How does the saying go? "If you have your health, you have everything". I feel the same way. Before I concern myself with other vital important retirement requirements (such as: housing, income, food security, utilities) in my retirement planning, I put Medicare at the top of my list.
When I first started out on Medicare, back when I turned 65, I chose the cheapest medical policy I could. That was Plan K at $61.50 a month, under original Medicare. I was fully responsible for 10% of my medical procedures. (Side Note: I will NEVER get any Medicare Advantage Plan. You think you are getting a deal but they have been known to deny many health procedures. No thanks.) At the time I was 65, both hubby and myself were in good health and there was no reason to buy a more expensive plan. Fast forward to when I turned 70 and I realized we were playing Medicare Roulette. So, we switched to a more comprehensive (and super expensive Plan N at $219 a month) whereby 100% of any and all medical procedures were covered except for a $20 doctor visit co-pay.
My instincts unfortunately were correct because by the time I turned 73 I was diagnosed with Stage II breast cancer and hubby is suffering from Congestive Heart Failure. he will eventually need a pacemaker in the very near future. Know what those bills can total up to? Hundreds of thousands of dollars. And we would be responsible for 10% of that! Now, as I have stated, we are fully covered under Plan N. Yes, it's more expensive. 169% higher than our starting Plan K. Fast forward to January 2025 and the monthly premium increased by another 12% to $245! Each!
Here's an example of what my medical costs were when I started radiation treatment (after six rounds of chemo and breast surgery):
Granted, yes, Medicare doesn't pay that whole amount. They have an arrangement with the hospital to accept a lower amount, of which I would have been 10% responsible. Now, under the new plan, I am responsible for zero!
Our medical expenses amount to 22% of our take-home income (two social security checks, one pension, two investments). Since we have no mortgage, no car loans, no student loans, no credit card debt, we can afford our medical expenses. We've been debt free for over twenty-five years and counting. For us, our secret to having Plenty at Seventy was to make ourselves debt free as soon as possible. We did that when we turned fifty. We downsized, got our finances under control and have lived quite well ever since.
Stay tuned as I will post more about our financial journey in the future posts soon to come.
Next topic: housing. Having a solid roof over your head is proving to be a good start to having Plenty at Seventy.
I am very thankful for our Medicare. You were very fortunate that your state would allow you to change plans without underwriting. Our state does not do that. Is the amount you quoted that you pay monthly for your supplement for both of you? We both have Plan G where we only have to pay the Medicare deductible of $257 each. We also have to pay the $185 each for Plan B. The cost of our Plan G is $222 for both of us. I am 67 and hubby 65. We still have the HSA funds from hubby’s work available to us and use it for dental and vision things. I researched things quite a bit before we went on Medicare. I am not sure if HSAs were around when you guys were working?
ReplyDeleteHi Chris. We now pay $245 EACH, plus the Medicare deductible of $257 EACH and each time we see a doctor, $20 co-pay ($50 for ER visit unless we are admitted, then the ER fee is waived). last year I had so many doctor office visits that that $20 co-pay became hundreds of dollars a month because I saw several doctors each and every week. I was going to up my coverage to Plan G but the additional monthly expense wasn't worth it. Plus I knew my dr visits would lesson over time. In New York, where we live, Medicare insurance costs are very very expensive. You are very fortunate your own costs are so low. Good job!!!
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