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Keep my individual health insurance even though I have employer health?
Old 05-06-2011, 06:56 PM   #1
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Keep my individual health insurance even though I have employer health?

I've been working part time and have an individual health insurance policy - relatively cheap ($350 for good benefits) as I'm healthy and 57. Recently I went back to work full time, though I hope to quit totally shortly after turning 60 (in 27 months but who's counting). My employer is now paying for health insurance and I have kept my individual plan. In my state, they can only raise my premium for my cohort - not if I get sick. I figure I have two possibillites with my current individual insurance.

1. Just keep it and figure that is part of the cost of early retirement. My concerns: Well the cost for one and secondly, if health reform sticks, I could Cobra until 2014 when they'll have to take everyone.

2. Change it to a less rich plan (high deductible plan for instance) that would cost me less. They told me I could do this without further underwriting. That way, i'd be paying less but still have something if I were to develop a condition between now and retirement.

What do you all think? What experiences have you had with this kind of scenario? Thanks for any advice.
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Old 05-06-2011, 09:03 PM   #2
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If you have a good employer plan, you're wasting your money. At $350/month plus rate increases, you are talking ~$10k over 27 months that would be better spent elsewhere. $10k would probably pay for a full 18 months of COBRA with money left over in a worse case scenario. You would basically be spending ~$10k just to make sure that 1. Obamacare doesn't get repealed and 2. That you don't need a HIPAA policy 4 years from now.
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Old 05-06-2011, 09:45 PM   #3
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Thanks for your thoughts on this. What are the chances that health reform will get repealed? I don't have a feel for the odds on that one.
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Old 05-06-2011, 09:49 PM   #4
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Repealed? Probably slim. I think there will be some big changes before it takes full effect though. Just my personal opinion. There are a lot of things that can happen in 3 years.
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Old 05-06-2011, 10:02 PM   #5
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I had private health ins as a contractor. I joined a company and took the bait of a company policy and dropped my private ins to save a few bucks. Bad move. My business is up and down. The job did not last and I found I could not get private insurance anymore.

Do not depend on employer benefits. Things change.
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Old 05-06-2011, 10:07 PM   #6
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Do you know the cost if you switched to a high deductible policy? What does your employer coverage cost you? Does your employer provide a credit if your don't take their health coverage?
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Old 05-06-2011, 10:12 PM   #7
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Originally Posted by Ed_The_Gypsy View Post
I had private health ins as a contractor. I joined a company and took the bait of a company policy and dropped my private ins to save a few bucks. Bad move. My business is up and down. The job did not last and I found I could not get private insurance anymore.

Do not depend on employer benefits. Things change.
If the group policy is good, $4k+ per year is still a lot to pay for an individual policy just to maintain insurability. I don't know what state the OP is in, but United Health One has a "continuity" rider that you can buy on a policy to guarantee your insurability if you drop the policy later. Might want to apply for that before taking your group benefits. Nobody promotes it because nobody ever buys it, but I'm pretty sure it's still available. Would be a lot less expensive than keeping your individual policy altogether though. I've never sold one of the continuity riders personally.
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Old 05-06-2011, 10:19 PM   #8
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I'm in Kansas.
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Old 05-06-2011, 10:26 PM   #9
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I'd suggest calling United Health One to see if that rider is still available. From what I remember it can only be purchased at the time you buy the policy and costs around $50/month.
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Old 05-07-2011, 12:13 AM   #10
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My experience as a 50-something in Alaska is that once you lose private health insurance (Mutual of Omaha pulled entirely out of the State with only one month's notice) I could not buy private insurance without riders that made it worthless. I had to buy a State-sponsored, very expensive, very high deductible, plan for uninsurable people (and I was healthy!) until I could get retiree insurance.
So if it was me, I would do whatever is necessary to keep that private plan alive and/or available to you. If you are healthy, a high deductible policy (assuming you have the cash stashed if you need it) may save you money over the long run, but you can do the math on that and decide for yourself. I was told by my insurance agent that once you change to a high deductible, you usually can't change back to a low one, so think about it.
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Old 05-07-2011, 12:49 PM   #11
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I would keep it and make sure if you raise the deductible that you can lower it without requalifying. What you have is gold. The money especially for such a short period is never wasted.

If you were talking 10 years, then it might be worth it. Remember that it will be money wasted if you remain healthy. But qualifying again at 60 is not a sure thing.
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Old 05-07-2011, 01:19 PM   #12
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Thanks to all for your responses. The decision seems to be between the relatively rich plan that I have and a higher deductible one that would be ok if needed. I'll look at the difference and decide. Keeping the plan does give me some options to quit earlier if things go well with my savings.

I've been paying for this plan when I made less money so I should be able to continue while I make more. My relatively small employer isn't likely to give me a credit if I drop their plan but they are saying that we may have to pay part of the cost next year. Maybe I'll drop theirs at that point.
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Old 05-07-2011, 01:40 PM   #13
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Do you have a need for a tax deduction? If so you could go to a higher deductible and get an HSA, and fund it. I have a 5k deductible, pays 100% after that. My premium is $61 a month (47 yrs old). The HSA tax deduction actually makes my premium less than free! I got off my company plan because it is cheaper than staying on my previous employers plan. The HSA money will accumulate tax free and you can use it tax free to buy your Medicare premium when you turn 65. Hopefully DGoldenz is reading this to determine the legality of having an HSA while still having 2 insurance plans at same time with one not being HD.
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Old 05-07-2011, 03:53 PM   #14
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I think I read that I can't have an HSA while one of the plans is not eligible. But I could potentially turn down the employer health insurance. I'll be talking with my agent now that I have some ideas of what might work.
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Old 05-08-2011, 09:44 AM   #15
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My employer-paid insurance stops in November (part of my severance package) and I was told by the insurance company (Anthem BCBS) that I would be quaranteed an individual policy beginning in December without underwriting as long as I have maintained my employer-provided BCBS policy for the prior 12 months. They gave me a quote of $230 (age 50 with no health issues). Seems almost too good to be true, but that's what I was told!
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Old 05-08-2011, 10:05 AM   #16
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If you decide not to keep the $350 plan, can I have it? That's less then 1/2 of what we anticipate we'll pay starting in Jan 2014 for each of us.
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Old 05-08-2011, 12:10 PM   #17
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Repealed? Probably slim. I think there will be some big changes before it takes full effect though. Just my personal opinion. There are a lot of things that can happen in 3 years.
Not if Obama get re-elected...
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Old 05-08-2011, 12:30 PM   #18
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Not if Obama get re-elected...
TJ
Probably a shoo-in to get re-elected and I am not very political.
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