First, you pay for Medicare! Depending on your Social Security income, it varies between 6 and 14% of your base income. Regular insurance with an employer usually costs the employee around 10%. Social Security has a built in yearly cost of living increase – sort of. Inflation is ‘officially’ about 3.4% in the U.S. in 2007. In reality it is much more when you look at the increases in transportation, heating and food costs (among others). None the less, in 2007, SS recipients were given a 2.3% raise. Simultaneously, Medicare Part D, the part that pays for your medications by forcing you to pay for a private insurer plan changed its rules and raised its rates by 3.1%.
So, in my case, my income rose by $15.89 per month but that is modified by a $2.90 increase in Medicare costs, a $9 raise in Part D (Prescriptions) and a $7 raise in the supplemental coverage policy, making for a grand total of a loss of $3.01 in real money! At this rate, it will only take 19 years before I would have a negative income from SS and have to pay them for being old!
It’s Complex! The index of the introductory pamphlet is 4 pages long by itself. There are 4 parts to Medicare:
Medicare Part A (Hospital Insurance) helps cover your inpatient care in hospitals. Part A also helps cover skilled nursing facility, hospice, and home health care if you meet certain conditions. It does not include nursing homes.
Medicare Part B (Medical Insurance) helps cover medically-necessary services like doctors’ services and outpatient care. Part B also helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse. Cost is $96.40 a month with a $135 deductable and a 20% co-pay. Also, if you don’t sign up for this initially, but decide to later, there is a 10% penalty for each year you haven’t signed on. Interestingly, you have to have had 3 pints of blood given to you before Medicare starts paying for it. There is NO normal Vision or Dental coverage or physical exams beyond the first one or any Long-term care (nursing homes)
Medicare Part C (Medicare Advantage Plans) is another way to get your Medicare benefits. It combines Part A, Part B, and, sometimes, Part D (prescription drug) coverage. Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically-necessary services. However, plans can charge different copayments, coinsurance, or deductibles for these services (like the Massachusetts plan).
Drugs and medical costs continue to rise so the dollar amount of your co-pays will also increase.
Oh, That Is Not All:
Assuming those costs – deductibles and co-pays for Dr. and hospital – still take too much of available income, you have to buy a supplemental insurance is around $87/month
So, if you have a spotty work history or had low pay most of your working years, you might be in my category of SS=$691/month
Minus: $96.40 for Medicare part B
$19.00 for Part D Drug Rx plan
$87.00 for supplemental medical plan – (this may seem like a lot extra but just one hospital stay, emergency procedure or expensive medication will make it well worthwhile. You are just playing the odds.)
Now for some examples of why Docs don’t find Medicare worthwhile for their own future retirements.