Healthcare: PPO to Medicare
This has been part of our savings strategy while employed with medical benefits (blessed). HIP PPO forces us to pay 100% of all expenses up to about $10k max out of pocket. In fact all preventative care and diagnostics are 100% covered, and most prescriptions have been $0 or no more than $10. This also allowed us to invest into an HSA account—triple tax benefit.
But… as I prepare to retire in Dec 2026, even if rolling into the SAME insurer and plan, it would be a new account. So any accrued deductible spending would typically fall away. Our company health coordinators were optimistic and asked that I call them back to advocate honoring prior deductible expenses for the remainder of the year’s requirements.
If you are currently in a HIP PPO and to transition to an employer or HCA health plan, consider the timing and impact of any previous deductible expenses that may reset.
Note: even if HSA investments are not deducted from paycheck, pre-tax, there is a way to claim that for a refund during tax preparation.
At 65, Medicare “C” $200/mo + family $570/mo’+’Medicare A $1.7/mo + Medicare “B” $0.4K/mo; Ruth can apply for ABT Medicare Advantage “C” at 65
Costs per Abbott-specific figures:
Michael at 65 in 2032:
Abbott Medicare C: $200/mo
Medicare A: $1.70/mo
Medicare B: $400/mo
Total: $601.70/month = $7,220/year
Ruth at 65 in 2037: same $601.70/mo starting assumption
Family HIP PPO: $570/mo, continuing while Ruth is pre-Medicare
2037 onward: family HIP PPO disappears because both of you are on Medicare/Abbott C
IRMAA remains a separate potential cost, driven by MAGI and the two-year look back.
The 2032 jump is because Michael’s Medicare costs are added while Ruth still requires the $570/month family HIP PPO. Then in 2037, the HIP PPO disappears and you’re paying two individual Medicare packages instead.
[follow up]
One thing I would investigate next
Your statement that Medicare B costs $400/month is particularly important.
If that $400 is the Abbott retiree-plan cost for Part B, rather than the standard Medicare Part B premium, we need to determine whether:
$400 is Abbott’s reimbursement/plan cost, or
it is actually your out-of-pocket Part B cost, or
it already includes some form of IRMAA, or
Abbott reimburses/subsidizes some portion of the Medicare premium separately.
Also, because your planned Roth conversions may push MAGI above the IRMAA thresholds, I would keep IRMAA completely separate from these Abbott premiums until we establish exactly what Abbott does with IRMAA.
IRMAA Refresh:
Medicare Surcharges for Parts B & D
Added to standard Part B & Part D for upper income earners
Based off of MAGI calculation (Married filing income of $218k/yr (impact of $1150/yr); +$2900/yr of income > $280k income; +$6900/yr of income > $500k
Annoying, but for upper income families it is not as impactful as high RMDs.