# Health Care / US Pension



## Mike Capcom (Sep 18, 2013)

Hi to all 

REALLY hoping someone can help me out so please forgive me with any ignorant / dumb questions.

I'm in Victoria but will be moving permanently to the US in early 2015 (Seattle) with my American wife who resides with me. I'm 60, she's 50 and apart from me with Type 2 (under control and little medication) we're both well. I won't be working but my wife MAY take on some part time work

Question 1. - Pension

I understand there is a reciprocal arrangement between the US and Australia insofar as the aged pension is concerned and it cuts in at 65. Am I correct?

Question 2. - Health Insurance Policy

I have a choice between me taking out health insurance and add my wife to the policy or my wife takes out the policy and adds me. All indications suggest that my wife should do that, whether it be related to the ease of her doing it, the costs and indeed, adding me later until I have a social security card . Am I correct? Any advice?

Question 3. - Health insurance costs 

I phoned BUPA just on the off chance they could give me a competitive quote. It was extraordinarily high. Now that I've crossed them off my list, does anyone have any ideas as to whom to contact / recommendations?

Many thanks

Mike


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## Crawford (Jan 23, 2011)

Washington State has its health insurance exchange since the start of the Affordable Care Act. You should start here to see what health insurance policies are available to you.

Not all US insurance companies are in all states.

Washington Health Benefit Exchange :: Calculate Your Costs



Don't know about the reciprocal agreement between US and Australia (know that State Pension payments in the UK can go towards Social Security payments in the US)


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## Crawford (Jan 23, 2011)

Just another thought..... what are you going to do about health insurance at age 65 and above?

Most working people who have 40 credits to their name are eligible for Medicare (the State run program for Seniors). They do not have to pay for Part A (hospitalisation) which currently is around $400 per month per person. They then pay another 100 bucks for Part B (income related so could be more), plus costs for Part C and D. 

If neither you nor your wife intend to work then, if you don't have the necessary 40 credits, Medicare is going to be pretty costly for you.

However, private insurance at over 65 (unless you are eligible for subsidies) is going to be pretty costly too.

Maybe your wife already has the working credits?


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## Mike Capcom (Sep 18, 2013)

Crawford said:


> Just another thought..... what are you going to do about health insurance at age 65 and above?
> 
> Most working people who have 40 credits to their name are eligible for Medicare (the State run program for Seniors). They do not have to pay for Part A (hospitalisation) which currently is around $400 per month per person. They then pay another 100 bucks for Part B (income related so could be more), plus costs for Part C and D.
> 
> ...


Hi Crawford.

Now you're taking me into unchartered territory 

I think my wife worked for close to 10 years in the States. As for me, I've worked for 42 years (all here) but I don't know if my Australian working life counts towards US Medicare. Can you shed any light on that?

Many thanks for your input thus far.

Mike


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## Crawford (Jan 23, 2011)

No sorry. YOUR working life and payments into Australian funds don't count towards the US Medicare System - that's based purely on payments during your working life in the US.

As said, it usually amounts to about 10 years of work so you need to check carefully to see if your wife has those credits which she can use for Medicare eligibility. If so then you won't have to pay for the Part A part of the costs.

Now the problem comes in that YOU being 10 years older than your wife means that YOU cannot claim Medicare until she gets to 62 and starts taking Social Security, because your eligibility is based on her contributions and age (as you are not intending to work). So you are looking at making payments to an individual health insurance scheme for some time.

Something to think about, as health insurance is costly here in the US. For example, hubby and I (both retirees) pay 400 bucks a month each for part B,C and D and that's without having to pay for Part A. We do, I admit, have good incomes so the costs are income related and we have a supplementary plan.

I don't wish to scare you but health insurance and related costs are the biggest element of most retirees spending, so you should be budgeting quite a few hundred bucks a month for each of you.


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## Mike Capcom (Sep 18, 2013)

Sobering news .... but very grateful for the advice nonetheless Crawford 

Sorry to keep asking questions (you've been great !) but does Obamacare influence any of this come my 65th?

Mike


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## Crawford (Jan 23, 2011)

Obamacare has hugely influenced all ages when it comes to health care. No more pre-condition restrictions, no cap on benefits, more competition between the insurance companies.

When you get to 65, with wife still only at 55, you won't be able to get Medicare I'm afraid but you will at least be able to apply *and obtain* a health insurance policy without fear that they are going to reject you because of pre-conditions. As with all commercial products they can still bulk up the premiums because of age etc (even if in theory they are not supposed to) but you will get a policy.

In addition based on your income you might be able to get government subsidies to help with the premiums.

Go onto the Washington health site and put in the figures - it will tell you if you qualify for subsidies or not and what you would pay for the various levels of plans.


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## Mike Capcom (Sep 18, 2013)

That rounds it out well  Thanks again Crawford

I went to the Washington site ... so here's another dumb question. It asks you to input your annual income .... given I won't be working at all (living off my savings and supplementing household income from that rather large pot) and maybe my wife with some limited part time work, that annual income is going to be really small.

When I enter 2 in the household / annual $ of $10,000 / and our ages, the result is "MEDICAID" against all these entries

1. Estimated monthly silver plan premium (without subsidy) 
2. Estimated tax credit from the government
3. Your estimated monthly silver plan premium

Does that sound odd to you?


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## BBCWatcher (Dec 28, 2012)

Mike Capcom said:


> I understand there is a reciprocal arrangement between the US and Australia insofar as the aged pension is concerned and it cuts in at 65. Am I correct?


There is a U.S.-Australia social security treaty. Take a look at the U.S. Social Security Administration's guide to that treaty -- it's quite an easy read. I'll summarize how I think it'll work for you and your spouse, but please check me on the details.

Your wife almost certainly will qualify for U.S. Social Security retirement benefits at some level because she worked in the U.S. and (I assume) in Australia. If necessary -- and she should tell them about her work in Australia -- the U.S. Social Security system will count her working history in Australia in order to qualify her for U.S. benefits. (She may also collect from Australia is she is eligible, though if she does those Australian benefits will reduce her U.S. benefits to some degree. It's still certainly in her interest to collect from both systems if she qualifies.)

The U.S. system gives her the flexibility to start collecting retirement benefits at any time from age 62 to age 70. The longer she waits to collect, the greater her monthly benefit. If she doesn't need the benefit and if she's in good health then it's a very good deal to wait until age 70. If she starts collecting after age 70 then she loses some money because the benefit level doesn't increase past age 70 and Social Security can't pay benefits in arrears to any great extent.

The U.S. will also provide a spousal benefit to you because you're the legal spouse of a U.S. Social Security beneficiary. Again, when you start collecting will influence the benefit amount, and there are a couple additional rules. I'm not precisely sure when (at what age) you can start collecting the spousal benefit, so that's something to check.

She can access the U.S. Social Security Web site and see a record of her contributions to that system, and she can also run estimates of her likely benefit levels based on her U.S. contributions. (If she needs to count Australian contributions to qualify in the U.S. then the Web site will be somewhat less helpful. That's a more complicated calculation that requires some help.) She can also stop by a U.S. Social Security office to get advice -- years before she's eligible to collect.

Her resumption of part-time work in the U.S. should re-qualify her for U.S. Social Security disability coverage before too long, and that's obviously nice to have. It'll also boost her future retirement benefit and the spousal benefit.



> I have a choice between me taking out health insurance and add my wife to the policy or my wife takes out the policy and adds me. All indications suggest that my wife should do that, whether it be related to the ease of her doing it, the costs and indeed, adding me later until I have a social security card . Am I correct? Any advice?


I don't think it particularly matters. Under the new U.S. Patient Protection and Affordable Care Act ("Obamacare") you'll both be required to maintain PPACA-compliant medical insurance coverage as residents of the U.S. It's really household-based now, so if she finds it easier to get on the health exchange Web site, that's do.

If you both don't maintain PPACA-compliant coverage and you don't qualify for one of the exemptions then you might have to pay a tax penalty. But let's not go there since you'll want coverage anyway. The U.S. is a scary place to be without medical insurance, at least if you've got savings to protect (which you do).

Since you're living off savings you're kind of throwing the PPACA online calculator off. (They don't really account for such scenarios too well.) Pick a higher number -- try $20,000 -- and see what happens. I'm assuming neither one of you would qualify for Medicaid.

Assuming your wife has made non-trivial contributions to the U.S. Medicare system within any 10 calendar years, you will qualify for U.S. Medicare benefits when you reach age 65 as long as your American spouse is at least age 62. In other words, since she's more than 3 years younger than you are then you'll have to wait until she reaches age 62 before you can sign up, or you may qualify on your own if you meet the 10 year requirement. And that's realistic since you could work even part time within any 10 calendar years and qualify on your own. Until you qualify for Medicare (on your own or through your wife) you can get health insurance through the Obamacare exchange. I have to correct something, though: the exchange premiums will be comparatively reasonable, at least by U.S. standards, because the PPACA severely limits what's called age rating. You won't pay the full hypothetical "free market" cost of insurance when you're older, plus you may qualify for federal subsidies on top of that limited premium. Yes, older policy holders pay more than younger policy holders, but it's not the hypothetical commercial/market premium gap. It's much less than that, _then_ the federal premium subsidies kick in (if you qualify).


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## Mike Capcom (Sep 18, 2013)

Wow !!! .. thanks so much BBC  Really informative.

The thing that confuses me is that is there is no assets test for Medicaid (and everything I've read suggests bank accounts / house / car / personal items are excluded) so if we're living off my savings and my wife doesn't work, then we qualify for that service. 

That just does NOT sound right (particularly from a moral perspective) and I expect to pay my way. But that's what the Washington site comes up with.

It can't be that skewed where some poor souls are carrying a substantial load because they might be earning good income(s) and others who may be financially secure and not need to work derive a substantial benefit?

Thanks again and look forward to your comments.


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## Crawford (Jan 23, 2011)

Mike Capcom said:


> That rounds it out well  Thanks again Crawford
> 
> I went to the Washington site ... so here's another dumb question. It asks you to input your annual income .... given I won't be working at all (living off my savings and supplementing household income from that rather large pot) and maybe my wife with some limited part time work, that annual income is going to be really small.
> 
> ...



If you are living off your savings the amount you would be drawing down from your investment to live on would be your income would it not?

Surely you are not living on 10,000 per annum? - that is the amount of money you are getting from your wife's part time job and other incidentals.

Yes, someone whose expendable income was $10K per year would be eligible for Medicaid but that is not your scenario by the sounds of it.


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## BBCWatcher (Dec 28, 2012)

You are correct that there are no longer any asset tests for Medicaid. That's also part of the PPACA, to make sure that coverage is coordinated to avoid gaps. (Though due to a U.S. Supreme Court ruling states can opt out of the PPACA's Medicaid expansion, and some have -- though the holdouts are slowly coming around. Washington State fortunately did expand Medicaid, so there's no "donut hole" among the working poor and lower middle class in Washington State.)

However, my understanding for Washington State is that only your wife can qualify for Medicaid. Citizenship and immigration status have a greater bearing on Medicaid eligibility, so my best guess is you won't qualify. But of course please check me on that. Medicaid eligibility varies by state.

If your wife (and possibly you) qualify for Medicaid then that's what you/she should select. If she feels _guilty_ about that, she shouldn't. Citizenship sometimes has its privileges, and publicly supported healthcare systems, funded by general tax revenues (which she will be paying as a part-time worker) are very common throughout the developed world. Also, signing up for Medicaid is not the same as _using_ Medicaid. She can at least _defer_ her guilt. 

The (further) good news is that if you are not eligible for Medicaid (due to your legal but still ineligible immigration status) then you are eligible to participate in the PPACA health insurance exchange regardless of your income. If your income is below the PPACA exchange minimum (i.e. ordinarily Medicaid eligible in income terms) then your income will be deemed to be equal to the PPACA exchange participation minimum, and you can enroll in a policy there. In that case you'll qualify for the full federal subsidy to help you purchase exchange medical insurance. Meaning, you should qualify for free PPACA exchange medical insurance, up to the second most expensive "silver" plan. Nice deal, eh?

Your wife shouldn't get _too_ jealous, though. Medicaid provides some coverage from dollar #1. PPACA exchange policies typically require you to exhaust your deductible before they pay out, and even then you have some co-pays up to your annual out-of-pocket maximum. So your PPACA exchange insurance policy could end up paying you nothing even if you have low or moderate claims. The exchange policies focus on prevention -- paying for a range of preventive services -- and then (mostly) _catastrophic_ coverage. Medicaid is a bit more generous to the beneficiary, typically.

Washington's Web site may not be able to handle this particular set of circumstances since it's rather unusual. If that's the case, call your state's exchange by telephone, pay a visit to an authorized "health navigator," or apply by mail. Explain your circumstances very carefully, and ask for a second opinion if something seems odd.

Welcome to the United States.


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## Mike Capcom (Sep 18, 2013)

Crawford said:


> If you are living off your savings the amount you would be drawing down from your investment to live on would be your income would it not?
> 
> Surely you are not living on 10,000 per annum? - that is the amount of money you are getting from your wife's part time job and other incidentals.
> 
> Yes, someone whose expendable income was $10K per year would be eligible for Medicaid but that is not your scenario by the sounds of it.


Hi Crawford (again) 

No, the $10,000 was simply a figure I input to see the result. Actually, $22,500 as an annual income is the trigger point that dissolves the Medicaid option.

Thanks yet again


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## Mike Capcom (Sep 18, 2013)

Thanks BBC watcher.

Interesting stuff and more homework for me to do during the course of the day.

_However, my understanding for Washington State is that only your wife can qualify for Medicaid. Citizenship and immigration status have a greater bearing on Medicaid eligibility, so my best guess is you won't qualify. _

Understood.

_The (further) good news is that if you are not eligible for Medicaid (due to your legal but still ineligible immigration status) then you are eligible to participate in the PPACA health insurance exchange regardless of your income. 

Nice deal, eh?_

It sure is .... especially given I don't want a free ride.

_Welcome to the United States. _

Thank you sooo much .... I've been there off and on over the years and I LOVE the place !!

All the best Mike

PS ... I'll report back from what I find out.


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## BBCWatcher (Dec 28, 2012)

Oh, it's not a free ride, Mike. You'll be paying taxes in the United States. At a minimum you'll be paying Washington State sales and excise taxes, federal excise taxes, and possibly some federal income tax on your interest, dividends, and capital gains, less any foreign income taxes you have to pay. You'll also be paying local property taxes (directly or through your landlord) and "user fees." Your wife will pay payroll and income taxes (probably) on her part-time employment income.

....But so what? If you're disabled, a child, or just for whatever reason not Bill Gates (another resident of Washington State), maybe you won't be paying taxes, or you'll be paying fewer taxes than I do. (OK, I don't pay the taxes Bill Gates does in absolute terms, though I probably do pay a higher percentage than he does -- which is a problem in my view.) That's called living in a developed _society_ where we help each other out from time to time. We don't count how much clean air you breathe (kept clean thanks in part to the U.S. Environmental Protection Agency), how often you walk on the sidewalk (paid for and maintained with local property taxes), or how long you sit on the bench in a public park (ditto). You and your wife are going to receive some benefits from living in that society, and you're going to make some contributions, at least at certain points in your lives. But I don't care what the monthly, quarterly, annual, or even lifetime "balance" shows for particular individuals, and hopefully most people don't care. I think -- as do most people throughout the developed (and even developing) world -- that you ought to have essential medical care regardless of your ability to pay. The U.S. has a particular new system to try to do that. It's imperfect (as they all are), and imperfect in its own peculiar ways, but thank goodness it appears to work well enough in your cases.


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## Mike Capcom (Sep 18, 2013)

_Oh, it's not a free ride, Mike. You'll be paying taxes in the United States. At a minimum you'll be paying Washington State sales and excise taxes, federal excise taxes, and possibly some federal income tax on your interest, dividends, and capital gains, less any foreign income taxes you have to pay. You'll also be paying local property taxes (directly or through your landlord) and "user fees." Your wife will pay payroll and income taxes (probably) on her part-time employment income._

Yep  I know all that's coming my way insofar as taxes are concerned and it's probably less than what I pay here. All happy with that and I wouldn't expect anything less. The only "foreign" experience to Australians in terms of spending your hard earned cash is that we don't tip, but I know why it happens in the States so I'm all good with that as well, ESPECIALLY given reward is deserved for good service.

As for the rest of your comments, couldn't agree more.

I'll miss my Aussie Rules Football, my cricket and maybe hearing the Australian accent (unless I end up talking to myself too much) but that's not a great loss for the experience of living Stateside. 

Cheers again


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