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.

1.     MEDICARE AS PRIMARY INSURANCE

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. 

2.     SUPPLEMENTAL INSURANCE

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?
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