Chicken over Health Insurance

[GmaBunky]

Hey folks - 60 yo married DH is 62; we have a couple million bucks and a paid for home in FL just waiting on us. The fear: Insurance - we have some health issues that require regular meds that run near a grand plus a month for both of us. Do we really have to wait on medicare - seems likely so.

 

[bclover]

Hey folks - 60 yo married DH is 62; we have a couple million bucks and a paid for home in FL just waiting on us. The fear: Insurance - we have some health issues that require regular meds that run near a grand plus a month for both of us. Do we really have to wait on medicare - seems likely so.

Welcome Gma.

**sighs*** that's the big "unknown" for many of us. Some folks way smarter than me will be along to give great advice but some general questions.

If you retire now where will you get your health insurance from? is it affordable? Stable? I'm not 60 yet but when I left mega corp I had retiree insurance. it's still expensive (IMO) $750 bucks a month and I have 1 dependent. I have one friend who is on the ACA and unfortunately she is really worried that it will go away and she'll be uninsureable due to the dread pre existing conditions.

did you run firecalc? how'd that go.

Now the non financial questions. just some thing to think about, not really for an answer.

How's the health overall now? you say you have a few issues (lol, who doesn't) will they prevent you from doing what you want if you wait until 65?

Do you like your jobs? I loathe, hated and despised mine so the stress was real for me.

Lastly, I became widowed at a very young age (late dh was 55) so I'm a bit "skewed" on the "wait" mentality.

 

[Sunset]

You have to pay for the medicare prescription drug coverage, Part D for Drugs.

To test it out, go to medicare.gov and you should be able to see how much it will cost when on Medicare. You can input your current drugs to find the yearly cost.

 

[FreeBear]

You have to pay for the medicare prescription drug coverage, Part D for Drugs.

To test it out, go to medicare.gov and you should be able to see how much it will cost when on Medicare. You can input your current drugs to find the yearly cost.

It would be wise to get total cost estimates for both ACA and Medicare, as stands today, even though they are upward moving targets. I suggest checking out ACA on healthcare.gov since it's best that you have specific numbers in mind. You may need to make some phone calls to get detail on what drugs are covered to get an idea of real out of pocket.

In terms of the high cost of drugs, I don't think anyone "wants" to pay this much on top of already high premiums, ACA or otherwise. In my mind, though, it is more of a rational evaluation of whether you can afford it in terms of your savings and still maintain you desired lifestyle in retirement. If you "can", along with enough margin, even if arbitrary, then getting out before Medicare is at least a possible option. Keep in mind that Medicare is fairly close for you both, plus SS, which cuts expose greatly.

 

[MichaelB]

Hey folks - 60 yo married DH is 62; we have a couple million bucks and a paid for home in FL just waiting on us. The fear: Insurance - we have some health issues that require regular meds that run near a grand plus a month for both of us. Do we really have to wait on medicare - seems likely so.

Welcome to the forum, GmaBunky.

Yes, you must wait until age 65 for Medicare. In the meantime, 5 years for you and 3 for your DH, you will need individual health insurance policies. ACA exchange policies are available in Florida if you decide to move there.

 

[Alvin Tostig]

I hear you. Also a couple of million and a paid off house. Bu, the same reason I can't pull the trigger.

If I have to pay a lot for health insurance- so be it. I'm willing to do it - even if it's 20K-25K or more a year for me and the wife.

But I have to have it due to pre-existing conditions. Actually, I'm interested in covering myself for catastrophic events like being hospitalized etc.

I want to retire. I can get COBRA for 18 months...so being that I'm 61 1/2 ..that would take me to 63. My wife is almost 58, so she'd need health insurance for a longer period of time until Medicare.

I guess we both need the people on this board who have recently retired knowing the uncertainty to come here and give us the big push!

 

[VanWinkle]

I hear you. Also a couple of million and a paid off house. Bu, the same reason I can't pull the trigger.

If I have to pay a lot for health insurance- so be it. I'm willing to do it - even if it's 20K-25K or more a year for me and the wife.

But I have to have it due to pre-existing conditions. Actually, I'm interested in covering myself for catastrophic events like being hospitalized etc.

I want to retire. I can get COBRA for 18 months...so being that I'm 61 1/2 ..that would take me to 63. My wife is almost 58, so she'd need health insurance for a longer period of time until Medicare.

I guess we both need the people on this board who have recently retired knowing the uncertainty to come here and give us the big push!

I retired 18 months ago with retirement medical at 970.00 per month for me(free for the first 18 months) and my wife on a cobra from my plan at 667.00 per month. The 18 months are ending for us both. We will now go onto the ACA in January 1st as a couple. I planned for this in advance and have my income regulated to 175% of poverty level for a couple. This will give us the maximum subsidy and maximum cost sharing. This will for at least one year save us 1500 per month in premiums. 2019 is unknown, but there are too many of us for them to ignore. I need 2 years and my wife needs 2.5 yrs to get to medicare.

I say you can do this, but see if you can control your reported income by holding off on SS and getting a healthy taxable account to handle living expenses.

Best of luck to you,

VW

 

[NomDeER]

Hey folks - 60 yo married DH is 62; we have a couple million bucks and a paid for home in FL just waiting on us. The fear: Insurance - we have some health issues that require regular meds that run near a grand plus a month for both of us. Do we really have to wait on medicare - seems likely so.

It all depends on your tolerance for risk and the impact the stress will have on you. I am in a similar situation. If not for the need to know that I will be able to buy health insurance, I would retire much sooner. There's just no security re: health insurance accessibility right now, and I would be too stressed without it. I think a lot of people right now are thinking that, because they don't have retiree health insurance benefits, they won't be able to retire until they reach the age when COBRA will cover them until age 65. The one upside is that you'll have plenty more money to enjoy when you do retire. And you may be able to afford to do things now that you were waiting to do until retirement. Like some nice trips.

Save​

 

[MBSC]

We will now go onto the ACA in January 1st as a couple. I planned for this in advance and have my income regulated to 175% of poverty level for a couple. This will give us the maximum subsidy and maximum cost sharing.

Maximum cost sharing reductions occur between 100%-150% FPL in non-expansion states and between 138%-150% FPL in Medicaid expansion states.

People with low and moderate income can qualify for one of the reduced cost-sharing silver plan variants. People with incomes less than or equal to 150% of the federal poverty level (FPL) can enroll in a plan where the actuarial value is increased to 94%; people with incomes between 150 and 200% FPL can enroll in a plan where the actuarial value is increased to 87%; and people with incomes between 200 and 250% FPL can enroll in a plan where the actuarial value is increased to 73%. These variants are referred to as CSR94, CSR87 and CSR73 plans.

The average annual deductible amount is...$737 for CSR87 plans and $229 for CSR94 plans.

The average out-of-pocket limit for single coverage is...$1,691 for CSR87 plans and $879 for CSR94 plans.

Reference: https://www.kff.org/health-costs/issue-brief/cost-sharing-subsidies-in-federal-marketplace-plans/

 

[wmc1000]

GmaBunky - Welcome! Having a couple million bucks is still an unknown unless you also know what your expenses are. A couple with a total expense level of $60,000 - including HI would most likely be good to go now. However if your expense level is $125,000 per year then not so good! You need to use ACA premiums WITHOUT subsidy and with TOTAL OOP faded in - to put together your potentially worst case budget between now and medicare age.

 

[HadEnuff]

Hey folks - 60 yo married DH is 62; we have a couple million bucks and a paid for home in FL just waiting on us. The fear: Insurance - we have some health issues that require regular meds that run near a grand plus a month for both of us. Do we really have to wait on medicare - seems likely so.

Exclusive of healthcare costs, what are your living expenses likely to be.

Also, how much of your "nut" do you have in after tax stash? If you can live two years or so on cash with minimum taxable income (MAGI @ 45K or so), you can get an ACA subsidy. Of course, if current administration has its way, that will be altered in some way, impossible to predict. But likely safe for 2018, I guess.

 

[VanWinkle]

Maximum cost sharing reductions occur between 100%-150% FPL in non-expansion states and between 138%-150% FPL in Medicaid expansion states.

I agree those are the accepted percentages, however that would be 22411 to 24360 for a married couple. At 28000, the premium subsidies and cost sharing are the same amount as the lower amounts. I do not think there is a substantial change until you hit 200% per the 2018 Heathcare.gov site. I have tested the site with different incomes to receive these results.

VW

 

[GmaBunky]

bclover: I am so sorry to hear of your loss. Not what you guys had planned, I'm sure.

If we retired now we would have to buy from ACA is the thought. I ran FIRECALC and at 60k a year it was 100% all the time. (nice) Overall health is ok but to keep it that way we have expensive maintenance med (asthma and psoriatic arthritis and a couple other gems). I'm about done w/ the job, its a good job and I like it but after 40 years.... well you know. We'd rather be boating.. and you are so right, we have lost dear friends in last two years all in the 60's - why wait?

Sunset I'll check our list agains the medicare.gov web; good suggestion.

FreeBear I've check quotes on ACA but I'm not clear if we can use a reduced income or it takes our last tax year which puts us with no subsidies. We would like to be able to support our habit of a home in Florida and driving an RV around from time to time with a small boat to fish with. Fairly close seems like forever right now

Michael Thanks bunches.

Alvin isn't it frustrating not knowing how to best plan for health insurance? I don't suppose I ever thought it would be so expensive. From what I've found you are right w/ deductibles about 25k a year and pre existing conditions. COBRA is something I had not thought about, but again the cost would be close to double what I'm paying now. "I guess we both need the people on this board who have recently retired knowing the uncertainty to come here and give us the big push!" Someone push me quick!

VanWinkle Very interesting concept and outside the box: "..have my income regulated to 175% of poverty level for a couple. This will give us the maximum subsidy and maximum cost sharing. This will for at least one year save us 1500 per month in premiums: How does the first year work - look back on last year or a look forward? Right now we need 5 years and 2 respectively.

We have never asked the government for anything (like most Americans) and I'm feeling a bit cheated at this stage. Entitled, no; but man.... Thanks for your input.


NomDeER "If not for the need to know that I will be able to buy health insurance, I would retire much sooner. There's just no security re: health insurance accessibility right now, and I would be too stressed without it." Ahhhh we are blood brothers/sisters. Exactly my thoughts, but like VW says likely doable if we have a bit more knowledge. Need a strong Indian guide.

MBSC You are still employed? I will review your link and gain some knowledge there. Need to try and pinpoint this insurance issue.
Thank you.

wmc1000 I think 60k would do us. Need to be more prudent but certainly doable. "You need to use ACA premiums WITHOUT subsidy and with TOTAL OOP faded in - to put together your potentially worst case budget between now and medicare age." Wise words. Thank you.

HadEnuff I think we could get our "nut" less than 60k; lived on a lot less once upon a time. MAGI ? minimum adjusted gross income? And its the unpredictability that really chaps my ......


VanWinkle I need to run those numbers. Found at healthcare.gov?

 

[fisherman]

We ESR'D eleven years ago and purchased our own health insurance for the last twelve years. We were 41 then. It has been an emotional ride. One DW finally had enough of this year. She had previously worked a government job many years ago for a year and and a half and could go back for eight and a half years to retire with government retiree healthcare. That is what we are doing now for Healthcare as there is only one ACA plan available and it only covers doctors and the one hospital in our county. We do not consider that viable insurance.

Our only other option was to move to another county where better ACA plans were still available but that was not a good option due to elder family obligations.

Until the politics are decided around Healthcare I consider retire Healthcare the only option and preferably one backed by the government taxing authority.

It is a sorry situation to be in.

 

[HadEnuff]

GmaBunky, my reference to MAGI has to do with your eligibility for ACA subsidy. In my state, if I keep my MAGI under 45K, I can just about get my Bronze plan for free. But I still have a total deductible exposure of around 13K. But that's better than the premium PLUS the 13K.
So the MAGI is all of your taxable income, minus a few deductions, like your HSA deduction, or an IRA (if you can take one) deduction.

Your Schedule A deductions won't reduce your MAGI for ACA purposes. Your standard exemptions also won't reduce it.

If you look at a 1040, the 2016 form has line under line 37. Line 37 is MAGI, and below that line, (hence the terms "above the line" and "below the line"), THOSE deductions will reduce your tax bill, but won't have an effect on your ACA eligibility.

So if you can live on after-tax accounts, without creating a taxable event, like an IRA distribution, you can live your life, but not have to report income, this maintaining eligibility for the ACA subsidy.

 

[Carol1862]

Isn't line 37 on the 2016 the AGI? This is what the ACA looks at. If I'm incorrect please advise. We were self employed shortly this year (one month) so we can take off the entire year of paying healthcare premiums (at least that's what our accountant has informed us). Right there is a reduction of our AGI of $18,000.

My husband goes on MC mid 2018 and then it'll be only half of the amount that will qualify me for a subsidy. So far, we haven't been eligible for one but I believe we'll be in 2018 as we don't plan on much employment.

We all have to make that decision for ourselves on the balance...whether to leave work and pay these horrendous amounts for healthcare, or stay working to to help defray the costs. We had a health scare recently out of the blue. I am so glad we retired a few years ago. You can't get back that time and it's been a really wonderful time for us. I certainly am not sorry, even though it's meant high healthcare premiums and less money in the bank. Whatever your personal decision, it has to be what makes you look back and be happy. No regrets.

 

[HadEnuff]

Isn't line 37 on the 2016 the AGI? This is what the ACA looks at. If I'm incorrect please advise. We were self employed shortly this year (one month) so we can take off the entire year of paying healthcare premiums (at least that's what our accountant has informed us). Right there is a reduction of our AGI of $18,000.

My husband goes on MC mid 2018 and then it'll be only half of the amount that will qualify me for a subsidy. So far, we haven't been eligible for one but I believe we'll be in 2018 as we don't plan on much employment.

We all have to make that decision for ourselves on the balance...whether to leave work and pay these horrendous amounts for healthcare, or stay working to to help defray the costs. We had a health scare recently out of the blue. I am so glad we retired a few years ago. You can't get back that time and it's been a really wonderful time for us. I certainly am not sorry, even though it's meant high healthcare premiums and less money in the bank. Whatever your personal decision, it has to be what makes you look back and be happy. No regrets.

That is what I was trying to say. Some call it AGI and some call it MAGI. It's "modified" by the above the line deductions, but not by those deductions below line 37, which do effect your tax bill, but not your ACA eligibility.

 

[Sue J]

The MAGI for ACA is a little different than regular AGI. It includes 100% of your Social Security benefits (not just your taxable amounts) and your tax exempt interest.

I'm not sure what "tax exempt interest" is. Is that from tax exempt bonds or something like that?

 

[RunningBum]

FreeBear I've check quotes on ACA but I'm not clear if we can use a reduced income or it takes our last tax year which puts us with no subsidies. We would like to be able to support our habit of a home in Florida and driving an RV around from time to time with a small boat to fish with. Fairly close seems like forever right now

There's another thread today asking that same question. You can provide a written explanation that you've just retired and give estimates of what your income will be for the next year and they should accept that. At the very worst case, you pay the full premium but get the credit back when you fill out your taxes. On the flip side if your estimate is wrong, and you go over the subsidy cliff, this is where you'll have to pay back the subsidy you took but weren't actually eligible for.

 

[HadEnuff]

"I've check quotes on ACA but I'm not clear if we can use a reduced income or it takes our last tax year which puts us with no subsidies. "

Your eligibility is based upon your tax return in the year you get (or don't get) the subsidy.
The prior year has no bearing.

 

[Souschef]

You have to pay for the medicare prescription drug coverage, Part D for Drugs.

To test it out, go to medicare.gov and you should be able to see how much it will cost when on Medicare. You can input your current drugs to find the yearly cost.

Remember the "Doughnut hole" After a certain amount, you have to pay about 6K OOP before catastrophic kicks in.Here is a link that explains it:
https://www.aarp.org/health/medicare-insurance/info-11-2009/part_3_the_doughnut_hole.html