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Take Employer's Health Insurance or Private Insurance?
Old 03-06-2016, 07:35 PM   #1
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Take Employer's Health Insurance or Private Insurance?

I'm retiring soon and have to make a decision to accept my company's retiree plan or less expensive private insurance. Both plans are PPO plans that cover the whole country. I need such a plan, and these seem to be disappearing. The private plan is through Florida Blue.

The Florida Blue plan is $200 a month cheaper than my retiree insurance; however, I'm afraid Blue Cross might start pulling their PPO plans out of Florida like they have their insurance in other states. Of course, my company could pull their plan any time, but I have reasons to think that's not likely. I've budgeted for the more expensive plan, but would certainly like to save $2400 a year, if possible.

I'm in good health, so taking a generous plan doesn't really matter to me.

So what do you think? Is it worth $2400 a year to take what I think is a surer bet? Or am I overexaggerating the potential private insurance situation?
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Old 03-06-2016, 07:46 PM   #2
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Is this a one-time-only chance to enroll in the employer retiree plan? (That is, if you decline it, can you ever opt into it in the future?) If it's a one-time offer I'd be a little more inclined to go with the employer-sponsored plan, especially given what is happening to PPO plans on the individual market.
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Old 03-06-2016, 07:56 PM   #3
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Is this a one-time-only chance to enroll in the employer retiree plan? (That is, if you decline it, can you ever opt into it in the future?) If it's a one-time offer I'd be a little more inclined to go with the employer-sponsored plan, especially given what is happening to PPO plans on the individual market.
Thanks, I forgot to specify. Yes, it's a one time option.
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Old 03-06-2016, 08:00 PM   #4
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Do they cover a Medigap policy post 65? My retiree medical was half price insurance until 65, then $150 a month for a Medigap policy. I didn't qualify since I left prior to being 55 yo.
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Old 03-06-2016, 08:22 PM   #5
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I had to make a similar choice late in 2014. It was a last chance to sign up with Megabank's plan. I had retired from a different company and was on Cobra. I opted to go with Megabank's plan. It is essentially the same plan that is offered to current employees, with a different (lower) premium subsidy.

I was (and still am) concerned about the breath of network coverage with private and ACA plans. In NY where I live, no insurance company is offering out of network coverage on the ACA exchange.

There are no guarantees, of course. I consider ACA or private insurance a back up plan. The picture will change when I become Medicare eligible in a few years.

How long do you expect to need the plan (i.e. how many years to Medicare)?

With all the changes in the health insurance landscape, it's hard to assess the possible trade-offs between cost and availability.
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Old 03-06-2016, 08:27 PM   #6
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Well it's a One-Time Option to stay IN, but presumably you can get OUT say in 3-5 years if you decide the external environment changes to make the choice more clear?
One benefit of the employer plan probably means you have less risk of getting cancelled, or other shenanigans.

If you've budgeted for it, and it means keeping docs and not having to mess around with changes, it sounds like a a decent trade off. Were I you, I'd stay in for that price difference, at least at first, at least until after the election cycle.
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Old 03-06-2016, 08:34 PM   #7
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I have been extensively researching this exact same issue. My findings are that BCBS and others have been leaving the private market completely in many states and in states like IL, the network in the private plans has been slashed to a much smaller size along with huge premium increases! Obamacare has brought too many sick and otherwise very expensive to insure people into these plans causing large losses. This trend will continue. Soon private insurance
premiums will be near your employer's retirement plan premium.
A two tier system is evolving. Semi socialized medicine will inevitably cost more and more every year. The likely imbalance of care starts when doctors prefer patients paying in full over the lower Medicaid payments for service. The overloaded private networks WILL adopt Medicaid reimbursement tables causing long waits for care for those not on employer backed policies that pay fully for medical services and have a network large enough to include doctors not willing to work under the Medicaid/Medicare price controls.
DO NOT give up this chance to be away from this evolving mess. It may consume the employer backed policies one day, but at least that's further down the road.
For me the price is very steep and it's still a must do to be on the Employer Retirement Plan.
Once you decline where I work it's permanent.
Good luck with your choice!
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Old 03-06-2016, 08:48 PM   #8
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Do they cover a Medigap policy post 65? My retiree medical was half price insurance until 65, then $150 a month for a Medigap policy. I didn't qualify since I left prior to being 55 yo.
I'm 52 and leaving prior to 55. I'm paying more by not waiting, but it's worth it. The company plans have no medigapl policies.
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Old 03-06-2016, 08:58 PM   #9
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I had to make a similar choice late in 2014. It was a last chance to sign up with Megabank's plan. I had retired from a different company and was on Cobra. I opted to go with Megabank's plan. It is essentially the same plan that is offered to current employees, with a different (lower) premium subsidy.

I was (and still am) concerned about the breath of network coverage with private and ACA plans. In NY where I live, no insurance company is offering out of network coverage on the ACA exchange.

There are no guarantees, of course. I consider ACA or private insurance a back up plan. The picture will change when I become Medicare eligible in a few years.

How long do you expect to need the plan (i.e. how many years to Medicare)?

With all the changes in the health insurance landscape, it's hard to assess the possible trade-offs between cost and availability.
I'll need the plan for 13 years. My pension income is too high to qualify for ACA subsidies. The employer plan will be $787 a month for a very rich plan. I wish I could get something with higher deductibles, but it is what it is. Moving to Florida and not paying income tax should at least help offset the cost.

Thanks for your input everyone.
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Old 03-07-2016, 12:07 AM   #10
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I've got the same choice to make in a couple of months. In my case the employer policy is only about $100 higher, but it costs $1440/mo (after company subsidy!). I think I'm going to go with the retiree plan, for just the reasons that you describe.
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Old 03-07-2016, 06:15 AM   #11
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So what do you think? Is it worth $2400 a year to take what I think is a surer bet? Or am I overexaggerating the potential private insurance situation?
Florida resident here. That's $31200 over the next 13 years, and you're not getting anything in return besides a bigger deduction. Florida is a very big and competitive market for health insurance, BCBS isn't the only one offering PPO plans. Humana has a similar large, nation-wide network PPO. I don't expect to see them disappear, just get more expensive, which is what has happened for the past 3 years.

The Blue Cross companies in Texas and Florida have the same name but are not otherwise related, so what happened in Texas has no bearing on the Florida company. I'd think this one through carefully. You do have once yearly opportunity to drop any plan and choose another on the exchange, although the longer you wait, the more it will cost you.
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Old 03-07-2016, 06:44 AM   #12
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Monthly premiums are one thing.

But what about the co-pays and deductibles in case you had a serious illness or operation?

You've got to project out the total costs.

It seems as if many/most people have to use their insurance eventually. Women first fall apart at 50 years old while men wait until age 60 to have problems.

I stayed with my company's retiree insurance @ $420 per month, but was fortunate to have a retiree health savings account to pay it until 3 mos. shy of going on Medicare. My wife and I stayed on their Medicare supplement because of better terms.
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Old 03-07-2016, 07:10 AM   #13
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I went with private insurance. My old employer was bad about jumping around from one insurance company to another and deductibles, coverage, co-pays, etc always changed. My premium if I had stayed wouldn't have been much different anyway.
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Old 03-07-2016, 08:20 AM   #14
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I'm retiring soon and have to make a decision to accept my company's retiree plan or less expensive private insurance. Both plans are PPO plans that cover the whole country. I need such a plan, and these seem to be disappearing. The private plan is through Florida Blue.

The Florida Blue plan is $200 a month cheaper than my retiree insurance;
It sounds like you may be comparing a group rate (same for all ages) to an attained-age rate which will increase as you get older. Assuming all other factors between the retiree and private plans are the same (provider network, MOOP, etc.) I would use the premium for age 58 or 59 (halfway between 52 and 65) on the attained-age plan for comparison.
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Old 03-07-2016, 11:39 AM   #15
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It sounds like you may be comparing a group rate (same for all ages) to an attained-age rate which will increase as you get older. Assuming all other factors between the retiree and private plans are the same (provider network, MOOP, etc.) I would use the premium for age 58 or 59 (halfway between 52 and 65) on the attained-age plan for comparison.
Thanks. That's a good point. I recalculated the insurance quote based on age 59. That makes FL Blue only $100/month cheaper than my current plan. It's hard to compare plans - my current plan has a $2,500 deductible and the FL Blue plan is $6,100. Both have HSAs, which is something a want (I'm using the HSA as a supercharged ROTH IRA). The provider networks are essentially the same (my current doctors are also accept FL Blue).

I'm okay with a higher deductible and actually wish my employer's plan had a higher one to reduce the premiums. I'm not on any meds or anything and most of the time, when I visit the doctor, it's for preventive care and screenings.
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Old 03-07-2016, 11:46 AM   #16
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Thanks. That's a good point. I recalculated the insurance quote based on age 59. That makes FL Blue only $100/month cheaper than my current plan. It's hard to compare plans - my current plan has a $2,500 deductible and the FL Blue plan is $6,100. Both have HSAs, which is something a want (I'm using the HSA as a supercharged ROTH IRA). The provider networks are essentially the same (my current doctors are also accept FL Blue).

I'm okay with a higher deductible and actually wish my employer's plan had a higher one to reduce the premiums. I'm not on any meds or anything and most of the time, when I visit the doctor, it's for preventive care and screenings.
The difference in deductible amounts is meaningful and probably favors the employer plan. Here is a spreadsheet done my fellow ER member Anamorph (here) that will help you compare the total cost of each policy.
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