This is an up close and personal POV about Social Security and Medicare truths from my experiences. As of this typing, I’m seventy-five and a half. Yes, I have read all those articles in the old codger mags like AARP and AMAC. I learned nothing of value from them that I didn’t already know. These anecdotes I’m sharing with you are for real and firsthand.
Ponzi Scheme or Not?
Yeah, I know, Social Security is a Ponzi scheme and you’re not going to see any of it. That’s so much Bravo Sierra. I have heard that story since I was old enough to vote. The government is never going to stop paying out Social Security. It’s a way to control the older population. Vote for me or the other guy will cancel your income. They will throw Granny off a cliff. It’s never going to happen. We’re too large a voting block.
Follow The Money
Like they say, “Follow the money!” They control the money. As is their habit, they will just print more as needed. They will inflate the value as needed. What a misnomer, inflation. Typical of government double speak, it really means the exact opposite of what it is. Our money deflates as the cost of goods and services goes up, up, up. The less it’s worth, the easier it is to pay you some of it. On to the story!
Think It Through – More Truths About Medicare
I have heard from people who tell me they are going to take their social security payments as soon as possible. Curiously, I asked why. Only one reason was repeated to me, “I don’t know how long I’m going to live and I want to get every dime I can.” This is an underwhelming argument. I thought it through and decided to wait until I was seventy so I could draw as much each month as possible. I’m not too worried about dying sooner. My concern about my financial situation is if I die much later. Die sooner, your worries are over. The evidence shows we tend to live longer these days. If you make it to the benefits age, you have already beaten the odds. Unless you are at death’s door, you might rethink this. Chances are you’re going to continue living.
It May Pay To Delay
Each year you delay, your payout increases by eight percent. If you start from the earliest possible age of sixty two and compound that eight percent over the following eight years, until you reach seventy, you will find the increased monthly benefit eye opening. Try it and see. Start by going to www.ssa.gov and find out how much you will start getting, and then multiply it by 1.08. Multiply that amount by 1.08 seven more times always using the new larger amount. That will be the amount of your monthly check when you reach seventy compared to what you would get at 62.
Did You Know Medicare Is Not Free?
Here’s another ugly truth they don’t tell you about much. Medicare is not free! No sir, not free at all. Now we start upon the entangled web. All of these elements intertwine. My plan is to keep it as simple as possible. That may require going back and forth a little. First premise, Medicare isn’t free. They charge you for it. The premium comes off the top of your Social Security benefit every month. It also goes up every year.
Here’s the scam; the government often (but not always) gives you a cost of living adjustment (COLA) annually.
Inflation and Medicare Deductible
It varies according to what they claim is the current inflation rate. They do not count food or energy (gas and oil) in the inflation rate. Seems reasonable, right?? Yeah, right. . . Next, they take some of it back by raising your Medicare deductible.
Now I’m not going to bother you with the alphabet soup of all the different Medicare elements, like plan A and B and such. Simply put, Medicare pays 80% of doc visits for approved procedures. You are on the hook for the rest. This is known as the ‘Medi-gap’. Here’s what you do about that. Read on.
Each Year You Get To Do It Again
During the fall of each year, you’ll notice the media waves are flooded with advertising for ‘Medicare supplemental’ insurance policies, and Medicare Advantage plan benefits. The supplementals can make up most or all of the difference that Medicare leaves for you, the 20%, for a price. If you have a stroke or something, you’ll find out quickly that the amount you owe can be enough to give you a heart attack. That’s what the supplemental addresses, the Medi-gap.
The Best And The Rest
The very best supplementals are called PPO’s. They are also the most expensive. PPO’s cover your 20% gap on everything that Medicare will cover. There are some things Medicare will not cover. Teeth, ears, and eyeglasses are not covered. I have no hands on experience with the other Medi- gap programs as I am able to afford a PPO (so far anyway). Most of them charge you a monthly fee. Some of the advantage plans claim to give you money back every month. Remember; TNSTAAFL, There is no such thing as a free lunch. They are giving you back your own money. The right hand takes it and the left hand gives a dab of it back. I do know that many of the other plans have their own deductibles and co-pays. When you go to a doctor’s office, there is a fee that you pay to the doctor upfront. Some require you to go to the doctor of their choice, not your choice. Others will not approve all procedures. You often must get many procedures approved first.
Always Keep This In Mind!
Keep in mind, you are dealing with a for profit business, not an altruistic enterprise. They do not care about you. Insurance companies care about their bottom line. When you reach a certain point, you become more of a liability to them. Your longevity is not in their best interest or their shareholders. For instance, some of them charge you a fee based on your current age. Some charge based on the age that you were when you started with them. They all go up every year.
The Cost Differences
I have not done an analysis of the difference in cost between a supplemental plan, like the one I have, and the other supplementals, like Humana or United Health Care or any of the other Medicare Advantage plans. My suspicions are the cost would be similar. Often they come with a monthly premium, just not as much as my supplemental. A big difference is, that I pay for mine up front each month with no further expense, and the other plans nickel and dime you with every doctor visit you have. The only way I have to measure it is by studying the documents I receive from my plan. They come after my doctor visits. They are called an EOB or ‘explanation of benefits.’ It details what services were rendered what they cost and what was paid by my provider, my 20%. The number can be stunning. Try a couple of night’s stay in a hospital for instance.
Get The Best You Can Afford
One other thing you should do is get the very best you can afford starting out. You are allowed to change every fall. That’s fraught with pitfalls. Often you will have to change to all new doctors if you change plans. You may get dinged for a preexisting condition. You may even get denied if you have a chronic condition or have one foot in the grave. The first time in, they must take you no matter what. Not so after that, buyer beware!!
Moving On To Medicare
Next, we will go on to part 2 on Some Truths About Social Security and Medicare. A down and dirty look at drugs and Medicare. It’s enough to rate a whole blog of its own. Hold on!!