ACA effect on retirement rates

[Lisa99]

ACA is the reason that DH and I were able to pull the plug at 49 and 54.

DH has a pre-existing condition that would have make the premium far too expensive for us to afford pre-ACA.

I retired in January and due to my severance package we received no subsidy so were in a high premium, high deductible plan. However, we stockpiled enough cash prior to retirement that it will be several years before we have to pull money from investments.

We have just enough income to keep us off the Medicaid roles so our subsidy next year will be about $750/month and very low deductibles. We plan to do full tune ups next year in case ACA changes dramatically.

 

[brucethebroker]

For those who asked earlier in the thread (I'm late to this party), ACA made semi-ER possible for us-pre-existing conditions and affordability. ACA handled both, and slashed the COBRA premiums by about 70%.

Once our CPA explained that HSA, IRA and SEP deductions reduce MAGI (and some can be applied at the last minute/tax time), we breathed easier. Also, by having a small business, the premiums are still deductible.

Planning is the name of the game. Others have mentioned using HELOC's to keep from taking taxable withdrawals from IRA's, etc. But it even goes deeper-want to sell a property? Better call the CPA for advice first.

BTW, I have stopped talking about ACA socially. Too many peers consider it a government handout and have strong/bitter opinions. Personally, I find it no different than the mortgage deduction, child care credits, rental property depreciation, IRA deductions, etc. Most of the time, the govt. uses tax policy to influence behavior, and our behavior has been influenced by the rules of ACA.

 

[Fermion]

I think we can manage insurance outside of ACA if we are allowed to go back to a catastrophic plan. I don't want to pay for a lot of the extra stuff required in a conforming ACA plan if I no longer can buy an ACA plan. I don't mind paying each time we go to a doctor and have a $30,000 a year deductible if our premium is only a few hundred a month.

I do think they should tax the employee on the value of the health insurance they are provided and tax pensioners on the value of their pension provided insurance. It seems a fair way to go if you are going to eliminate subsidies.

The other option is to greatly reduce our MAGI and just get in on Medicaid. People on here are smart and there is always a way to work the system on the low end the same way the 0.1% work it on the high end. If you sell your house for $300,000, you have at least 6 years of near zero MAGI with a $50,000 spend rate.

 

[broadway]

BTW, I have stopped talking about ACA socially. Too many peers consider it a government handout and have strong/bitter opinions. Personally, I find it no different than the mortgage deduction, child care credits, rental property depreciation, IRA deductions, etc. Most of the time, the govt. uses tax policy to influence behavior, and our behavior has been influenced by the rules of ACA.

Unless one has used it, most people have no clue about ACA.
They simply parrot the naysayers.
I use it and still don't know its full ramifications.
But my experience with it has been positive.

 

[BreathFree]

For those who asked earlier in the thread (I'm late to this party), ACA made semi-ER possible for us-pre-existing conditions and affordability. ACA handled both, and slashed the COBRA premiums by about 70%.

Once our CPA explained that HSA, IRA and SEP deductions reduce MAGI (and some can be applied at the last minute/tax time), we breathed easier. Also, by having a small business, the premiums are still deductible.

It was my understanding you can not deduct ACA premiums from small business income.

You can deduct an individual health insurance plan's premiums as a business expence if the insurance was purchased by the business but then you are not eligible for ACA subsidies or you can use the ACA with subsidy but can not deduct from business income.

Am I incorrect on this?

 

[NW-Bound]

Unless one has used it, most people have no clue about ACA.
They simply parrot the naysayers.
I use it and still don't know its full ramifications.
But my experience with it has been positive.

ACA allows people with preexisting conditions to get insurance, and that's good.

However, the premium skyrockets with increasing healthcare cost, and the problem now is that of sustainability.

Where I am, an HMO Silver plan for 2017 is $24K/year for a couple, and with a $14.1K deductible. Pre-ACA, I paid around $8K/year, and the deductible was $10K. Of course pre-existing conditions were not covered then, so it's hard to compare.

If I can keep the joint MAGI down to below the 400% FPL of $64K, I will get a subsidy of $1,628/month or $19.5K/year. That means a premium of $5K/year, with the deductible of $14.1K.

This means my healthcare expenses will vary from $5K if we are healthy to $19K if we get really sick. Without subsidy, it varies from $24K for healthy to $38K for being sick. Obviously, the subsidy would help a lot if I can keep my MAGI down.

Look at my pre-ACA cost above. Pre-ACA, my cost was $8K for healthy, and $18K for being sick. Compared that to the ACA cost, I would be ahead with ACA if I stay below the $64K MAGI. If I go above, it's a world of hurt.

Even if I can stay below the $64K MAGI, the next question is how sustainable this subsidy is, as I do not know how it gets funded.

The healthcare cost goes up across the nation, but it really goes out of control in some places in the country, like where I am. Nobody has the answer, or if they know they are not sharing. Why is healthcare cost so different from one place to another? Big populated places with higher income can cost significantly more than rural areas with low income. Why? What is going on, ACA or not?

Without an understanding of costs, even Medicare will not stay the way it is now. So, by the time we get to that age, it may not be what we think it is.

 

[Retire2013]

ACA and ER

+1

Without the ACA, either my wife or I would have to remain employed just for health insurance, as opposed to being able to retire in our early 50s.

Because of ACA, I was able to ER at the age of 53. I am not sure what will happen now?! I do have a pre-existing condition!

 

[gauss]

I think we can manage insurance outside of ACA if we are allowed to go back to a catastrophic plan. I don't want to pay for a lot of the extra stuff required in a conforming ACA plan if I no longer can buy an ACA plan. I don't mind paying each time we go to a doctor and have a $30,000 a year deductible if our premium is only a few hundred a month.

I do think they should tax the employee on the value of the health insurance they are provided and tax pensioners on the value of their pension provided insurance. It seems a fair way to go if you are going to eliminate subsidies.

The other option is to greatly reduce our MAGI and just get in on Medicaid. People on here are smart and there is always a way to work the system on the low end the same way the 0.1% work it on the high end. If you sell your house for $300,000, you have at least 6 years of near zero MAGI with a $50,000 spend rate.

Watch out here...

If you get Cancer or some other type of really expensive disease, do you think they will limit your premium to a few hundred dollars if they are allowed to medically underwrite you on an individual basis if you aren't part of a group plan?

As far as the Medicaid backup plan, remember that under the old system you had to spend down almost all of your assets before being eligible for Medicaid. It was that ACA the removed the asset test for Medicaid.

-gauss

 

[Fermion]

Watch out here...

If you get Cancer or some other type of really expensive disease, do you think they will limit your premium to a few hundred dollars if they are allowed to medically underwrite you on an individual basis if you aren't part of a group plan?

As far as the Medicaid backup plan, remember that under the old system you had to spend down almost all of your assets before being eligible for Medicaid. It was that ACA the removed the asset test for Medicaid.

-gauss

I think there are/were ways to get around the spend down if they brought that back.

 

[foxfirev5]

Watch out here...

If you get Cancer or some other type of really expensive disease, do you think they will limit your premium to a few hundred dollars if they are allowed to medically underwrite you on an individual basis if you aren't part of a group plan?

As far as the Medicaid backup plan, remember that under the old system you had to spend down almost all of your assets before being eligible for Medicaid. It was that ACA the removed the asset test for Medicaid.

-gauss

Bingo! Excellent points. We need to realize that as we get older we become more concrete in our thought process. The rules are changing, no doubt. Please stay flexible and willing to adjust to the new situation. I strongly feel that advance planning will be required as this unfolds. Thank-you.

 

[Corporateburnout]

ugh if trump repeals aca one of will need to go back to work. we would only be able to get insurance from assigned risk pool. we live in mass so hope mass brings back it's previous plan.

i think we will have a year to figure it out. we retired at 56 and 54 because we could get health ins with no pre-existing cond issues (no subsidy needed). if we can't we will need to get some for 5 more years.

It looks like MA will revert back to Romneycare which was passed into law back in 2006. As another resident of MA who has an ACA plan (no subsidy) I was encouraged by the article.

https://www.bostonglobe.com/busines...l-obamacare/bFC9mivzgtlC3c7ElXTUyI/story.html

 

[eta2020]

It looks like MA will revert back to Romneycare which was passed into law back in 2006. As another resident of MA who has an ACA plan (no subsidy) I was encouraged by the article.

https://www.bostonglobe.com/busines...l-obamacare/bFC9mivzgtlC3c7ElXTUyI/story.html

I am glad to live in a great state of Mass. We are liberals who don't mind if people have access to medical care irrelevant of income.

 

[pb4uski]

I am glad to live in a great state of Mass.

When I lived there, Massachusetts was a commonwealth, not a state.

 

[NW-Bound]

A lot easier to relocate to than to Canada. No visa or citizenship application. How people have not thought of that?

I will be surfin' Zillow to see what the real estate market looks like over there.

 

[daylatedollarshort]

A lot easier to relocate to than to Canada. No visa or citizenship application. How people have not thought of that?

I will be surfin' Zillow to see what the real estate market looks like over there.

I've never lived in New England. It could be fun to live there half the year, I mean half the year and 1 day. Although now that California has a Democratic governor and legislature, maybe the state will step in if key ACA provisions are repealed.

 

[NW-Bound]

I was just kidding. I like to live where the population density is lower and I can afford a larger home and land. It's not like people are abandoning this place, despite the problems that we have.

The other day, just looking at the election map I saw that we had 11 electors. Many states had much fewer than that, it was surprising. Another surprising thing is the political makeup is also closer to 50/50 than many other states.

 

[NW-Bound]

The question is not about denying anybody access. It's always the matter of funding.

Perhaps people should take a closer look at "RomneyCare". I thought they did, back when the debate about ACA started. I myself have not researched it.

 

[Corporateburnout]

I am glad to live in a great state of Mass. We are liberals who don't mind if people have access to medical care irrelevant of income.

A commonwealth that insures its residents have access to the best healthcare regardless of pre existing conditions.

 

[daylatedollarshort]

I was just kidding. I like to live where the population density is lower and I can afford a larger home and land. It's not like people are abandoning this place, despite the problems that we have.

The other day, just looking at the election map I saw that we had 11 electors. Many states had much fewer than that, it was surprising. Another surprising thing is the political makeup is also closer to 50/50 than many other states.

I'm sure not kidding. We were given a really tough time first getting on COBRA and then converting to a guaranteed issue policy. We came close to not getting health insurance at all before the ACA despite having the laws on our side. I'm not going through that again.

We probably wouldn't sell our Bay Area house. We both really like it here. If we become uninsurable in California, we would most likely rent out the house and live some place we could get health insurance until Medicare age. We have relatives come visit us from other countries sometimes for months at a time with travel insurance, so we could go live near them and come back here to visit with travel insurance like they visit us now. But MA would be a lot less hassle than moving outside the country.

 

[NW-Bound]

I don't think that coverage for pre-existing conditions will be repealed. That would get a lot of people upset. But there's talk about taking the subsidy away. So, what's the point of offering insurance that people cannot afford?

I have shown repeatedly that a couple with a modest income of $64K will have to pay as much as $38K total in healthcare in my county. Pre-existing exclusion or not, many people will have to go without insurance if there is no subsidy. That includes working people too, not just ERs. There's nothing left for them to pay taxes, food, and shelter.

The subsidy at the cliff of 400% FPL is $19.5K where I live. This high level of subsidy is not sustainable. They have to understand what costs so much and to bring it down.

 

[daylatedollarshort]

I don't think that coverage for pre-existing conditions will be repealed. That would get a lot of people upset. But there's talk about taking the subsidy away. So, what's the point of offering insurance that people cannot afford?

I have shown repeatedly that a couple with a modest income of $64K will have to pay as much as $38K total in healthcare in my county. Pre-existing exclusion or not, many people will have to go without insurance if there is no subsidy. That includes working people too, not just ERs. There's nothing left for them to pay taxes, food, and shelter.

The subsidy at the cliff of 400% FPL is $19.5K where I live. This high level of subsidy is not sustainable. They have to understand what costs so much and to bring it down.

There is uninsurable at any price and then at what point is it simply crazy to stay living in a place where health insurance is available for $38K or even more a year in premiums and out of pocket when it can be much less expensive to retire to some other country or state with more affordable premiums. I agree with you that high U.S. healthcare costs are the root issue but I can't control that. I can only control things like getting a W2 kind of job again or moving as a Plan B if we lose our subsidies and rates for people in our age group also skyrocket. Our premiums are around $1.5K a month without subsidies for next year and I'm okay with that, but that is with the 3 to 1 age rates in place.

 

[NW-Bound]

...I agree with you that high U.S. healthcare costs are the root issue but I can't control that...

Nor can any of us as individuals.

But if the public understands that we must demand to know why it costs so much instead of just asking for more subsidy, the people we elect will begin to do their job properly.

I have said that it bothers the heck out of me that my county healthcare cost is so much higher than other counties. I want to know why people are sicker here, or perhaps they are just charged more than other places in the country. If they are really sicker, then bring in the CDC to study why we have an endemic of dreadful diseases.

Instead of pleading for more subsidy, we need to ask why we have to pay so much. Let's put our representatives and senators to work to find out.

 

[eta2020]

Nor can any of us as individuals.

But if the public understands that we must demand to know why it costs so much instead of just asking for more subsidy, the people we elect will begin to do their job properly.

Well the fact that Healthcare equities rocketed up after election is telling me that their profits will raise and your costs will go up. My guess is that this will be accomplished by reducing subsidies.

Shopping for coverage at this time in 2017 will be interesting.

BTW you can buy a lot of house here in Mass if you live west of 495 and not on a coast. Personally I find places like Marblehead, Rockport or Cambridge more interesting and worth the price.

 

[ShokWaveRider]

A lot easier to relocate to than to Canada. No visa or citizenship application. How people have not thought of that?

I will be surfin' Zillow to see what the real estate market looks like over there.

Not if you are Canadian BUT both places are just too damn cold for me.

 

[NW-Bound]

...Healthcare equities rocketed up after election...

Not all healthcare stocks go up in recent days. Some stocks like Tenet Healthcare drop 29%. Pundits blame this on possible loss of subsidies, causing fewer patients. Tenet Healthcare revenue rose from $11B in 2013 to $18.6B in 2015. It operates 99 hospitals.

Another company, Centene, sees its stock drop 28%. This company saw its revenue rising from $10.9B in 2013 to $22.8B in 2015, a really explosive growth. It provides a myriad of healthcare services to the government.

The recent increase in revenue with ACA enactment may simply mean that these companies were good and beat the competition when ACA brings in new patients. There may not be anything sinister if a company is good at what it does and takes business from competition. But this shows that the picture is a lot more complex than one sees on the surface, because not all healthcare companies lose or win together.