Medicare Plan B

[givenall]

I am now eligible for Medicare Plan B. Does this make sense if i am living in Bangkok and have no immediate plan to go back home

[nkped]

In my view no. I'm fortunate enough that it would be rather expensive and I do have continuing health insurance as part of my retirement benefits. It may be a challenge declining it from outside the country. I signed and sent in the form they sent me in the mail. No indication of any action on it after a few months. I was in the US and went to the local SSA office which got the job done in short order.

[NeverSure]

Just remember that if you don't sign up when first eligible, there is a 10% premium penalty for each year that you delay. Many guys retire in Thailand, find out they can't even get insurance when they reach about 70, and then develop an expensive medical condition. Now they have no insurance in Thailand or in the US.

I'm in the US. I have A, B, F, and RX. F is Medigap which covers all deductibles and co-pays. I usually pay 10% or 20% for prescription drugs and that has been peanuts so far. Usually there's a cheap generic.

A is free, B is $104.00 per month, my F is about $140 per month and RX is about $25 per month. The US Federal Government subsidizes my F with a private health insurance carrier in the amount of about $1,100 per month. So I'm paying about $270 per month for something that actually costs about $1,400 per month.

NOW. Two years ago I found out much to my surprise that I have a very expensive and permanent medical condition. This was just before I bought/'became eligible for Medicare and going for the gold was a no-brainer. They can't refuse you for pre-existing conditions. Every six months I have to go in for tests to include an MRI and a CAT scan and then I see 4 different doctors with different specialties. That doesn't include the radiologists who read and report on my MRI and CAT scans.

Every 6 months. I go to the best university medical school I know of and see professors and top people in these fields. They are challenged by my condition. These are $5,000 days. $5,000 twice a year just for checkups!! They don't cost me a dime.

That makes my puny health insurance premiums a real bargain considering that this $10K per year is just for checkups and doesn't include any other medical needs that come up.

I have no clue how someone with no health insurance can retire in Thailand. Age typically brings problems.

If you retire in Thailand with no insurance and then develop a condition, your only hope is to return to the states and go to a state that has expanded Medicaid and hope for the free state health care. That's only available if you're poor. If you have money you'll burn through it either in Thailand or the US before you get any help in the US. You'll never qualify in Thailand. Go HERE and read JingThing's excellent and long thread about repatriating to the US on a low budget. It covers medical care etc.

Well worth the read, and then some.

Cheers.

[NeverSure]

I'm going to ask a mod if this should go into the Home Country Forum. I'm not sure. That's where we usually discuss these things.

Cheers.

[craigt3365]

Interesting post NS! If you don't mind me asking, why is your insurance subsidized? You can PM if you don't want it public! LOL

Another point. If you are entitled to military medical insurance, it is covered by Part B. I cancelled my mother's only to find out she'd then have NO insurance here! We started it back up easily, but a bit nervous for 8 months or so! She has TriCare.

[BKKSnowBird]

$104 a month is cheap insurance. I would take it just in case. It comes right out of your SS. You will not miss it.

[Pib]

Since Medicare does not cover medical costs obtained outside the U.S. (except in some unique cases), if you plan on living outside the U.S. and never going back for any medical care then it's not worth it as you are paying a monthly premium and getting nothing in return...not even peace of mind coverage since there is generally no coverage outside the U.S.

However, but, it's so easy to say I've been in good health all my life, don't plan to go back to the U.S. for any reason, I'll get all my treatment in countries where the medical costs are lower, I'll just self-insure, etc. I like the self-insure excuse as if everyone has plenty of savings to cover major medical costs or I'll just tuck that monthly premium in a bank account to pay future medical costs. The self-insure excuse is all to frequently just that, an excuse for not wanting to pay for medical costs.

But in the real world most people do not save towards future medical costs or won't have enough savings to cover a major medical cost like cancer, heart attack, stroke, a major operation, or a whole variety of possible medical issues that come along. It can just be eye-opening how big hospital/doctor bills can quickly add up to even for a few days in a hospital or taking care of some chronic disease. And a person may not truly realize the costs involved until they have to pay such costs and/or have a close family member/friend incur the costs.

But plans do indeed change and considering the 10% per year for life penalty premium for late Part B signup that could turn cheap medical insurance into not so cheap insurance....guess it depends on how much you are willing to pay per month for coverage and if you maybe are in the minority of folks who can and will self-insure and pray for no major disease hitting them in the old age.

Also if your plans change and you decided you do need to go back to the U.S. for medical care/Medicare coverage, unless you were already signed up you have to wait for the next annual general signup window 1 Jan -31 Mar and then the coverage still does not start until 1 July.

Everyone have different levels of acceptable risks...and some folks are just gamblers and more than happy to take their chances. And let's face it folks, old bodies are much more susceptible to medical breakdown due to long years of use---they just wear out, get diseased, etc.

As craigt3365 said, for military retirees and their dependents living outside the U.S. using Tricare coveage, which does cover you anywhere on Earth, they must sign up for Part B in order to retain Tricare once reaching 65. Although paying Part B premiums they receive no coverage from Medicare outside the U.S., Tricare does provide 75% reimbursement coverage....and if that military retiree decides to go back to the U.S. even for a short visit then Medicare does immediately start providing coverage at 80% reimbursement and Tricare picks up the remaining 20%...that sums up to 100% coverage...definitely a good deal...no Medigap coverage needed. So if a military retiree whether or not to sign up for Part B is a lot easier decision.

If signing up in 2016, Medical Part B premiums will be $121.80. Higher than what current enrollees are paying such as Neversure due to the COLA-Medicare issue this year, but premiums for current enrollees and 2016 enrollees foward will merge back to the same over the coming years do to the way the Mediare and COLA laws interact.

Good luck in what you decide. For me I haven't reached 65 yet but will be there before long and I also have struggled with do I really want to pay Part B premiums now that I have retired to Thailand supposedly for life. Both the wife (dual Thai/U.S. citizen) and I plan to signup for Part B since I'm military retiree. Some might think why have the Thai wife sign up for Part B as she could just use the Thailand 30 baht program and that's true. But she (nor I) want to set in a govt hospital queue for a half a day or longer just to be seen...and then trying to get the kind of medical care desired and get it quick. I'm already seen very well how the 30 baht program works with the Thai mother-in-law and several other in-laws....it's definitely a good deal "money out of you pocket wise" but it can make a person feel like sheep in the field being herded around by a border collie. To get the medical care you want, get it quick, and with the doctor your want, you need to go to a private hospital for that which cost money.

Good luck in your decision as I know it can be hard.

[Sheryl]

This has been discussed in some other ghreads yo umight like to read:

http://www.thaivisa.com/forum/topic/807799-medicare-questions-for-american-expats-65-or-older/page-2?hl=medicare#entry10190146

http://www.thaivisa.com/forum/topic/873652-american-expats-using-medicare-as-a-way-to-cover-medical-needs/?hl=medicare

I think a big part of the decision should hinge on what sort of health insurance you are able to get and maintain here in Thailand. If the answer is "none" or a policy with low coverage/lots of exclusions, then you really do need Medicare Parts A & B as a back up.

[Langsuan Man]

And don't let that 2015 rate of $104.90 per month for Part B fool you, this year it is going up to $121.80 and that is your initial monthly price, after that you are subject to normal inflationary increases PLUS increases based upon your reported income from your US Tax filing

Mine went up $66 per month for next year:

source: https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

[Pib]

Durn LSM, you are one of those rich guys with that extra premium being added on. Can I come live with you? Happy Holidays.

[Langsuan Man]

You too Pib. Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

[JimGant]

And don't let that 2015 rate of $104.90 per month for Part B fool you, this year it is going up to $121.80 and that is your initial monthly price,

LSM, for the majority of us already paying Medicare premiums in 2015 -- and not subject to the means-testing surcharge -- our monthly premiums will remain at $104.90. But, yeah, folk subject to surcharge -- and those becoming eligible for Medicare in 2016 -- will pay the higher rate.

Unfortunately (or maybe that's fortunately) means-testing surcharges on all so-called entitlements is the only way we'll address getting our financial house in order (not that that is the total solution).

Like Pib, my Medicare premiums allow for health insurance in Thailand to replicate Tricare Standard. And, at $150 deductible per person, plus a catastrophic cap of $3000 per person -- amounts that haven't changed in decades -- it's a great deal. And as long as the memory of the Walter Reed scandal, plus all the damaged war veterans in evidence, Congress isn't likely to change this in the near term. Yeah, drinking beer on Waikiki beach, allowing for a clear decision to stay for 20, was fortuitous. Even those who stayed in the Reserves are reaping these medical benefits.

[JimGant]

Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

I'm far removed from the $170,000 surcharge threshold for filing jointly, even with RMD. But, since having to take the RMD for the last few years, I found out that I should have started earlier, cashing in those IRAs to the extent they remained in the 15% tax bracket. Now I find that the RMD is nearly all in the 25% bracket. Oh well.

[NeverSure]

Interesting post NS! If you don't mind me asking, why is your insurance subsidized? You can PM if you don't want it public! LOL

Another point. If you are entitled to military medical insurance, it is covered by Part B. I cancelled my mother's only to find out she'd then have NO insurance here! We started it back up easily, but a bit nervous for 8 months or so! She has TriCare.

Sorry I'm late. Medicare part F (Medigap) or part C (Medicare Advantage) are both subsidized by the Feds. There is NO way a private health insurance company would insure me for 100% coverage (F) for the $140 per month I pay. Even a young person couldn't get that coverage.

It's not something you have to ask for. You contact a private agent that sells for the private carrier of your choice (policies vary) and sign up. That carrier applies for and gets the subsidy. You just pay your part of the premium. My company happens to be Continental Life, but there are many good ones. Their policies vary a bit so it's good to spend some time reading fine print, or use an agent you know and trust.

Cheers.

[NeverSure]

Let's not forget that part B isn't real health insurance. It covers only an incident that requires an overnight hospital stay. It doesn't cover doctor visits, office procedures such as lab tests or X-rays or even an MRI which is about $3,000.

If one of you folks develops a big and expensive medical condition that won't go away ever, and you need regular care for it... I thought I was healthy until right about the time I turned 65 and then... I should live a long time and be pretty much OK, but my health care costs are astounding. I doubt if there are many expats who could afford it even in Thailand, especially dragged out for perhaps 20 years.

The $250+ dollars a month I pay for insurance including Medigap is peanuts.

Cheers.

[CaptHaddock]

Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

I'm far removed from the $170,000 surcharge threshold for filing jointly, even with RMD. But, since having to take the RMD for the last few years, I found out that I should have started earlier, cashing in those IRAs to the extent they remained in the 15% tax bracket. Now I find that the RMD is nearly all in the 25% bracket. Oh well.

Rather than taking distributions, you should have converted them to a Roth IRA to the top of the 15% bracket before the RMDs and then those assets would have grown or produced income tax-free forever.

Edited January 1, 2016 by CaptHaddock

[CaptHaddock]

Let's not forget that part B isn't real health insurance. It covers only an incident that requires an overnight hospital stay. It doesn't cover doctor visits, office procedures such as lab tests or X-rays or even an MRI which is about $3,000.

If one of you folks develops a big and expensive medical condition that won't go away ever, and you need regular care for it... I thought I was healthy until right about the time I turned 65 and then... I should live a long time and be pretty much OK, but my health care costs are astounding. I doubt if there are many expats who could afford it even in Thailand, especially dragged out for perhaps 20 years.

The $250+ dollars a month I pay for insurance including Medigap is peanuts.

Cheers.

It's certainly true that Parts A & B are not adequate health insurance, but Part B does indeed cover doctor's services on both an inpatient and outpatient basis.

What is Medicare Part B coverage?

Medicare Part B (medical insurance) covers medically necessary services and supplies needed for the diagnosis or treatment of your health condition. This includes outpatient services received at a hospital, doctor’s office, clinic, or other health facility. Medicare Part B also covers many preventive services to prevent illness or detect them at an early stage. Together, Medicare Part A and Part B are known as Original Medicare.

https://medicare.com/about-medicare/medicare-part-b/

[Langsuan Man]

Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

I'm far removed from the $170,000 surcharge threshold for filing jointly, even with RMD. But, since having to take the RMD for the last few years, I found out that I should have started earlier, cashing in those IRAs to the extent they remained in the 15% tax bracket. Now I find that the RMD is nearly all in the 25% bracket. Oh well.

Rather than taking distributions, you should have converted them to a Roth IRA to the top of the 15% bracket before the RMDs and then those assets would have grown or produced income tax-free forever.

Too late now, Roth Conversions are treated as income in the year they are made so they can up you to past the thresholds, granted only for one year

What most people don't understand is that Medicare is allowed to count income using their formula that is called MAGI (modified adjusted gross income) which includes, tax free income, capital gains, the sale of property, withdrawals from an IRA or conversion from a traditional IRA to a Roth IRA

Since it includes tax free income (primarily government bonds) I have my doubts that they can't MAGI your Roth Distributions

I thought that they couldn't touch my tax free munis which turned out to be not applicable to the Medicare MAGI

[CaptHaddock]

Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

I'm far removed from the $170,000 surcharge threshold for filing jointly, even with RMD. But, since having to take the RMD for the last few years, I found out that I should have started earlier, cashing in those IRAs to the extent they remained in the 15% tax bracket. Now I find that the RMD is nearly all in the 25% bracket. Oh well.

Rather than taking distributions, you should have converted them to a Roth IRA to the top of the 15% bracket before the RMDs and then those assets would have grown or produced income tax-free forever.

Too late now, Roth Conversions are treated as income in the year they are made so they can up you to past the thresholds, granted only for one year

What most people don't understand is that Medicare is allowed to count income using their formula that is called MAGI (modified adjusted gross income) which includes, tax free income, capital gains, the sale of property, withdrawals from an IRA or conversion from a traditional IRA to a Roth IRA

Since it includes tax free income (primarily government bonds) I have my doubts that they can't MAGI your Roth Distributions

I thought that they couldn't touch my tax free munis which turned out to be not applicable to the Medicare MAGI

I am not worried about Roth distributions being included in my MAGI.

Earnings within a Roth IRA are tax free, so are these earnings included in the modified adjusted gross income which is used to determine Roth IRA eligibility?

By Denise Appleby

A:

There are two possible answers to this question, depending on whether or not the distribution from the Roth IRA is qualified.

Earnings on investments within a Roth IRA are neither subject to income tax nor are they included in the IRA owner's income. Instead, they accumulate on a tax-deferred basis and are tax free when withdrawn from the Roth if the distribution is qualified.

If an individual receives a distribution from his/her Roth IRA and the distribution is qualified and therefore tax free, the amount is not included in the individual's income - therefore, it is not included in the modified adjusted gross income (MAGI) to determine Roth IRA eligibility. However, if the distribution is not qualified, then the amount attributable to earnings is included in the individual's MAGI to determine Roth IRA eligibility.

http://www.investopedia.com/ask/answers/05/iraearningsmagi.asp

A qualified Roth distribution is one that meets the seasoning and age requirements.

[NeverSure]

Let's not forget that part B isn't real health insurance. It covers only an incident that requires an overnight hospital stay. It doesn't cover doctor visits, office procedures such as lab tests or X-rays or even an MRI which is about $3,000.

If one of you folks develops a big and expensive medical condition that won't go away ever, and you need regular care for it... I thought I was healthy until right about the time I turned 65 and then... I should live a long time and be pretty much OK, but my health care costs are astounding. I doubt if there are many expats who could afford it even in Thailand, especially dragged out for perhaps 20 years.

The $250+ dollars a month I pay for insurance including Medigap is peanuts.

Cheers.

It's certainly true that Parts A & B are not adequate health insurance, but Part B does indeed cover doctor's services on both an inpatient and outpatient basis.

What is Medicare Part B coverage?

Medicare Part B (medical insurance) covers medically necessary services and supplies needed for the diagnosis or treatment of your health condition. This includes outpatient services received at a hospital, doctor’s office, clinic, or other health facility. Medicare Part B also covers many preventive services to prevent illness or detect them at an early stage. Together, Medicare Part A and Part B are known as Original Medicare.

https://medicare.com/about-medicare/medicare-part-b/

You're right, my bad, and thank you for being tactful.

Medicare B has a 20% co-pay with no annual cap. In my case my costs would be staggering as I have a very expensive illness. My F (Medigap) with Continental Life picks up all co-pays and deductibles so I never have any out of pocket other than an occasional small charge for an RX co-pay. The RX isn't included in my F.

By law, C (Medicare Advantage) protects you from any out of pocket costs in their plan above $6,700 per year. Many such plans have a lower threshold so it pays to check into that.

Thanks for setting that straight. I've never used B only as I went straight for A+B+F+RX.

Cheers.

[gk10002000]

And don't let that 2015 rate of $104.90 per month for Part B fool you, this year it is going up to $121.80 and that is your initial monthly price, after that you are subject to normal inflationary increases PLUS increases based upon your reported income from your US Tax filing

Mine went up $66 per month for next year:

Medicare in jpg.jpg

source: https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

excellent post. thanks. So now I have to go and read up on how they compute the increase based on Tax filing. AGI? MAGI? Earned Income only?

[gk10002000]

Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

I'm far removed from the $170,000 surcharge threshold for filing jointly, even with RMD. But, since having to take the RMD for the last few years, I found out that I should have started earlier, cashing in those IRAs to the extent they remained in the 15% tax bracket. Now I find that the RMD is nearly all in the 25% bracket. Oh well.

Rather than taking distributions, you should have converted them to a Roth IRA to the top of the 15% bracket before the RMDs and then those assets would have grown or produced income tax-free forever.

Converting traditional IRA to Roth IRA is a subject more people need to investigate. I have substantial amounts in both and have run the numbers. At the moment, most of my traditional IRA money comes from my 401k roll overs. The catch here is those contribution monies came when I worked in a Tax state (California). So those pre tax contributions were not taxed by California. now, when I later withdraw those monies I will be doing that as the Florida Resident which has no state income tax. So I effectively avoid state taxes on all that 401 k contribution monies. Of course any taxation if I do convert a traditional to a Roth would also now not happen since Florida has no state income tax. So I encourage any of you fellow USA folks to consider your state residency when taking traditional 401k or IRA distributions or if converting a traditional IRA to a Roth. CA has 10% state tax in general so all things being equal, you save that amount in taxes by doing things in a tax free state, Nevada, Florida, Texas, et. al..

[gk10002000]

And don't let that 2015 rate of $104.90 per month for Part B fool you, this year it is going up to $121.80 and that is your initial monthly price, after that you are subject to normal inflationary increases PLUS increases based upon your reported income from your US Tax filing

Mine went up $66 per month for next year:

Medicare in jpg.jpg

source: https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

looking at the link, it looks like your monthly rate went up because your tax filing Modified Adjusted Gross Income (MAGI) must have increased. That is good to know as I close in on retirement. I will be able to adjust my income as needed given the nature of my investments in my IRAs and Roth IRA accounts and how and when I take distributions or do conversions. I will keep an eye on things. Thanks

$85,000 or less $170,000 or less $85,000 or less $121.80 above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $170.50

[Langsuan Man]

I would suggest that you read up on how Medicare comes up with the MAGI, not that there is much you can do about it, but at least you won't be surprised like I was

[CaptHaddock]

Many others are going to be in this same boat when their Required Minimum Distribution kick's in and there is no way around it

I'm far removed from the $170,000 surcharge threshold for filing jointly, even with RMD. But, since having to take the RMD for the last few years, I found out that I should have started earlier, cashing in those IRAs to the extent they remained in the 15% tax bracket. Now I find that the RMD is nearly all in the 25% bracket. Oh well.

Rather than taking distributions, you should have converted them to a Roth IRA to the top of the 15% bracket before the RMDs and then those assets would have grown or produced income tax-free forever.

Converting traditional IRA to Roth IRA is a subject more people need to investigate. I have substantial amounts in both and have run the numbers. At the moment, most of my traditional IRA money comes from my 401k roll overs. The catch here is those contribution monies came when I worked in a Tax state (California). So those pre tax contributions were not taxed by California. now, when I later withdraw those monies I will be doing that as the Florida Resident which has no state income tax. So I effectively avoid state taxes on all that 401 k contribution monies. Of course any taxation if I do convert a traditional to a Roth would also now not happen since Florida has no state income tax. So I encourage any of you fellow USA folks to consider your state residency when taking traditional 401k or IRA distributions or if converting a traditional IRA to a Roth. CA has 10% state tax in general so all things being equal, you save that amount in taxes by doing things in a tax free state, Nevada, Florida, Texas, et. al..

Quite true. If you have moved to Florida or to Thailand, for instance, when you do the Roth conversion you escape state taxes on the IRA money forever. Even if you subsequently move back to a state with an income tax since by then it is safe in the Roth, although I wouldn't try that trick with California.

Analyzing whether it's worthwhile to do the Roth conversion is complex. Basically, the longer the life span of your Roth IRA (not necessarily you), the higher the return on your investments in the Roth, the more worthwhile it is. If, for instance, you have a younger wife then the tax-free Roth money might be feeding her decades from now since in addition to its tax-free status the Roth is free from Required Minimum Distributions, unlike a Traditional IRA.

[NeverSure]

Just an update. My Medigap (Plan F) premium apparently increased from $140 to $160 per month this year. It's on auto pay from my checking account and I just got emails from my bank and Continental life that my account was charged $160 while always before it was $140. Of course I'll check with my agent but I doubt they made a mistake.

This is one issue with retirement. A "fixed income and fixed savings" don't grow fast but inflation is always in your face.

Cheers.

[Pib]

Yea, Medigap policy premiums which are really just commercial polices are not restricted from premium increases as far as I know just because Medicare Part B premiums are not raised for everyone due to no social security COLA increase.

By the way, below is partial quote from a website that I think summarizes pretty well the 2016 Part B premiums for new enrollees but stayed the same for most due to the COLA interaction and the probable 2017 rates for most if there "is" a COLA increase for 2017. Actually it appears folks who first enrolled in 2016 will receive a very minor premium increase while folks who have escaped premium increases due to the no COLA thing will see a significant increase in order to get the 2016 enrollees paying the same premium as most others which is the fair thing to do. The COLA interaction varies the fine print for all enrollees. Keep in mind we are talking the typical premium which applies to most folks, not the higher Part B premiums that some pay such as those with higher income (i.e., higher than average Modified Adjusted Gross Income(MAGI)), etc.