Fear ACA will be repealed at some point - how do you "plan" for that?

[Corporateburnout]

Just be sure to factor in the 5.15% flat income tax, car/boat excise tax and 6.25% sales tax before you load up the truck!

We could do much worse. We're #33 in sales tax and we're in the middle of the pack for overall tax burden.

United States Of Taxation 2014: Here Are The Best And Worst States For Consumption Taxes, Total Tax Burden
States With the Highest (and Lowest) Taxes - 24/7 Wall St.

 

[EastWest Gal]

Medical underwriting is politically unpopular enough that it seems to me extremely unlikely that it will return. In my case, worst thing is that I could stop doing Roth conversions and go on Medicaid.

You won't be able to go on Medicaid. The old Medicaid rules had an asset test which all of us would flunk in spades.


Sent from my iPhone using Early Retirement Forum

 

[pb4uski]

You won't be able to go on Medicaid. The old Medicaid rules had an asset test which all of us would flunk in spades.


Sent from my iPhone using Early Retirement Forum

Are you sure? Bye-Bye Medicaid Asset Test* | The Incidental Economist

When I was trying to use our state exchange I was accidentally on Medicaid.... never was I asked about assets... they did eventually take me off.

 

[jim584672]

Are you sure? Bye-Bye Medicaid Asset Test* | The Incidental Economist

When I was trying to use our state exchange I was accidentally on Medicaid.... never was I asked about assets... they did eventually take me off.

Asset tests still exist under "old" Medicaid. Since ACA repeal would repeal the "new" rules, only the "old" rules will remain.

 

[Fermion]

Asset tests still exist under "old" Medicaid. Since ACA repeal would repeal the "new" rules, only the "old" rules will remain.

If the ACA repeals all of the "new" rules then people with preexisting conditions will be out on the street so to speak. If it gets to pick and choose which parts are kept and which are repealed, it is quite possible the Medicaid asset test doesn't come back.

Either way it is going to be a HUGE mess if it is repealed.

 

[ziggy29]

When I was trying to use our state exchange I was accidentally on Medicaid.... never was I asked about assets... they did eventually take me off.

I don't know if the Marketplace would ask about that or not, or if the state Medicaid administrators would do that. In any case, I believe the asset tests for Medicaid only apply to folks over 55.

 

[jim584672]

I don't know if the Marketplace would ask about that or not, or if the state Medicaid administrators would do that. In any case, I believe the asset tests for Medicaid only apply to folks over 55.

Actually for folks 65 or greater, disabled, or blind still have asset tests, the new law adds the 18-64 group with only an income test. I think the reason is long term nursing home care is the reason the 65+ group has an asset test, to make sure the person is made destitute before they start paying for anything.

 

[GTFan]

True, but I'm not aware of anyone who proposes repeal and do nothing.. which was my point (and what the CBO analysis was based on).

Without consensus on a replacement, repeal is effectively dead IMO. No one is seriously going to tell millions of people to go pound sand so at this point it's all just posturing for next year's elections. And no future president is going to sign a repeal-only bill, doesn't matter what party they're in.

 

[ziggy29]

Without consensus on a replacement, repeal is effectively dead IMO. No one is seriously going to tell millions of people to go pound sand so at this point it's all just posturing for next year's elections. And no future president is going to sign a repeal-only bill, doesn't matter what party they're in.

This is my hope, and is likely reality. I suspect a lot of folks, myself included, are certainly open to significant reforms of the ACA but "repeal now and we'll give you a rain check on new reforms in the future" is not remotely an acceptable option IMO.

 

[easysurfer]

How do I plan? I eat my fruits and vegetables.

Not trying to be cute (well, maybe a little). I FIRE'd pre-ACA and was healthy and fortunate enough to get my own health insurance without any pre-existing conditions. Thus, if ACA does get repealed and we are back to the way things were, then hopefully, I'd be able to get insurance again at least until Medicare.

Of course, this is a far stretch as who knows what is the outcome if there is a true attempt to repeal. Thus, in the meantime, mostly just wait and see at least until after the next Prez gets chosen and look at the climate then.

 

[youbet]

Agreed. I need to run the numbers/projections on that. We wouldn't be ready right now at full premium level, but I'm pretty sure we'll be there in 2 years.

I hope! If not, well, better to accept reality and adjust our plans.

Lots of us already FIRE'd geezers waited until Medicare or until MegaCorp retiree HI would kick in, etc., so we understand your pain. I think your likely worse case scenario with the ACA guaranteeing you access but perhaps with reduced or eliminated subsidies isn't too onerous. You and DH would still be in your early 50's when you pull the switch. Not bad!

My wish would certainly be that all aspects of ACA work out for you. But we seem to agree that betting the farm on the subsidies staying intact might be a tad risky since you're a long way from Medicare.

 

[ziggy29]

Not trying to be cute (well, maybe a little). I FIRE'd pre-ACA and was healthy and fortunate enough to get my own health insurance without any pre-existing conditions. Thus, if ACA does get repealed and we are back to the way things were, then hopefully, I'd be able to get insurance again at least until Medicare.

That plus living right and praying that you don't develop an expensive condition in the meantime...

 

[daylatedollarshort]

That plus living right and praying that you don't develop an expensive condition in the meantime...

Or get hit by a drunk driver.

 

[audreyh1]

Or get hit by a drunk driver.

Or have a bicycle accident.

 

[travelover]

Or have a bicycle accident.

Or fall off a ladder. Husband of a friend has turned into a zombie after his closed head injury.

 

[simple girl]

Lots of us already FIRE'd geezers waited until Medicare or until MegaCorp retiree HI would kick in, etc., so we understand your pain. I think your likely worse case scenario with the ACA guaranteeing you access but perhaps with reduced or eliminated subsidies isn't too onerous. You and DH would still be in your early 50's when you pull the switch. Not bad!

My wish would certainly be that all aspects of ACA work out for you. But we seem to agree that betting the farm on the subsidies staying intact might be a tad risky since you're a long way from Medicare.

Agree on all points!

 

[kevink]

somewhat similar situation

Lots of great comments here.

My wife and I left the full-time working world earlier than we should have and have been living on a SS-level "draw" from assets for quite awhile. Pre-ACA the amount we were spending (even though healthy) for an ultra high-deductible health plan left us with little leftover for actual medical and dental care, so we hightailed it to Mexico for 3 years where we could both afford insurance and eas afford routine care. We are only back in the U.S. because of ACA.

Due to our low taxable income it's a year-by-year thing whether we are on Medicaid or on a highly subsidized ACA plan. We made sure to pick a "blue" state and the insurance co-op we had our policy with this year is one of the 11 or 12 who are going out of business, so it's been another mad scramble during open enrollment.

We are still a long way away from Medicare eligibility ourselves and are highly unlikely to be able to find work that would give us insurance coverage so for lack of any other choice we look at ACA on a year at a time basis. If key parts of the law are repealed, or if the combined deductible and total out-of-pockets costs get high enough that we can't handle the financial exposure we'll move back to Mexico at least until we're both 65, and plan on doing so in any case should either of us ever need assisted living or nursing home care. We have a network of doctors and hospitals in the Lake Chapala area we know well and have received care there that's easily the equal of the best we've had in the U.S., at 10-20% of the cost.

Not a "Plan B" that will have mass appeal, obviously, but it works for us.

 

[razztazz]

Without consensus on a replacement, repeal is effectively dead IMO. No one is seriously going to tell millions of people to go pound sand so at this point it's all just posturing for next year's elections. And no future president is going to sign a repeal-only bill, doesn't matter what party they're in.

I don't competely agree. Who are these newly insured people? How are they distributed? What states and districts do they live in? They are almost all poor or lower middle/working class. Not a lot of voter turnout there. They can be statistically neutralized.

Definitely true no one will actually run on a repeal-only platform but afterwards it's a roll of the dice as I see it. They already tell lots of people to go pound sand on any number of other issues. If I were affected by this I would be on "Condition Orange" or something

 

[Fermion]

They are almost all poor or lower middle/working class. Not a lot of voter turnout there. They can be statistically neutralized.

If things were that simple we could have gotten rid of SSI and SSDI ages ago. Those people rarely vote at all!

 

[razztazz]

If things were that simple we could have gotten rid of SSI and SSDI ages ago. Those people rarely vote at all!

Good pernt but even the Money Interests have a stake in keeping "Those People" off the streets. At least in sufficient numbers. The medical insurance improvements are not so entrenched and the current fix is not of such long standing. They don't have to completely end or repeal anything. just "tweek" it. Give everybody a $1500.00 voucher and remove the requirement to cover existing conditions. Sounds draconian. And that'll do. I am not assuming the floor will cave in but I do expect the attempt.

 

[AllDone]

I don't competely agree. Who are these newly insured people? How are they distributed? What states and districts do they live in? They are almost all poor or lower middle/working class. Not a lot of voter turnout there. They can be statistically neutralized

I'm one of "those people". I think that most people would class me as "rich" rather than "poor" or "working class". I know a lot of people both here and IRL who have had their access to HI guaranteed by the ACA and have used that security to retire or leave corporate life to start businesses. I've seen healthy young people born with congenital diseases that caused them to reach their lifetime cap as toddlers given the gift of access to HI. I've seen young millenials receive covered emergency care through their parent's insurance. I've seen people with pre-existing conditions in their families be able to leave large corporate employers for smaller businesses. I've seen people who were uninsured receive HI through their small business employer. I've seen lower income people who buy individual insurance receive part of the tax break that wealthier workers have long receive through their employer provided insurance.

You are quite mistaken in your understanding of what the ACA means to people.

 

[brucethebroker]

As a former health insurance agent, my opinion is that most people who object to Obamacare are most concerned about 2 issues: being forced to buy insurance when they"don't need it", and the cost of the subsidies to lower income people and insurance companies. Many taxpayers are furious, and have let their representatives know it.

The insure-ability issue is most likely history. I say that because much of the damage has already been done. Many people formerly without insurance, who put off serious operations, etc. for years rushed to get treatment soon after ACA was adopted. They worst may be behind us on that score. And, the longer ACA is on the books, it would seem that the easier it will be for actuaries to determine future usage of those covered.

If the ACA is ever repealed, and insure-ability becomes an issue, I would expect the government to put together another COBRA type safeguard for individual policy holders. But like COBRA, it may not be cheap.

 

[aja8888]

........................(snip) But like COBRA, it may not be cheap.

Let me also add that ACA coverage is not necessarily "cheap" for many. One I know, in particular, is a single, healthy, under 40 years old family member that makes about $25,000 per year (gross wages) and ends up paying close to $150/month in premium with a $6,350 deductible, co-pays, etc. That's over 25% of gross wages. And according to the deal this year, her doctor is opted out of the ACA game, like many are doing.

 

[simple girl]

So I went to healthcare.gov and looked at what plans would cost us without ACA subsidies if we were to retire 2016, in Florida (where we plan to relocate to) but at our projected ages in 2 years (50 and 54).

The cheapest combo of premiums plus max OOP came to a total of $19,680 per year.


I know we won't necessarily hit out max OOP each year, but I thought it would be comforting to model a "worst case scenario" and see if our portfolio could handle it.

I added this amount to the rest of our projected budget, and ran FIRECalc with all of our other data.

FIRECalc says we would have a 95% success rate for a budget $1500 lower than the projected worst case scenario budget, assuming social security is still in effect by the time we hit normal retirement age (not asking for speculation on that. I don't want to stir any more political hornet nests, lol.)

This was very comforting to me, even though it wasn't 100% at the full projected worst case scenario budget. I figure:

1) In any year we hit max OOP on medical costs, we can always decrease our spending in other areas - I have $5K allotted to travel, so we would take it from there.

2) The likelihood of continuing to hit max OOP year after year is relatively low....knock on wood. Even so, it could happen. It gives me comfort to at least plan for worst case scenario and see that it is possible to handle it, with adjustments to our spending. I would rather have more padding in the budget, but, right now it feels like I'd be willing to take the risk. We will see in 2 years if I still feel the same way.

3) We have two more years to see how much our investments grow and also see how much hubby's pension and our SS amounts grow. Those amounts will certainly affect FIRECalc results and hopefully will increase the amount we can safely withdraw.



Thanks to all so much for all of your insights - love this board!

 

[MichaelB]

So I went to healthcare.gov and looked at what plans would cost us without ACA subsidies if we were to retire 2016, in Florida (where we plan to relocate to) but at our projected ages in 2 years (50 and 54).

The cheapest combo of premiums plus max OOP came to a total of $19,680 per year.


I know we won't necessarily hit out max OOP each year, but I thought it would be comforting to model a "worst case scenario" and see if our portfolio could handle it.

That is a very good approach for contingency planning.