Medicare, Medigap, MA - Budget for Retirement

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drummerboy
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Medicare, Medigap, MA - Budget for Retirement

Post by drummerboy » Thu Mar 01, 2018 9:14 pm

I'm still 13 years away from Medicare.... But I'm realizing I'm quite lacking in my knowledge of the premiums, coverages, etc.

What should I be budgeting for healthcare coverage during retirement?

I'll most likely be paying for:
  • Medicare (deducted from Social Security) - $150 a month for a married couple?
  • Medigap Insurance - $ ???
  • Prescription Coverage - $ ???
  • Do I need "Medicare Advantage" Policy? How much does this cover?
  • What should I budget for annual deductibles?
My company offers a "retirement" medical plan that I can pay for. It sounds more like a Medicare Advantage option. Basically a PPO through United Healthcare or Cigna.

I just want to be sure I'm forecasting appropriately in my retirement plans. Thank you for any education you can provide!

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EyeYield
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by EyeYield » Thu Mar 01, 2018 9:27 pm

13 years out is too far to reliably predict costs and plans. Medicare could look a lot different by then.

For currrent info look here: https://www.medicare.gov
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carolinaman
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by carolinaman » Fri Mar 02, 2018 8:53 am

EyeYield wrote:
Thu Mar 01, 2018 9:27 pm
13 years out is too far to reliably predict costs and plans. Medicare could look a lot different by then.

For currrent info look here: https://www.medicare.gov
Current costs for Medicare are the best you thing you have and you should be planning for this. DW pays $216 a month for medigap plan F (the best), $29 for part d. We each pay $134 for part b. My former employer pays my medigap and prescription coverage. Part D costs will vary depending upon your prescription needs. My DW uses minimal prescriptions. You should adjust these for inflation. Medigap has gone up more than inflation due to aging cohort. I hope this helps.

dbr
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by dbr » Fri Mar 02, 2018 9:10 am

carolinaman wrote:
Fri Mar 02, 2018 8:53 am
EyeYield wrote:
Thu Mar 01, 2018 9:27 pm
13 years out is too far to reliably predict costs and plans. Medicare could look a lot different by then.

For currrent info look here: https://www.medicare.gov
Current costs for Medicare are the best you thing you have and you should be planning for this. DW pays $216 a month for medigap plan F (the best), $29 for part d. We each pay $134 for part b. My former employer pays my medigap and prescription coverage. Part D costs will vary depending upon your prescription needs. My DW uses minimal prescriptions. You should adjust these for inflation. Medigap has gone up more than inflation due to aging cohort. I hope this helps.
There is a range in costs for these plans and the future is 13 years away just to get started. That said, the above numbers reflect a possible reality today. You could also consider dental costs, which are hard to insure. Maybe another $1000/year unless you have some major issues. My employer also added a Health Care Reimbursement Account for retirees that at least covers most of Medigap.

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Sheepdog
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by Sheepdog » Fri Mar 02, 2018 9:45 am

We are a retired couple, ages 84 and 77 at the end of 2017. I can give you our costs each year since 2010.

Our out of pocket medical expenses for the last 8 years are listed in each category are:
(First amount shown is for 2010, followed by 2011, 2012, 2013, 2014, 2015, 2016, 2017}

Medical insurance premiums [Medicare ('paid from SS deduction)], Medigap, Part D prescription and Medicare Advantage plans (Advantage for me in 2014-17 and spouse 2016-17): $6830, $7033, $8037, $8943, $6436, $6436, $4135, $4691

Dentist (uninsured): $220, $2962, $2977, $1576, $2500, $2981, $413, $2209

Physicians: $1583, $162, $66, $111, $296, $464, $725, $1048

Prescription Medicines: $685, $808, $62, $140, $279, $426, $1293, $2755

Misc (eyes, lab, hearing, chiropractor) mostly uninsured $532, $2545, $248, $2577, $0, $1107, $1276. $1947

Hospital and surgical $0, $906, $0, $0, $0, $424, $0, $214

TOTAL OUT OF POCKET MEDICAL EXPENSES FOR THIS RETIRED COUPLE: 2010 $9,850, 2011 $14,416, 2012 $11,290, 2013 $13,347, 2014 $9,511, 2015 $11,838, 2016 $7,842, 2017 $12,864


COMMENTS: I purchased a Medicare Advantage plan (Anthem BC/BS for me only in 2014.. My wife remained with Medicare and Medigap until 2016 when she also purchased a Humana Advantage plan.) You can see the resulting lower insurance costs starting in 2014, They are saving us over $4000 per year.

Uninsured dentist expenses are much higher than 10 years ago.

Hearing aids (uninsured) for me started in 2011. I have purchased two (in 2011 and 2013) at a cost of over $2000 each. Replacement aids were purchased in 2017, but all covered by my Advantage Plan.

Most of our medications had been generic until 2016 when my wife had to purchase 2 expensive name brands.

[In 2005 our total cost for these things was $7558.]
Last edited by Sheepdog on Fri Mar 02, 2018 9:56 am, edited 1 time in total.
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Watty
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by Watty » Fri Mar 02, 2018 9:49 am

For learning about Medicare I would highly recommend the book "Medicare for Dummies" despite it's title. Be sure you are looking at the most current version since it is constantly changing.

As far out as you are you could skim through it to get the highlights.

A big thing to remember is to apply for Medicare three months before you turn 65. If you are still working then or have retiree health coverage figuring out when to apply may not be obvious but it is important to figure out the details since applying late can be bad if you assume something that is incorrect.
carolinaman wrote:
Fri Mar 02, 2018 8:53 am
EyeYield wrote:
Thu Mar 01, 2018 9:27 pm
13 years out is too far to reliably predict costs and plans. Medicare could look a lot different by then.

For currrent info look here: https://www.medicare.gov
Current costs for Medicare are the best you thing you have and you should be planning for this. DW pays $216 a month for medigap plan F (the best), $29 for part d. We each pay $134 for part b. My former employer pays my medigap and prescription coverage. Part D costs will vary depending upon your prescription needs. My DW uses minimal prescriptions. You should adjust these for inflation. Medigap has gone up more than inflation due to aging cohort. I hope this helps.
Those are our ballpark numbers too.

With a Medigap plan like "F" which covers the most the deductibles are covered so that should be most of the medical expenses. Usually you would just show your coverage information and never get a bill with that plan.

The part D prescription drug coverage will still have various copays that might add up to a couple of hundred dollars a year for most people but it would not be uncommon for people to still be paying several thousand dollars a year for drugs if they need significant medicine. If you need a drug that is not in the formulary the costs could still be significant. Note: This are for drugs that you would get at a corner pharmacy. Things like expensive chemotherapy drugs that are given in a hospital or doctors office is usually under your normal medical coverage.

"All in" I am using a budgeting number of $600 a month per person for our current healthcare under medicare, not including possible high specific drug costs if you need them. Some Medigap plans will normally increase as you age so that is important to understand when you select one. Medical cost may go up in the future too and that is hard to predict.

This does not include dental, vision, hearing aids or long term care costs.

If you are on a more limited budget then there may be ways to lower that by using a Medicare Advantage program which is like a HMO like Kaiser. Some people like then even if they are not on a tight budget. One concern that I have with them is that a plan might be good now but if you need to change in 20 years changing from a Medicare Advantage plan can be tricky or impracticable.

dbr
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by dbr » Fri Mar 02, 2018 9:55 am

The above numbers of $10K-$12K a year for a retired couple would be consistent with our experience in ten years of retirement. We use Medigap plans but have an offset of about $4000 due to employer subsidy. I guess that says the cost is about $15k.

I have a disabled retired family member whose costs for extensive medical care are exactly zero because he has overlapping coverage from Medicare, a former employer, VA, and Medical Assistance. Nobody could collect on a billing anyway because his sources of income are judgement proof and he has no assets. Due to the way Medical Assistance works he also has no income, in effect.

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dm200
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by dm200 » Fri Mar 02, 2018 10:08 am

drummerboy wrote:
Thu Mar 01, 2018 9:14 pm
I'm still 13 years away from Medicare.... But I'm realizing I'm quite lacking in my knowledge of the premiums, coverages, etc.
What should I be budgeting for healthcare coverage during retirement?
I'll most likely be paying for:
  • Medicare (deducted from Social Security) - $150 a month for a married couple?
  • Medigap Insurance - $ ???
  • Prescription Coverage - $ ???
  • Do I need "Medicare Advantage" Policy? How much does this cover?
  • What should I budget for annual deductibles?
My company offers a "retirement" medical plan that I can pay for. It sounds more like a Medicare Advantage option. Basically a PPO through United Healthcare or Cigna.
I just want to be sure I'm forecasting appropriately in my retirement plans. Thank you for any education you can provide!
Yes - as others have posted - there could be many changes in 13 years. However, not too early to think about it and follow Medicare.

Medicare Part B - basic is NOW $134/month PER PERSON (not per couple)- but higher if higher income. This has and will go up in coming years. Who knows? All Medicare is per person and not per couple/famly.

Almost all companies have terminated health benefits for retirees on Medicare. Follow your company's retiree plan BUT my guess is that you will get nothing after Medicare. HOWEVER, there might be an exception?

Even now, plan with Physicians/providers for transition to Original medicare (if you do not choose medicare advantage). In this area, most primary care physicians do not accept new Medicare patients, but will see existing ones. Lean towards younger Physicians AND group practices. A friend had been seeing an individual practice primary care physician - and when he retired, she was on medicare and had a challenge finding a physician who would accept a new medicare patient and that she was satisfied with.

Talking to friends/acquaintances on Original medicare - they pay a lot for Supplements and drug coverage. DW and I have Kaiser medicare plans (Medicare Cost - very similar to Medicare Advantage) and do not have (cannot get) the supplement and drug coverage is included.

Medicare Advantage (MA) plans vary greatly from one area to another and the same provider's plans differ from one area to another (even in the same state). Become familiar with the MA plans in your area (some are good and some are terrible). With most (but not all) MA plans you have the risk of higher out of pocket annual costs, but normally lower costs otherwise.

In this area, the MA market is competitive and highly advertised. Kaiser and Humana are big. With Kaiser (DW and I) you must use Kaiser physicians/facilities and Humana uses a network of physicians in their own offices.

Talk to folks (both happy and unhappy) on MA plans because (in both directions) the actual experience may differ from what the documents say. In our Kaiser plan, for example, there are many examples of some lower costs and better benefits than what the written things say or imply.

Our Kaiser medicare plan (in addition to Part B premium) includes presctiption drug coverage. maximum out of pocket (this year) is $6,000. Office visits are $20 (primary care) and $45 specialist. Blood tests are zero. Email with doctors - no cost, as are telephone appointments.Most outpatient surgery (at their facility) is $250. Xrays and ultrasounds $20. CT and MRI are $150. No charge for parking (my previous doctor was in a hospital facility and $5 to park). Annual physical is no cost. Annual Optometry visit (including refraction) is $20.

Our plan only costs $30 per month per person! :) NOTHING added for supplement or drug coverage.

2015
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by 2015 » Sat Mar 03, 2018 10:47 am

Watty wrote:
Fri Mar 02, 2018 9:49 am
For learning about Medicare I would highly recommend the book "Medicare for Dummies" despite it's title. Be sure you are looking at the most current version since it is constantly changing.

...
I second this excellent suggestion.

Shallowpockets
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by Shallowpockets » Sat Mar 03, 2018 1:08 pm

I second getting Medicare for Dummies.

Also, you stated $150 month for both of us. You need to get that straight right away. Medicare is not for couples. It is for individuals. No family coverage. One person, one medicare.

Medicare for Dummies.
If you don't want to buy it, then you are not interested in answers. If you buy it you will not have to post any questions here. In fact, you will,be able to answer questions here.
Thirteen years out is a long time away.

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dm200
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by dm200 » Sat Mar 03, 2018 2:56 pm

Shallowpockets wrote:
Sat Mar 03, 2018 1:08 pm
I second getting Medicare for Dummies.
Also, you stated $150 month for both of us. You need to get that straight right away. Medicare is not for couples. It is for individuals. No family coverage. One person, one medicare.
Medicare for Dummies.
If you don't want to buy it, then you are not interested in answers. If you buy it you will not have to post any questions here. In fact, you will,be able to answer questions here.
Thirteen years out is a long time away.
Very important to understand..

For those (such as federal employees) - if there are deoendents then the federal coverage can extend to dependents and make the whole choice of Medicare choices more complex.

FBN2014
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by FBN2014 » Sun Mar 04, 2018 12:54 pm

By the time you are 65 Medicare and Medicaid will most likely be different from what it is today. The cost of these programs is unsustainable and eventually will be means tested IMO. So there is little you can do now that will matter in investigating whether to go with a Medigap (supplemental) policy or a Medicare Advantage policy. One thing you should do is look into long term care insurance since Medicare doesn't cover long term care costs and Congress will most likely close all the loopholes that currently exist that allow people with substantial assets to qualify for Medicaid by arranging the titling of assets with the assistance of an elder law attorney. At your age depending on your health you should have some affordable options available: partnership plan or a hybrid plan. Find an insurance agent who specializes only in long-term care insurance and explore your options.
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dm200
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Re: Medicare, Medigap, MA - Budget for Retirement

Post by dm200 » Sun Mar 04, 2018 1:03 pm

FBN2014 wrote:
Sun Mar 04, 2018 12:54 pm
By the time you are 65 Medicare and Medicaid will most likely be different from what it is today. The cost of these programs is unsustainable and eventually will be means tested IMO. So there is little you can do now that will matter in investigating whether to go with a Medigap (supplemental) policy or a Medicare Advantage policy. One thing you should do is look into long term care insurance. At your age depending on your health you should have some affordable options available: partnership plan or a hybrid plan. Find an insurance agent who specializes only in long-term care insurance and explore your options.
Who knows? While there will, near certainly, be changes - I do not think it is too early to stay aware of the pros and cons of Medicare Advantage type plans. Depending on the area, it might even be worth considering being on plan(s) that might make the transition smother. In this area, for example, the Kaiser HMO transition from regular, employer, or ACA to Medicare is seamless.

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