Obamacare questions

[Lee]

9 hours ago, MikeB said:

If you are collecting SS retirement before Medicare age (65) you are automatically signed up for Part A (hospital benefits) and Part B (office) when you turn 65.

My wife wasn't automatically signed up for any part of Medicare after she signed up for SS at age 62.

After turning 65, she had to send in several original documents including her passport to the US Embassy in Manila to start Medicare. Failure to act within a few months of her 65th birthday would have incurred penalties we were told.

[Mike J]

6 hours ago, Possum said:

I would advise anyone from the US who reached retirement age and is not covered by COBRA to sign up for Medicare B ASAP. IF not you will pay a penalty for every year you do not.

For those wanting to know what the penalty would be to reinstate Medicare Part B;

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Part B late enrollment penalty
You'll pay an extra 10% for each year you could have signed up for Part B, but didn't. You may also pay a higher premium depending on your income.

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[OnMyWay]

12 hours ago, MikeB said:

Part B is about $200 per month

2024 Part B is 174.70 unless your previous income was too high, in which case you pay extra.  I think they base it on income from 2 years prior.

12 hours ago, MikeB said:

You can always reinstate it if you move back to US as I did.

Yes, but if you don't start at 65 there is a nice penalty to pay for every year you delay.  So in 2024 I will pay 174.70 X 12 = 2096, in case I need it.

[MikeB]

5 minutes ago, OnMyWay said:

Yes, but if you don't start at 65 there is a nice penalty to pay for every year you delay.  So in 2024 I will pay 174.70 X 12 = 2096, in case I need it.

The penalty is 10% per year. I think I reinstated after 2 years so it was (is) $30 something per month penalty. But in 2 years I saved almost $4k by not having it. I'm in a medicare advantage plan now that pays full giveback of Part B plus has (some) dental and vision benefits that straight Medicare does not. My monthly payment for Medicare Part B now is $21 something. Don't know don't care how they came up with that, it is a bargain.

I don't think there's a strictly right or wrong way, it depends on your situation; your health, if you're going back, when, how long you may live, etc. My decision worked out ok for me. As far as going back to the US if medically necessary that was never a consideration for me.  

[OnMyWay]

6 minutes ago, MikeB said:

The penalty is 10% per year. I think I reinstated after 2 years so it was (is) $30 something per month penalty.

Yes, 2 years doesn't kill you, but 5 or 10 would be something to think about.

[Mike J]

20 hours ago, OnMyWay said:

Yes, 2 years doesn't kill you, but 5 or 10 would be something to think about.

The flip side of the coin is that you saved 5 or 10 years of Part B fees.  If you have to reinstate, the additional cost is the 10 percent penalty and you would be paying back in dollars worse less due to inflation.   If you invested the savings the increase in funds would take care of much, perhaps all, of that penalty.   I am assuming the 10 percent is not compounded but that might be a bad assumption?  That of course means you would need the financial discipline to save/invest, rather than spend, the difference.  As an earlier poster commented, circumstances such as health issues, future plans, financial resources, etc. would impact the decision for many expats.

[OnMyWay]

34 minutes ago, Mike J said:

The flip side of the coin is that you saved 5 or 10 years of Part B fees.  If you have to reinstate, the additional cost is the 10 percent penalty and you would be paying back in dollars worse less due to inflation.   If you invested the savings the increase in funds would take care of much, perhaps all, of that penalty.   I am assuming the 10 percent is not compounded but that might be a bad assumption?  That of course means you would need the financial discipline to save/invest, rather than spend, the difference.  As an earlier poster commented, circumstances such as health issues, future plans, financial resources, etc. would impact the decision for many expats.

I was curious about this.  This is the way I think it would work.  Comments?  I used 3% for the annual premium increase.  They really want to push people to enroll at 65.

Edited November 16, 2023 by OnMyWay

[Lee]

13 minutes ago, OnMyWay said:

I used 3% for the annual premium increase.

So you plugged in 3% and ran the total yearly increase to set up this chart.

Is that correct or is the chart something the SS people have put out?

[Mike J]

13 minutes ago, OnMyWay said:

I was curious about this.  This is the way I think it would work.  Comments?  I used 3% for the annual premium increase.  They really want to push people to enroll at 65.

Here is a calculator that shows what the approximate penalty would be.  You put in the number of months.  It calculates the penalty that you would have to pay in addition to your monthly premium.   For me, 96 months,  the monthly premium penalty shows 131.92.  But I have saved eight years worth of premiums, about 12K?   That 12K would go a long way to make up for the premium penalty.  But as said earlier, it all depends on factors and risk tolerance. 

https://themedicarefamily.com/calculators/part-b-penalty/

[OnMyWay]

7 minutes ago, Lee said:

So you plugged in 3% and ran the total yearly increase to set up this chart.

Is that correct or is the chart something the SS people have put out?

Yes, I made it, not SS.  I never saw anything like this from SS, just "10% per year of delay".