Transition Private PPO Medical to Medicare

[Route246]

Planning for Medicare from Private PPO when I retire, currently myself 66, wife 65, both of us enrolled in Part A already. Additionally, neither of us draws SS yet and don't plan to until 70+ to maximize benefit as we won't need SS to maintain lifestyle.

I believe we will always be in a high income tax bracket, especially when RMD happens.

Simple question: What sort of budgetary numbers can I expect when we transition off private PPO insurance from my employer to a full-service PPO Medicare plan? It won't affect our cashflow much since we are comfortably FI but it is still an expense to deal with so I was curious what to expect. I remember my parents' premiums for AARP Secure Horizons PPO were very modest but they did not have the retirement income level we have.

Just rough budgetary numbers would be helpful.

One other question, how far in advance of retirement date should I dial in our Medicare PPO coverage so I avoid COBRA or other expenses to overlap smoothly?

 

[youbet]

Simple question: What sort of budgetary numbers can I expect when we transition off private PPO insurance from my employer to a full-service PPO Medicare plan?

Not quite sure what a "full-service PPO Medicare plan" is.........

 

[jollystomper]

Simple question: What sort of budgetary numbers can I expect when we transition off private PPO insurance from my employer to a full-service PPO Medicare plan?

Do you mean a Medicare Advantage PPO Plan (which are different from the more common Medicare Advantage HMO plans)?

 

[pb4uski]

Planning for Medicare from Private PPO when I retire, currently myself 66, wife 65, both of us enrolled in Part A already. Additionally, neither of us draws SS yet and don't plan to until 70+ to maximize benefit as we won't need SS to maintain lifestyle.

I believe we will always be in a high income tax bracket, especially when RMD happens.

Simple question: What sort of budgetary numbers can I expect when we transition off private PPO insurance from my employer to a full-service PPO Medicare plan? It won't affect our cashflow much since we are comfortably FI but it is still an expense to deal with so I was curious what to expect. I remember my parents' premiums for AARP Secure Horizons PPO were very modest but they did not have the retirement income level we have.

Just rough budgetary numbers would be helpful.

One other question, how far in advance of retirement date should I dial in our Medicare PPO coverage so I avoid COBRA or other expenses to overlap smoothly?

For us... 67/68 yo couple in Florida:

Medicare Part B = $164.90/mo each.......................$3,957.60
Medicare Part D (Rx) = $8.40/mo each........................201.60
Medigap Plan G = $168.26 and $193.44/mo each.....$4,352.40
Medicare Part B deductibles = $226/yr each.................456.00

Total...................................................................$8,967.60

If your joint income is above $194,000 then your Medicare Part B costs will be higher.

 

[Katsmeow]

Are you doing traditional Medicare + a supplement or do you plan to do Medicare Advantage. If you are higher income I would generally myself prefer traditional Medicare given the flexibility it gives you.

Here is the IRMAA info for Part B if your modified AGI exceeds $194000

https://www.cms.gov/newsroom/fact-s...s-2023-medicare-part-d-income-related-monthly

 

[Route246]

Correct. By PPO I mean non-HMO.

Do you mean a Medicare Advantage PPO Plan (which are different from the more common Medicare Advantage HMO plans)?

 

[Katsmeow]

Correct. By PPO I mean non-HMO.

Why would you do Medicare Advantage? I can maybe understand doing that if you can't afford a supplement and traditional Medicare but it sounds like you can. While a PPO is better than a non-HMO there are still potential problems with it. Some doctors just won't see Medicare Advantage patients if they aren't in network (even though the plan allows it). The other thing is that you are having an insurance company who has every incentive to deny and delay coverage. It doesn't sound like you have to financially live with the care limitations of Medicare Advantage.

 

[Route246]

I'm just digesting all of the minutiae and nuance now.

I'm in a corporate PPO now (Cigna). They have every incentive to deny coverage. Is Medicare Advantage much different? I need to study the care limitations you cite. Thank you for that.

Why would you do Medicare Advantage? I can maybe understand doing that if you can't afford a supplement and traditional Medicare but it sounds like you can. While a PPO is better than a non-HMO there are still potential problems with it. Some doctors just won't see Medicare Advantage patients if they aren't in network (even though the plan allows it). The other thing is that you are having an insurance company who has every incentive to deny and delay coverage. It doesn't sound like you have to financially live with the care limitations of Medicare Advantage.

 

[pb4uski]

A Medicare supplement is more akin to your current coverage. Medicare Advantage is akin to a HMO and while cheap or even free, is often subject to high deductibles.

We prefer to pay an extra $5k a year vs Part B and free Medicare Advantage and have unlimited access across the USA and a lower limit on our deductibles.

 

[jollystomper]

Correct. By PPO I mean non-HMO.

DW and I are in our first year of Medicare. We were on Megacorp PPO (too much retirement income to be eligible for ACA, plus the Megacorp rate was better) and we have chosen a corporate Medicare Advantage PPO policy (only available to Megacorp retirees). So far the only difference has been lower premiums, much cheaper doctor visits and lab tests (e.g. $20 vs $100+ for primary). All of our previous doctors accept the plan, including one out of network but they accept the reimbursement level of the plan. We have not had anything serious, but no issues with any treatment being denied. DW is currently dealing with a fractured ankle, and so far no issues seeing our specialists, getting xrays. etc. Coverage is international, and our deductibles are much lower.

I researched this a lot before choosing it. Most folks do not differentiate between Medicare HMO and Medicare PPO plans. My research showed that, perhaps due to their being more restrictive, the PPO plan was just as good as my Megacorp retiree plan. We will have to see what the premium looks like at renewal time, but so far so good.

 

[zl55lz]

Planning for Medicare from Private PPO when I retire, currently myself 66, wife 65, both of us enrolled in Part A already. Additionally, neither of us draws SS yet and don't plan to until 70+ to maximize benefit as we won't need SS to maintain lifestyle.

I believe we will always be in a high income tax bracket, especially when RMD happens.

Simple question: What sort of budgetary numbers can I expect when we transition off private PPO insurance from my employer to a full-service PPO Medicare plan? It won't affect our cashflow much since we are comfortably FI but it is still an expense to deal with so I was curious what to expect. I remember my parents' premiums for AARP Secure Horizons PPO were very modest but they did not have the retirement income level we have.

Just rough budgetary numbers would be helpful.

One other question, how far in advance of retirement date should I dial in our Medicare PPO coverage so I avoid COBRA or other expenses to overlap smoothly?

You did not mention whether the Medicare Advantage PPO plan you are thinking about is through your employer or not. If so, these "EGWP" plans are sometimes considered much "better" than the Advantage plans offered to the general public.

Also, a Medicare Supplement Plan G HD (High Deductible ) premium is much lower than the regular G Plan--check the Medicare.gov site for premiums, deductibles, etc. It is a good idea to be familiar with the specific Supplement plan rules in your State for change options, etc.

I think the regs allow one to enroll immediately in Part B since you are already 65, and I think the effective date is now the first of month after enrollment, so it may be the Supplement or Advantage effective date would be the same for timing purposes. Lots of info at the Medicare.gov site.

 

[Katsmeow]

I'm in a corporate PPO now (Cigna). They have every incentive to deny coverage. Is Medicare Advantage much different? I need to study the care limitations you cite. Thank you for that.

Medicare Advantage is run by insurance companies. Yes, they do have things they have to cover. However, they want to make a profit so if they can delay or deny well then works for them.

What state are you in? In most states if you go to Medicare Advantage (with a couple of exceptions) and you want to go back to traditional Medicare you can but you don't have a right to get a supplement unless you pass underwriting. I've known people who wanted to go back to traditional Medicare but could not pass underwriting.

 

[Luvtoride]

Route246,
We just enrolled in Medicare Part B as my corporate Aetna health plan ended on July 31, the month that I retired.

We are in the middle of an interesting situation regarding our supplemental health coverage.
My DW is a NYC Retiree and we are accessing her retiree health benefits. We were enrolled in Emblem Health GHI Senior care offered for retirees who live in NJ, as our supplemental coverage as of August 1st. Our Pharmacy benefits are through this plan as well.

Most of you may not be aware or following the news stories this summer, but the City of NY wanted to convert ALL NYC retirees to an Aetna Medicare Advantage plan as of Sept 1, 2023. This move has been fought by most NYC unions and other retiree interests for many of the reasons mentioned above about Medicare Advantage Plans. The fight has ended up in court and so far, a judge has blocked the implementation of this MANDATED health care switch for all existing and New retirees.

So for now, we are spared having to convert to the Medicare Advantage plan which would clearly not be as beneficial to us and most retirees as regular Medicare with the supplement plans offered (different but similar plans for residents of other states). Obviously, the city is trying to save money by this move.

PS. The NYC Retiree health coverage has historically been one of the best deals for retirement benefits. In addition to the plans having no premium payments by retirees, they reimburse retirees for the Medicare premiums we pay.

 

[Gotadimple]

Route246,

So for now, we are spared having to convert to the Medicare Advantage plan which would clearly not be as beneficial to us and most retirees as regular Medicare with the supplement plans offered (different but similar plans for residents of other states). Obviously, the city is trying to save money by this move.

PS. The NYC Retiree health coverage has historically been one of the best deals for retirement benefits. In addition to the plans having no premium payments by retirees, they reimburse retirees for the Medicare premiums we pay.

Although retiree health insurance may be offered as a benefit, the offer will change over time. You just have to get used to the fact that finances change for employers and while a pension is guaranteed, other benefits are not. I know that seems harsh - but - a different perspective might help.

I worked for 16 years for a health insurance plan that sold Medicare Advantage and offered a corporate Medicare Advantage plan to retirees for what it cost them to administer the plan. Over time, the cost increased (see next paragraphs for why).

"Corporate" just like "Union" means a plan that cannot be bought by the general public.
It also means that coverage is broader, and co-pays and deductibles are lower. The employer negotiates premiums based on claim costs.
And finally it means it is restricted and as members age their health declines and claim costs go up.
When claim costs go up, premiums go up.

Ultimately I moved away from the plan offered to retirees because it was too expensive and a similar plan with higher co-pays and deductibles cost half as much for the exact same care.

You don't have to take the offered MA plan - you can go with the general public with traditional medicare and a supplement for better coverage. Yes there is a financial impact: but there will be a financial impact if the city is able to move you to Medicare Advantage.

It might useful to look at the other side of the coin. Yes the city wants to save money. So how many employees do they need to lay off so they can maintain retiree health care that the unions don't want them to change?

 

[DallasGuy]

Medicare Supplemental plans usually have a higher monthly premium than the Advantage plans. There are pros and cons to both. But in my opinion, if you think you'll ever have a major illness, Supplemental plans (Part G in my case) generally have better coverage. The problem lies in the situation where you're really healthy and get an Advantage plan because they're less expensive and then suddenly out of the blue get an unexpected major illness. Then it's more difficult to switch to a supplemental plan because you have to go through qualifications at that point. I've heard of several friends and family members that picked an Advantage plan to start out with, got sick and then wanted to switch to a supplemental plan for better coverage and it was a hassle for them to do that, and they had to pay higher monthly (compared to others in their age group in that supplemental plan). So in the case that you get a major illness out of the blue, you'll probably be much better off with a Supplemental plan because you can pretty much go to any doctor and there aren't as many limitations.

I'm not an expert on all of this, so if my generalizations above are incorrect, please correct me. I have had multiple myeloma (totally unexpected diagnosis) for about 10 years and I can't imagine having an Advantage plan with a diagnosis like that. Just my 2 cents worth...

 

[pb4uski]

I was talking with someone just like that the other day. They were healthy when they signed up for Medicare Advantage then later had an illness and now can no longer pass underwriting for a Medicare Supplement.

As previously posted (post #4), our total costs for two (excluding vision and dental) is about $9k a year and just Part B is about $4k a year (for two people) so I view the extra $5k ($2,500 each) as just paying what we might otherwise pay for MA deductibles but monthly and limiting our exposure to particularly large bills.