What would you do?

The health insurance question looms big when assembling a retirement budget, especially when there are some expensive drugs in play. As you can imagine, every case is different and playing the numbers game can be just that, a game.

Building the cost of healthcare, like every other item, into that retirement budget is the most logical approach. Making a guess as to how much it and everything else will go up is a bit of a crap shoot but that has to be part of the equation. If the numbers indicate that retirement could work, financially, then go for it. After all, most of the sand in our Hourglass of Life is already in the bottom and some of the sand that remains might be a bit clumpy.

For me, when I turned 60 I retired. I’d done 21 years as a high school teacher which was a second (or third or fourth) career. In order to keep my wife and I insured, we stayed on my former employer’s plan and picked up the full premiums which were about $15K/year. We’d looked around but this was during the time when pre-existing conditions were an issue and my wife was bringing that into play. When I turn 65 I went on Medicare and kept her on the previous plan by buying my supplemental from them, which was really expensive. When she turned 65 last year we both went on Medicare, got a Type G supplemental, good Rx plan, and cut our annual costs by about $6,500.

Now, about retiring, IMO it is something that might better be done as soon as one can. For me, I have MANY hobbies, interests, and passions so there was no question that I would find complete fulfillment outside the workplace so I went as soon as I could, which in our system was at age 60 or 25 years. For others that I know, the workplace was so much of there being, identify, and social life that leaving it was/is too much of a life change and they’ve continued to work even though they could afford to quit. It’s a complex issue.

Now that I’ve been retired for 11 years I have zero regrets of doing so. I figure that every once in a while, say every 15-20 years, I want the opportunity to reinvent myself in some way and retirement is just another way of facilitating that. I’d had several careers and lived in lots of different places. In retirement I went back to school, obtained a BFA and have become an artist, something totally different from my past lives. And I’m looking forward to further life changes and adventures. Why not?

I too would find an expert to do a full analysis on what alternative medicare plans would charge you out-of-pocket for the same meds. There are agents who do this sort of work free-of-charge for those considering an enrollment in medicare. Just take your time and find a good one familiar with your local plans. Many good recommendations at social media websites. Sometimes, pharma companies will give steep discounts for their expensive products. Although this is not always 100% guaranteed, it's something to examine.

I realize many people do it, sometimes out of necessity, and continue to work in their retirement years for their medical benefits. Given a choice, I would not want to do it, unless I really loved my job. Retirement can free up so much time to expand horizons and really enjoy life in the sunset years.

Whichever path you choose, I wish you all the luck in the world.

Alephnull, that's quite the dilemma. I think the idea of using one of the Medicare experts to help you through this sounds like the right approach. Having said that, my understanding also is the Part D prescription drugs under Medicare will be capped at $2000. But I'm not enough of an expert to know for sure that your drugs will be capped at that level -- hence the need to contact someone really knowledgeable. But if that's the case it sure solves your problem.

Beyond that I can tell you that retirement, at least for me, has been wonderful. I enjoyed my job but the freedom to do whatever and when ever is life changing. If you can financially swing it I can recommend it. I know folks that get a little bored in retirement but I've found a full and enriched life. Hope you do as well.

Jim

Certainly not asking you to discuss annual income here but I would point out that certain foundations offer copay assistance even for people on Medicare. Generally your annual household income has to be less than approximately $65,000. Different groups have different requirements so you have to check closely. On medicare, lupron/eligard shots are covered 100% so you could switch from Orgovyx. In doing the medicare drug search I have found prices vary wildly as pointed out by Bohemond. ,Get a medicare "go to person". There should be one where you live but there are also some national companies. Let their computers do the search and compare to your own research. Re: work or retire, call my son the financial planner and talk things through.

Thank you all for the advice.

Especially Mr Mattam!!

Air biscuit, dude I’ve been laughing for 5 minutes straight!!!
Thank you so much for the laugh!!

Aleph,
I would also recommend finding a Medicare advocate/advisor. I'm in the process of transitioning to Medicare right now, and it's confusing as ****. My current insurance is provided by my previous, long term employer, and I am considered retired by them--so I have to go to Medicare at 65 (Sept). They provide an advocate/advisor, and without that I'd be having a lot more trouble figuring out what to do.

And I don't have major medication challenges, at least not as of today.

Best of luck to you! My plan is to retire as of May 31 next year--so I'm not far behind you.

I agree with finding a pro to help you with the medical plan.

In my retirement community we have folks who found an agent in India (not a pharmacy) who buys their expensive cancer drugs and ships them here. These drugs are the same as those purchased in the US, even the boxes are identical. They end up paying substantially less than their copay would be on their Medicare supplement. Their doctor knows about what they are doing and does not disapprove.

After I quit working, it was important to find things to keep me busy and active. I still get bored, but do not miss going to work.

Post Edited (RCS) : 7/13/2023 4:20:34 AM (GMT-8)

I have found that just asking pharmacy for their best cash price not using my insurance but with any discount programs they have can yield pretty good results. There are a number of drugs that you have to pay full price full under the $500 deductible and even with coinsurance, the pricing is not very good.

Aleph - I reread your post and remarkable PCa story and have to think that getting on with retirement soon might be a good idea. There must be a bucket list somewhere that is not being tended to while you are still working. For some, work is their life and they are lost when they retire. Not sure where you sit on that fence? Where is your wife on these decisions?

Retirement can be expensive depending on what your drug needs and retirement plans are but most can swing a few years of it without going broke. No do-overs at this point so you probably get one shot at a decent retirement now and I would be inclined to consider it sooner than later. Just my opinion.

The choices for coverage as you enter Medicare can be very complicated and confusing. This is exasperated by the type of drugs you take, or may take in the future. But as others have said there is more relief for drug costs coming. This is in response to the seriously expensive drugs developed and used in the past decade or so. Also, the move by CMS to push certain infusion drugs from Part B to Part D which shifts more cost to the individual. A prime example are the monoclonal antibody drugs, most of which are infused in a clinic. Historically this would be a Part B coverage with Medicare covering 80% of the costs. In the past few years CMS has pushed these to Part D, which is usually for self-administered drugs you buy at the pharmacy, and has greatly shifted cost from the government to the individual and commercial insurance companies. However, drugs are covered in very similar ways regardless of the type of Medicare coverages you choose.

The decision starts with an assessment between using traditional Medicare Part A (which all will have automatically) and Part B coupled with two commercial insurance plans being a Medicare Supplement and Part D prescription drug plan, or using a Part C-Medicare Advantage plan. The combination of traditional Medicare and a supplement generally provides the most comprehensive coverage and greatest choices of providers, basically unrestricted, but will usually have the highest commercial insurance premiums each month. For example, I have traditional Medicare and a Plan N supplement with a Plan D for drugs and I pay about $112.00 per month for this combination.

Alternatively, one can opt out of traditional Medicare and choose a commercial insurance company by enrolling in Part C-Medicare Advantage. In doing so, Medicare sends the commercial insurance company the premiums as Medicare will not be paying any claims. These premiums are about $1,000 per month. Under Advantage the commercial insurer builds a coverage package that must be at least what traditional Medicare provides and then can build in a combination of coverages that may cover items like limited dental and vision. Advantage plans include the prescription drug coverage. To manage costs, these plans come with a provider network that limits access and increases costs if you have to or want to go outside the network, plus generally higher deductibles and copays especially in the hospital, than with traditional Medicare and a supplement. While the premium is generally lower and sometimes $0, the maximum out of pocket cost is usually many times higher than traditional Medicare and a supplement plan. With both traditional Medicare and Advantage you will pay the Part B premium of $164.90 per month through your Social Security.

Prescription drug coverage will be very similar regardless which route you choose as the Advantage Plans generally follow the Part D Plans regarding deductibles, co-pays and tier formularies. Over the past decade congress has made changes in drug coverage that are resulting in less out of pocket exposure and this continues with upcoming changes as others have noted.

I generally suggest you work with an excellent agent that represents and chooses both supplemental plans and Advantage plans based on the specific individual needs and preferences. Find an objective specialist. My greatest knock on agents are the ones that primarily represent or sell mostly, or only, Advantage plans. Intrinsically, there is more commission to the agent for an Advantage plan compared to a Supplement. Choose an agent that will make an objective assessment for your situation and do not be blinded by the marketing hype one often sees on TV, or the ancillary coverages that often are of limited value. Understand that Advantage Plans vary greatly among states as companies fit plans to the demographics. States like Florida and Arizona have Advantage plans superior to most other states. Consider using non-profit advocacy organizations (every state has one), but understand they can’t advise or secure coverage for you, so they are a source of information and that may be valuable. Also understand that any individual or organization you secure coverage through is a licensed agent and receives a commission. Medicare Advantage and Supplement plans are often the single biggest revenue source for AARP, more than a billion dollars a year in commissions.

Also understand that if you start with an Advantage plan, it may be difficult or impossible to go to a supplement plan in the future as they are medically underwritten and can exclude people with significant health conditions. The primary exception is when you first qualify for Medicare at age 65, or within a limited time after ending coverage from an employer sponsored plan, at an older age.

I am asking myself the same questions, but am only 56.

Do I stop working full time? Get cobra for 18 months, then move to Obamacare, and get a p/t job just to pay the medical bills?

I have a modest nest egg. All of the big life bills (house/colleges/wedding) are done. Wife has a p/t job and if i can get 5% somewhere on the egg, we would be ok living frugally, but the medical bills are scary.

Stephen, In my opinion, the last thing you do is rely on individual health insurance (Obamacare) for a prolonged period, nine years in your case, unless you want to go broke. Individual premiums plus deductibles and copays are easily $15-20k per year. Plus the strain on your assets of giving up your employee income.

If you can continue to work with a decent employer plan, that is preferred, from a health insurance standpoint. On the other hand, if you have the assets to retire at 56 keeping you in your current lifestyle without consuming the assets, then you shouldn’t be concerned about health insurance costs. Even given your PCa status, your longevity could be significant given the treatments available.

As Elmer Fudd said…..Be very….very….careful. At your point in life, Medicare is of no concern to you.