I waited a long time to get a look at my MegaCorp retiree health insurance benefits and they just arrived. It’s open enrollment time right now and I just booked my new insurance plan.
As background, I worked at one MegaCorp for 24 years and a second for just 3. I’m an official retiree of the first one, where I went from temporary Administrative Assistant (a college summer job) to Corporate Officer/VP. I left on a ‘Rule of 70’ package and have been waiting for age 55 to claim my early retirement insurance & pension.
I expected that the MegaCorp retiree ‘credit’ system was going to be complicated, but it’s not. I’m basically getting a $325/month annuity. It gets halved when we’re eligible for Medicare in 10 years. It gets halved again when I or my wife pass on. I can buy their insurance or stick with ours.
MegaCorp’s insurance is a bit better. It’s with the same carrier, MN Blue Cross/Blue Shield, and has the same monthly premium. It has a lower deductible ($11K vs $14K) and a carries across the USA. Our old coverage was only good in-state. We had to buy separate coverage for the months when we were in Florida.
The downside of the new plan is that it is only 80% coverage after the deductible is met. Our old coverage was 100% in network. That said, we never ever reached our deductible- even when the ‘big one’ hit.
It’s also not classified as a ‘high deductible plan’ that allows us to contribute to a HSA, which I have been a big fan of. I’m not sure what the government tax requirements for that are.
Still, I think apples-to-apples, the MegaCorp insurance is probably $100 cheaper a month. That, combined with my retiree $325 monthly credit benefits me about $5K a year, starting in January. MegaCorp will handle all the billing for me with my pension, which will also give me more time to goof off!
All-in-all, the plan is better than I expected. Do you have health insurance benefits as a retiree or are you expecting them?
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MrFireStation 
Chief, you hit the jackpot. No retiree benefits whatsoever for me, healthcare or otherwise. Fortunately, I always understood that, in my profession, preparation and maintenance of our lives in retirement was all up to me. As a
Planner, I planned. Medicare and Medigap have insured us well so far. The biggest unknown for us is what the US government will do when Medicare cost exceeds funding circa 2026.
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I think you & I both know what will happen in 2026. They’ll keep printing more debt-backed money – even faster than before! 😉
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I read an article where Social Security is going up 5.9% in 2022, and the Medicare base premium is going up 14.5%. One half of the increase was attributed to a new Alzheimer’s drug from Biogen called Aduhelm.
As an aside, many think that Medicare is free. There is a base premium next year of $170 monthly for Part B. There is also an income based adjustment that many who read this forum will see their premium adjusted up to around $500 monthly. Expect to see more of getting ‘the wealthy’ to pay their fair share, with the wealthy making quite a bit less than Candidate Biden’s $400K cut-off.
Here are excepts from the article.
“Today’s announcement … confirms the need for Congress to finally give Medicare the ability to negotiate lower prescription drug costs,” Rep. Frank Pallone, D-N.J., said in a statement. “We simply cannot wait any longer to provide real relief to seniors.”
A nonprofit think tank focused on drug pricing pegged Adulhelm’s actual value at between $3,000 and $8,400 per year — not $56,000 — based on its unproven benefits.
There is an unvirtuous cycle where Big Pharma donates AKA bribes members of Congress, who return the favor by passing legislation that prohibits Medicare and other government health care providers from negotiating the price they pay. No way the corrupt financial illiterates who populate Congress will do what is right to stop stealing from our children and stop the money printing presses.
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I am trying to follow along with the post, so please let me know if we are on the same page.
Your retiree benefit allows you to participate in MegaCorp’s Group Health Insurance at their rate. You have to pay both the former employer’s portion and your own portion, so you are responsible for 100% of the cost, less a $325 monthly credit you receive as your retirement benefit.
The 11K deductible seems high. Could this be the Maximum Out of Pocket. I checked mine and it is $3,000 per person and $6,000 for family max out of pocket.
Do you have set amounts specified for various services? Specified amounts for Office Visits, Specialist Visits and Emergency Room Fees?
Here is an interesting exercise to run through during your next open enrollment period; benchmark your different options. In my case, I found one option that was slightly higher cost than the cheapest but much cheaper than than most expensive option covered many of the costs for actual services we used at clear specified fees and offered very good coverage for unplanned surprise expenses. In most cases the difference between deductibles is simply baked into the monthly premium. The particular policy that I choose didn’t and in my mind offered the most value, even though it wasn’t the cheapest.
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Sorry for responding late – we were traveling. Yes, that’s the situation. $325 credit per month. $11K family deductible. I always take the highest deductible to lower the premium. (Our current deductible is $14K). No financial worries covering the first $11K of our medical needs.
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I normally elect for high deductibles myself, but in 2019 after doing the math I elected for what looked like to me a mispriced plan. Normally the difference in deductibles is baked into the difference in monthly price. If you don’t get sick, you win the bet.
In my case I found a plan that had zero dollar deductible that was $204 per month more than the $5,000 Individual / $10,000 family deductible with $6,350 / $12,700 max of pocket. Office visits were a straight $30 versus 20% after meeting the deductible. ER visits were $200 versus 20% after deductible.
The year I signed up for the deductible, my son and I were involved in a rollover car accident where I got knocked unconscious and woke up in a trauma center under an MRI strapped to a backboard. Neither of us were admitted. Both of us had been helicopter evacuated. The sticker price was around $40K for both of us. My insurance company had a negotiated rate that was around $20K. The out of pocket for both of us was $400 total.
In this case I saved around $12,700 by spending an extra $204 per month.
I have worked with my oldest son to help him benchmark his plans and in the end we selected a medium deductible plan with an HSA attached where his company made a contribution. The math for this one worked out that if he continued having good health for year to break even. Any year after that would be in the money.
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Wow – that sounds like a horrific crash. I’ve never reached my deductible ever. Even when I had my heart attack two years ago. My father-in-law had to be helicopter lifted from an accident on his ATV a couple years ago. That too, was very very expensive. He’s on Medicare so he never saw a bill for it.
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My car gave its life on our behalf so we could walk away from the accident (after I woke up under the MRI). The break-even on deductibles in my case was around $2,400 per year, which seemed like a bargain at the time I signed up for it and the plan does not bracket by age. My analysis told me that if I utilized the normal services that we use as a family I would be slightly under break-even. If something catastrophic happened, then I would have a positive return.
My normal experience running the numbers is that the difference between deductibles are baked into the difference in monthly premiums. It was one of two times that I have had a major cost unexpectedly go down by a lot. Sounds like your plan options have the numbers that I am used to seeing when I compare plans versus my expected use.
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Agree – Insurance companies run on pretty thin margins, so I’m sure the premiums reflect the deductibles pretty closely.
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I used to have a customer that was a large health insurance company. They taught me that a health insurance company can go broke if they charge too much or too little. If they charge too much, only the bad risks who cannot switch stay with them. If they charge too little, they don’t bring in enough to cover their costs.
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