Retiree Medical - ouch?

[bulbar]

I'm at least a few years away from ER, but I was looking at the retiree medical coverage offered by my employer and it sure looks expensive. I'm sure you guys are going to say "duh" but I'll ask anyway if it seems in line with what you're paying. FYI, I'm almost 53 and would like to ER at 55.

The cheapest of their 3 plans is the High Deductible Plan. I would be eligible for 80% subsidy, but even then it would cost me (plus wife and 2 kids) $774/month or $9,288/yr in premiums. Right now while I'm still employed, we only pay $93/month for the same type of plan.

So my med premiums in retirement would go up by $8,000/yr. Ouch. So much for ER....

 

[REWahoo]

Welcome to the real world of early retirement. Have a seat, your health insurer will be along to rob you shortly.

http://www.early-retirement.org/forums/f28/the-hidden-cost-of-retiring-early-72387.html#post1458813

 

[M Paquette]

Sounds about right. Cost where I am for a Bronze high deductible, HSA eligible plan for myself, DW, and a college age student is $1277 a month.

No more cross-age employer group risk pools, employer subsidies, etc.

 

[bulbar]

Thanks Paquette, I think. I should have mentioned I am in Houston Texas

 

[Corporateburnout]

I'm at least a few years away from ER, but I was looking at the retiree medical coverage offered by my employer and it sure looks expensive. I'm sure you guys are going to say "duh" but I'll ask anyway if it seems in line with what you're paying. FYI, I'm almost 53 and would like to ER at 55.

The cheapest of their 3 plans is the High Deductible Plan. I would be eligible for 80% subsidy, but even then it would cost me (plus wife and 2 kids) $774/month or $9,288/yr in premiums. Right now while I'm still employed, we only pay $93/month for the same type of plan.

So my med premiums in retirement would go up by $8,000/yr. Ouch. So much for ER....

Are you sure that the plan is 80% subsidized by your company? That means the premium for such a plan is $3870/month. That is very high....

 

[aja8888]

You would have to ride whatever you choose for 10 more years then be qualified for Medicare and all the trappings. You will pay almost as much on Medicare then with a good supplemental policy. What I am saying is that it will not get less expensive after you retire.

 

[bulbar]

Corporateburn - yeah, that's at 80% subsidy.
aja8888 - wow, I thought medicare might be cheaper

 

[ERhoosier]

Welcome to the real world of early retirement. Have a seat, your health insurer will be along to rob you shortly.

http://www.early-retirement.org/forums/f28/the-hidden-cost-of-retiring-early-72387.html#post1458813

Must respectfully disagree. Reality is high HI premiums are due to high overall HC costs. Insurers are sometimes a PITA, but they are generally among the lowest profit margin businesses in the US with typical margins from 2-5%.
Health insurer profits not as fat as Dems claim - politics - Health care reform | NBC News
Health Insurance Profits: Not Worth the Outrage? - ABC News
Compare that with typical profit margins of 15-20+% for Big Pharma and 12+% for medical device makers.
Ezra Klein - Health-insurance industry: Still not that profitable
And as we all know, the huge $$$$ we in US spend on drugs, devices, etc. buys us no better outcomes than other developed countries.
With Health Care Costs, the U.S. Is a Huge Outlier | Brookings Institution

Ever rising costs are a problem worldwide, and interestingly US is not among global leaders in HC inflation. Seems other nations are starting to close the HC spending gap.
Middle East, Africa lead rising global health care costs for 2014: Survey | Business Insurance

 

[Katsmeow]

We are on subsidized retiree insurance from the company DH retired from. He is actually on Medicare so we are paying for coverage for me and kids. It started out fully subsidized but the company absorbs only 5% of price increases per year. Last year there was a huge increase. We are paying $780 a month. I did look at ACA policies and not being eligible for subsidies there, it was cheaper to keep the retiree coverage.

 

[ocdokie]

I'm at least a few years away from ER, but I was looking at the retiree medical coverage offered by my employer and it sure looks expensive. I'm sure you guys are going to say "duh" but I'll ask anyway if it seems in line with what you're paying. FYI, I'm almost 53 and would like to ER at 55.

The cheapest of their 3 plans is the High Deductible Plan. I would be eligible for 80% subsidy, but even then it would cost me (plus wife and 2 kids) $774/month or $9,288/yr in premiums. Right now while I'm still employed, we only pay $93/month for the same type of plan.

So my med premiums in retirement would go up by $8,000/yr. Ouch. So much for ER....

$9,288/yr in premiums for 4 people sounds good to me. DH and I pay over $12K/yr for the 2 of us, with no employer subsidy. We are retired, pre-Medicare age, and not eligible for Obamacare.

 

[aja8888]

Corporateburn - yeah, that's at 80% subsidy.
aja8888 - wow, I thought medicare might be cheaper

Medicare is not free and you will need additional coverage to cover what Medicare does not cover. Typically, the best way to go is a "Medigap" policy that can cost up to $200+ per month per person on Medicare. An alternative is a Medicare Advantage choice but that type of coverage, although cheaper, has a lot of limitations and varies in availability and quality across the country.

Then a drug plan (Part D) which pays a part of your drug costs for around $30/month per person. This is nowhere near as good as a drug plan under an employer coverage policy.

Between Medicare, Medigap, and Part D, our cost per person (DW and I) is near $4K per year each. But we have the best coverage.

 

[Live And Learn]

I'm at least a few years away from ER, but I was looking at the retiree medical coverage offered by my employer and it sure looks expensive. I'm sure you guys are going to say "duh" but I'll ask anyway if it seems in line with what you're paying. FYI, I'm almost 53 and would like to ER at 55.

The cheapest of their 3 plans is the High Deductible Plan. I would be eligible for 80% subsidy, but even then it would cost me (plus wife and 2 kids) $774/month or $9,288/yr in premiums. Right now while I'm still employed, we only pay $93/month for the same type of plan.

So my med premiums in retirement would go up by $8,000/yr. Ouch. So much for ER....

\

You're fortunate that you even have the option for retiree healthcare. Go to your states ACA site and see what their options are.

I'm not counting on any ACA subsidies and am budgeting 27k annually for HC (premium plus out of pocket maximum) for 2. Feel better now ?

 

[Animorph]

Check healthcare.gov for your official alternatives. You may qualify for a subsidy if you are living off already-taxed investments and keeping your income low.

 

[dontworry]

We pay over $7000 annually for our family of five and this is a benefit...I am still working! I believe the company pays at least that (probably more). Granted, we have very good coverage but still have deductibles to meet every year. My employer IS my health insurance company btw. We are actually non-profit. Health care costs are the problem, not necessarily the health insurance companies (IMHO).

 

[jimbee]

Compare that with typical profit margins of 15-20+% for Big Pharma and 12+% for medical device makers.
Ezra Klein - Health-insurance industry: Still not that profitable

Thanks for those links. I especially liked the Yahoo Business link in the quote above. Direct link here: Healthcare Sector - Yahoo! Finance Industry browser

According to that information, over three quarters of the health care industry market capitalization and most of the profit, is attributed to the pharmaceutical companies. I can see how that might appear to be a bit lopsided...

 

[Pscott2019]

I know that insurance is only subsidized by mega corp for myself. Not my dependents. You might want to double check.

 

[Chuckanut]

The cheapest of their 3 plans is the High Deductible Plan. I would be eligible for 80% subsidy, but even then it would cost me (plus wife and 2 kids) $774/month or $9,288/yr in premiums. Right now while I'm still employed, we only pay $93/month for the same type of plan.

That is quite a good deal for a retiree.

Many of us would love to get a 50% subsidy. 80% is very nice. I know several people who pay more than you for one person on a silver plan.

Don't look a gift horse in the mouth.

OTOH, if the price of health insurance makes retirement unaffordable, then one has to continue working at least enough to earn employee paid insurance.

 

[pb4uski]

$774 for a family for HDHI premium sounds reasonable. We pay $683 per month for 2 for our HDHI policy. If you want to play, you gotta pay.

 

[gauss]

The final dollar figure sounds reasonable, it is the claim of the 80% subsidy that might be where the mischief exists.

-gauss

 

[ripper1]

I'm at least a few years away from ER, but I was looking at the retiree medical coverage offered by my employer and it sure looks expensive. I'm sure you guys are going to say "duh" but I'll ask anyway if it seems in line with what you're paying. FYI, I'm almost 53 and would like to ER at 55.

The cheapest of their 3 plans is the High Deductible Plan. I would be eligible for 80% subsidy, but even then it would cost me (plus wife and 2 kids) $774/month or $9,288/yr in premiums. Right now while I'm still employed, we only pay $93/month for the same type of plan.

So my med premiums in retirement would go up by $8,000/yr. Ouch. So much for ER....

Well, I got that beat. My premiums for two people are 12,600 a year and I am one of those despised spoiled public employees.

 

[Cat-tirement]

$9,288/yr in premiums for 4 people sounds good to me. DH and I pay over $12K/yr for the 2 of us, with no employer subsidy. We are retired, pre-Medicare age, and not eligible for Obamacare.

I will be RE in a few months, and have been looking at insurance options. Currently, it appears that the best for us at the moment is a Megacorp plan for pre-65 retirees. This doesn't offer any subsidy, but there is some benefit from being in such a large group plan with the working employees. It will be about $10,500 for the two of us.

 

[pb4uski]

The final dollar figure sounds reasonable, it is the claim of the 80% subsidy that might be where the mischief exists.

-gauss

+1 I'm thinking the same thing - no way it is 80% subsidized given the pricing of unsubsidized HDHI policies. I wonder if perhaps active employees are 80% subsidized - the $93 a month would seem to fit with that.

 

[Corporateburnout]

+1 I'm thinking the same thing - no way it is 80% subsidized given the pricing of unsubsidized HDHI policies. I wonder if perhaps active employees are 80% subsidized - the $93 a month would seem to fit with that.

+2

 

[daylatedollarshort]

Check healthcare.gov for your official alternatives. You may qualify for a subsidy if you are living off already-taxed investments and keeping your income low.

I am usually surprised in health insurance threads in this forum there are not more posters using this methodology during the pre-Medicare years.

 

[stepford]

Though my Megacorp pension will be not particularly generous when I start to collect at 55 (roughly 20% of my final year's pay after 26 years with the company) they do have a decent retiree medical plan. They subsidize 3.3% for every year of service, so while I won't get the full ride I will get about a 90% subsidy - meaning premiums of $80-95/month for me (or double that if DW quits her job and gets onto my plan).

I believe this subsidy ends when Medicare takes over, but I'll drive off that bridge when I come to it.