The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: Morning Glory on August 12, 2018, 01:52:41 PM
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The Medicare portion of FICA tax is 1.45% of gross income (slightly more if you make over $200k). I have heard rumors that it would be cheaper to insure everyone under 65 than everyone over 65. So if we had a national health plan that extended coverage to everyone it would need to cost about 3% of everyone's gross income. (I know that this is an oversimplification and that medicare doesn't cover everything).
I have a family of four and pretty good insurance from my employer. Last year I spent about 6.4% of my gross income on health insurance, deductibles, and copays. In the first half of this year it was 7%. So I would definitely come out ahead with a "Medicare for all" plan.
What about all of you? Include all insurance premiums, copays, deductibles, etc. Don't include dental, vision, OTC meds, orthodontics, or premiums that are paid by your employer. If you are FIREd, express as a percent of your annual withdrawal. Info on family size and whether the insurance is employer or private would also be helpful.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
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Are you including the premium your employer pays?
We have insurance through dh's employer, and if you figure in what the employer contribution is (and you should, because it's really part of your compensation) it comes to about 20% of our income. We don't pay much else, most years, because we're pretty healthy. We spend more at the dentist and on glasses than we do at the doctor's, though this year will be different because I'm having a knee replacement.
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Are you including the premium your employer pays?
OP states:
Include all insurance premiums, copays, deductibles, etc. Don't include dental, vision, OTC meds, orthodontics, or premiums that are paid by your employer.
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Family of 3. FIREd since mid 2016. Living on ~$40K/year of dividends and capital gains from investments. In 2017 and the first half of 2018 while slow traveling around the world we maintained travel insurance with World Nomads to cover emergencies, which cost ~$150/month. Now that we're back in the US, our health care costs are $0, as we are 100% covered by our state's version of Medicaid.
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Ballpark estimate would be about 5% for DH and I. We have insurance through my employer with a $6,000 deductible ($3K each). DH rarely goes to the doctor but I have a couple chronic conditions with medications that add up fast. I hit my deductible around March this year. Then I still pay around 20% for office visits, tests, etc. and separate copays on medication.
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I became unexpectedly disabled due to an injury 3 years ago (yes, super healthy people, it can happen to any of us!). Single. Prior to that, was less than 1% of annual spending with employer based coverage.
1st yr of disability: 11% (employer based coverage + COBRA)
2nd yr of disability: 13% (COBRA)
3rd yr of disability: 41% (ACA) --> thank goodness I just got on Medicare recently through SSDI. Ballpark should be 15% with Medicare.
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In a typical year, roughly 0%. I am young and healthy and my employer pays 100% of my insurance premiums. Most years I just buy the occasional OTC medications.
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I only spend about 1% on my health care policy, but with my employer and maxing out my HSA it is 6%.
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1.6% - DW's employer covers 90% of our $0 deductible plan. If we were on my employer's insurance it would be much much worse; 5.6% with a $5000 deductible (not HSA eligible). I hope she never quits.
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0.9% of gross income last year not including employer paid portions of healthcare premiums last year.
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Now that I'm retired, its about 17% gross. Much less in the 3 out of 5 years I collected the maximum Obamacare subsidy. It is substantial if you no longer have employer subsidized healthcare and too young for Medicare.
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Agreed.
If I had bought an equivalent plan on the ACA exchange, I'd be paying 2.9% of gross pay instead of 0.9%. If I was living on my FIRE budget and paying for an ACA plan it'd be 15% of gross.
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About 17% - I’m in an HSA for which I get ex-employer’s group rate, but no subsidy. FIREd 3 years. Too young for Medicare.
I would pay a lot more for any ACA plan in my state.
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Are you including the premium your employer pays?
OP states:
Include all insurance premiums, copays, deductibles, etc. Don't include dental, vision, OTC meds, orthodontics, or premiums that are paid by your employer.
But the question doesn’t make sense that way. (Or maybe I don’t understand the question.)
But I have a friend who is German, and what they pay for health insurance as a percentage of salary is not insignificant. There’s not a magical free button, though there may be a More Rational Plan Button, not that I think we’re going to see it happen.
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For just myself, my monthly premium is about .8% of my gross pay for the buy up BCBS PPO plan that’s probably about the best plan money can buy.
What hits me hard is since I’m a contractor and I take time off between jobs. The same plan is like $800/mo for Cobra, and since I’m traveling, the garbage ACA plans that are often HMO only (can’t even buy PPO privately in TX) and they don’t cover me except life threatening emergencies when I’m on the road, which I do for months at a time.
I always have great cheap care when I’m working, but the group our insurance industry fu*** the most is those that aren’t poor and don’t get it through an employer. Add someone that wants to travel for a few months and you better hope if you get sick it’s life threatening..
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Add someone that wants to travel for a few months and you better hope if you get sick it’s life threatening..
And even emergency care protection out of network won't protect you from balance billing. You might look into travel insurance as recently brought up in the ACA thread.
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2098134/#msg2098134
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2098706/#msg2098706
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I know you asked for responses from US readers, but I just want to mention that in Australia the Medicare Levy is 2% of your gross income and it is deducted along with your tax. And it covers everyone but not quite everything.
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When we first retired it was a 4th of our income. now that I work p. T. It is a 6th before taxes, etc,
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About 5% as we carry the full cost of premiums for my wife and kid while employer carries full premium cost for me and makes an excellent HSA contribution.
That said, I AM also the employer so I could also answer 10%.
As an employer, I cannot stand the system. I so wish it weren't expected to be provided by us and think having me making decisions about our employees healthcare coverage is a waste of my time doing something I'm not all that equipped to be doing and which is very much not core to what we do. I resent it. Rant over.
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Are you including the premium your employer pays?
OP states:
Include all insurance premiums, copays, deductibles, etc. Don't include dental, vision, OTC meds, orthodontics, or premiums that are paid by your employer.
But the question doesn’t make sense that way. (Or maybe I don’t understand the question.)
Agreed.
Also remember that medicare tax is also paid by the employer, so they would have to pay an additional 1.45% and the self employed would be paying an additional 2.9%. Still seems like a good deal for individuals and a screaming great deal for employers except in as much as they lose the shackles of health care to keep people chained to their desk.
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That brings up the question, "what is income?"
If I use line 22 on my 1040 form,
this would include all my Mustachian dividends and interest.
Then we pay 12%.
If I include only the earnings from work, (line 12)
Then we pay 17.5%.
If I use taxable income (line 37),
Then we pay 18.3%
If I use my taxable income, (line 43)
Then we pay 28.3%.
Family of 4. These numbers just got worse, my daughter
started dental school. The school requires she have a specific health
insurance that is $3,468 a year. That is twice what she cost me on
my policy.
What 1040 line is your preference?
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I'm somewhere around 2-3%. It really depends on how bad my asthma gets. Already had one serious flare this year, and I'm expecting the STHTF in September/October (allergies are a major trigger for me). Dental and vision are fairly routine.
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Add someone that wants to travel for a few months and you better hope if you get sick it’s life threatening..
And even emergency care protection out of network won't protect you from balance billing. You might look into travel insurance as recently brought up in the ACA thread.
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2098134/#msg2098134
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2098706/#msg2098706
I was just thinking the same thing- that travel insurance may fill in the gap. I don't think DAN (https://www.diversalertnetwork.org/travel/) was mentioned in either thread and they supposedly have very good results for customers during claims (never have had to make a claim personally).
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About $11k (~8%) these past couple years for a family of 5. Employer based (same rate no matter the # of kids) HSA. Have maxed out of pocket these past 2 yrs. $3k premiums,$6k OOP and $1-2k dental work.
Sent from my iPhone using Tapatalk
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1.45% (Medicare) + $3450 - $600 (HSA minus employer contribution) + $65.50*26 (bi-weekly premiums) = 6.3%
To get under 3% I'd have to slightly more than double my income but then would be subject to the higher Medicare rates (additional 0.9% on anything over 200k).
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Between 1.5% and 2.5% based on taxable income of about 14k, and coverage outcomes that vary from year to year. Single 50something FIR(E) using ACA.
Income above is less than "real" income in that some of my practical income is from rent, but that income is not taxed because technically is an expense that offsets my housing cost. Using a fairer income of 19k, healthcare as you define it would be roughly 1% to 2%.
My real spending on healthcare is higher than that because for me, most of the expense is in categories you exclude.
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Between 1.5% and 2.5% based on taxable income of about 14k, and coverage outcomes that vary from year to year. Single 50something FIR(E) using ACA. Subtracting the 12,700 personal deduction from 14k leaves about 1300 AGI; healthcare premiums and copays after subsidy range from roughly 10% to 25% of stated AGI.
Income above is less than "real" income in that some of my practical income is from rent, but that income is not taxed because technically is an expense that offsets my housing cost. Using a fairer income of 19k, healthcare as you define it would be roughly 1% to 2%.
My real spending on healthcare is higher than that because for me, most of the expense is in categories you exclude.
Those are close to ERE numbers! Way to go, Bicycle_B.
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For the past 5 years, about 5-6% for a family of two, covered by the much-envied federal health insurance. I'm hoping it will drop a bit for the next few years but who knows. I'm very worried about it rising substantially as we grow older.
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31 year old male here. My employer pays 100% of my HDHP premiums, and since my contributions to my HSA are tax deductible, I would say my health care spending is actually negative.
I haven't been to the doctor in probably 3 years though, and still have money in my HSA from my previous employer that matched my HSA contributions. Overall I'd say my HC spending has been in the negative thousands.
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Yearly premiums for my HDHP through work, plus doctors visits plus over the counter medications total up to about $540 for me. DW is on her own plan at work.
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Premiums alone are about 2%, we don't have any planned medical expenses throughout the year (no prescriptions, planned visits outside of yearly physicals, etc.). But as expected stuff happens occasionally that puts us up into the 5% of income toward medical, all the way up to 10% when we had our kids in 2015 & 2017.
If there was a good healthcare covered for all program available, I would say I'd be happy to give up 5% of my income for that.
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Between 1.5% and 2.5% based on taxable income of about 14k, and coverage outcomes that vary from year to year. Single 50something FIR(E) using ACA...
Income above is less than "real" income in that some of my practical income is from rent, but that income is not taxed because technically is an expense that offsets my housing cost. Using a fairer income of 19k, healthcare as you define it would be roughly 1% to 2%.
My real spending on healthcare is higher than that because for me, most of the expense is in categories you exclude.
Those are close to ERE numbers! Way to go, Bicycle_B.
Thanks, @maizeman. I don't want to be deceptive, though, so:
- "some of my practical income is from rent" - my cash outlay is about 30k, of which 17k or so is house mortgage, taxes, insurance, repair; rent from roommates is about 15k, mostly classified as expense.
- By covering some portion of outlay through savings drawdown or accepting zero interest debt, in recent years I did not have to show all outlays as income. My taxable income is thus lower than my real long term income, at least slightly. However the question appeared to ask for income as shown in my tax form, so I gave that.
-The housing cost as stated above doesn't count cost of capital - I have a lot of equity. Like MMM himself, my cost would be higher if cost of capital were included.
- The 19k is what I would pay if I rented a room in a house similar to mine. It's also about the net amount based on accounting for cost of capital and living the way I do. (So I break even by owning vs renting). So... a little more than ERE, I think, but thanks anyway!
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This is kinda a #fakenews comparison.
You can't just magically double the tax and replace employer subsidized insurance, which seems to be the inference from the OP.
As an aside the US spends roughly 16% of our GDP on healthcare which is about double what it was 50 years ago. We spend far above the next highest nation.
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Including dental insurance about 7%, excluding it about 6%. That's for a family of 7 with excellent health insurance (Tricare Reserve Select through the National Guard) though my wife has a couple of chronic conditions so she has some prescriptions, labs, and occasional trips to a specialist. Everyone else is relatively healthy but I'm sure we had a few urgent care and ER visits in there with five young kids.
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This is kinda a #fakenews comparison.
You can't just magically double the tax and replace employer subsidized insurance, which seems to be the inference from the OP.
As an aside the US spends roughly 16% of our GDP on healthcare which is about double what it was 50 years ago. We spend far above the next highest nation.
Magically, no...but Congress could pass a law that makes it happen. Or at least, a law that causes Medicare for All to replace employer subsidized insurance, with a tax rate approximately double the current 1.45%.
It would have to be determined through experience how close the new rate would be to exactly paying for the costs. Presumably if the variance is large, it would cause problems unless remedied, but that's different from requiring magic.
Fwiw, I assume the 1.45% employer share would also be doubled. So the total amount for expanded Medicare would be 5.8% of pretax wages. That's much less than 16% of GDP, but wouldn't be expected to cover all costs. It would only replace medical premiums, copays and some deductibles (I think), plus the portion of medical cost currently covered by employer sponsored insurance...will accept correction from those with more detailed knowledge, but a substantial portion of costs was excluded by OP's proposal.
Plus Medicare is sort of efficient, perhaps offering some savings rather than a mere redistribution of costs. Not magic, just efficiency from standardization, eliminating some of the numerous private sector middlemen, and freeing the patient from the need to pay for private sector profits.
So the proposal is plausible, maybe even realistic. Not magic, at least.
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Also, Medicare doesn't mean free healthcare as most people seem to think, other than the tax. By the time you add the various parts/supplementals to get adequate full coverage, it could get very expensive. As I noted earlier, someone on Medicare stated they were paying about $11,000 /yr.
Your income after you subtract your standard deduction is NOT AGI.
An HSA is not the same as paying for healthcare expenses, that's the saving part. The spending will come later.
Your current Medicare tax is not the same as paying for your own premiums and healthcare expenses.
If I had Medicare instead of my health insurance through work, my total out of pocket would be much higher. I prefer to stick to my 0.7% figure posted earlier, until I FIRE.
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Also, Medicare doesn't mean free healthcare as most people seem to think, other than the tax. By the time you add the various parts/supplementals to get adequate full coverage, it could get very expensive. As I noted earlier, someone on Medicare stated they were paying about $11,000 /yr.
I believe this number was for two people, wasn't it? I could be misremembering that bit.
However, I do clearly remember that this example assumed you made significant use of the hospital throughout the year (realistic for someone old enough to qualify for current medicare, probably not for a lot of the younger healthier people who would be covered in an expanded medicare for all), and also included extremely comprehensive supplemental plans for drugs and doctors visits (which again likely make sense for people who expect to hit their deductibles most years but not for younger healthier adults, and would also likely cost less even for the exact same coverage for younger and healthier adults).
I'm not arguing it's not a useful datapoint, but for many folks a medicare for all plan would not require coming up with nearly so much out of pocket in an average year.
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Also, Medicare doesn't mean free healthcare as most people seem to think, other than the tax. By the time you add the various parts/supplementals to get adequate full coverage, it could get very expensive. As I noted earlier, someone on Medicare stated they were paying about $11,000 /yr.
I believe this number was for two people, wasn't it? I could be misremembering that bit.
However, I do clearly remember that this example assumed you made significant use of the hospital throughout the year (realistic for someone old enough to qualify for current medicare, probably not for a lot of the younger healthier people who would be covered in an expanded medicare for all), and also included extremely comprehensive supplemental plans for drugs and doctors visits (which again likely make sense for people who expect to hit their deductibles most years but not for younger healthier adults, and would also likely cost less even for the exact same coverage for younger and healthier adults).
I'm not arguing it's not a useful datapoint, but for many folks a medicare for all plan would not require coming up with nearly so much out of pocket in an average year.
Yes, that was a couple. There's a cost to part B. To protect yourself against having to pay 20% of those costs out of pocket, you need a supplemental. And prescriptions can be very expensive for anyone, and you can't add Part D later without a penalty. Of course anything could change if Medicare was expanded to all, but the point is that it's not free, it's not paid for only by the tax.
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Yup, it'd be more than just the payroll deduction, but a lot less than the number you put forward previously.
So let's start with $5,500/year part A deductible, part B supplemental insurance, and part D coverage per year (off by 50%).
-Now most people are not hospitalized in most years, so assuming you'll pay the maximum part A deductible each benefit period seems misleadingly pessimistic for people in their 20s, 30s, 40s, and 50s.
-Similarly for parts B and D, bringing in a lot more young and healthy people into medicare would either mean setting a new separate insurance premium for those younger enrollees which would be much lower or alternatively if all enrollees are lumped together would bring down the insurance premium for all medicare enrollees, although less so than in the first option.
Here are some hard numbers on how big the difference in drug insurance costs would be for current medicare enrollees and people currently too young to enroll in medicare:
(https://hpi.georgetown.edu/sites/hpi/files/files/upload/drugs3.png)
So americans >=65 years old (essentially those currently on medicare) spend about $800/year on prescription drugs and those 18-65 years old spend ~$300/year on average.
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The ACA caps my healthcare premiums at 9.5% of income (MAGI). Without the ACa subsidy, premiums would be ~ 20% of my (M)AGI. Thats the floor for my healthcare costs. Add in co-pays, uncovered expenses, meds, etc etc and I'm probably closer to 12%. W/O the subsidy I'd be cracking the 25% threshold. This is for a very healthy family of 4.
Where did you come up with the 3% criterion for voting? I'm so far north of that it aint funny.
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The ACA caps my healthcare premiums at 9.5% of income (MAGI). Without the ACa subsidy, premiums would be ~ 20% of my (M)AGI. Thats the floor for my healthcare costs. Add in co-pays, uncovered expenses, meds, etc etc and I'm probably closer to 12%. W/O the subsidy I'd be cracking the 25% threshold. This is for a very healthy family of 4.
Where did you come up with the 3% criterion for voting? I'm so far north of that it aint funny.
Medicare costs would be far north of 3% as well to get full coverage. People think it just means free healthcare - not even close.
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I pay 0.6% of my base pay in medical insurance premiums. If I had to pay my out of pocket maximum plus my insurance premiums each year it would be 3.7% of my base salary. With my "normal" amount of pay (including base and overtime and other income sources) it would be about 2.5% of my total income in an average year.
In reality, I pay my premium and generally nothing else because I also have VA healthcare for free. So I just keep the work plan as a backup in case I don't want to wait to get in to a VA facility or want something more convenient (like telemedicine for $25 copay through the work plan).
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I pay nothing but modest ($40) copays so far as a relatively healthy adult because my employer pays 100% of my premiums. But they don't pay anything for my spouse, who is on an individual plan through the only option available in our area (there's no competition for health insurance in Philadelphia). She pays $365/month for a high deductible plan, plus copays. It doesn't cover her mental health costs, either, which are substantial.
That said, i don't believe we will see Medicare for All happen because of the simple fact that the boomers already have Medicare and selfishness will prevent them from voting to raise taxes to support something that doesn't benefit them. Since they vote at such a higher rate than young people, it will be decades before something like this is viable politically. That doesn't even factor in the lobbying by the establishment health industrial complex. I hope the millennials prove me wrong, but i am very pessimistic about universal single-payer in the US.
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Income is too wildly variable to base off of but it is generally around 15-20% of our spending. Family of 5, self-employed, private insurance. This is our second largest expense (taxes is #1)
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I pay nothing but modest ($40) copays so far as a relatively healthy adult because my employer pays 100% of my premiums. But they don't pay anything for my spouse, who is on an individual plan through the only option available in our area (there's no competition for health insurance in Philadelphia). She pays $365/month for a high deductible plan, plus copays. It doesn't cover her mental health costs, either, which are substantial.
That said, i don't believe we will see Medicare for All happen because of the simple fact that the boomers already have Medicare and selfishness will prevent them from voting to raise taxes to support something that doesn't benefit them. Since they vote at such a higher rate than young people, it will be decades before something like this is viable politically. That doesn't even factor in the lobbying by the establishment health industrial complex. I hope the millennials prove me wrong, but i am very pessimistic about universal single-payer in the US.
I think we will still have plenty of people 65+ decades from now as well. ;-)
I take your point though - I believe that incremental changes would have to go into effect to see progress toward expanding Medicare. e.g. Introduce additional Medicare coverage via taxes to younger people first and let the older people grandfathered with the lower rates die off.
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I think we will still have plenty of people 65+ decades from now as well. ;-)
I know you are being snarky, but the reason i say it will be decades (and not never) is because of demographics. The millennial generation is substantially bigger than gen x and will eventually outnumber boomers as they die off. There will be a demographic moment where pre-medicare (youngish) voters outnumber medicare (old) voters and that will be the chance to reform the system…if it isn't killed off entirely before then.
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The cost of medicare for all has been projected at anywhere from $1.4 trillion to $3.3 trillion per year. In 2017, the combined payroll tax income for medicare, medicaid, and social security all together was about $1.1 trillion. Since the employee + employer portion of social security, medicare, and medicaid is 15.3% of gross income, this means to raise $1.4 to $3.3 trillion would require a payroll tax increase of 19.5% to 45.9% in order to cover all costs via payroll tax.
I'm not sure about you guys, but I don't really like the idea of an additional 19.5% payroll tax and I am absolutely not on board with an additional 45.9% payroll tax.
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If you are saying that the payroll tax would increase by ~50% over what it currently is (i.e., from 15.3 to about 23% of wages), I would be 100% ok with that. And I am self employed, so I pay both ends of that tax.
ETA: In fact, I would be 100% ok with this even if I personally STILL had to also pay the ~6K/year in premiums for private health insurance that I currently do, if it meant that all citizens could receive the same coverage and not have to worry about losing it when they changed jobs. Also, it would benefit companies who could stop worrying about the costs of covering employees as a changing percentage of their bottom line every year.
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The cost of medicare for all has been projected at anywhere from $1.4 trillion to $3.3 trillion per year. In 2017, the combined payroll tax income for medicare, medicaid, and social security all together was about $1.1 trillion. Since the employee + employer portion of social security, medicare, and medicaid is 15.3% of gross income, this means to raise $1.4 to $3.3 trillion would require a payroll tax increase of 19.5% to 45.9% in order to cover all costs via payroll tax.
I'm not sure about you guys, but I don't really like the idea of an additional 19.5% payroll tax and I am absolutely not on board with an additional 45.9% payroll tax.
The UK spends 7.7% of its GDP to make sure that every citizen has a decent level of basic care (source (https://www.bbc.com/news/uk-42950587)). The US is currently spending 8.5% of its GDP on Medicare+Medicaid+ACA. That isn't counting any of your private contributions, if you add private contributions in the US you get 17.1% of GDP (to the UK's 9.7%). That's insane. If you copied and pasted the UK system into the US we could have Medicare for all for $1.49T per year (in 2017 dollars, that obviously does not count social security). I'm not saying that we should pay for it with a payroll tax, I'm saying that it is insane that the UK pays so much less for health care than the US. This isn't an economic problem*, it is a political one.
* - Except that it is quickly becoming an economic problem for the US economy.
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About 14%. That's not counting the portion that my wife's employer pays for our health insurance.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
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It depends on what kind of plan you choose, and also on your income. (I've got to sign on this year, and am finding it very confusing. Like so many things, you need a crystal ball.)
You can choose traditional medicare and buy supplements, or you can buy into a plan that works more like an HMO, and covers more, but is geographically limited. My dh's retirement plan covers *his* supplemental insurance costs, but not mine. It's just as confusing as every other thing about insurance!
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This isn't an economic problem*, it is a political one.
That's further complicated by the fact that something like 1 in 6 jobs in the US are in health care and health insurance. That's a huge portion of the economy and many of those jobs would be eliminated by single payer. I'm all for Medicare for all, but employment effects are another huge hurtle to overcome (and a big reason why costs are so high).
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I think we will still have plenty of people 65+ decades from now as well. ;-)
I know you are being snarky, but the reason i say it will be decades (and not never) is because of demographics. The millennial generation is substantially bigger than gen x and will eventually outnumber boomers as they die off. There will be a demographic moment where pre-medicare (youngish) voters outnumber medicare (old) voters and that will be the chance to reform the system…if it isn't killed off entirely before then.
My point is there will always be scores of millions of citizens aged 65+ or approaching the benefit age regardless of which generation they are born in.
I don't think boomers are inherently against a program if they were younger (and to be fair, fiscal policy as to what would keep a program afloat is different in a ZPG [technically, the US is already in/near Stage 5 of the DT and only has population increase due to immigration] world than a growth economy), I just think whoever is approaching 65+ will largely be against paying more money for the same medical coverage. Many are on or will be on fixed incomes and are largely past their prime earning/working years. Gen x, millenial, whoever - whenever they get older they'll also be against raising taxes on healthcare after they've reached the age in which they receive benefits and will vote more frequently than they did when they were younger. I don't see that pattern changing for awhile, especially as the TFR is under replacement and the proportion 65+ won't be decreasing dramatically.
I hope you're correct and all the whippersnappers will be able to implement healthcare policies that are financially viable and take care of every citizen. I just think voting patterns that potentially alter the taxes/benefits for seniors are more age-based rather than cohort- or generation-based and that there will be am omnipresent silver tsunami force that resists paying more.
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This isn't an economic problem*, it is a political one.
That's further complicated by the fact that something like 1 in 6 jobs in the US are in health care and health insurance. That's a huge portion of the economy and many of those jobs would be eliminated by single payer. I'm all for Medicare for all, but employment effects are another huge hurtle to overcome (and a big reason why costs are so high).
That is definitely true. As documented by David Graeber in Bullshit Jobs: A Theory, that was one of the reasons that Obama didn't push for single payer. That is, he didn't think that he had the political capital, especially in a recession, to trim that many jobs from the economy.
It's also true that you can't just trim 7.4% off of your GDP overnight or expect it to be pain free. But in the long run it seems like an obvious plus for the economy.
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I hope you're correct and all the whippersnappers will be able to implement healthcare policies that are financially viable and take care of every citizen. I just think voting patterns that potentially alter the taxes/benefits for seniors are more age-based rather than cohort- or generation-based and that there will be am omnipresent silver tsunami force that resists paying more.
I wish that were what i was predicting. Unfortunately, i agree with you and don't think it's possible.
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I've heard highly conflicting numbers re cost of Medicare For All. Fwiw, here is an article quoting the author of a recent possibly Koch-funded study of the subject...that Alexendra Ocasio-Cortez has recently been quoting (misquoting, according the author).
https://www.factcheck.org/2018/08/the-cost-of-medicare-for-all/
TL;DR - it probably won't be cheaper overall than what we have.
That said, clearly the US system is the most costly and presumably inefficient of the national healthcare systems in prosperous countries, so surely we can and should improve it greatly. Medicare For All seems like a reasonable approach in that many aspects of it are similar to typical systems that work.
OP, sorry for all of the sidetracking.
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The cost of medicare for all has been projected at anywhere from $1.4 trillion to $3.3 trillion per year. In 2017, the combined payroll tax income for medicare, medicaid, and social security all together was about $1.1 trillion. Since the employee + employer portion of social security, medicare, and medicaid is 15.3% of gross income, this means to raise $1.4 to $3.3 trillion would require a payroll tax increase of 19.5% to 45.9% in order to cover all costs via payroll tax.
I'm not sure about you guys, but I don't really like the idea of an additional 19.5% payroll tax and I am absolutely not on board with an additional 45.9% payroll tax.
The UK spends 7.7% of its GDP to make sure that every citizen has a decent level of basic care (source (https://www.bbc.com/news/uk-42950587)). The US is currently spending 8.5% of its GDP on Medicare+Medicaid+ACA. That isn't counting any of your private contributions, if you add private contributions in the US you get 17.1% of GDP (to the UK's 9.7%). That's insane. If you copied and pasted the UK system into the US we could have Medicare for all for $1.49T per year (in 2017 dollars, that obviously does not count social security). I'm not saying that we should pay for it with a payroll tax, I'm saying that it is insane that the UK pays so much less for health care than the US. This isn't an economic problem*, it is a political one.
* - Except that it is quickly becoming an economic problem for the US economy.
Exactly. Our health care spending is ridiculous compared to the rest of the world. Per capita, most of the developed world spends less to cover everyone than we do just on public costs, which is only about half our spending.
(https://www-tc.pbs.org/prod-media/newshour/photos/2012/10/02/US_spends_much_more_on_health_than_what_might_be_expected_1_blog_main_horizontal.jpg)
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
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i don't believe we will see Medicare for All happen because of the simple fact that the boomers already have Medicare
@nkt0
That simple fact is no fact at all. Many boomers are 55 to 64 years old and do not have Medicare, with the youngest of them being nearly a decade away from receiving it.
Also, as I have stated earlier, Medicare isn't really free if you want decent coverage. Premiums can be quite steep, and co-pays and significant deductibles would probably be included in any "for all" plan to reduce the enormous cost of the program needed to implement it, despite a hefty tax hike.
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This is kinda a #fakenews comparison.
You can't just magically double the tax and replace employer subsidized insurance, which seems to be the inference from the OP.
As an aside the US spends roughly 16% of our GDP on healthcare which is about double what it was 50 years ago. We spend far above the next highest nation.
Magically, no...but Congress could pass a law that makes it happen. Or at least, a law that causes Medicare for All to replace employer subsidized insurance, with a tax rate approximately double the current 1.45%.
It would have to be determined through experience how close the new rate would be to exactly paying for the costs. Presumably if the variance is large, it would cause problems unless remedied, but that's different from requiring magic.
Fwiw, I assume the 1.45% employer share would also be doubled. So the total amount for expanded Medicare would be 5.8% of pretax wages. That's much less than 16% of GDP, but wouldn't be expected to cover all costs. It would only replace medical premiums, copays and some deductibles (I think), plus the portion of medical cost currently covered by employer sponsored insurance...will accept correction from those with more detailed knowledge, but a substantial portion of costs was excluded by OP's proposal.
Plus Medicare is sort of efficient, perhaps offering some savings rather than a mere redistribution of costs. Not magic, just efficiency from standardization, eliminating some of the numerous private sector middlemen, and freeing the patient from the need to pay for private sector profits.
So the proposal is plausible, maybe even realistic. Not magic, at least.
Studies have shown that the biggest decrease in cost in "medicare for all" would be the 40% pay cut that healthcare providers (doctors, nurses, etc) would have to take. There would be a one-off decrease in admin costs, which would lower the total cost by 10-15%, but "medicare for all" would not change the rate at which the cost of health insurance is rising each year. Further, as medicare rates would become the norm, a decent percentage of smaller clinics would go out of business due to the much lower medicare reimbursement rates.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
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This is kinda a #fakenews comparison.
You can't just magically double the tax and replace employer subsidized insurance, which seems to be the inference from the OP.
As an aside the US spends roughly 16% of our GDP on healthcare which is about double what it was 50 years ago. We spend far above the next highest nation.
Magically, no...but Congress could pass a law that makes it happen. Or at least, a law that causes Medicare for All to replace employer subsidized insurance, with a tax rate approximately double the current 1.45%.
It would have to be determined through experience how close the new rate would be to exactly paying for the costs. Presumably if the variance is large, it would cause problems unless remedied, but that's different from requiring magic.
Fwiw, I assume the 1.45% employer share would also be doubled. So the total amount for expanded Medicare would be 5.8% of pretax wages. That's much less than 16% of GDP, but wouldn't be expected to cover all costs. It would only replace medical premiums, copays and some deductibles (I think), plus the portion of medical cost currently covered by employer sponsored insurance...will accept correction from those with more detailed knowledge, but a substantial portion of costs was excluded by OP's proposal.
Plus Medicare is sort of efficient, perhaps offering some savings rather than a mere redistribution of costs. Not magic, just efficiency from standardization, eliminating some of the numerous private sector middlemen, and freeing the patient from the need to pay for private sector profits.
So the proposal is plausible, maybe even realistic. Not magic, at least.
Studies have shown that the biggest decrease in cost in "medicare for all" would be the 40% pay cut that healthcare providers (doctors, nurses, etc) would have to take. There would be a one-off decrease in admin costs, which would lower the total cost by 10-15%, but "medicare for all" would not change the rate at which the cost of health insurance is rising each year. Further, as medicare rates would become the norm, a decent percentage of smaller clinics would go out of business due to the much lower medicare reimbursement rates.
The 40% cut general statistic is misleading because half (56% I believe) of the healthcare received in the US already runs through Medicare and Medicaid. So for providers with Medicare patients nothing would change for that subset. Yes funds received from patients previously carrying private insurance would decrease but, as you mentioned, there would be some decrease in administrative cost.
I strongly believe that Medicare for all would slow the rise in health Insurance costs because Medicare is already covering the sickest people in the country. Adding everyone else to the pool would be adding the healthiest set of people which would do the exact opposite of what everyone is afraid of with the ACA which is a death spiral. The healthier people not needing as much care would help fund the people needing care and costs would either slow there rise or possibly even go down. In addition to potentially reducing the cost of health insurance, the cost of care would likely go down as well because now there would be one huge entity with massive leverage to limit the cost of procedures.
Imagine a "non-profit" hospital that makes so much money (25% profit) that they are continually expanding infrastructure and adding "cancer wings" because they're making so much money they have to do something with it so that it doesn't look like they're making money hand-over-fist. Now that hospital has to negotiate with an entity that controls essentially 100% of its patient base. Do you think that profit margin is going to go down? There's a reason why private equity firms are diving into the hospital space and that's because the profits to be had are disgusting.
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i don't believe we will see Medicare for All happen because of the simple fact that the boomers already have Medicare
@nkt0
That simple fact is no fact at all. Many boomers are 55 to 64 years old and do not have Medicare, with the youngest of them being nearly a decade away from receiving it.
Also, as I have stated earlier, Medicare isn't really free if you want decent coverage. Premiums can be quite steep, and co-pays and significant deductibles would probably be included in any "for all" plan to reduce the enormous cost of the program needed to implement it, despite a hefty tax hike.
Premiums for Medicare aren't steep at all. For most folks Part B is $134 a month per person for a couple making up to $85,000, and Part A is free. And the premiums are still reasonable as income rises above that. The average premium for the drug plan (Part D) is $30-some a month. Sure there will be co-pays and deductibles, just like there is for virtually all private insurance now.
The thing is, the Mercatus study showed we're already spending, as a country, every dollar it would take to implement medicare-for-all. so it would literally cost nothing to implement this program other than shifting around how and where the money is being spent. I could care less whether my taxes go up a little bit if that means I spend less out-of-pocket on Healthcare. At the end of the day where the money comes out of my pocket.
So if we could literally insure every person in the country for not one penny more than what we are spending already why would we not want to do that? There's only one answer and that is the healthcare industry lobby. That lobby is also the most powerful in the country which is why it will still be exceedingly difficult to get medicare-for-all despite it being a complete no-brainer.
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The Medicare portion of FICA tax is 1.45% of gross income (slightly more if you make over $200k). I have heard rumors that it would be cheaper to insure everyone under 65 than everyone over 65. So if we had a national health plan that extended coverage to everyone it would need to cost about 3% of everyone's gross income. (I know that this is an oversimplification and that medicare doesn't cover everything).
I am 99% sure that Medicare costs more than just the 1.45% FICA taxes. And, after looking it up, that hunch is confirmed.
https://www.kff.org/report-section/a-primer-on-medicare-how-is-medicare-financed-and-what-are-medicares-future-financing-challenges/
Only about 1/3rd of it is paid for via FICA. Also recall that the employer is also paying 1.45%, which ultimately, according to most economists, comes from your pocket in depressed wages.
Not saying we shouldn't have medicare for all. Just people need to get a little more realistic about what it would cost. Taxes would need to go up 10+ percentage points across the board to pay for it (or more for some groups and less for others).
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Not saying we shouldn't have medicare for all. Just people need to get a little more realistic about what it would cost. Taxes would need to go up 10+ percentage points across the board to pay for it (or more for some groups and less for others).
Do you want to explain to me why? That is, we are already paying more than the UK pays for the entirety of their government healthcare system. Why would our taxes need to go up?
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Not saying we shouldn't have medicare for all. Just people need to get a little more realistic about what it would cost. Taxes would need to go up 10+ percentage points across the board to pay for it (or more for some groups and less for others).
Do you want to explain to me why? That is, we are already paying more than the UK pays for the entirety of their government healthcare system. Why would our taxes need to go up?
Taxes would go up because your out of pocket spending on healthcare would go down. Medicare is more generous than essentially all the high deductible health plans out there now. In the end you aren't going to care if your taxes go up but your out of pocket healthcare spending goes down so that the net cost is the same.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
Yeah, $10,000 for a couple for Medicare is about $10,000 more than many seniors can afford. It's ridiculously expensive - far from free as most people seem to think!
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Not saying we shouldn't have medicare for all. Just people need to get a little more realistic about what it would cost. Taxes would need to go up 10+ percentage points across the board to pay for it (or more for some groups and less for others).
Do you want to explain to me why? That is, we are already paying more than the UK pays for the entirety of their government healthcare system. Why would our taxes need to go up?
Taxes would go up because your out of pocket spending on healthcare would go down. Medicare is more generous than essentially all the high deductible health plans out there now. In the end you aren't going to care if your taxes go up but your out of pocket healthcare spending goes down so that the net cost is the same.
So what you are saying is that the UK can provide health care coverage for every citizen for 7.7% of GDP but we couldn't possibly for 8.5% of GDP? Because economics work differently in the UK, or the actual medical devices, maybe UK citizens posses different anatomy? I reject the premise that the US magically necessitates higher healthcare costs than every other developed country on the planet, but I'm willing to listen to evidence.
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The Medicare portion of FICA tax is 1.45% of gross income (slightly more if you make over $200k). I have heard rumors that it would be cheaper to insure everyone under 65 than everyone over 65. So if we had a national health plan that extended coverage to everyone it would need to cost about 3% of everyone's gross income. (I know that this is an oversimplification and that medicare doesn't cover everything).
I am 99% sure that Medicare costs more than just the 1.45% FICA taxes. And, after looking it up, that hunch is confirmed.
https://www.kff.org/report-section/a-primer-on-medicare-how-is-medicare-financed-and-what-are-medicares-future-financing-challenges/
Only about 1/3rd of it is paid for via FICA. Also recall that the employer is also paying 1.45%, which ultimately, according to most economists, comes from your pocket in depressed wages.
Not saying we shouldn't have medicare for all. Just people need to get a little more realistic about what it would cost. Taxes would need to go up 10+ percentage points across the board to pay for it (or more for some groups and less for others).
1.45% increased to 10+%, which could be well above 10%, and it will need to be high to provide people with decent coverage along with the high out of pocket costs while not screwing over healthcare providers who are already losing money on existing Medicare patients, with many facilities already closing their doors. Someone upthread mentioned cutting healthcare providers and employees' incomes by 40%. That can't happen. It's hard to make a profit and find good help as it is.
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As a Welfare Rother, I pay $0 for my ObamaRomneyHeritageCare Medicaid.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
Yeah, $10,000 for a couple for Medicare is about $10,000 more than many seniors can afford. It's ridiculously expensive - far from free as most people seem to think!
I don't get the idea from my interactions with people that most think Medicare is free. It can also be substantially cheaper than $5,000 per year per person because that number included medigap. The basic cost for Medicare is $134 a month. That gets you Part A and Part B. The deductible on an inpatient hospital stay is $1,340 per year and you pay 0% coinsurance for the first 60 days in the hospital. The deductible on all other care is $183 per year and you only pay a 20% coinsurance after that. If you want a drug plan, add another $30-some a month for reduced drugs costs.
I dare you to find private insurance covering an individual for less than $200/month that gives you a low three-figure deductible and 20% coinsurance. I bet you can't get insurance that cheap as a 20-something year old.
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Not saying we shouldn't have medicare for all. Just people need to get a little more realistic about what it would cost. Taxes would need to go up 10+ percentage points across the board to pay for it (or more for some groups and less for others).
Do you want to explain to me why? That is, we are already paying more than the UK pays for the entirety of their government healthcare system. Why would our taxes need to go up?
Taxes would go up because your out of pocket spending on healthcare would go down. Medicare is more generous than essentially all the high deductible health plans out there now. In the end you aren't going to care if your taxes go up but your out of pocket healthcare spending goes down so that the net cost is the same.
So what you are saying is that the UK can provide health care coverage for every citizen for 7.7% of GDP but we couldn't possibly for 8.5% of GDP? Because economics work differently in the UK, or the actual medical devices, maybe UK citizens posses different anatomy? I reject the premise that the US magically necessitates higher healthcare costs than every other developed country on the planet, but I'm willing to listen to evidence.
I have no idea if our cost would be higher than the UK. I just know that taxes would go up to pay for the plan but out of pocket costs would go down, neutralizing the increase in taxes. What gets latched on to is people saying, "taxes will go up so see, they just want to take more money out of our pockets," without the other half of the equation which is that actual healthcare spending will go down. The Mercatus study basically showed us it's a zero sum game. I could care less how the money comes out of my pocket if, at the end of the day, the dollar amount doesn't change. Taxes, paying the doctor bill myself, insurance premiums. If it cost me $1,000 and you could change the whole system, insuring 30 million more people, and it still only costs me $1,000 for every facet of healthcare, tax away! The money is just coming from a different bucket.
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Mr. Green,
I don't necessarily disagree with you. If I could pay the same as today for everyone to be well covered I would. But we should actually be able to do better than that. If we brought our healthcare spending on par with the rest of the world we could cover everyone without even raising taxes.
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Family of 3 with an HSA and a $5,000 deductible + $1,000 copay. We pay $715 a month ($8,580 a year) in health insurance.
We've also paid $2,700 out of pocket this year so far. $2,100 of that was due to a trip to the ER after my toddler son fell and cut his head. Small cut, but we had to glue it shut. The rest was miscellaneous childhood check-ups and vaccines.
My wife is pregnant with our second child, so I expect to pay ~$4,000 out of pocket over the next 12 months to cover the C-section and related doctors visits, assuming baby and momma are healthy and no complications. There's a cap of $7,000 out of pocket per year for an in-network doctor so at least we know the worse case scenario.
Thank goodness we're healthy or I don't know what our healthcare bills would look like. I haven't been to the doctor, even for a check-up, in 6 years.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
Yeah, $10,000 for a couple for Medicare is about $10,000 more than many seniors can afford. It's ridiculously expensive - far from free as most people seem to think!
I don't get the idea from my interactions with people that most think Medicare is free. It can also be substantially cheaper than $5,000 per year per person because that number included medigap. The basic cost for Medicare is $134 a month. That gets you Part A and Part B. The deductible on an inpatient hospital stay is $1,340 per year and you pay 0% coinsurance for the first 60 days in the hospital. The deductible on all other care is $183 per year and you only pay a 20% coinsurance after that. If you want a drug plan, add another $30-some a month for reduced drugs costs.
Don't forget Plan D (covers prescriptions) $78 a month and Plan F supplement (covers the 20% Medicare doesn't pay) $241.50 a month. For some people, the cost is higher. If you really want to be adequately covered, you need these parts/supplements.
Based on the OP, I'm comparing it to to my private insurance through work, which costs me $50/mo (my cost, not employer's), and my deductible is $100. Compare that to the Medicare couple paying $11,000 in Medicare premiums.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
Yeah, $10,000 for a couple for Medicare is about $10,000 more than many seniors can afford. It's ridiculously expensive - far from free as most people seem to think!
I don't get the idea from my interactions with people that most think Medicare is free. It can also be substantially cheaper than $5,000 per year per person because that number included medigap. The basic cost for Medicare is $134 a month. That gets you Part A and Part B. The deductible on an inpatient hospital stay is $1,340 per year and you pay 0% coinsurance for the first 60 days in the hospital. The deductible on all other care is $183 per year and you only pay a 20% coinsurance after that. If you want a drug plan, add another $30-some a month for reduced drugs costs.
Don't forget Plan D (covers prescriptions) $78 a month and Plan F supplement (covers the 20% Medicare doesn't pay) $241.50 a month. For some people, the cost is higher. If you really want to be adequately covered, you need these parts/supplements.
Based on the OP, I'm comparing it to to my private insurance through work, which costs me $50/mo (my cost, not employer's), and my deductible is $100. Compare that to the Medicare couple paying $11,000 in Medicare premiums.
What you're paying isn't reflective of the true cost of insurance, it's being heavily subsidized by your employer. You're still paying for it in the form of lower wages, you just don't see it coming out of your paycheck.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
Yeah, $10,000 for a couple for Medicare is about $10,000 more than many seniors can afford. It's ridiculously expensive - far from free as most people seem to think!
I don't get the idea from my interactions with people that most think Medicare is free. It can also be substantially cheaper than $5,000 per year per person because that number included medigap. The basic cost for Medicare is $134 a month. That gets you Part A and Part B. The deductible on an inpatient hospital stay is $1,340 per year and you pay 0% coinsurance for the first 60 days in the hospital. The deductible on all other care is $183 per year and you only pay a 20% coinsurance after that. If you want a drug plan, add another $30-some a month for reduced drugs costs.
Don't forget Plan D (covers prescriptions) $78 a month and Plan F supplement (covers the 20% Medicare doesn't pay) $241.50 a month. For some people, the cost is higher. If you really want to be adequately covered, you need these parts/supplements.
Based on the OP, I'm comparing it to to my private insurance through work, which costs me $50/mo (my cost, not employer's), and my deductible is $100. Compare that to the Medicare couple paying $11,000 in Medicare premiums.
What you're paying isn't reflective of the true cost of insurance, it's being heavily subsidized by your employer. You're still paying for it in the form of lower wages, you just don't see it coming out of your paycheck.
Did you read what I posted.? I specifically stated, "my cost, not employer's". I'm staying on point here - OP asked to not include employer paid premiums.
I'm only paying $50/mo of the premium and $100 deductible. And I'm comparing that to the extremely high cost comparable Medicare parts/supplemental that I mentioned that I would pay out of pocket. That's in addition to the large tax hike (which is justified to pay for this expensive program). I also reject the notion that I'm paying a lot more indirectly through reduced wages because I am certain that my employer would not suddenly pay me the difference if they were to stop paying their share of my insurance premium. That would be extra profit for the business, sort of like how businesses that got big Trump tax cuts didn't pass those on down to employees via higher wages.
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About 0.7% for me. Family size =1 Employer based coverage, net cost after tax deduction
By the way, Medicare has pretty poor coverage unless you purchase the additional parts and supplementals. Someone in the ACA thread mentioned it was costing about $11,000 per year for Medicare premiums to get adequate healthcare coverage.
Something isn't adding up on that Medicare number. My grandparents had all the main parts (A, B, and D) and even Medigap (Part F?) And they paied less than that per year combined. And with Medigap that means they don't pay a penny more.
@Mr. Green
I said "about" $11,000. The actual figures were $907 a month, $10,884 a year. It wouldn't surprise me that some peoples would be a little less.
Interestingly, you actually responded about this in the other thread saying, "I feel like $10,000 is a reasonable amount of money..."
and I had responded to you, "That's $10,000 out of pocket per year. That seems incredibly high to me."
https://forum.mrmoneymustache.com/welcome-to-the-forum/what-comes-after-the-aca/msg2036831/#msg2036831
What I meant by $10,000 being reasonable was as a total cost for a couple. If we had Medicare and Medigap, or an equivalent, that meant we didn't pay a dime more out of pocket, I'd consider $5,000 per person per year to be a reasonable cost. And the best part is that your expenses would be the same every year so it'd be easy to budget for and a worry-free line item.
I know my grandparents pay a little less than $5,000 each for all their Medicare premiums, and that includes Medigap so that pay that and not a penny more. That's covered them through multiple joint replacements, heart surgury, etc.
Yeah, $10,000 for a couple for Medicare is about $10,000 more than many seniors can afford. It's ridiculously expensive - far from free as most people seem to think!
I don't get the idea from my interactions with people that most think Medicare is free. It can also be substantially cheaper than $5,000 per year per person because that number included medigap. The basic cost for Medicare is $134 a month. That gets you Part A and Part B. The deductible on an inpatient hospital stay is $1,340 per year and you pay 0% coinsurance for the first 60 days in the hospital. The deductible on all other care is $183 per year and you only pay a 20% coinsurance after that. If you want a drug plan, add another $30-some a month for reduced drugs costs.
Don't forget Plan D (covers prescriptions) $78 a month and Plan F supplement (covers the 20% Medicare doesn't pay) $241.50 a month. For some people, the cost is higher. If you really want to be adequately covered, you need these parts/supplements.
Based on the OP, I'm comparing it to to my private insurance through work, which costs me $50/mo (my cost, not employer's), and my deductible is $100. Compare that to the Medicare couple paying $11,000 in Medicare premiums.
What you're paying isn't reflective of the true cost of insurance, it's being heavily subsidized by your employer. You're still paying for it in the form of lower wages, you just don't see it coming out of your paycheck.
Did you read what I posted.? I specifically stated, "my cost, not employer's". I'm staying on point here - OP asked to not include employer paid premiums.
I'm only paying $50/mo of the premium and $100 deductible. And I'm comparing that to the extremely high cost comparable Medicare parts/supplemental that I mentioned that I would pay out of pocket. That's in addition to the large tax hike (which is justified to pay for this expensive program). I also reject the notion that I'm paying a lot more indirectly through reduced wages because I am certain that my employer would not suddenly pay me the difference if they were to stop paying their share of my insurance premium. That would be extra profit for the business, sort of like how businesses that got big Trump tax cuts didn't pass those on down to employees via higher wages.
I guess it depends on the employer. I have worked for companies that paid the employee the difference if they didn't want to use the company's health insurance.
The only thing I was alluding to with the comparison if your cost to a retiree's cost with Medicare is that it isn't apples to apples. Your bill is being subsidized and the Medicare enrollee's isn't.
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Not including the employer cost makes a huge difference, so I don’t understand excluding it.
I’m now a SAHM and when working for a Fortune 100 company we were on my employer plan which with our son ran us about 3.5k annually in premiums- having my son was 4K on top of that for my personal OOP max and would have been double if he’d needed NICU treatment. Now through my husbands job our premiums are triple, though with lower deductibles, because they are a small business that can’t afford to cover 80% of the costs and don’t have the negotiating power of a large company. I’m not including percentage because it isn’t a fair comparison since we obviously lowered our income with me leaving the workforce recently.
Medicare for all wouldn’t just save us money, it would allow small businesses to compete for talent with large ones, and allow would be retirees to open jobs (FIL is not a FIRE person but only works because MIL isn’t 65 yet) a few years earlier.
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So what you are saying is that the UK can provide health care coverage for every citizen for 7.7% of GDP but we couldn't possibly for 8.5% of GDP? Because economics work differently in the UK, or the actual medical devices, maybe UK citizens posses different anatomy? I reject the premise that the US magically necessitates higher healthcare costs than every other developed country on the planet, but I'm willing to listen to evidence.
I think there is a very good chance that if we do Medicare for All, our per capita healthcare costs will go down. However, I think a more conservative assumption (the type we should generally use for budgeting purposes, both personally and nationally!) would be that they would stay the same.