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Healthcare premium for early retirees under PPACA
Old 11-14-2012, 12:02 AM   #1
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Healthcare premium for early retirees under PPACA

This may be obvious now for early retirees. I am estimating 20K for health care premium with a family of 4. Now that PPACA is a sure thing (?), if I keep my early retirement income below 92K annually (with dividend/interest/ROTH conversion), I see that the actual premium after subsidy is $8,740 from the calculator. This makes quite a difference for me.

Health Reform Subsidy Calculator - Kaiser Health Reform

Am I safe to use this amount to estimate my healthcare expense, or are there other health related costs that I am not aware of?
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Old 11-14-2012, 12:15 AM   #2
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Am I safe to use this amount to estimate my healthcare expense, or are there other health related costs that I am not aware of?
Check the notes on the calculator for information about your maximum out-of-pocket (OOP) costs. Also, costs vary according to whether you live in a high, medium, or low cost area (as MichaelB recently pointed out, these haven't been delineated for us yet).
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Old 11-14-2012, 09:31 AM   #3
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Yeah, I'll echo the max out of pocket for planning.

Premiums are just one part, but what if you are hitting max out of pocket?

Since you have a family plan, consider that at least one of you get some chronic condition requiring max OOP every year. Don't think it can happen? Think again. A young man I w*rk with is max OOP every year due to a very treatable, non-fatal condition that requires 4 courses of medication per year, at 3k per pop. He's fine, very healthy, but has this nagging issue of reaching max OOP every year. He didn't see it coming either. It just happened with no family history.

To me, that's the safest way to plan.
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Old 11-14-2012, 09:41 AM   #4
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Very good point about the OOP cost.

I am using 'family of 4', and 'Higher cost factor', and see premium $8,740, and OOP $8,333. This brings up to $17,000 for my planning. Slightly lower than my original estimation. At least it is not more expensive, I hope.
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Old 11-14-2012, 09:47 AM   #5
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One approach would be to budget the premium as an ongoing expense, assuming inflation, nad put the OOP amount in a segregated interest bearing account, or CD or something. As you draw down the OOP, you could replace it, but you'd never have to worry about it.
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Old 11-14-2012, 11:44 AM   #6
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Look at your OOPs over the last few years. I budget premiums plus a few thousand for OOP since we are healthy, but I certainly know that if one of us were to develop a chronic illness that my OOP budget would be too light.
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Old 11-14-2012, 11:56 AM   #7
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The Kaiser site only gives you an option for an individual or a family of four. The subsidy is based upon poverty level. With a family of two (can't remember if you have kids or not) you need to keep income below $60,500 to get the subsidy. I use this calcultor that gives a family of 2 option

National Health Care Calculator
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Old 11-19-2012, 02:59 PM   #8
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I know that income is household income and is based upon MAGI, which includes social security benefits. Can anyone give me a clue where to verify the premium for an individual in a household of two where one of the people is eligible for medicare and the other has to do PPACA? How is the premium determined when the household is two and only one needs insurance. The PPACA will not allow for the filing of separate tax returns. Anyone? Thanks, Joe
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Old 11-19-2012, 03:14 PM   #9
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Originally Posted by Live And Learn View Post
The Kaiser site only gives you an option for an individual or a family of four. The subsidy is based upon poverty level. With a family of two (can't remember if you have kids or not) you need to keep income below $60,500 to get the subsidy. I use this calcultor that gives a family of 2 option

National Health Care Calculator
Based on this information it would appear that you would be better off with a high premium, low deductible policy rather than a lower premium, high deductible. You would get a better policy at a lower cost when factoring in the subsidy. Is this correct?
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Old 11-19-2012, 03:33 PM   #10
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I know that income is household income and is based upon MAGI, which includes social security benefits. Can anyone give me a clue where to verify the premium for an individual in a household of two where one of the people is eligible for medicare and the other has to do PPACA? How is the premium determined when the household is two and only one needs insurance. The PPACA will not allow for the filing of separate tax returns. Anyone? Thanks, Joe
This another one of those really good questions that need ironing out over the next 59 weeks.

I can envision a large percentage of families (myself included) in this situation and my guess is that they'll have some check-box somewhere that will accomodate the problem.

What I've done to get an idea of the premium is to just enter '1' on the Berkeley calculator and halved my income.
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Old 11-20-2012, 06:21 AM   #11
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I have Megacorp subsidized HDHP and HSA. DW has Medicare A and B due to disability. I budget for HI premiums, Medicare Premiums, OOP max of $10k plus extra for vision and dental and stuff that is not covered. Total is about $16k/year, including max contribution to HSA.
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Old 11-20-2012, 12:00 PM   #12
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I know that income is household income and is based upon MAGI, which includes social security benefits. Can anyone give me a clue where to verify the premium for an individual in a household of two where one of the people is eligible for medicare and the other has to do PPACA? How is the premium determined when the household is two and only one needs insurance. The PPACA will not allow for the filing of separate tax returns. Anyone? Thanks, Joe
I have been looking for the answer to this question, too. For us the situation is that DH will have health care insurance through his pension plan. The pension plan is transitioning to NO COVERAGE for spouses so I'm looking to use PPACA in 2014 or 2015.

How is this handled in Massachusetts? If we can only buy coverage through PPACA for both of us we may just drop DH's plan through his pension. Hate to do that because it's affordable and very good coverage.
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Old 11-20-2012, 01:33 PM   #13
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Interestingly I ran the Kaiser premium tool with the following parameters

income $30k
single adult
age 52
high cost area

the premium was calculated at $9k of which I'd pay $2.5k

Under current MA system Commonwealth Care, and using the same inputs, the premium is $1.2k

Now if my income is $60k the Kaiser calculation has me paying the entire $9k premium and has an OOP annual max of $6.2k whereas in MA I'd pay $4.2k for a 2k/5k plan.
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Old 11-20-2012, 01:56 PM   #14
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Nun, are you saying that under O'care, you'll pay more than the current MA plan even with/without subsidies?
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Old 11-20-2012, 04:40 PM   #15
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Nun, are you saying that under O'care, you'll pay more than the current MA plan even with/without subsidies?
Yes, according to the Kaiser and the MA websites the MA premiums are half as much in both cases. As MA is not aggressively looking at the cost aspect of this I expect the rates to show far slower growth than in the past.
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Old 11-20-2012, 06:44 PM   #16
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Yes, according to the Kaiser and the MA websites the MA premiums are half as much in both cases. As MA is not aggressively looking at the cost aspect of this I expect the rates to show far slower growth than in the past.
...........and.......this is progress?

I'd assume that in 2014 the Mass plans will become obsolete in order to align with the O'care plan(s)
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Old 11-20-2012, 07:14 PM   #17
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...........and.......this is progress?

I'd assume that in 2014 the Mass plans will become obsolete in order to align with the O'care plan(s)
MA state officials have said that people probably won't see too many changes to their insurance because of Obamacare as employer plans and those you buy through "The Connector" are expected to meet many of the requirements of Obamacare. There will be some changes like limits to flexible spending accounts and there may be some changes in how the subsidies for the poor are calculated, other premiums won't change drastically. Also there is a state commission in place to look at costs and it looks like the growth in insurance premiums will be liked to the growth in the state's GDP.
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Old 11-21-2012, 07:30 PM   #18
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I am trying to find out if there is an insurance company that can pick up my 20%. I will stay with my company insurance but that covers 80%. My spouce had medicare and will have a supplemental- but I have 4 years to go till I can get an over 65 supplemental. Any ideas.
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Old 11-25-2012, 10:57 PM   #19
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Don't make any firm plans regarding the amount of those promised subsidy checks. Nothing certain yet, but it looks like the level of these subsidies may now be among the items negotiated (down) during the "Fiscal Cliff" negotiations. One line of negotiation involves reducing the subsidies to the smaller ones that passed out of the Senate Finance Committee when the legislation was being put together.

The Wash. Examiner report.
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Old 11-26-2012, 05:42 AM   #20
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Maybe a nice concession would be to lower the eligibility income by $10K but remove SS from the MAGI. Hmmmmm. That would work!
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