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

[travelover]

...............Rpow53 - sounds like you should go to the political board.

 

[walkinwood]

For guaranteed issue states like NJ and NY (Maine too, I think), this may lead to a reduction in premiums for the same coverage. When I bought my individual policy in 2008, there were only about 100,000 individual policies in NJ! The mandate would make that pool much larger and hopefully, reduce premiums.

A lot of people on this board would qualify for subsidies in ER. If that is the case, you can be already calculate your premiums.
Health Reform Subsidy Calculator -- Premium Assistance for Coverage in Exchanges/Gateways

But I agree with what a lot of people have said. We need to wait & see. 2014 is a long way away.

Please keep the constitutionality and other politics out of this discussion. It is an important topic & let's not do anything that will cause it to be locked by the administrators.

 

[wildcat]

Rates should go down in GI states because now there will be more people (healthy) buying ins. not just people who have some medical condition?

True about the rates if the uninsured in NY is made up of healthy people as a result of the bill alone (which excludes any additional increases in the cost of healthcare of course). I really don't know who is part of that group in NY under normal conditions. Since the economy has tanked, we have seen the healthy dropping out of the IM market which has caused some rate increase filings in some states.

I was trying to find our actuarial studies/estimates for NY post-bill but couldn't locate 'em.

My guess was mostly for non-GI states. Agree though, I couldn't imagine the NY rates going higher

 

[TromboneAl]

Rightly or wrongly, a lot of the LBYMs here will be below the annual $58,000 (two-person) income threshold, and will be eligible for subsidies for buying insurance. This will be especially true before they start tapping their tax-deferred accounts.

 

[ziggy29]

It will be interesting to watch the legal battle unfold but it sounds like the legal academic money is on this program passing muster.

If Social Security and Medicare were allowed by the courts, it's hard to see precedent for striking this down. I honestly don't see the constitutional authority for any of those things, but that doesn't seem to matter any more.

Moving away from the quasi-political and to the OP's question, the short answer is "it might." There's a chance it's the best gift a high asset/low income early retirement has ever been given. We may not start knowing until it fully kicks in in 2014.

 

[TromboneAl]

There's a chance it's the best gift a high asset/low income early retirement has ever been given.

Right. Savers and LBYMers are so uncommon that they fly beneath the legislative radar.

 

[FinanceDude]

It will be interesting to watch the legal battle unfold but it sounds like the legal academic money is on this program passing muster.

Particularly since lawsuits will be steered to appelate judges who are left leaning..........

 

[kyounge1956]

I've been thinking another way the bill may affect people's ability to retire early is that you can't be denied coverage because of pre-existing conditions. That may make it more feasible for people who live in high cost-of-living regions to move to somewhere less expensive, thus facilitating ER.

re: constitutionality of the bill. I agree that discussion belongs on the political topics board, so I started a thread there. I hope I managed to phrase it so it is a "FIRE Related" political topic and not politics plain & simple.

 

[audreyh1]

Right. Savers and LBYMers are so uncommon that they fly beneath the legislative radar.

Yes! This is so true. ERs in general fly under the radar IMO.

Only paying SS out of wages while working I understand - since if I retire early, obviously I can fund my own retirement. There was an income cap on SS contributions anyway.

But not having to continue to pay into the Medicare system (no income cap BTW) when retired early - that sure has been a gift! And will continue to be IMO as I doubt many ERs will be pulling in AGI's exceeding $250K

Audrey

 

[huusom]

Will assets be a consideration?

Hi all:

I'm not quite clear about goverment subsidy. What if we have a small monthly annuity ($1000) and no other incomes but also own a paid for house worth 500K?

Will we still be eligible for subsidy?

 

[audreyh1]

Hi all:

I'm not quite clear about goverment subsidy. What if we have a small monthly annuity ($1000) and no other incomes but also own a paid for house worth 500K?

Will we still be eligible for subsidy?

Subsidies (taxes in general) look at your income for each year. They don't look at your net worth. And this legislation is the same - everything is annual income based.

So sounds like you are eligible for generous subsidy to me if you are living off only $12K a year. Is that true?

Audrey

 

[winger]

Just keep in mind that taxes are going up on everything. Healthcare is going to change as we know it. Going to the doctor will not be like it is now. be prepared for a mass mentality when you are treated. get ready to accept less in treatment. you will no longer be an individual. retirement is not going to be what it used to be. the government will control all your money and health care. they will decide where you live and when you die.

Sigh.........

 

[FinanceDude]

! And will continue to be IMO as I doubt many ERs will be pulling in AGI's exceeding $250K Audrey

I guess 2014 is my FIRE year.............

 

[MichaelB]

The NY individual policy covered by the GI requirement is expensive premium for mediocre coverage and very low limits. (I had it for 5 years) It is really a “better than nothing but not much else” type of policy. I have no doubt reformed policies would offer greater coverage for less premium.

The approved reform is positive for ER types in two ways. First, it guarantees coverage to middle aged folks that have lots of eligibility issues Second, it limits the age component cost uplift to 3 times the lowest age bracket cost. Currently it is much higher than that (mine is much higher than that).

There is also an immediate measure that reduces costs for companies that provide health care for ER’s.

 

[Onward]

There's a chance it's the best gift a high asset/low income early retirement has ever been given.

This is exactly what I get out of the limited amount I've read so far. It looks like low-income, high-net-worth people will have the majority of their health-care premiums paid by Medicaid.

 

[huusom]

Subsidies (taxes in general) look at your income for each year. They don't look at your net worth. And this legislation is the same - everything is annual income based.

So sounds like you are eligible for generous subsidy to me if you are living off only $12K a year. Is that true?

Audrey

No, we have other savings that we can dip into before collecting SS. If what you say is true then the current assets based medicaid eligibility requirements are going away

 

[MichaelB]

This is exactly what I get out of the limited amount I've read so far. It looks like low-income, high-net-worth people will have the majority of their health-care premiums paid by Medicaid.

Medicaid eligibility depends on income and assets, so high net worth people are not eligible.

 

[ziggy29]

If what you say is true then the current assets based medicaid eligibility requirements are going away

No, not if someone is on Medicaid. That is, and will continue to be, subject to an assets test as well as an income test.

If you're not on Medicaid, you have no current or former employer coverage and can live on very little taxable income, congratulations. You just hit the jackpot.

 

[audreyh1]

No, we have other savings that we can dip into before collecting SS. If what you say is true then the current assets based medicaid eligibility requirements are going away

Ooops - my bad. I didn't realize we were talking about Medicaid eligibility. Shouldn't have posted anything!

Audrey

 

[TromboneAl]

Second, it limits the age component cost uplift to 3 times the lowest age bracket cost.

I hadn't heard about this part. Do you mean that insurance companies won't be able to charge a 60 year old more than three time what they charge a 20 year old?

 

[ziggy29]

I hadn't heard about this part. Do you mean that insurance companies won't be able to charge a 60 year old more than three time what they charge a 20 year old?

Correct. As I understand it, anyway.

 

[Bimmerbill]

So, they will just jack up the 20 year old cost to cover the 60 year old cost. That's what I'd do.

 

[MichaelB]

I hadn't heard about this part. Do you mean that insurance companies won't be able to charge a 60 year old more than three time what they charge a 20 year old?

Yes- if 20 is the youngest bracket. They can (and will) also charge for smoking and family size.

An excellent resource is Kaiser Family Foundation. A summary here http://www.kff.org/healthreform/upload/8023-S.pdf

 

[donheff]

So, they will just jack up the 20 year old cost to cover the 60 year old cost. That's what I'd do.

Hey, if the incoming, subsidized masses substantially raise their costs, then they have to raise their rates. But they have to spend 80% of proceeds on health care so they won't be able to arbitrarily raise them beyond that threshold.

 

[huusom]

No, not if someone is on Medicaid. That is, and will continue to be, subject to an assets test as well as an income test.

If you're not on Medicaid, you have no current or former employer coverage and can live on very little taxable income, congratulations. You just hit the jackpot.

If this is true then I'm going to set my ER date to 1/1/2014