coming out of my shell

coming out of my shell

Sunday, July 17, 2016

Time for Medicare

Holy Shit! Both T and I will turn 65 soon and we must sign up for Medicare.  Are you one of those people who always thought you paid into Medicare with every paycheck so that health care would be free when you got old?  Wrong.

We retired at 62 with The University’s fabulous health insurance plan. We were lucky to have that policy. We paid a reasonable monthly premium and, if we got sick, we could go to the doctor without breaking the bank. In addition to the reasonable premiums, there was a low co-pay and no deductible.

We’ll be kicked off the fabulous plan when we turn 65. The University requires Medicare-eligible retirees to switch to their less desirable 80/20 Insurance for Retirees as a secondary policy to cover what Medicare doesn't.


What is Medicare?

a.     Part A is “free” in that we spent our entire working lives paying into this fund. However, it is pretty much only for hospital bills.

b.     Part B is for routine medical services (e.g., doctor bills). You have to pay for Part B, so it is optional; however, you’d have to be wealthy, foolish, or poor enough to qualify for Medicaid not to buy into this program. After paying out of pocket for the annual deductible ($166), Part B pays 80% of covered costs.

For most oldsters the Part B premium is $104/month. Since we both turn 65 and sign up for Medicare in the fateful year of 2016 (when there was no Social Security increase) we are instead stuck paying $125/month (each). Don’t ask me to explain why. I don’t understand and I don’t really want to think about it overmuch. I have anger management issues. It is better for everyone if I think of it as simple bad luck.

c.      Part C is an optional “Advantage” program you can pay a private insurer for if you choose.  It then replaces Medicare Parts A and B (and sometimes D) and becomes kind of a super HMO, with similar restrictions on doctor choice. We are not HMO fans so we will not be opting for this.

d.     Part D is the government’s prescription drug program. You can choose to pay monthly for this if you want a prescription drug plan, which is not covered in Parts A or B. In addition to monthly payments, there are co-pays. Luckily, we will not need Part D because The University 80/20 Insurance Plan for Retirees has a decent prescription drug coverage. 


Like I said above, our current fabulous University health insurance terminates when we turn 65.  Boo freakin’ hoo!  The University’s 80/20 Insurance for Retirees” will become our secondary health insurance. It requires a slightly lower monthly premium payment than the fabulous policy, but requires a yearly deductible before it will start paying 80% of the 20% Medicare does not pay. Yes, this is confusing, its not just you.

First there is the 80/20 primary Medicare Part B coverage (after their deductible is met), then 80/20 secondary supplemental coverage (after that deductible is met). I don’t know about you, but thinking in terms of repeating percentages  gives me a headache.

Here is the bottom line: When we 1. sign up for Medicare Parts A and B, and 2. switch to The University's 80/20 Insurance for Retirees we will pay $4,044/year more for health care for the two of us than we used to pay for the fabulous plan. And this does not include co-pays.  Ouch!

I wake up in the middle of the night trying to wrap my mind around this. However, I know it could be worse - we could be a struggling young family with obscenely high monthly health insurance premiums! I feel for them.

We are some of the lucky ones.  We knew this was coming and we will figure it out. We roll with the punches pretty well. We will just have to spend less on other things...

I understand why medical insurance becomes more expensive as one gets older, but I am not sure why it becomes more complicated. I had more brain cells to figure these things out when I was younger.

A brain cell image from the internet! Isn't she gorgeous?
medicalpicturesinfo.com430 × 323


  1. Years ago, when I was 55 and self employed, I decided I would activate my Maytag retirement benefit and treat myself to health insurance again. The pension is $325 a month. I answered an ad in the paper for Anthem/Blue Cross, and a lanky young man in a red pick up signed me up for a policy with a $2000 deductible. That was 1998. The young man is still my agent. My supplemental health picks up 100% of the excess over Medicare and now costs about $210 a month. The prescription stuff is outrageous, another $60 a month, and my drug costs still are several thousand a year. But, I haven't exceeded my pension yet (at least in my mind), and that keeps it all palatable for me. The lanky young man has grown stout, has a wife and two boys, and being a soccer coach yielded him an ankle replacement. It's all life, I guess.

    1. Sigh. These monthly costs may not seem like a lot to the policy makers and insurance companies, but when you're getting older day by day and there is not a lot of money coming in, it is a huge deal and becomes a constant worry.

  2. I can't retire until age 67, which gives me 12 years to worry myself about it. Yay?

    1. My advice is to put it out of your mind and enjoy the next 10 years. Plenty of time to worry about all this Medicaid nonsense when you turn 65.

  3. For the life of me I cannot understand why such a wealthy nation like yours cannot come up with a statutory health insurance but what do I know. Nothing.

    We would be broke by now without the "socialist" German health system.

    Hospital treatment costs 10 Euro/day for the first 28 days/year, after that it's free. There is a 5 - 10 Euro co-pay for medicines, but the serious stuff like morphine prescriptions and chemo come without a co-pay.

    Normal dentist treatment is also included, but the co-pay for fancy stuff is huge.

    Everything else is "free" or rather included in the 15% deduction from the gross salary. If only one member of the family works, this covers the whole family incl. kids in education/training up to age 25.
    When I retire, the deduction will continue but it will be a bit less than 15%.
    You can opt for a private insurance but it's expensive and once in, there is now turning back.
    Only about 10% of Germans do this. Senior civil servants have a slightly different deal but in general, we are all equal when it comes to who is who in the waiting rooms.

    If the annual co-pay is above 5% of the insured household's annual salary, it becomes tax deductible.

    I have watched so many US expats working here over the years realising how the system works after their first 3-4 months, still waiting for the catch, the invoice from hell etc. but no, this is it. For the time being, mind you. We have an ageing population and no plan B.

    1. Wow, thanks for sharing. I have often wondered what it was like in European countries. The German system sounds so civilized! Health care in the U.S.A. is out of control, mean spirited, and insane. Truly.

    2. U.S. Doctors are WAY overpayed, drugs are overpriced and enriching the top executives in the drug industry, and insurance companies should be ashamed of themselves for fighting universal health care.

  4. The HH turned 65 while he was still working so he had to sign up for A. The HH was in the hospital for 3 days due to an unexpected appendectomy. Our insurance left us owing 4K (yes we work(ed) for the state). So we turned the balance in to medicare. They didn't pick up a penny because the hospital marked it as 'outpatient' supposedly following medicare's directive. So the A thus far has been worthless for us.

  5. I have never paid a dime for health insurance yet have always had great insurance (thank you public service). But now, just a few years from 65, I think I may need a army of advisers to get me through this Medicare rigmarole. Why do they do this to seniors???


So, whadayathink?