Will the new healthcare law make it easier for me to retire early?

[donheff]

So they are making a political statement? I wouldn't equate it to a Tea Party demonstration or a protest. There is a chance that some of the folks at those big corps are smarter than the govt folks rolleyes and maybe they are taking their medicine before things get really ugly..........

Lets drop this one. I am not sure we are even talking about the same thing. I was not talking about corporations making a statement. I agree they should take the write off. I was talking about politicians latching onto corporation write offs to assert that the new health care bill was drastically bashing those corporations' bottom line.

 

[Westernskies]

I am guessing the root cause of the concerns swirling around the health care bill- and how it affects to people's ability to ER is the billions of dollars in costs- since we just added 32 million people to the medical rolls- is- Who is going to pay for it?

1. Taxpayers (hence the wide-spread angst over this bill. We've all seen Congressional fuzzy math before.)

2. Employers- (hence the preemptive write-offs to cover their anticipated out-of-pocket costs and employees who will be clamoring for raises to make up for their drop in take-home pay.) I think taking the write-offs now is good business acumen - if you have a future liability staring you in the face, better start stockpiling cash now to address it head-on. Proactive beats reactive.

3. Health Insurance Companies - (hence the massive rate hikes just before the bill was enacted) now will be making decisions not based on sound business principals, but based on criteria set up by folks who aren't paying the bills. If they deny coverage for any reason, the Congress-critters will have a media event; the expectation is that they aren't in business to make money but to administer medical welfare programs. Sure, they just got lots of new customers- but are they customers they can afford to do business with?

The money has to come from somewhere. People and companies are justifiably concerned about how this bill is going to impact their wallets and bottom line. For everyone who thinks that this bill will make it easier to ER because of increased access to medical coverage, there is someone else concerned that their ability to save for ER has been impacted.

 

[oliverdickens]

Hi, many have said if you have insurance from a former employer you are not eligible for subsidy.

How about this situation:

Income is at $42,000
Family of 2, so limit on income is $58,000
By 2014, will be paying about $1000 per month to be part of my former employer self insured insurance plan

Question: Will I be eligible for some subsidy?

Question: In 2014 can I shop for insurance on exchange and perhaps get a better deal than with employer plan? Any restrictions?

Question: Is income based only that which is taxed now? Can I lower income by being in tax free vehicles, such as muni's etc. and thus increase amount of subsidy?

Really would appreciate boards thoughts on these questions.

Thanks

 

[regnig]

health care

there is a provision (sec 1102 ) that will give your current employer a tax benefit if they continue to pay a portion of your health care..if you leave your job at 55, You have to be 55 , but it does guarantee one form of continuing health insurance at a known cost. It expires when you are eligible for Medicare. I guess it's like bridge reasonable health insurance . they are caling it the reinsurance clause. makes me feel a little safer that i can know the expense.

there will be other forms of insurance availble at better rates. just not until 2014.

 

[FUEGO]

I wonder what effect this law will have on existing individual policy premiums? Specifically the provisions restricting insurers from excluding pre-existing conditions and not charging different premiums based on health status.

My parents in-law pay out of pocket for their health insurance and they are still 4-8 years from medicare eligibility. I think they are currently paying around $700/month total for very basic coverage. If the premiums go up significantly, then they will likely go bare until 2014 when they can get medicaid coverage.

 

[FinanceDude]

Lets drop this one. I am not sure we are even talking about the same thing. I was not talking about corporations making a statement. I agree they should take the write off. I was talking about politicians latching onto corporation write offs to assert that the new health care bill was drastically bashing those corporations' bottom line.

Right now, we DON'T KNOW how the bill will affect things 100%. However, the Fortune 500 Companies seem to THINK it will be detrimental to their bottom line, and are taking steps to address that. If politicians or a party latch onto that, its up to them.........

 

[ziggy29]

I'm still a little confused about all the details and what takes effect immediately as opposed to on 1/1/2014.

 

[samclem]

there is a provision (sec 1102 ) that will give your current employer a tax benefit if they continue to pay a portion of your health care..if you leave your job at 55, You have to be 55 , but it does guarantee one form of continuing health insurance at a known cost. It expires when you are eligible for Medicare. I guess it's like bridge reasonable health insurance . they are caling it the reinsurance clause.

The law appropriates $5 billion for this purpose. If we assume that employers will be reimbursed approx $5000 per retiree/familee, then that will cover 1 million cases. I'd bet there are a lot more folks in that situation than can be covered for this amount of money. So, either employers won't get the subsidy and they'll dump more people into the exchanges, or the government will increase the spending on more subsidies (cha-CHING! Another bill for the kids to pay. Won't they be proud of us!).

makes me feel a little safer that i can know the expense.

I'm not following this. How do you know what your expenses will be? If private insurane prices go up (does anyone think they won't, especially with the new requirements of this law?), companies will get an approx 80% reimbursement for the part they pay (until the money pot goes dry). The rising costs will be passed on to retirees, so I'm not seeing why anyone in this situation should feel a sense of security that their costs won't change.

there will be other forms of insurance availble at better rates. just not until 2014.

We'll see about the price of that insurance. Prepare to be disappointed.

 

[MichaelB]

I'm still a little confused about all the details and what takes effect immediately as opposed to on 1/1/2014.

A new summary with timeline here Health Reform Implementation Timeline - Kaiser Family Foundation.
A more detailed summary here http://www.kff.org/healthreform/upload/8061.pdf

 

[MichaelB]

I wonder what effect this law will have on existing individual policy premiums? Specifically the provisions restricting insurers from excluding pre-existing conditions and not charging different premiums based on health status.

I agree with FD that we don’t really know what will happen. That said, today there is a substantial and growing difference between large group policy rates and small group business rates. The small business rates are much more granular and priced to maximum risk and age. The new regulations reduce the age spreads and pool the risk so we would expect to see a trend for prices on both ends to move toward the average. We would also expect to see a closing of the gap between small and large group rates. I don’t expect to see any decline in my rates but I do expect to see increases below the average on this is enacted – if I am still graced with the gift of life by then...

 

[IndependentlyPoor]

I'm glad that you guys have the fortitude to plow through all of this health care stuff and provide summaries. I just can't bring myself to do it and rely on you folks to hash it out.

Sorry to be a wimp on this one, but there it is.

 

[REWahoo]

I ran across this Fortune article expanding on the earlier posts about corporations writing off "losses" as a result of the new health care bill. Interesting title and history on how and why US corporations ended up offering health care bennies to employees: Dead $14 billion loophole could sink corporate health care

 

[donheff]

I ran across this Fortune article expanding on the earlier posts about corporations writing off "losses" as a result of the new health care bill. Interesting title and history on how and why US corporations ended up offering health care bennies to employees: Dead $14 billion loophole could sink corporate health care

Interesting article. I didn't realize corporate health benefits started as an auto-makers union busting tactic. It is too bad major elements of both sides are opposed to making the exchanges/public option both nationwide and available to all. That might encourage a move away from employer based health insurance.

 

[MichaelB]

I ran across this Fortune article expanding on the earlier posts about corporations writing off "losses" as a result of the new health care bill. Interesting title and history on how and why US corporations ended up offering health care bennies to employees: Dead $14 billion loophole could sink corporate health care

Informative link. Thanks. I continue to believe that comprehensive reform - which is not quite what was recently passed - will level the business playing field and remove one advantage large businesses have over small.

 

[free4now]

To me it's a no brainer that the new healthcare bill is going to lower my lifetime costs for healthcare.

However that doesn't mean it will be painless; my current $140 monthly premium for private healthcare insurance will surely rise significantly when the law is in full effect for several reasons:
- The new law tends to shift the burden from old sick people to young healthy people like me.
- If my plan is required to accept people with preexisting conditions that will surely increase the costs of providing care
- Hopefully the new law will prevent many of the abusive ways that insurers deny care people are entitled to, and as the insurers well know providing the care that people are entitled to costs more than using the "claim denied" stamp.

If this plan didn't go through, I'm absolutely convinced that I would end up paying big out of pocket costs for healthcare somewhere down the road.

A year ago an accident brought me into the emergency room . I ended up with $25k worth of hospital bills just for 8 hours worth of checking me out to make sure I was okay and some stitches. Despite having insurance with 100% coverage for the procedures that were done, I probably spent a hundred hours of my time in appeals and bureacracy to get my insurance to pay for what they are supposed to. In my case there was no question about the medical necessity; all the hangups were legal and procedural loopholes that the insurance company was exploiting. A year later and there are still loose ends I'm tying up with the billing. And to top it all off they discovered a thyroid condition to watch that will surely be considered a preexisting condition even though it doesn't affect my day to day life.

If I was in the hospital for weeks or months instead of just 8 hours, the hassle of straightening out the billing could easily have exceeded the ability of any human to deal with, and that seems to be exactly what the insurance companies depend on. I just can't imagine it getting worse.

 

[explanade]

I'm hopeful too, because if not for the uncertainty over health care, I might already be ER'd.

In all this health care debate, on various forums, people outlined the coverage they had. I have been seeing creeping increases in costs -- higher copayments, payroll deductions, etc. But some people who had coverage would have to pay thousands out of pocket before getting one cent in claims paid by the insurer.

The prospect of going out to the individual market now, as it stood before reform, wasn't something I looked forward too. Basically I would have expected to get a catastrophic policy and hang on until I was eligible for Medicare, hope that I didn't have some accident or major illness which would exhaust the lifetime cap of the individual policy I got (assuming the insurer decided to pay out).

Biggest fear would be to have health care costs eating into retirement assets. After all, it's the biggest cause of personal bankruptcies, as medical bills have depleted the savings of many.

 

[samclem]

But some people who had coverage would have to pay thousands out of pocket before getting one cent in claims paid by the insurer.

Just like the many car and homeowners policies? That's what insurance is, I think..

After all, it's the biggest cause of personal bankruptcies, as medical bills have depleted the savings of many.

This is often repeated, but debatable. I'm sure many people do get forced into bankruptcy by medical costs, but . .
http://www.early-retirement.org/forums/f52/obama-said-the-b-word-47765.html#post885019

 

[explanade]

What I meant was, thousands in premiums and deductibles per year before seeing one cent in claims paid out.

 

[ERD50]

But some people who had coverage would have to pay thousands out of pocket before getting one cent in claims paid by the insurer.

Just like the many car and homeowners policies? That's what insurance is, I think...

What I meant was, thousands in premiums and deductibles per year before seeing one cent in claims paid out.

Gotta agree with samclem, that's what insurance is, I think...

I've paid on many policies year after year and never collected one cent. But others have collected many, many dollars. That is what I insure against.

Hey! I've got an idea! Why don't you start the 'Explanade Insurance Co-Op', and you can pay out claims to *everybody*! As a Co-op, you don't need to make a profit, just distribute all those insurance premiums, to everyone, every year! That should solve that sticky little problem of some people paying premiums year after year and never getting a cent. Let us know how that works out!

-ERD50

 

[explanade]

Well I purchased individual policies about 20 years ago, paid like $88 a month back then and remember choosing a lower deductible plan.

Now, the "consumer-driven" plans or the catastrophic policies with high deductibles are "rainmakers" to insurance companies, according to a former Cigna executive who testified before Congress:

First, the high deductible plans many of them have been forced to accept — like I was forced to accept at CIGNA — require them to pay more out of their own pockets for medical care, whether they can afford it or not. The trend toward these high-deductible plans alarms many health care experts and state insurance commissioners. As California Lieutenant Governor John Garamendi told the Associated Press in 2005 when he was serving as the state's insurance commissioner, the movement toward consumer-driven coverage will eventually result in a "death spiral" for managed care plans. This will happen, he said, as consumer-driven plans "cherry-pick" the youngest, healthiest and richest customers while forcing managed care plans to charge more to cover the sickest patients. The result, he predicted, will be more uninsured people.

In selling consumer-driven plans, insurers often try to persuade employers to go "full replacement," which means forcing all of their employees out of their current plans and into a consumer-driven plan. At least two of the biggest insurers have done just that, to the dismay of many employees who would have preferred to stay in their HMOs and PPOs. Those options were abruptly taken away from them.

Bill Moyers Journal . Testimony of Wendell Potter | PBS

IOW, these are not good-faith insurance products but a way to maximize premiums revenues and minimize claims payouts.

 

[ERD50]

Now, the "consumer-driven" plans or the catastrophic policies with high deductibles are "rainmakers" to insurance companies, according to a former Cigna executive who testified before Congress:

So it's safe to assume you have zero dollar deductibles on your car and home insurance? I doubt it, because that is not why we buy insurance. And I sure hope the insurance companies are making a profit on me (on average) - that is the only way they can be around if/when I have a claim. That is what I pay them for - no free lunch.

Well I purchased individual policies about 20 years ago, paid like $88 a month back then and remember choosing a lower deductible plan.

Well, when I bought a policy on my son one year ago, it was just $60/month. Even before factoring inflation. High deductible yes, but that is what I want.

The cost of public education has risen far faster than inflation also, and that's with the 'public option' - which big, bad, greedy, profit-grabbing corporation do we blame for that?

-ERD50

 

[plex]

My premiums are $48/month for a semi high-deductible plan (1k), young adult plans have extremely low premiums, and most young adults only need to cover catastrophic care, it is extremely rare to develop chronic conditions anywhere near the young adult age range. I have no doubt in 2014 that the premiums for the lowest priced young adult plans will jump up to somewhere around 150-200/month.

 

[Gotadimple]

IOW, these are not good-faith insurance products but a way to maximize premiums revenues and minimize claims payouts.

Your equation is a little 'off.'

The insurer gets: lower premium revenues + lower claims expenses = potential higher short-term profit. But only if the employees are a healthy group, if they aren't, then the insurer gets lower profits as claims exceed revenues.

The company gets: lower premium costs = potential short-term profit. But only if the employees are a healthy group. If they aren't, and they are a large company, their rates go up the next year.

The employee gets: lower premium costs + higher out of pocket = same or higher insurance costs. Until the next year, when the employer makes a different decision.

-- Rita

 

[growing_older]

It seems very difficult to find health insurance that is actually insurance. Because of all the rules for deductibles and copays, most policies seem more like a billing partnership where I pay a premium to have the insurance company insert itself between me and the medical providers, where they negotiate fees without my involvement, then decide how much they will pay and how much I will pay. It sort of insulates me from medical costs, so it's sold as insurance, but what I really want is something I can COUNT ON to pay any very large medical bills (that should be unlikely) thus insuring me from financial ruin in case (unlikely) of a big ticket medical issue. Current forms of medical insurance usually involve big risks my "insurer" will decide that an expensive event is not covered, thus I am really uninsured after all.

I'm sorry the "reform" failed to focus on issues like this and instead we have some very complicated new rules that affect the "billing partnership" that masquerades as health insurance. I have no idea how I personally will be affected as it is far too complicated and doesn't seem anyone really understands all that it does, even the people who wrote and voted on it.

 

[samclem]

It seems very difficult to find health insurance that is actually insurance. Because of all the rules for deductibles and copays, most policies seem more like a billing partnership . . .
I'm sorry the "reform" failed to focus on issues like this and instead we have some very complicated new rules that affect the "billing partnership" that masquerades as health insurance..

Yes. In addition to all your valid points, if you want to pay your own non-catastrophic medical expenses, you have to pay exorbitant rates much higher than any insurance company pays. The system assures that any patient that tries to be more self-sufficient and to reduce the role of insurance companies gets punished. True reform would address this.