Medicare is a Bargain!

Would you be interested in a service that you must absolutely have? As a matter-of-fact, almost everyone has it. It’s not free. You will have to pay, but let’s say you could get the same thing for 400% less than what most people pay. Would you be interested in a bargain like that? Most people would enthusiastically say ‘YES!’  You ask, ‘what is the bargain?’  Medicare.  Medicare is a bargain!

Everyone needs health care because everyone gets sick and needs doctors, hospitals, drugs, treatment, etc. The average cost of a decent group health plan is going to be $1,000+ per month per person. If you go into the exchange to purchase an individual plan, you are looking at $500-$600 per month WITH a $2,500 deductible, and that is not including the maximum out of pocket.

You may say that you only pay $50 or a $100 per month for your health plan at work. That is because your employer is paying the majority of the cost. You are not getting it for free. You’re not even getting it for a reduced price. It still costs $1,000. Your employer is taking your compensation and applying a portion to your health insurance instead of paying the money to you. It’s your money, your compensation. You are not given a choice on how to receive it. That employer portion is just part of your total compensation. And it is still part of your employer’s total expense for an employee.

You might complain that now I have to pay the full cost of health care myself. Yes, your employer is not paying for your health care because you are not working any longer. Your employer is also not paying you a salary any longer. When you go to the grocery store, you can’t use your salary to pay for the groceries. You have to use your Social Security check, savings, investments, IRA’s, etc. Your source of earned income stopped when you retired, which includes your employer subsidy for your health insurance.

The realization of the true costs of services, like health care, doesn’t diminish the fact that Medicare is a bargain!

What does Medicare cost? For most people, you paid for Medicare Part A during the working years, so there is no charge. Medicare Part A covers the hospital. Medicare Part B is for doctor and outpatient procedures and that is generally $104.90 per month currently. With a Medicare supplement—let’s say a plan F—you will pay around $100-$140 when you turn 65 depending on male or female and location (Omaha, Lincoln, Council Bluffs). Add in a Part D prescription drug plan. It is possible to come in around $250 per month in total for your Medicare health coverage. With a plan F, there will be no deductibles, co-pays, or co-insurance. Incredible Cadillac health insurance for approximately $250 per month. Much better than a group plan or an individual plan on the ACA (Affordable Care Act) exchange that costs $1,000+ per month which also includes deductibles, co-pays, and co-insurance.

Medicare is a bargain! Medicare is something that you should be excited to become a part of when you turn 65. I am 53 as of the writing of this blog. I purchase my own insurance on the exchange as a self-employed individual. I would happily pay triple what Medicare beneficiaries pay for that same coverage, and it would still be a bargain for me.