There’s a good chance your out-of-pocket costs will rise once you move into Medicare

Yes, Medicare is heavily subsidized. But it is hardly free

The costs surrounding Medicare are arguably one of the biggest points of confusion for people about to enter into it (hint: it’s hardly free).

In this week’s column, Phil Moeller, the author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs and co-author of the updated edition of How to Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security, offers advice on this topic.

Got a question of your own about Medicare or Social Security? Send it to [email protected].

Is Medicare really a bargain?

Loretta: I am so fed up with excessive health prices! I wish someone would publish all the compensation received by health care CEOs, clinics operated by physicians, and pharmaceutical profits.

For the past few years, I’ve been buying my health insurance from my state Affordable Care Act Marketplace. With the subsidies, I paid less than $100 a month. Now that I’m turning 65, I’ll be paying $135 for Medicare Part B plus $57 for a Medicare Advantage plan.

So, my costs will nearly double even though I have the same income, live at the same address, etc.

Where’s the fairness in all of this? Thanks for listening.

Phil: Thanks for your note. Many people are surprised to learn that Medicare is not the bargain they assumed.

While big CEO paychecks clearly don’t help, the real “culprit” is that health care costs twice as much in the U.S. as it does in Europe and other industrial countries.

Also, I know that many people are as surprised as you were to learn that their out-of-pocket cost for Medicare is less than for their Marketplace plan.

After paying payroll taxes for Medicare their whole working lives, they logically assume their costs will decrease when they get Medicare.

As you learned, this isn’t the case. Marketplace and Medicare both receive government subsides but they are larger for the Marketplace plans than for Medicare.

So, while both types of coverage are heavily subsidized at the federal level, your out-of-pocket costs rose when you moved onto Medicare.

Can I still file on my ex’s Social Security?

Sharon: Can I still file on my ex-husband’s Social Security even though he put it in our divorce papers he doesn’t want me to be able to?

Phil: Yes, you can still file. Your husband has no control over this. He has no legal right to insist on your not filing, and I don’t even know why he would want to. His benefits are not affected by what you do.

What’s the best way to plan for long-term care costs?

Michelle: Hi, Phil. My 85-year-old uncle has advanced Parkinson’s and has a urinary catheter, is bowel incontinent and has a permanent feeding tube.

He’s maxed out his rehab and is now being transferred to a long-term facility. I don’t think he’s eligible for Medi-Cal.

Although he and his wife have assets, they will burn through them in a year or two at $15,000 a month!

My own mother is 85 and in relatively good health at this point, but I’m realizing now that she could find herself in a similar situation if we aren’t proactive.

Thank you in advance for any direction you may provide.

Phil: The devastating cumulative burden of assisted-living costs needs to have a more prominent role in financial planning and efforts to shore up Medicare, which does not currently cover long-term care costs.

It is seldom that my replies suggest people find an attorney, but that’s my thought here, both for your uncle and mother.

In your uncle’s case, it seems that he would qualify for Medi-Cal once he has spent down his assets.

There are attorneys who specialize in this process. I don’t do recommendations and suggest you reach out to the National Association of Elder Law Attorneys for a recommendation to someone in her area.

Your mother might benefit from similar advice to help develop a spending plan should she require assisted-living care as well.

I don’t know anything about her financial situation, of course, so it’s possible she should consult a financial adviser if she doesn’t already have one.

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