Some of the best material I find is from readers. There is an old saying that if you want to find out something on the Internet, post an obviously wrong answer and people will educate you! Maybe that's why I have this blog - to get educated!
A reader writes with some interesting comments on Medicare. You could write a book on this subject and I am sure someone has! Anyway, I thought his extensive comments deserved a wider audience. Republished with permission:
I am a long time reader of your blog and found your recent writings on the Medicare game most interesting.I am "similarly situated" age-wise and other factors as you relative to Medicare and thought you might be interested in some additional information.In addition to the Medicare Advantage vs. Original Medicare with a Supplement and Part D drug plan decisions, many states throw in yet another wrinkle to further complicate the matter.Some states allow different pricing schemes that can cause massive Medicare Supplement price increases just as you can least afford it. Specifically, some states allow Attained Age pricing, Issue Age pricing, and Community pricing.With Attained Age pricing, the cost of your Medcare Supplement goes up each year based on your age in addition to any increases for inflation and higher costs. I know of several people who started out paying around $50/month for their Supplement at 65, and now that they are in their late 70's, are paying $400/month or more. And it will continue increase significantly each year that they live.With Issue Age pricing, the price is based on your age when you first took out the policy, and will increase based only with inflation and general overall cost increases and NOT on your advancing age. The difference being that had the people mentioned above who are now paying over $400/month and increasing each year, had chosen an Issue Age policy, they would be paying around $150/month now. So massive back-end loading price increases as your resources decline with 401K withdrawals and the usual failure of Social Security payments to keep up with *real* increases in living costs.Community Pricing is where everybody in the same state and class pay the same rate.If you go the Medicare.gov website and go to the "find policies" page where you can enter your zipcode, you can play around and see what others have to pay and deal with by entering zipcodes from different states. When I did this, I entered some random zipcodes for Georgia and Florida, and it appears that those states and many others are Issue Age only states, where state law only allows Issue Age policies that provide important and valuable protections to their residents.
Comment: Yay, Georgia! I noticed this on the Medicare website, but didn't understand what it meant.
If you then enter a zipcode from say Indiana, you will see that that the vast majority of all policies available are Attained Age pricing. These policies start out around 110 to 120 per month and the only viable Issue Age policy starts around 145/month. So minimally cheaper to suck you in, then by the time you've had some health issues, are well past your 7 month guaranteed issue period at 65, and cant change your plan, they bleed you dry with massive price increases.From what I can see, the best way to go is an Issue Age Plan G Supplement with traditional Medicare Parts A and B and whatever Part D drug plan you chose. The Part D is the least concerning because you can change that every year with no penalty and based on the benefit level you want and the premium you want to pay.
Comment: I was not aware of this with regard to part D.
As to Medicare Advantage aka Part C, run the other way, fast. Don't even consider them unless you want a screwing for the rest of your life. They draw people in by offering low or even zero dollar monthly premiums depending on the state you live in, and with low or no deductibles and low max out of pockets, Then, once they have you past your guaranteed issue point, they jack premiums, deductibles, and max out of pocket through the roof.The place I happened to retire from, like most companies now, offered a so-called retiree health plan using a Medicare Advantage plan from who else but United Healthcare. In this plan, they set aside a certain number of thousands of dollars based on your years of service that could only be used to pay the premiums on their chosen plan.The plan starts out at about a $70 monthly premium and a no deductible max 2000 annual out of pocket. Sounds like a good deal, right? Until you talk to other victims of this plan and find out the monthly premiums double or triple in a just two or three years and keep going up from there, AND the max out of pocket also climbs by 30% or more EACH YEAR.End result is you find yourself in your seventies, the fund from the place you retired from is all used up, and you are stuck paying 500 per month in premiums and climbing rapidly, and your max out of pocket per year is in the many thousands and rising fast. And since you are long past your 7 month guaranteed issue period at age 65, if you do try to change, any company you try to change to does not have to accept you, and if they do accept you, they can charge whatever they want.
Comment: Medicare Advantage (Part C) sucks. Some agents push it for the commissions.
One last point, from what I understand, it does not really matter what insurance company you choose for your Supplement because other than to pay your premiums, you really won't have any contact with them. When you get medical care, your doctor etc. bills Medicare for the full amount and whatever Medicare does not cover is billed by Medicare directly to your Supplement insurance company, so no forms to fill out. So a plan G from company X will pay out exactly the same as a Plan G from company Y.Anyhow, just a few thoughts that came to mind after reading your most recent posts on Medicare and Social Security. I look forward to reading in your blog about what you end up doing as far a Medicare and whatever supplement company you choose.
Thanks for the feedback! I think I have finally figured this out. Now, to pick a company for plan G and a company for plan D. MoO has the low premiums for Plan G ($160), although "Wooodmen of the World" (About Schmidt) has even lower at $130. I think Aetna has Plan D at $49 a month or so.
Oddly enough, UHC offers a plan G at $170 a month and a "deluxe" Plang G for over $400 a month. I guess that gets you gold-plated service or something. While UHC is popular with the AARP set, I read something online about UHC recently, can't remember what.
AARP started out selling burial insurance. I wrote about them before. Twice. Still, it is cheap to join ($55 for five years) and you do get a insulated tote bag!
