ACA or not

[golfnut]

For the last 3 yrs, we (dw, ds and me) have been covered under my former employer's retirement plan. The cost is $800 per month. Also, this coverage would be x/s medicare coverage once my wife and I reach 65. Right now we are 58 (me) and 55 (dw). Cost of this x/s cover would be $160 per month. However, my former employer makes it clear they can cancel this coverage for retirees at any time (nice of them to point this out).

ACA coverage would be approx. $300/month with the subsidy. Note we are income poor but have a decent amount of assets.

This hc stuff is such a crap shoot. What would you do if you were in our shoes?

Thanks,

 

[Hamlet]

Make sure that you compare total expected costs including co-pays and deductibles.

Most of the ACA plans have pretty high deductibles compared to many employer plans.

 

[golfnut]

Make sure that you compare total expected costs including co-pays and deductibles.

Most of the ACA plans have pretty high deductibles compared to many employer plans.

Thanks, our present plan has a annual oop of $11,200.

 

[Katsmeow]

Thanks, our present plan has a annual oop of $11,200.

Is that the out of pocket max or the deductible?

DH and I have a similar situation. We get coverage for us and kids through DH's retiree coverage through his former employer. Our premium went up about $300 a month this year and is now $780 a month. DH is on medicare. The retiree coverage is not excess for him, though. All he gets is that Megacorp pays for his Part D coverage.

We aren't entitled to any subsidies since our income exceeded subsidies limits last year. Without subsidies the retiree coverage was ahead even with the $780 a month premium (our deductible is $3000).

We are spending down taxable money this year and probably will be eligible for subsidies next year, but it is doubtful we would be eligible in future years. So, I remain undecided.

 

[golfnut]

The deductible is $5,600.

 

[W2R]

If you do this, make sure that the doctors, hospitals, and labs that you prefer are included in the ACA plan you choose.

I don't know what I would do, in your situation. Some people are waiting a year to let the initial website issues resolve, and to let the insurance companies get used to handling ACA policies so that payment issues are resolved as well.

Medicare has been great, at least so far. But ACA is still in its infancy and it is hard to know what people should expect.

 

[sengsational]

If you do this, make sure that the doctors, hospitals, and labs that you prefer are included in the ACA plan you choose.

I don't know what I would do, in your situation. Some people are waiting a year to let the initial website issues resolve, and to let the insurance companies get used to handling ACA policies so that payment issues are resolved as well.

Medicare has been great, at least so far. But ACA is still in its infancy and it is hard to know what people should expect.

You can buy the same plan through the exchange or not. Doctors and their billing lackies don't know or care if you got a subsidy.

It looks like the $800/mo from the employer matches deductable and OOP with plans available to me (and probably the OP too). So my recommendation would be if you can get a similar policy, similar network of healthcare providers, you'd be nuts not to cut your expense. Right now!

 

[AllDone]

If you drop the employer insurance now, can you reinstate it when you reach Medicare age?

 

[golfnut]

If you drop the employer insurance now, can you reinstate it when you reach Medicare age?

Unfortunately, cannot reinstate. In fact, for any employees who retired Jan 1, 2012, they discontinued coverage for medicare age.

 

[pb4uski]

You'll need to assess how this applies to your situation, but I decided to forgo subsidies in favor of doing tIRA to Roth conversions to the top of the 15% tax bracket from now until we are 70 (in 12 years). If we had kept our income low enough to get a subsidy (just under 400% FPL) we would get hammered with taxes beginning at age 70.

 

[daylatedollarshort]

I would make a spreadsheet of best case, worst case and likely total after tax medical + premium costs under various ACA plans and the employer plan and choose the one with best ROI.

For us the HSA Bronze plan came out to be the obvious choice, among the ACA plans. We did not have an employer plan in the mix. We are arranging our finances to maximize our ACA subsidies and college aid and foregoing any Roth conversions for now. Once our kids are out of college that may change.

Added -

And as someone else mentioned, you have to also make sure your ACA plan has your preferred or at least acceptable doctors and hospitals. If they don't, personally I'd stick with the employer plan, if you are happy with those doctors now. I think the extra premium cost is worth it for high quality care.

 

[MichaelB]

I would make a spreadsheet of best case, worst case and likely total after tax medical + premium costs under various ACA plans and the employer plan and choose the one with best ROI.

Post 85 in this thread has a spreadsheet, prepared by Anamorph, where you can compare total cost of various plans. http://www.early-retirement.org/for...-and-coinsurance-copay-68965.html#post1374536

 

[Fermion]

You'll need to assess how this applies to your situation, but I decided to forgo subsidies in favor of doing tIRA to Roth conversions to the top of the 15% tax bracket from now until we are 70 (in 12 years). If we had kept our income low enough to get a subsidy (just under 400% FPL) we would get hammered with taxes beginning at age 70.

It would be a hard call for me to give up free money and also pay tax now for the chance at paying a lower tax rate at age 70.

 

[Corporateburnout]

I will be retiring in June and will have current healthcare coverage through my employer until March 2015. I will have the Cobra option available at $900/month for DW and I. So far of the plans available in my state that accept my current doctors and healthcare professionals the premiums less subsidy are about the same as Cobra. Unless things change between now and March I plan to use Cobra for the first 18 months of coverage then switch to an ACA plan for a couple of years before Medicare kicks in.

 

[Rpharmer]

For the last 3 yrs, we (dw, ds and me) have been covered under my former employer's retirement plan. The cost is $800 per month. Also, this coverage would be x/s medicare coverage once my wife and I reach 65. Right now we are 58 (me) and 55 (dw). Cost of this x/s cover would be $160 per month. However, my former employer makes it clear they can cancel this coverage for retirees at any time (nice of them to point this out).

ACA coverage would be approx. $300/month with the subsidy. Note we are income poor but have a decent amount of assets.

This hc stuff is such a crap shoot. What would you do if you were in our shoes?

Thanks,

I too am income poor but have decent assets. This allowed me to get a premium BCBS Silver policy for $159/mo. Deductible (met) is $250. OOPmax (also met, as of this week) is $500. I knew I needed some out-patient surgery, so this all worked out very well. Doctor's office staff was all a-buzz when they saw the EOB estimate. I'll have no more medical expenses for 2014 -- but a great deal of scheduled health care and prescriptions. Plus, 100% coverage for the unexpected. Recall that this is a "true" out-of-pocket max, so even copayments and coinsurance are eliminated. You just pay your premiums.

Doing the Roth conversions (to get a taxable income to reach $14,000) is an added bonus, as this should reduce my MRDs and taxes come age 71 "and a half." (My state did not expand Medicaid.)

Point is, if you are income poor, but have enough assets to Roth convert, I wouldn't overlook the opportunities of cost-sharing via a Silver plan. There may be better options in individual cases, of course -- but I certainly could not have asked for a better outcome.

 

[golfnut]

Thanks to everybody who has responded here. This is such a great forum. I knew pretty much there would be no black and white answers to our situation. As I said, hc is a (necessary) crapshoot.

 

[pb4uski]

It would be a hard call for me to give up free money and also pay tax now for the chance at paying a lower tax rate at age 70.

I never said it was an easy decision!

In our case it was very highly likely that we'll be in a much higher tax bracket once we are in our 70s. Probably even more likely that we'll make it to our 70s. But given longevity in both our families I think it was the right call.