Has the Threat of ACA Pushed People Toward Retiring "Overseas"?

[pb4uski]

I don't get it. Right now if you retire, you get no subsidy. How is this different with ACA?

It seems like with ACA, you should be better off, since you might be able to get a subsidy. If not every year, then every other year if you manage your income right.

I don't see how this can be any worse than what exists today, assuming that HI policies cost about the same. But maybe I'm missing something...

I think what he is saying is that health insurance premiums will be more expensive than today (which is probably true) and if you don't qualify for the subsidy then you are worse off.

But you're right in that it might be best to take enough out of tax deferred accounts to cover multiple years of living expenses as long as the tax bite is not too much and then get the benefit of the subsidy for the years you live off that stash.

 

[M Paquette]

Sengsational, I don't think you've explained why you think the ACA might push people toward retiring overseas. At present, retirees without health insurance through their former jobs either have to pay a lot for it, or they are unable to get health insurance. After the ACA goes fully in effect next year, at least early retirees who can't get health insurance at present will finally be able to get it. If anything, it seems to me it would reduce the number of retirees who would be inclined to move overseas mainly for health care reasons.

Precisely. Because of the ACA, I'm not bothering to chase down paperwork to demonstrate Swiss family ties any more. That was one of the plans when I couldn't qualify for individual medical insurance back when I was on the COBRA group coverage continuation. I was also exploring becoming a very small business to get group coverage for the three of us.

This isn't a problem with the 'guaranteed issue' nature of coverage under the Affordable Care Act. In addition, the strict restrictions on recession (now only allowed for actual fraudulent applications) mean that I don't have to worry about losing coverage from some omission of a childhood problem should I be diagnosed with some [-]expensive[/-] serious problem and have an eager [-]loss mitigation specialist[/-] claims agent processing my paperwork.

 

[M Paquette]

I think what he is saying is that health insurance premiums will be more expensive than today (which is probably true) and if you don't qualify for the subsidy then you are worse off.

I suspect that with the ACA health insurance premiums will be more expensive next year than this year. I also suspect that without the ACA, health insurance premiums would be more expensive next year than this year.

I'm not sure why I might possibly suspect such a thing, though...

 

[FIREd]

I suspect that with the ACA health insurance premiums will be more expensive next year than this year. I also suspect that without the ACA, health insurance premiums would be more expensive next year than this year.

I'm not sure why I might possibly suspect such a thing, though...

I think that what pb4 was saying is that some people can currently buy cheaper policies than what will be offered under ACA. For example, I can currently get an Anthem PPO insurance policy in California for DW and me for $600 a month (0% co-insurance, $5,500 deductible). Covered California says that under ACA we can expect to pay $1,149 a month with a $12,800 out-of-pocket maximum.

 

[Katsmeow]

I think that ACA would make it more likely that people wouldn't retire overseas. That is, currently, some people under Medicare age may feel that they have to retire overseas because they can't get insurance in the US. Under ACA, they will now be able to obtain insurance that they couldn't obtain before so might be able to stay in the US.

 

[sengsational]

Sengsational, I don't think you've explained why you think the ACA might push people toward retiring overseas. At present, retirees without health insurance through their former jobs either have to pay a lot for it, or they are unable to get health insurance. After the ACA goes fully in effect next year, at least early retirees who can't get health insurance at present will finally be able to get it. If anything, it seems to me it would reduce the number of retirees who would be inclined to move overseas mainly for health care reasons.

From what I understand, there are plenty of folks who moved overseas after retiring early in order to live a more affordable (and more adventuresome) life. Part of the cost equation is health care. Most of the discussion is about where to get world class health care, but not pay US prices for it.

I didn't go back and read post 1, but I think I said that if someone had no plans for living overseas, I didn't expect this topic to tip the scales. Also, I think I said something about not just needing a year or two in order to get to Medicare. And if I didn't say it, I meant to say too that your lifestyle and your asset profile might make it hard to manipulate under the subsidy cliff.

Imagine a 55 year old couple that's already sort of adventuresome and likes to travel. No pre-existing condition issue, so could get HI overseas for really cheap. They would be spending a lot and pulling from accounts that will show as income, so might not be able to juggle the subsidy manipulation as easily as those with a more favorable asset layout and a lower spending rate. It just seems to me that a couple like that might look at the (likely) higher cost of HI next year and just say, "FIREOS!"

--Dale--
(that would be "O"ver "S"eas)

 

[sengsational]

(PDF document) http://www.ifhp.com/documents/2012iFHPPriceReportFINALMarch25.pdf

I just scanned through and picked out France to compare to the US. I'm wondering if they have an axe to grind because the US is the only country that has 25th percentile, average, and 95the percentile shown. So, looking only at average for the US, it looked like the US was twice to three times France, in general. From what I understand, you get good healthcare in France, as good as the US.

One thing I noticed...there was one procedure where the US was less than twice France: colonoscopy! Maybe they figure the other procedures do that financially

 

[donheff]

From what I understand, there are plenty of folks who moved overseas after retiring early in order to live a more affordable (and more adventuresome) life. Part of the cost equation is health care. Most of the discussion is about where to get world class health care, but not pay US prices for it.

I didn't go back and read post 1, but I think I said that if someone had no plans for living overseas, I didn't expect this topic to tip the scales. Also, I think I said something about not just needing a year or two in order to get to Medicare. And if I didn't say it, I meant to say too that your lifestyle and your asset profile might make it hard to manipulate under the subsidy cliff.

Imagine a 55 year old couple that's already sort of adventuresome and likes to travel. No pre-existing condition issue, so could get HI overseas for really cheap. They would be spending a lot and pulling from accounts that will show as income, so might not be able to juggle the subsidy manipulation as easily as those with a more favorable asset layout and a lower spending rate. It just seems to me that a couple like that might look at the (likely) higher cost of HI next year and just say, "FIREOS!"

--Dale--
(that would be "O"ver "S"eas)

You have just described a situation that does NOT add to the reasons to move overseas. The couple you described would not get affordable, world-class insurance in the US before ACA and might, or might not get affordable, world-class insurance in the US after ACA. In the search for affordable, world-class insurance ACA does nothing but improve their odds. They may qualify for subsidy and, if not, HI may cost more than a cheapo, limited policy today but it is more likely to at least approach that world-class caveat you posited than today's limited policy. And, even more important, it will definitely be available regardless of the individual's health status.

Now, if you believe that ER'd individuals making too much for a meaningful subsidy are better off with limited, but cheaper policies than more comprehensive but potentially more expensive policies under ACA, then maybe you have a point. But in that case forget the affordable, world-class alternative for pre-ACA in the US.

 

[sengsational]

The couple you described would not get affordable, world-class insurance in the US before ACA...

Affordable is relative to means. I'd rather go with "reasonably priced". Yes, most everyone in the US fails in the reasonably priced category (just look at that PDF of procedure costs by country posted earlier).

From what I can gather, it looks like the example couple would pay about 50% more for similar coverage next year under ACA (not currently grandfathered). That, compared to reducing insurance cost by 50% (probably more), by living overseas and getting an international policy. If the location is chosen wisely, they could get health care, should they even need it, at world-class facilities. So if they were already thinking about going the expat route, this might get them off the fence.

 

[donheff]

From what I can gather, it looks like the example couple would pay about 50% more for similar coverage next year under ACA (not currently grandfathered).

I have not read anything that shows that a typical ER age couple will pay double for what they get now. More for a more comprehensive policy, yes but not more for a similar policy. Please tell us where your info comes from.

 

[sengsational]

I just realized how my dad, now 85, ended-up getting his two big cost medical procedures...he did the local doctor thing for a while, then flew up to the Mayo Clinic for the second opinion. And then he stayed there for the operation, hehe. Based on that, presuming you could find an institution in a foreign country that you trusted to do good work, you could get an international policy and fly to, say, Panama, to get your operation, if you needed one. I'm not sure that would work or not, though. I know the international policy will not allow you to get medical services in the US, but they might not care where you reside, as long as you show up at the right place to get treated when the time comes. Obviously if your left arm starts bugging you, you won't hop a plane to Panama! hehe! So you'd be self-insured in the case of emergency room stuff. But if you're, say, 55 and healthy, maybe that's a risk you're willing to take instead of paying a lot every year for ten years for something you're unlikely (more unlikely than average) to use. I guess you'd still pay something, that is, the penalty for not buying into the ACA scheme. And you could do an extended vacation somewhere and do the routine preventive stuff out of pocket for a small fraction of what it would be in the US.

 

[sengsational]

I have not read anything that shows that a typical ER age couple will pay double for what they get now. More for a more comprehensive policy, yes but not more for a similar policy. Please tell us where your info comes from.

I said 50% more (not double). It comes from a single data point (what some friends of mine are paying) and what I figure (admittedly a wild guess) the exchange policy will cost. Even if it's the same year over year, that's only half of the consideration. The other half is how much less expensive health care is everywhere else in the world. That's a fact. Do people want to hassle with getting health services elsewhere? Maybe not. In fact, for the majority, probably not.

Beyond the single data point, my prediction that the cost will go up for my friends is based on macro economics. We have the same number of doctors, hospitals, nurses, but more people using those entities. That's what this whole thing is about...bringing more people into the system to get preventive care instead of waiting until they're about to croak to hit the emergenty croom and then get treated in a more expensive way. So more demand (more people using heath care), same capacity to serve, higher prices. Supply and demand. I'd think it would be just wonderful be wrong about this! We'll see.

 

[pb4uski]

It looks like my premiums will be ~35% higher than current, but after subsidies my net cost will be ~22% lower. For a 57 yo couple.

 

[donheff]

I said 50% more (not double). It comes from a single data point (what some friends of mine are paying) and what I figure (admittedly a wild guess) the exchange policy will cost. Even if it's the same year over year, that's only half of the consideration. The other half is how much less expensive health care is everywhere else in the world. That's a fact. Do people want to hassle with getting health services elsewhere? Maybe not. In fact, for the majority, probably not.

I doubt you would find current evidence for a big rise like that for most people on equivalent policies. Certainly not enough to run away from the US. I have read predictions of future increases in exchange rates (largely based on predictions of pool imbalances from sick people signing up and healthy taking the penalty) but nothing that supports major increases to date. We will see over the next few years.

Beyond the single data point, my prediction that the cost will go up for my friends is based on macro economics. We have the same number of doctors, hospitals, nurses, but more people using those entities. That's what this whole thing is about...bringing more people into the system to get preventive care instead of waiting until they're about to croak to hit the emergenty croom and then get treated in a more expensive way. So more demand (more people using heath care), same capacity to serve, higher prices. Supply and demand. I'd think it would be just wonderful be wrong about this! We'll see.

I recognize that you haven't explicitly said anything about opposing extending health care coverage to your fellow citizens but the above paragraph (coupled with the OP) feels like it counsels that. Screw the poor SOBs with little money or pre-existing conditions, should we bail on the US rather than help them out?

The prediction of huge price hikes due to demand caused by all of these under-served masses flies in the face of claims from many Obamacare opponents who say those folks are currently getting decent major care through emergency rooms. If you agree that they are not, why not do the charitable thing and change the system so they do get care?

 

[sengsational]

It looks like my premiums will be ~35% higher than current, but after subsidies my net cost will be ~22% lower. For a 57 yo couple.

Thanks for that additional data point.

I doubt you would find current evidence for a big rise like that for most people on equivalent policies. Certainly not enough to run away from the US. I have read predictions of future increases in exchange rates (largely based on predictions of pool imbalances from sick people signing up and healthy taking the penalty) but nothing that supports major increases to date. We will see over the next few years.

Yep, That seems to be the result of most of these discussions...we just don't know yet.

I recognize that you haven't explicitly said anything about opposing extending health care coverage to your fellow citizens but the above paragraph (coupled with the OP) feels like it counsels that. Screw the poor SOBs with little money or pre-existing conditions, should we bail on the US rather than help them out?

I certainly didn't say anything like that. The system, as defined, will cause people to alter their behavior. Maybe just a little bit (duck under the 400% FPL), or something more drastic, like "to run away from the US".

The prediction of huge price hikes due to demand caused by all of these under-served masses flies in the face of claims from many Obamacare opponents who say those folks are currently getting decent major care through emergency rooms. If you agree that they are not, why not do the charitable thing and change the system so they do get care?

I am not 'for' or 'against' anything in this thread. I accept that there exists "the law of the land". I expect that most people will be "looking out for number one", rather than make an attempt to be charitable. Charity, after all, is not taken by force (laws with penalties attached). My interest is to see what options people might chose, given the laws that are on the books.

My (admitedly uninformed) opinion is that there will be higher demand once people have insurance, beyond the emergency room "disease care" they get today. After all, they paid for the insurance, and they are going to expect something back for it. But again, we shall see.

 

[sengsational]

I think that ACA would make it more likely that people wouldn't retire overseas. That is, currently, some people under Medicare age may feel that they have to retire overseas because they can't get insurance in the US. Under ACA, they will now be able to obtain insurance that they couldn't obtain before so might be able to stay in the US.

Maybe it would be a wash, then. Those folks with pre-existing conditions that would have retired overseas will stay in the US, and those folks that are without pre-existing conditions, will take their place, hehe.

 

[anethum]

The title of this thread, "Has the Threat of ACA Pushed People Toward Retiring "Overseas"?" could also have been written "Will the Promise of ACA Allow People to Remain in the U.S. After Retirement?" or "Will the Promise of ACA Allow More People to ER?" (emphasis mine).

One aspect of the law which isn't mentioned often, is that many healthy people who are currently uninsured will be purchasing insurance, and those folks will counterbalance those who are currently unable to get insurance. Many people seem to be assuming that the new law will only result in additional sick people getting insurance.

I've seen lots of speculation in this forum about the new law, but the simple truth is that no one knows how the new law will play out. We'll know for certain what premiums look like for 2014 beginning this fall, but I suspect it will take another year after insurance companies have actual claims experience under the new law before we get a more accurate picture of what prices will look like going forward. Health providers, particularly hospitals, will probably see a significant reduction in cases for which they presently receive no payment, and who knows how that might affect hospital charges going forward.

Some aspects of the law are unquestionably beneficial for retirement planning, specifically the elimination of lifetime caps, and making it illegal for insurers to drop policyholders if they become sick.

I would also expect that Congress will tweak the law in the future. For example, aspects such as subsidies and tax penalties for the uninsured could see changes in the next few years. Time will tell.

 

[sengsational]

The title of this thread, "Has the Threat of ACA Pushed People Toward Retiring "Overseas"?" could also have been written "Will the Promise of ACA Allow People to Remain in the U.S. After Retirement?" or "Will the Promise of ACA Allow More People to ER?" (emphasis mine).

I just got done reading about how one could live overseas and get world class healthcare for a small fraction of the price that is charged in the US. That, on top of the buzz about how quite a few people are engineering their finances to come in under 400% of the FPL suggested to me that the pricing for the policies on the exchanges are going to be higher than the same coverage today (yes, if you can get it). Unscientific, unreliable numbers I'm going with are 35% to 45% higher. Other people might use other numbers to plan with, but I think these numbers used for my planning, are better than 0% increase. How about "Have the (presumed) Pricing Aspects of the ACA Pushed Pushed People Toward Retiring "Overseas"?"

One aspect of the law which isn't mentioned often, is that many healthy people who are currently uninsured will be purchasing insurance, and those folks will counterbalance those who are currently unable to get insurance. Many people seem to be assuming that the new law will only result in additional sick people getting insurance.

Good point. I think that the assumption may be that middle class and better folks without pre-existing conditions might have already been able to find reasonably priced coverage, so are already in the system. Those are the ones that will most likely be paying more once they're placed in a group of users from the exchanges (generally less healthy group). Like any insurance, those that can benefit the most will jump at the chance to buy-in, and those that don't foresee much benefit will be less likely to buy-in (pay the IRS penalty tax).

I've seen lots of speculation in this forum about the new law, but the simple truth is that no one knows how the new law will play out. We'll know for certain what premiums look like for 2014 beginning this fall, but I suspect it will take another year after insurance companies have actual claims experience under the new law before we get a more accurate picture of what prices will look like going forward. Health providers, particularly hospitals, will probably see a significant reduction in cases for which they presently receive no payment, and who knows how that might affect hospital charges going forward.

Agreed. 2014 will be a shake-out period. Only in the fall of 2014 will we see where things will start to settle out.

Some aspects of the law are unquestionably beneficial for retirement planning, specifically the elimination of lifetime caps, and making it illegal for insurers to drop policyholders if they become sick.

Absolutely! Hopefully these aspects of the law will not get changed.

I would also expect that Congress will tweak the law in the future. For example, aspects such as subsidies and tax penalties for the uninsured could see changes in the next few years. Time will tell.

I certainly expect that there will need to be changes. I dread the hours of talking heads and whining that will probably be required to get the changes, though.

 

[gerrym51]

for those looking for a subsidy-at least based on california-the prescription co-pays are pretty high.

although people do visit doctors for services obviously- the big day to day rx co-pays add up.

if your a relatively big prescription filler it might be more beneficial to trade up to a gold or platinum plan depending on your prescription use

 

[Khufu]

Might those that FIREd, or are planning on it soon, and are a long way from Medicare considering bailing out of the whole obamacare thing by just getting heath insurance and healthcare outside of the US?

For instance, according to Kathleen Peddicord in How to Retire Overseas, you can get HI in Panama for $150/mo with a $300 deductable. She went to the ER for an infected spider bite that set her back a grand total of $70, including an English speaking doctor, blood work and injections. She also talks about "Bupa International" who sells a policy for a 60 year old couple living in Panama for $181/mo that has a $3,400 deductable. If the couple is 70, it's $379/mo.

I'm not saying that those that never considered travel suddenly put this on the list of possibilities, but for folks on the fence, it might make a lot of sense to put ACA into the equation and you might find yourself with an umbrella drink in your hand and much more money in your pocket.

--Dale-

You have it backwards. It's the high cost of US health care that offers an advantage for an American to retire abroad. The ACA is an effect, not the cause, of the high cost of US health care.

Here is a comparison of the costs to deliver a baby among some highly developed countries. Hard to blame the ACA for that.

http://economix.blogs.nytimes.com/2013/03/29/u-s-health-care-prices-are-the-elephant-in-the-room/