Hi all,
I'm considering not signing up for Medicare Part 'B' at age 65, and instead starting at a later age after I get some or all of my Roth conversion years completed. Medicare 'encourages' people to not go this route by assessing a lifelong penalty for each year skipped. If I'm reading the expense table correctly for healthcare, this penalty is not being considered by the software. I've enclosed a screenshot that shows $2k IRMAA and $4k Part 'B' charges for two people after about 10 years of skipped Part 'B.'
I suspect this happens because Pralana presumes my skipped years are during qualified employment years when the penalty is waived. Is there a way for me to tell Pralana that the penalty should be applied ?
Thanks, Eric
I doubt Pralana covers this, I've never heard of anyone wanting to voluntarily pay the penalty. But since the penalty is 10% of the base cost for every 12 months missed, you can simply calculate the penalty and enter it as part of the Insurance Premiums. Don't forget about Part D, that incurs penalties of 1% per month. Part D is much more expensive this year's Congress expanded what insurance companies have to pay for, the policy I was looking at was over half the Part B premium. My understanding is that insurance companies selling supplemental plans do not have to accept you after six months past age 65 or they can charge you more than standard if you are in poor health.
So I think with a little manual calculation, you can explore this in Pralana, but I wouldn't do it in real life. If you fall ill, you may not be able to get supplemental insurance and the IRMAA fees you saved may look tiny in comparison.
By the way, in my area, the age 65 Supplemental plan cost (part G) is more than the base Part B premium and it automatically increases both with whatever inflation adjustments they have plus 2%/year age adjustment until age 89. I had no idea how expensive that was all going to be.
I doubt Pralana covers this, I've never heard of anyone wanting to voluntarily pay the penalty.
Yah ... and you may never again 😉
The consideration is not Pralana related, so the short version is this:
At my IRMAA levels, the Part 'B' premium equals about 3/4 of the national average unsubsidized cost of Part 'B' services
I'm unusual in being an MD, and having insight into my health that most do not. I estimate that my group average lifestyle cost of care is about 10% of national average
And last, neither my wife or I have any interest in end-of-life futile care, or the lion's share of possible offered cancer related chemotherapy.
I've run through the epidemiology quite a few times, and except for trauma we are highly unlikely to ever have substantial Part B costs. Never say never, but our odds are quite low. From my POV, the problem with Part 'B' medical insurance is that it is mostly pre-pay rather than a spread of high cost but rare events.
I would be most happy with an insurance policy outside of Medicare Part 'B' that covers expenses past a relatively high threshold. A version of a high deductible plan for Part B. I've looked, and so far nothing is available.
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You mentioned the high cost of Plan G. Depending on the state you live in and your health, you may want to consider the high deductible (HDG) plan. That is what we would choose if I fold and agree to Part B premiums.
Yes, I was going to ask what you were going to do for a substitute for part B in the meantime. The federal takeover of insurance on seniors is so complete that I doubt you'll find anything.
On the Plan G vs G-HD, thanks, I knew of it but hadn't really investigated it, I will look into it some more.
Yes, I was going to ask what you were going to do for a substitute for part B in the meantime. The federal takeover of insurance on seniors is so complete that I doubt you'll find anything.
The problem with self-insuring Part B is loss of the Medicare negotiated rates. I've yet to crack that nugget
One other thing to note. Contra the explanation in the program and in the manual, Pralana's "auto-calculate Medicare" does not calculate Medicare Part D premiums. Medicare Part D varies by your location and plan, so it actually can't do it super-accurately even if it tried. The only thing the program is doing for Part D is auto-calculating any Part D IRMAA surcharge (ePRC and Online have the same issue). The documentation needs to change so people will include the Part D base premium in the Insurance Costs.
I did raise the issue using the Feedback button under "Manual" since it can be fixed with a different explanation rather than programming.
@ricke As far as I can tell, the manual does specifically state that the tool only calculates Part D surcharges. Am I missing some location in the manual where it states otherwise, or are you saying that we need to elaborate and include words to the effect that the user must manually specify Part D premiums?
Thanks,
Stuart
Ok, the manual says it correctly, but the information button next to the "auto-calculate Medicare Premiums" check box says it auto-calculates B and D premiums, see png file with screenshot.
@abq-goldgmail-com Just an FYI there's an advisor who hangs out here sometimes that's also an MD and only works as a Pralana advisor to other MDs, from what I remember. He knows Pralana very well in case you need any help that might be related to those concerns.
@abq-goldgmail-com Just an FYI there's an advisor who hangs out here sometimes that's also an MD and only works as a Pralana advisor to other MDs, from what I remember. He knows Pralana very well in case you need any help that might be related to those concerns.
That is interesting -- thanks for the FYI. Do you happen to remember a name or way to track him down ?
