Here’s your Medicare Part D

by Divorced one like Bush

Time for some real numbers. This example is also an example for people to understand the need for fixing our system of paying for health care. Because, even in the senior years, the cost can bankrupt you.

My parents, 2008 adjusted gross income $43,291. $19,745 is capital gains from a one time sale of land. This land was taken by the state of RI via eminent domain law. See, Fidelity didn’t have enough land (300 acres via a low rent to the state in exchange for some jobs) if Dow Chemical was going to put a plant there. Dow never built. The land was worth around $400K on the open commercial market. They got $180K divided by 3. The land was in the family for centuries.

$15,502 in SS not taxed.

My step-father is in the nursing home. Mom is currently paying the bill because they own the house. It’s around $6500/m. He’s on a few meds. 9 to be exact.

The Plan: No deductible. $2700 in total drug costs (co-pay plus plan pay) covered before the “coverage gap”.

Total expense as of 4/30: $2804.20. Coverage Gap: $4350. Amount toward the Gap: $1098.06 Balance of TrOOP (true out of pocket): $3251.94.

After the “Coverage Gap” he enters Catastrophic Coverage. The cost is $2.40/generic, $6/brand name.

So, he’s in the nursing home. He might be able to get off of 1 maybe 2 of these if we can get him home. Still, the cost of his meds have been running $370/m. Now that he has entered the “Coverage Gap” the cost will be $700/m. That is 4.6 months of paying before the rest of the insurance kicks in sometime in September 2009.

$43,291 – $19,745 (cap gains) + 15,502 (SS) = $39,048 to live on.
$39,048 – 4350 (Coverage Gap) = 34,698.00 to live on.

Of course, some things have changed since the “crash”. $8149 of that $34, 698 was dividends. They cashed out this year. So, that leaves $26,549 to live on. We could have waited the crash out, but see, dad’s in a nursing home. Either the home takes it, or the economy takes it. Either way, it’s not there to generate money from money.

$26,549 – $5989 (property tax) – $3922 (utilities) – $3038 (Insurance) – $5230 (auto expenses) = $8370 to live on.
Last year there was $8328 in medical expenses EXCLUDING meds. I don’t expect that much this year, but there could be at least half that. Mom needs some stents for the renal arteries before her vascular system pops from the very high Bp.

Total medical, out of pocket expenses, 2008: $9484. Potential this year: $8,000 to12,000 approximately not including the nursing home costs. That is $26,680 to date. Even if he is home, there will be cost for home care help.

What does someone do who is not in their position? Of course, if the medical is as last year, they will be in the hole financially.