Healthcare

What percentage of your income do you pay for health care? Only Medicare beneficiaries need reply 👵🏼

Old Bernie Sanders crys out for Medicare-for-all (not knowing what that actually means) while Old Liz Warren wants Obamacare enrollees to pay no more than 8.5% of income in premiums (with greater benefits). These two dreamers should get on the same page and enter the world of reality.

Neither one of them understands health care or paying for it which is far more than Medicare or Obamacare. Old Bernie lives in his hippie days and Old Liz can’t get over his fathers heart attack sixty years ago.

These changes will guarantee that every individual on the ACA exchanges has access to a plan that covers 80% of out-of-pocket costs and costs no more than 8.5% of income in premiums. The bill would also guarantee payment of CSRs, strengthen protections for essential health benefits, require all short-term insurance products to meet ACA standards. Source: Elizabeth Warren press release.

By the way, what exactly does “covers 80% of out-of-pocket costs” mean? Your OOP costs are your deductible and the 20% typically not covered by insurance as with Medicare. Does Old Liz want to cover 80% of the 20%?🤨

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3 replies »

  1. I do not believe a thing Warren and Sanders say, but the 8.5% figure got me thinking. Since I just retired, I wondered how much I should budget (percentage) for medical and what do the financial wizards now say. So I did a little Internet research to see how much to budget for medical (didn’t specify working or retired). I was shocked that there are many sites still saying to budget 5% for medical, some were saying 5-10% of your income should go to medical.

    I was lucky and planned my retirement costs on actual numbers, but 40 years ago, you needed a starting point for planning so you needed that percentage. Costs changed so much more than inflation over that time that I would be short on that amount if I followed that advice today. I was warned in the mid-1990’s by a retiree that medical costs caught him by surprise.

    In reality, medical is a fixed cost for most healthy people, so basically you can buy different levels of coverage and co-insurance for different prices. Every budget site based medical on a percentage. If you suddenly started making 6 figures you are paying more for medical (or getting hurt more) and if you just make the US mean average wage ($56k), somehow your insurance will cost you less. Maybe because you can’t afford to get sick?

    I did the math of what I actually spent for the first 3 months of this year and it worked out to be 13% of my income for out of pocket and my premiums with my employer retiree medical plan. If I had to pay for all of the insurance premium (employer and my costs) plus out of pocket, it would work out to be 66.7% of my income (non-Medicare). If I had only made the US mean wage and if I paid for all of my medical and insurance premiums, it would be 84% of my pension. Of course I would not be able to afford my current plan and I probably end up with a plan that pays only to see a witch doctor once a year.

    The first thing that needs to be done is that financial planners need to use real numbers because insurance has fixed premium costs plus out of pocket costs, not a percentage. From costs that I have been able to find, that’s somewhere between $6k for individuals to $30K for families and rising depending on the plans. Percentages need to be raised and decrease as you make more money, something like 15 to 10% not 5% to 10% for planning purposes if you must use a percentage figure.

    I have never heard of any employer plan or state medical plans (where the workers actually pay for their medical) where the worker pays less than 10% of the premium. Often it is in the 15-20% range that the worker pays for their medical insurance plus out of pocket amounts. So why would these two think the USA could afford to pay for free or even paying 91.5% of medical for every American? Those of us that are paying for our medical, we are more than likely paying more than the 8.5% right now.

    Liked by 1 person

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