No. of Recommendations: 6
TMFMurph writes,

You do realize that even three times the "normal" Medicare premium of $99.90/month (about $3600/year) is only one-third of the $11,000 per beneficiary the Gov't spends on Medicare.

You're still getting a tremendous bargain.

Oh, before I leave...speaking of "bad math", this sentence totally ignores the $65,000 in Medicare payments made during my working career ( and all the money those contributions could have made during the last 40 years ) ;-)


Assuming you retired in 2012, paid maximum FICA in each of the preceding 35 years, and got a 10% return on your annual Medicare FICA contributions, your $65,000 would have grown to $173,000. Of course, while a savvy investor might have realized a 10% return, the average person only got 2.1% annualized over the past 20 years according to DALBAR. At that rate, $65,000 only grows to $87,000.

A lump sum of $173,000 will only buy a 65-year-old an inflation-adjusted annuity of about $600/month ($7,200/year) I wasn't able to find a policy on with Medicare's $100 annual deductible. The best I could do was $1200/month ($14,400/year) for a $1,000 deductible plan for a 64-year old. And of course, your for-profit private insurer will want to increase that with age. What would they charge for a 75-year-old, an 85-year-old? Double? Triple?

Hard to see how you could do better on your own.

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