Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Will the new healthcare law make it easier for me to retire early?
Old 03-23-2010, 02:58 PM   #1
Dryer sheet aficionado
 
Join Date: Feb 2010
Location: Westchester County
Posts: 30
Will the new healthcare law make it easier for me to retire early?

Hi all -

I considered posting this in the Health Forum, but I thought it was a pretty universal question. I'm nearly 40, live in NY, have a good financial situation (2M portfolio and paid off house), and have considered biting the bullet and retiring early, or semi-retiring. My biggest worry through this decision-making process has been healthcare, as I have had nightmares of my indvidual policy premium spiralling upward from its current $1,000 per month to $2,500 per month over the next eight or ten years. Given the passage of healthcare reform on Sunday, should I relax now? I have tried to get as much detail about the law as possible, and I know there aren't as many cost control measures in there as most people wanted (public option being the main one), but it does seem like early retirees (who don't have their healthcare covered by their former employer) now have more protection both in terms of premium/out-of-pocket caps, no need to worry about losing insurance due to getting sick, etc. I have 25 years to go before Medicare - yikes - so I'm hoping I can get by without some kind of health insurance catastrophe now that the insurance world has changed. So my question is: Do you all feel like these reforms are GOOD, BAD, or NEUTRAL for early retirees? Thanks.
midlifeguy is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-23-2010, 03:43 PM   #2
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
If I were in your shoes, I would be taking a "watch and wait" approach right now. A lot of the stuff in the health care bill does not take place immediately. Plus, you will probably want things to be in place and to have the kinks worked out, so to speak, before you retire. And finally, there will probably be additional bills changing and refining some of the things in the health care bill. Once things have settled down and everything is working, you can read about experiences other early retirees are having and you will be able to tell more about how this bill could affect your retirement plans.

In the long run (5-10 years), I think this bill will probably be a great help to you but I would not break my neck running to HR to turn in one's retirement papers quite yet.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is offline   Reply With Quote
Old 03-23-2010, 03:55 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
IMO - Reform will be good for people that ER. Especially if one has or acquires health problems. Health care cost was one of the biggest personal risks to an individuals financial well being.

Health care cost/inflation is another matter. Containment of cost/inflation will be the next big issue.
chinaco is offline   Reply With Quote
Old 03-23-2010, 04:04 PM   #4
Thinks s/he gets paid by the post
charlie's Avatar
 
Join Date: Mar 2004
Location: Dallas
Posts: 1,211
With respect, I would suggest that this topic be moved to the political forum. There are very strong feelings on both sides of this issue and this thread will get nasty quickly, IMHO.

Cheers,

charlie
charlie is offline   Reply With Quote
Old 03-23-2010, 04:06 PM   #5
gone traveling
 
Join Date: May 2008
Posts: 3,864
Quote:
Originally Posted by charlie View Post
With respect, I would suggest that this topic be moved to the political forum. There are very strong feelings on both sides of this issue and this thread will get nasty quickly, IMHO.

Cheers,

charlie
Porky Pig reads this forum, too.
Westernskies is offline   Reply With Quote
Old 03-23-2010, 04:10 PM   #6
Recycles dryer sheets
 
Join Date: Sep 2007
Location: Chicago
Posts: 221
In general, from my reading of the bill, yes, it will probably help. Mostly because of reducing a number of the uncertainties related to buying individual insurance, which is the major health shift in early retirement as I see it. It won't necessarily be cheap - time will tell what all the changes will result in the individual cost of insurance, but the certainty of being able to buy it, having no lifetime payout cap, and subsidies/limits on the cost for lower income should narrow the scope of outcomes enough, even if at some cost, that it should help with early retirement.

other effects overall are a much broader debate and various things will change even before a lot of this comes into effect, but in regard to the limited question, I suspect that it will significantly help early retirement.
seabourne is offline   Reply With Quote
Old 03-23-2010, 04:24 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,001
You no longer have to worry about lifetime caps and pre-existing conditions and losing insurance because you get sick. And by 2014 there will even be a national group insurance option available to us ERs who don't have coverage through an employer or former employer. And these are all a big deal and do remove a lot of the scary uncertainties that have existing for us who are too young for medicare.

But I am still expecting premiums to continue to go up until I see otherwise. So you had better still budget plenty for insurance premiums.

Audrey
audreyh1 is offline   Reply With Quote
Old 03-23-2010, 04:42 PM   #8
Confused about dryer sheets
 
Join Date: Oct 2008
Posts: 9
It's also worth pointing out that NY is a guaranteed issue state already so at the margin will be impacted less by the changes in the bill.
mostlydone is offline   Reply With Quote
Old 03-23-2010, 05:32 PM   #9
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
There is one section -- which has been discussed a bit elsewhere -- that until 2014 has the government providing some relief to companies that provide coverage to retirees between 55 and Medicare age. This seems designed to encourage companies to provide insurance for early retirees, which I think is a significant incentive to early retirement. But perhaps the goal is more more employment-related, opening up slots for new hiring.

Coach
__________________
"Comprehensive health insurance is an idea whose time has come in America." President Richard M. Nixon, February 6, 1974
Coach is offline   Reply With Quote
Old 03-23-2010, 05:41 PM   #10
Recycles dryer sheets
 
Join Date: Dec 2009
Location: Cleveland
Posts: 344
I was going to post pretty much the same question. Seems this could enable me to retire a year or two earlier.
skyvue is offline   Reply With Quote
Old 03-23-2010, 05:46 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
target2019's Avatar
 
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,682
The big benefit for us is that my pre-existing condition does not lock us into wife's medical insurance until I reach medicare age. She will be able to take her pension, and move to another job. We can leave the bad tax situation in NJ too. There are very attractive employment moves I can make now.
target2019 is offline   Reply With Quote
Old 03-23-2010, 06:03 PM   #12
Dryer sheet aficionado
 
Join Date: Feb 2010
Location: Westchester County
Posts: 30
Charlie - I hear you on the political stuff, but I for one never go into the political forum, so hopefully people can simply comment on the bill as passed and its implications for early retirement rather than expressing political views.

All - so far from your comments it seems the result is a net improvment in the ease of retiring early. Neutral at worst.
midlifeguy is offline   Reply With Quote
Old 03-23-2010, 06:31 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Oct 2009
Posts: 1,190
Quote:
Originally Posted by mostlydone View Post
It's also worth pointing out that NY is a guaranteed issue state already so at the margin will be impacted less by the changes in the bill.
This has been my question: should those in states that aren't "Guarenteed issue" (i.e. state requires already that insurance take anyone irrespective of health) expect to see their premiums skyrocket as all states become "take all"?

As to the original question, I agree with other posters that the best approach is to wait and see how it plays out over the next year or so. I don't think anyone knows yet the full ramifications.
LARS is offline   Reply With Quote
Old 03-23-2010, 07:28 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,733
Quote:
Originally Posted by midlifeguy View Post
Charlie - I hear you on the political stuff, but I for one never go into the political forum, so hopefully people can simply comment on the bill as passed and its implications for early retirement rather than expressing political views.

All - so far from your comments it seems the result is a net improvment in the ease of retiring early. Neutral at worst.
Probably true, but don't forget the expectation (CBO) is that insurance premiums will increase by 10-15% for individual purchasers. So the law probably helps in that the chances of a facing a financially disaster due to medical cost is lowered. However, an increase in health care insurance cost for those of us who don't get sick will make it somewhat harder to retire early. And of course if you need $250-300K to live on you will be paying higher taxes. (Probably not a big issue for most board members )

Obviously, this is still mostly speculation at this point.
clifp is offline   Reply With Quote
Old 03-23-2010, 08:08 PM   #15
Full time employment: Posting here.
 
Join Date: May 2008
Location: Lexington
Posts: 714
In terms of health insurance premium increases, for those who have incomes that have incomes in ER that are too high to have premium caps and possibly subsidies, the benefits will be a mixed bag. There will be substantially more certainty about having insurance, but health insurance premiums will probably be higher. For those with incomes that allow them to at least receive the premium caps, there are really no downsides at all for them, they will probably be able to retire that much sooner without exception.
plex is offline   Reply With Quote
Old 03-23-2010, 08:32 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 4,366
I'll be moving from DW's job-based insurance to individual insurance when she retires, any year now. At least I won't have to make her wait 10 years until I reach Medicare age. I have a few health issues that may or may not be enough to make insurers reject me currently. Now we should be in good shape in 2014 at least.

I would expect that if I had no issues and DW has no issues, then it may have been less costly for individual insurance than it will be now that we have to pay for a wider pool of people. But I can live with that.

Given the larger pool of people being insured, I would assume the premium increases will be less volatile and more predictable after everything kicks in. I'm hoping I'm a little ways into the subsidy income levels to help out.
Animorph is offline   Reply With Quote
Old 03-23-2010, 08:49 PM   #17
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
I think the state-based exchanges are supposed to provide access to coverage for those otherwise unable to join an employment-related group. But I have been unable to determine the timing of this, not to mention the cost.

In the end, the Act will make insurance available where it is not currently so. If you are thinking of ER in maybe 3 or 4 years I would guess you will be able to purchase health insurance. But if you want to jump sooner, you'll need to look at individual policies, joining groups if you can, etc. Just an educated guess.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 03-23-2010, 09:08 PM   #18
Thinks s/he gets paid by the post
wildcat's Avatar
 
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
Hi ML. In case you don't already know, NY is a GI state so it sort of has already taken a step towards the bill that has been passed, at least at the state level. NY premiums are already pretty high, especially depending on where you live in the state - namely NYC rates

I work in the individual market (which we are modeling to be hit pretty hard) and my belief is that it will be a wash or slightly positive for some FIRE cases as some noted.

My quick guess:

Cons
Higher rates for policies
Higher taxes to pay for the reform
Portfolio will have to be able to cover the above

Pros
Access to healthcare
Reduces the possibility of having one of those black swan health related events that could wipe you out
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
wildcat is offline   Reply With Quote
Old 03-24-2010, 01:27 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 1,012
i dont know how good it will be for ERs (or anyone for that matter) since i think there is a large probability that the part of the law that requires all people to buy health insurance will be judged to be unconsitutional. then the rest of the provisions of the law will raise the cost of insurance for everyone since the insurance companies wont get all those "new customers" (the ones that are healthy and very profitable for the insurance companies) that were gonna provide the business that was supposed to offset the added costs of insuring those people that they now wont insure. so instead of the cost of health care (including the cost of the insurance) going down it will go up significantly. not to mention the cost to the tax payers of this very large new entitlement, a double whamy to the people who are already insured right now.
jdw_fire is offline   Reply With Quote
Old 03-24-2010, 02:15 AM   #20
Full time employment: Posting here.
 
Join Date: May 2008
Location: Lexington
Posts: 714
Well, the way our legal system works, you can call anything unconstitutional and attempt to sue based on that. Health insurance is actually already mandated in a number of states by state law, and most states have some form of mandatory insurance (such as auto), so...I wouldn't jump to the conclusion it is likely unconstitutional just because it is mandatory, that is quite a reach.
plex is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Let's make a list of current healthcare inefficiencies intent FIRE Related Public Policy 30 01-15-2010 05:07 PM
Healthcare reform - a wave of early retirees? FinanceGeek Health and Early Retirement 51 07-02-2009 05:12 PM
Off To a Good Start - Does a 401(k) Make Sense For Early Retirement? JayNYC Young Dreamers 18 06-07-2008 11:53 PM
How to retire early dory36 Other topics 8 03-05-2006 09:27 AM

» Quick Links

 
All times are GMT -6. The time now is 04:25 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.