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Very glad we opted out of Medicare! We have private insurance for life from my former business, in lieu of compensation for my consulting services. Better life insurance, also. I would encourage anyone who has the option of private medical insurance (as a company retirement benefit, or by some other agreement, such as ours) to stick with the private option, and forego the Medicare altogether.
The number of fortunate people who, like you, have paid medical insurance for life is vanishingly small, and will get smaller with each passing year as both public and private retiree benefits come under scrutiny and get modified for new hires and even for employees still working in cases where that is permitted by law. It is simply horribly expensive for employers and for retirement systems.
But fortunately, Medicare is a fantastic bargain. The linked article laments the coming increase in the Medicare Part B premium from $104.90 to $159.30, but at least it has the honesty to point out that the lower rate has held steady for about three years. The higher rate is still the bargain of the century.
For $160 a month, we can get 80% of our medical expenses paid, and for another three or four hundred dollars (in the form of a Medigap plan) we can get the other 20% paid. Getting free medical for approximately $500 a month! Is anyone naïve enough to think that the Medicare taxes we paid while working are enough to cover that? We old people are receiving an extremely generous subsidy from the United States government.
Therefore I find the tone of the linked article more than a little irritating. It moans that such and such a percentage of retirees have no savings without going into how many of those have a secure, inflation-protected pension in which case they may not need any savings.
I think this one explains it better.
To me anyway.
Thanks, I think it does. That is if I am making the right assumptions from what I read. Seems as though the possible 50-some% increase in Medicare part B premiums will affect three categories of folks:
1. New Medicare enrollees.
2. High income earners ( from $133,000 annually for singles on up, if my short term memory serves).
3. People who have deferred their SS/Medicare benefits.
Medicare recipients not in the above categories would be included in the "held harmless" category it seems, and so not subject to the Medicare part B premium increase in 2016 since the hold harmless clause is meant to prevent these increases from being more than an SS COLA. Since that is projected to be 0 in 2016, no Medicare B premium increase either.
I had just wondered when I read all this is my husband and I would be subject to those Medicare premium increases. From what I read here, since we don't fall into the above categories (1, 2, or 3), it seems we would not.
it does not exactly sound like double whammy for majority of SS recipients.
The folks who are currently received SS is likely not to get a COLA adjustment in 2016 but their Medicare cost is not going to increase either due to this hold-harmless clause that prevents increases in Medicare costs that are greater than Social Security's COLA.
The increase in Medicare cost will only apply to new Medicare enrollees starting in 2016. For people with low income, part B premium will be $159.30 in 2016 vs. $104.9 (in the last several years). For this group of people, this is not 'double whammy' for the new SS recipients and more like just single blow due to this $55 increase in part B premium. Only the people who have been receiving SS but will not enroll in Medicare until 2016 will see both no COLA and a higher Medicare part B than 2015 but it is still a single hit (if you consider no COLA being a hit!) because they are not paying 2015 Medicare.
For the remaining 2 groups of people who will see high Medicare premium in 2016, it appears to me only the high income current SS recipients (1.3M) will experience the double whammy because their SS earning will not increase but their Medicare part B will go up. The folks who defer claiming SS but receive Medicare (1.6M) only experience a single blow due to the Medicare increase and not double whammy because they are not receiving SS. I would think that this second group of people is likely to either have high income or high net worth or both. I very much doubt that the Medicare premium increase in 2016 will be much of a pain for these 2 groups of people.
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Medicare is required by law to cover a certain amount of its costs. If the costs can't be shared among everybody because of the hold-harmless clause, then those people not covered under the hold-harmless clause will feel the pain.
I agree, Bella. For most people it will not be a "double whammy" at all; that term is just part of the inflammatory, attention-getting rhetoric used in journalism to get people to read articles.
the common wisdom may be wrong depending on income level.
the gov't gives you a gift . you can pull up to 42k out of retirement out of retirement money at about a 4.50% tax rate or up to 22k at zero taxes if you are delaying ss.
you will likely never see those rates again and to be able to get rid of 8 years of ira money at low to no tax is a biggie for someone delaying ss. even from 62 to fra can eat up a few hundred k in future rmd's at either no tax or low tax ..
you can take 8 years of withdrawals at low to no taxes and get zero capital gains tax brackets in a brokerage account .
there are lots of myths out there that no one really looked under the hood at until recently .
If you pull more than 42k out of retirement money does the 42k stay at the 4.5% and just the marginal amount above 42k get taxed higher at the 15% and then the 25% rate? My reason for asking is do you have to precisely calculate the amount you pull out to be under the 42k amount otherwise all the 42k gets heavily taxed or can you just estimate and whatever is above 42k (say a few thousand) gets the higher tax say 15% on that extra few thousand?
At 55. I'm so glad I'm starting to pay attention to these issues now.
But, for me at least, it's another reminder that -- by the time I retire at 65...Lord only knows what that Medicare situation might be.
I find it confusing in our case. My husband enrolled in Medicare this year, at 65. He has not claimed SS, as he does not reach FRA until next year. Will he be hit with the increase? There has not yet been any deferral of benefits. Some articles read that anyone receiving Medicare but not SS will receive the increase, others say anyone that has "deferred" benefits. Anyone know?
I think this one explains it better.
To me anyway.
Me too.
Life sucks but it's government and we have to accept that.
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People who have deferred claiming Social Security: This hits an estimated 1.6 million people. It includes people 65 or older who are still working, but have signed up for Medicare because their employer doesn't offer health insurance. It also hits people who have filed and suspended Social Security benefits to allow a spouse to claim. If they are paying $104.90 a month for Medicare Part B this year, they will be charged $159.30 a month in 2016.
I'm 67 and not collecting social security benefits yet so every three months I sent off a check for $314.70 to cover my Medicare Part B premium but it appears that will be going up to $477.90 starting next year.
If I start taking benefits now it appears I will avoid the increase but will suffer lower benefits for the rest of my life and as long as I am working 85% of my benefit will be subject to federal income taxes that more than eat up any savings.
My husband enrolled in Medicare this year, at 65. He has not claimed SS, as he does not reach FRA until next year. Will he be hit with the increase?
I'd think that he is in the same category as the deferred SS recipients i.e. he will see an increase in Medicare.
The way I read these articles is that the 'hold harmless' clause for not increasing Medicare only applies to low income people who are currently received SS.
One aspect of this situation that no one has mentioned yet is that the increase to ~$159 will most likely be temporary for those not eligible for the hold harmless provision. Once inflation kicks back in and Social Security recipients once again receive COLAs, Medicare costs will be spread out among all recipients, not just the 25% who are bearing the brunt of it next year. Accordingly, those people whose Medicare premium was frozen at $104 will see a significant increase in the year following resumption of COLAs while those who had been paying $159 will see a decrease (unless Medicare costs really skyrocket out of control).
This is exactly what happened between 2009-2011 when Social Security recipients had their Part B premiums frozen at roughly $96 and those not covered by hold harmless saw their premiums rise to $110 and/or $115 IIRC. Once the Social Security COLA kicked back in, the Medicare premium eventually settled at $104, so those who had been paying $110/$115 saw a decrease in subsequent years while most everyone else had their premiums rise from the aforementioned $96.
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