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Old 02-20-2016, 08:38 AM
 
71,490 posts, read 71,674,131 times
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but the biggest issue is you need luck with an advantage plan . have a serious illness extend past a calendar year and it can whack folks really good for thousands of dollars and end up more costly then medicare and medigap plan.

usually advantage plans are cheaper when things do not go wrong but as you age they can become much more costly .

no question they are a cheaper alternative if you can live with the network , but how much cheaper is something you won't know until well down the road when issues start coming up more frequently .

the rough part is most who choose advantage plans do so because they are cheaper and fit their budget better but those yearly out of pockets can be a real budget killer when you don't have the dough in the first place.

Last edited by mathjak107; 02-20-2016 at 09:02 AM..
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Old 02-20-2016, 02:30 PM
 
Location: Ohio
19,883 posts, read 14,224,806 times
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Quote:
Originally Posted by GeoffD View Post
Your Social Security benefit is not means tested.
The threshold for a single person is $25,000, which is currently 200% of "poverty level" more or less. You make more than $25,000, you get taxed, and if not then you're not taxed. That's a form of means-testing.

Quote:
Originally Posted by luv4horses View Post
But (there is that but again) if SS is means tested, then why do I know years in advance what my projected benefit will be?
Quote:
Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:
  • file a federal tax return as an "individual" and your combined income* is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.
  • file a joint return, and you and your spouse have a combined income* that is
    • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
    • more than $44,000, up to 85 percent of your benefits may be taxable.
  • are married and file a separate tax return, you probably will pay taxes on your benefits.
https://www.ssa.gov/planners/taxes.html

You're means-tested after-the-fact.

I don't have a problem with means-testing Social Security, since it is income insurance.

Quote:
Originally Posted by luv4horses View Post
For Medicare, a couple of us have mentioned how a single event, such as sale of property or rights has meant that we suddenly receive a high medicare tax. Not just a few percentage points more, but in these cases a rate of 300% of the usual.
That's only for 2 years at the maximum.

Medicare only looks back at your last two years of tax returns. If you have a one time event, then notify Medicare so that your premiums are adjusted only for one year.

Some people would suggest that since you have the ability to pay more, you should pay more, by virtue of the fact that you have the ability to pay more, so you should pay more, because you can pay more, so you should pay more.
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Old 02-20-2016, 03:22 PM
 
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It is only for one year not 2. They will go by 2015 for 2017. They use 2014 because 2015 is not filed yet.

I am waiting to appeal since we were not even on medicare in 2014 or retired. But not sure they will go by 2015 for 2016
But it is worth a shot.
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Old 02-20-2016, 04:01 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,920,408 times
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Mircea - As I pointed out in another thread - there's a difference between having something like Social Security included in modified adjusted gross income - and actually having to pay taxes on it. Really depends on what your bottom line is after exemptions and deductions. My late FIL had a pretty healthy income but never paid a penny in income taxes after he moved into a SNF almost 3 years before he died (and had huge medical expenses/deductions).

I also get the sense that some people here are confused about the difference between 50% or 85% of SS being included in modified adjusted gross income - and paying 50/85% in taxes on Social Security income. Robyn
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Old 02-20-2016, 04:16 PM
 
Location: Wisconsin
21,535 posts, read 43,972,276 times
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Quote:
Originally Posted by mathjak107 View Post
the rough part is most who choose advantage plans do so because they are cheaper and fit their budget better but those yearly out of pockets can be a real budget killer when you don't have the dough in the first place.
A former coworker with chronic health issues was in that situation a few years ago, said the copays and other out-of-pockets were killing her. She had been loathe to commit to $200/mo., or more, for a Medigap, but in the end might have been better off. Don't know what she finally did.
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Old 02-20-2016, 04:22 PM
 
71,490 posts, read 71,674,131 times
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Quote:
Originally Posted by Robyn55 View Post
Mircea - As I pointed out in another thread - there's a difference between having something like Social Security included in modified adjusted gross income - and actually having to pay taxes on it. Really depends on what your bottom line is after exemptions and deductions. My late FIL had a pretty healthy income but never paid a penny in income taxes after he moved into a SNF almost 3 years before he died (and had huge medical expenses/deductions).

I also get the sense that some people here are confused about the difference between 50% or 85% of SS being included in modified adjusted gross income - and paying 50/85% in taxes on Social Security income. Robyn
depends on your income because the amt does kick in at a fairly low income today and once it does good bye deductions .

every time we sell a property that happens to us two years in a row .

the first year the income from the sale triggers it . the 2nd year what we pay in state and local taxes from the sale in the new year when we file triggers the amt again on deductions even though income is nothing special .

if you make more than $75,000 and have personal exemptions, state tax deductions or home-equity loan interest, or if you used stock options, you may still qualify for the AMT. If you make more than $100,000, your chances of qualifying for the AMT are high.

The AMT allows a medical expense deduction, but it may be smaller than the deduction under the regular income tax. If you claim an itemized deduction for medical expenses, part or all of it may be disallowed when you calculate your alternative minimum tax.

Last edited by mathjak107; 02-20-2016 at 04:35 PM..
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Old 02-20-2016, 05:03 PM
 
Location: Ponte Vedra Beach FL
14,628 posts, read 17,920,408 times
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Quote:
Originally Posted by mathjak107 View Post
depends on your income because the amt does kick in at a fairly low income today and once it does good bye deductions .

every time we sell a property that happens to us two years in a row .

the first year the income from the sale triggers it . the 2nd year what we pay in state and local taxes from the sale in the new year when we file triggers the amt again on deductions even though income is nothing special .

if you make more than $75,000 and have personal exemptions, state tax deductions or home-equity loan interest, or if you used stock options, you may still qualify for the AMT. If you make more than $100,000, your chances of qualifying for the AMT are high.

The AMT allows a medical expense deduction, but it may be smaller than the deduction under the regular income tax. If you claim an itemized deduction for medical expenses, part or all of it may be disallowed when you calculate your alternative minimum tax.
You live in a rather bizarre place for a normal retired person. NYC - in New York State. And also have some rather unusual AMT issues dealing not only with where you live - but with real estate investments and sales as well. Most retired people - even with fairly high incomes - won't encounter AMT issues (although it's always a good idea to keep track of them). Robyn
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Old 02-20-2016, 05:04 PM
 
Location: Living rent free in your head
30,998 posts, read 13,571,153 times
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Quote:
Originally Posted by mathjak107 View Post
don't confuse the fact that advantage plans have to cover the same services as medicare with them actually approving you for that service or care .


advantage plans are no different then any other hmo . you still need them to review and approve certain costs unique to your case .. you certainly can be denied if they feel it is something they feel not needed or something they will not cover in full for whatever reason they can give .

medigap plans have no review process . once medicare covers it they have to pay it regardless of what they think or whether or not they would have approved it for their advantage plan holders in a similar situation . .

in fact in a kaiser study 1/3 of advantage plan holders ran in to cases of denial or issues getting the care they wanted .
My husband has had 3 different medicare advantage plans, Humana HMO, Anthem PPO, and now a Blue Shield HMO. The only one he ever had problems with was Humana, they were horrible, it was always a constant battle with them over trying to get specialist referrals and denied claims. He has never had an issue with either of the other two insurers. It's not a matter of us not being able to afford a different plan, but we did the math and as long as he gets the care he needs, when he needs it, we will save the $200 a month that a medi-gap policy would cost and stick with the advantage plan. We re-evaluate it every year. My plan is better but it's part of a large group - CalPERS and costs my former employer $300 a month, if I had the option I would take the $300 a month put it in the bank and get an advantage plan like my husband's.
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Old 02-20-2016, 05:23 PM
 
Location: NC
6,548 posts, read 7,961,421 times
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Quote:
Originally Posted by Mircea View Post
Some people would suggest that since you have the ability to pay more, you should pay more, by virtue of the fact that you have the ability to pay more, so you should pay more, because you can pay more, so you should pay more.
Thanks for your explanations Mircea.

But...the reason some of us have the ability to pay more is we were really good about delayed gratification. So when we retire, we'd like to keep as much of what we set aside as possible.
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Old 02-20-2016, 06:21 PM
 
Location: Deep In The Heart of Texas
1,605 posts, read 1,270,557 times
Reputation: 3021
When I was working there was a separate tax deduction for medicare!
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