When my parents got in their late eighties, I did what many children do. I started helping out with their bookkeeping. That was a big deal \u2013 Dad spent most of his adult life dealing with \u201cbig\u201d finances. He negotiated multi-million dollar deals on restaurant napkins (one was framed in his office). But Mom was responsible for the \u201ccheckbook\u201d at home, I suppose because for years Dad spent his weeks \u201con the road\u201d selling television shows. And it always drove Dad crazy that Mom rounded all transactions up to the nearest dollar. The checkbook was never \u201cright\u201d for Dad, a University of Cincinnati accounting graduate.<\/p>\n\n\n\n
So when some bills started slipping by, I offered to help. Mom and Dad were \u201csnowbirds\u201d, spending about half the year in Florida. There was the main account in Cincinnati, but there was a second account in a Florida bank. And there were two sets of bills, ones for each house, and so things got confusing for everyone. And It didn\u2019t help that it was the early 2000\u2019s, and \u201conline\u201d banking and billing were becoming a thing. For my parents, the \u201ccheckbook\u201d controlled all and the fact that I had a spreadsheet accounting a thousand miles away that I updated weekly didn\u2019t make things clearer for them.<\/p>\n\n\n\n
What I discovered though, is that my parents were spending a lot of money on prescription drugs. That was my first experience with Medicare. It was the thing called the \u201cdonut hole\u201d. Medicare would cover the first $2000 of drug costs, then wouldn\u2019t pick up any cost until $5000 was reached. And my parents, being in their eighties, had tens of thousands of dollars of drug costs. <\/p>\n\n\n\n
So we struggled along keeping up with Medicare changes, and what was covered and what was not. Whenever a medical bill came in, it became the medical lottery game. The first move was not to pay, because the first bill was NEVER the final bill. There was what Medicare would pay, and then there was what the secondary insurance would pay, and then there was always a \u201cfinal accounting\u201d when you found out if you \u201cwon\u201d and really had to pay anything at all. To Medicare\u2019s credit, a lot of times you were \u201ca winner\u201d.<\/p>\n\n\n\n
And when Mom and Dad reached their last days, there were the \u201cfinal\u201d bills to take care of. Mom was struggling with lung issues, and with spinal fractures. When she needed to go to the hospital, the only way to get her there was by ambulance. Somewhere along the way, the \u201cwrong\u201d box was checked on a form. What was an emergency trip was classified as \u201ctransport\u201d. It was a four thousand dollar error, a fifteen minute ride that was billed at $267\/minute. For a year we argued with different medical staffs. No one would take responsibility for checking the wrong box, I suppose that would get them in trouble with Medicare. (After Mom\u2019s death, we ultimately settled that bill for $1400).<\/p>\n\n\n\n
So I thought I had a pretty good handle on Medicare and \u201csenior\u201d insurance. But now I turn sixty-five this fall, and I\u2019ve got to get the \u201cMedicare\u201d issue figured out for ME. It\u2019s no wonder that Mom and Dad needed help. <\/p>\n\n\n\n
Everyone \u201cassumes\u201d that when you hit sixty-five, you get free government health insurance called Medicare. But, like most assumptions, it\u2019s just not true. Medicare is not a \u201cfree ride\u201d. You have to pay into Medicare to get it for \u201cfree\u201d. For most Americans that\u2019s not a big deal: you paid into Social Security for forty quarters (ten years) and you \u201cearned\u201d Medicare coverage (it\u2019s listed as FICA on your paycheck). But some jobs, including mine, were exempted from paying into either Medicare or Social Security. The idea was that as public employees, the public pension systems were enough and \u201cwe\u201d wouldn\u2019t need Medicare or Social Security.<\/p>\n\n\n\n
I guess I thought that was a \u201cbenefit\u201d. What I didn\u2019t realize it was that “exemption” meant no one paid. While I am still eligible for Medicare, if I want it now, I have to pay for it. <\/p>\n\n\n\n
So for the uninitiated, there are actually four parts to Medicare Insurance: Parts A, B, C, and D. Part A covers hospitalization costs, and Part B is major medical costs. Part C is if you want to be in a total health \u201cplan\u201d, and Part D is for drug coverage. If you work your forty quarters, you are eligible for \u201cfree\u201d Part A, the most expensive coverage. But you still have to purchase the rest. And if you didn\u2019t pay in for the forty quarters, you have to pay for Part A as well.<\/p>\n\n\n\n
To give you numbers: for me Part A costs $5652\/year, and Part B $1776\/year. And since Medicare covers 80% of expenses, a private \u201csupplemental plan\u201d would be (at least) another $1200 a year, which ends up at $8538\/year, not including a Part D drug plan.<\/p>\n\n\n\n
You don\u2019t have to take Medicare Part A when you hit sixty-five, though if it\u2019s free you should. But if you choose not to, make sure you\u2019ve got health insurance for the rest of your life. Because for every year you don\u2019t buy Medicare after you turn sixty-five, you pay an extra ten percent on the cost if you did end up purchasing it. (I suspect, but don\u2019t know, that if you are in a Pension system that drops health coverage, a real possibility if you are a teacher, Medicare would waive that fee).<\/p>\n\n\n\n
I\u2019m lucky. As it turns out, I\u2019m eligible to be on my wife\u2019s insurance, even though she\u2019s retired as well. So I can buy Medicare B and still be covered for everything else (I don\u2019t even HAVE to buy Part B, but it will save me money in the long run). But it\u2019s no wonder that senior citizens (more senior than me) struggle to understand what\u2019s right for their financial situation. It\u2019s complicated. Even the folks at Medicare themselves don\u2019t understand all the in\u2019s and out\u2019s. It took several calls to find out I could buy Part B without buying Part A. <\/p>\n\n\n\n
Here\u2019s an out of the box new \u201cniche\u201d business, Medicare Advisor (without pushing a separate insurance product). There\u2019s a whole new group turning sixty-five every year, and they all need help. But that\u2019s for someone else. I\u2019m not looking for a new job \u2013retirement\u2019s good. It would\u2019ve been nice, though, if there was someone with \u201call the answers\u201d to help me through the process. It is a rude welcome to senior status. <\/p>\n\n\n\n
But, like birthdays, I guess it\u2019s still better than the alternative!<\/p>\n","protected":false},"excerpt":{"rendered":"