on Medicaid can vary wildly. In your shoes I'd probably stay out of it completely.

 

[shotgunner]

You are mixing Medicare and Medicaid..they are two different things..The wife will be on Medicaid until 65. And quality of care on Medicaid can vary wildly. In your shoes I'd probably stay out of it completely.

How am I mixing Medicare and Medicaid? I don't believe he and his wife would qualify for Medicaid in NH.

 

[ivinsfan]

...


SSI beneficiaries qualify for Medicaid not Medicare, in many states. You can't get on Medicare in your 50's even with a disability.

And of course your friend will need regular insurance until 65.

 

[shotgunner]

And of course your friend will need regular insurance until 65.

NH is a stingy state. From what I have read people who are approved for SSI do not automatically go on Medcaid, NH determines each case individually. Income limit for two people is $675 a month (SSI is not counted) and asset limit is $3000. You essentially have to be living below the poverty line and own nothing.

He is counting on the Exchange for himself.

I also read that people on SSDI can get on Medicare if they have been receiving SSDI for 24 months which she has.

 

[Sunset]

OP - Can you appeal to your friend's OCD tendency to track his ACTUAL expenses. As you have stated it seems your friend is under estimating expenses.

Included in his estimate should be an amortized cost of large expenses such as: roof, furnance, A/C, automobile replacement, water heater, dishwasher, fridge, stove, etc.

Reason being is saying a person spends $20K per year, is false if 4 yrs later they spend $20K + $30K for new car. (I did this and it was a cash flow squeeze )
In reality my example is: 20+20+20+20+30 = 110 / 4 = $27,500 per year.

 

[Morgan22]

If the wife is collecting SSDI she is eligible for Medicare before the age of 65.

The husband cannot go on Medicare until he is 65. (Unless he becomes disable and goes on SSDI himself.) If he wants health insurance, he will need to purchase retiree health insurance if eligible, or purchase health insurance through ACA. It sounds like their income will be low, so he may be able to get his health insurance through the ACA for close to free.

If they spend all of their money they will become eligible for Medicaid, regardless of age. (I believe you can have $2k if single to $3k if couple in assets only if on Medicaid.) Some states treat Medicaid recipients well, other states not so well.

 

[ivinsfan]

If the wife is collecting SSDI she is eligible for Medicare before the age of 65.

The husband cannot go on Medicare until he is 65. (Unless he becomes disable and goes on SSDI himself.) If he wants health insurance, he will need to purchase retiree health insurance if eligible, or purchase health insurance through ACA. It sounds like their income will be low, so he may be able to get his health insurance through the ACA for close to free.

If they spend all of their money they will become eligible for Medicaid, regardless of age. (I believe you can have $2k if single to $3k if couple in assets only if on Medicaid.) Some states treat Medicaid recipients well, other states not so well.

I'm goggling this and seeing you can go on Medicaid in some states but nothing about Medicare..if someone has experience with Medicare being available before 65 please let us know.

 

[ncbill]

...

SSI beneficiaries qualify for Medicaid not Medicare, in many states. You can't get on Medicare in your 50's even with a disability.

If the wife is already on SS disability (which is not SSI) then she qualifies for Medicare after 24 months.

But eligibility for SS disability depends on whether or not she had sufficient work credits on her own record to qualify.

If she really is already on SS disability I'd tell him to wait until she's enrolled in Medicare (24 months after qualifying for SS disability)

If she's receiving private disability benefits but not SS disability they need to meet with a lawyer about getting her onto SS disability ASAP...again, he shouldn't leave the current job until she's on Medicare.

 

[shotgunner]

OP - Can you appeal to your friend's OCD tendency to track his ACTUAL expenses. As you have stated it seems your friend is under estimating expenses.

Included in his estimate should be an amortized cost of large expenses such as: roof, furnance, A/C, automobile replacement, water heater, dishwasher, fridge, stove, etc.

Reason being is saying a person spends $20K per year, is false if 4 yrs later they spend $20K + $30K for new car. (I did this and it was a cash flow squeeze )
In reality my example is: 20+20+20+20+30 = 110 / 4 = $27,500 per year.

Thanks, I suggested to him to figure out what his take home income was for the year and subtract the increase in his savings in the same year as a way to determine what he was spending. I also told him you are going to want to fill your new found time and it will cost money, I went on to tell him I have found through experience you will spend more than you have budgeted for because things happen, dental crowns, car insurance deductible if you get hit in a parking lot etc. etc.

 

[ivinsfan]

If the wife is already on SS disability (which is not SSI) then she qualifies for Medicare after 24 months.

If she really is already on SS disability I'd tell him to wait until she's on Medicare.

I'm learning something here so if the spouse has been on SSI for 24 they can convert to regular Medicare... so it's 0-24 Medicaid by state and Medicare after 24 months after receiving a SSI check. Does anyone know if someone on SSI pays for Part B.. I am seeing you can buy add ons to Medicare.

 

[ivinsfan]

If the wife is collecting SSDI she is eligible for Medicare before the age of 65.

The husband cannot go on Medicare until he is 65. (Unless he becomes disable and goes on SSDI himself.) If he wants health insurance, he will need to purchase retiree health insurance if eligible, or purchase health insurance through ACA. It sounds like their income will be low, so he may be able to get his health insurance through the ACA for close to free.

If they spend all of their money they will become eligible for Medicaid, regardless of age. (I believe you can have $2k if single to $3k if couple in assets only if on Medicaid.) Some states treat Medicaid recipients well, other states not so well.

There is apparently a 24 month waiting period before going on Medicare?

I did not know there was a difference between SSI and social security disability. The complexity of this single subject should suggest to you that you need to let your friend figure this out on his own.

shotgunner do you actually know what type of disability the wife is receiving and when it started.

 

[shotgunner]

There is apparently a 24 month waiting period before going on Medicare?

I did not know there was a difference between SSI and social security disability. The complexity of this single subject should suggest to you that you need to let your friend figure this out on his own.

shotgunner do you actually know what type of disability the wife is receiving and when it started.

Work related arm and neck injury many years ago, I believe it is SSDI. Yes I agree he must figure this out on his own. I try to get him to think about what he will be dealing with in ER in terms of expenses. His situation is one I have no experience with and again if it were me I would continue to work at this point. It's hard to watch a friend risk his future as he seems to be doing.

 

[ivinsfan]

Work related arm and neck injury many years ago, I believe it is SSDI. Yes I agree he must figure this out on his own. I try to get him to think about what he will be dealing with in ER in terms of expenses. His situation is one I have no experience with and again if it were me I would continue to work at this point. It's hard to watch a friend risk his future as he seems to be doing.

It's not easy, but it might be like trying to stop a moving train. You can't stop the train and you are the one that gets hurt, stressed out and maybe even blamed when things go off the rails.

 

[Teacher Terry]

The wife has to pay for part b. I spent my career working with people with disabilities. Once his wife dies he will lose the lowest of the 2 social security. I wonder if he has thought about that. He is crazy to be thinking about retirement.

 

[MarieIG]

They should be looking for the best coverage, not just the cheapest.

They should investigate what DW's medical care providers will accept before he quits his job.

When I was working at my last job, the firm obtained (horrific) coverage to the determent of the employees after the ACA came in, with a huge deductible. One of the secretaries got cancer; and she had to jump through hoops to get the care she needed. Not all providers would take the coverage.

And no, Medicare will not necessarily pay what is carrier is covering through his job. This is going back - but Medicare would not pay for DF's IVIG infusions.

 

[ncbill]

There is apparently a 24 month waiting period before going on Medicare?

I did not know there was a difference between SSI and social security disability. The complexity of this single subject should suggest to you that you need to let your friend figure this out on his own.

shotgunner do you actually know what type of disability the wife is receiving and when it started.

SSI is for low income households with very few assets...$3,000 asset limit for a couple, IIRC...given the assets listed in the OP it is unlikely she is receiving SSI.

Again, IMHO he shouldn't leave his job until she's on Medicare as a result of going on SS disability.

https://www.aarp.org/retirement/social-security/questions-answers/ssi-eligible.html

 

[momoftwo]

Our family has (unfortunately) had to learn about Medicaid and Medicaid.
We are in NJ, maybe some I know is state specific but I dont think so.

DH became disabled at age 61 due to metastatic cancer.
He qualified quickly for SSDI (not SSI, not income/asset dependant). It also gave him Medicare immediately.
Waiting period might usually
require 24 month waiting period but cancer is one disease that allows Medicare as SSDI is approved.
His SSDI turned into SS retirement at 65, Medicare continued. He's fortunately still with us at 68.

Our permanently disabled from birth adult daughter received SSI at age 18. She immediately also qualified for Medicaid. When DH hit 65, DD became eligible under DH's record (combo of SSDI and SSI) and then Medicare after 24 months.

Im retired after 41 yrs in healthcare, collecting SS retirement. Medicare later this year at 65.

As you can tell, it can be complicated.
The SS reps have been surprisingly helpful thru all our challenges.

Best to OP's friend and his family.

 

[Peter]

Waiting period might usually
require 24 month waiting period but cancer is one disease that allows Medicare as SSDI is approved.

That is a key point that I don't think has come up previously in this thread.

 

[Katsmeow]

I think most of this has already been discussed. SSI and SSDI are not the same. SSDI can allow for Medicare coverage. The thing I want to add is that people under 65 are not always eligible for all the Medicare Supplement plans as people over 65. With serious health care costs, she would not want to go on medicare without being able to get a good supplement plan. I believe that what plans are available to disabled under 65 is a matter of state law. So he should look into that also.

Of course -- this man most likely should not retire. Right now his wife's medical care is apparently covering by his good insurance. I saw most likely because you said he had $300k in savings plus a 401k. You didn't say how much he has in the 401k. If he had a great deal of money in the 401k then maybe. But, because you say he and his wife together will only get $25k SS then he doesn't sound like a high earner so I would be surprised if he had a huge 401k.

Also, I wonder if he understands that the smaller of the SS checks will go away if his wife dies. Perhaps one check is much smaller than the other so it won't make a huge difference. But even $5k a year would make a huge difference here.

 

[shotgunner]

Thank you for all the replies.

MomofTwo would you share how much annual out of pocket costs you have experienced with DH's treatment while on Medicare and Supplements, PM me if you don't want it public.

Katsmeow he showed me a preliminary package an Amreprise planner gave him, there were no real details in it unless he hired her. From what he saw there was $60K in savings and $239K in a 401K and his home of $265,000K. There was also the SS for him and his wife, $16K and $9K respectively. All he saw is what he wanted to see, 100% chance of success on a starting income of $20K with a 2% inflation factor. I think it is woefully low for the area we live in, as I said his prop tax alone is $5600 with a historic inflation factor of 3 to 4%. He has yet to begin shopping for Medicare and HI for himself.

Medicare remains an unknown for me but its closing in fast, 17 months to go. I just don't believe it will cover his wife's continuing treatment or possibly end of life care like his group HI from work which is a major US manafacturer. I do feel like his obsessive nature could be pushing him off a cliff. So I came here to get input on how much out of pocket costs might be for a case of matastic cancer could be expected if his wife was on Medicare.

 

[momoftwo]

Shotgunner
Our experience is very atypical so I dont think it will be useful to your friends situation.
My retiree health coverage serves as my primary (only) coverage until Medicare this fall.
It has also served as DH's secondary to Medicare all through his cancer treatment. It is a self funded plan from my ex-employer, a large well rated healthcare system.
All of DH's care was in network. Its been over 5 years- 2 surgeries, another admission for embolism, multiple specialists, countless blood tests, radiology scans and months of chemo and radiation.
I'd estimate we've had 5-7K out of pocket total. Its extraordinary coverage not available to newer employees. Having it was a key part of my ability to retire last year.

I wonder if your friend can grasp the enormity of his wifes possible health care expenses. Of course, they could be much more focused on medical aspects which would be very understandable.
I wish them the best.

 

[audreyh1]

My MIL on Medicare and cancer. For traditional Medicare, if you have a supplement pretty much everything for cancer treatment is covered under Part B unless I suppose it’s experimental. If you don’t have a supplement, that 20% not covered by Medicare gets really expensive, really fast because cancer treatment is very expensive, especially the chemotherapy drugs administered at a doctors office.