Need Rec's for Lowering Medical Insurance Costs

[txdakini]

I recently retired from a Fortune 60 company. My retiree medical payment for my wife and me is now over $17,000 annually, bumping up $1500 this year. This is by far my largest single expense. In fact, it is almost greater than our housing, food, utilities, and other insurances combined. With a $3000 deductible and 85% paid thereafter, it is not exactly a cadillac program. I will say that the drug benefit is generous,.mainly due to negotiated discounts. It should be said we both have pre-existing conditions.

This cost is leaning towards the outrageous. So, two possibilities to make this manageable are: Go back to work to receive cheper insurance or run the numbers and see if a high deductible insurance will save us some money over time. Our current out-of-pocket costs run easily over $22,000, 25-30% of our annual budget Most of our medical costs, sans insurance, are office visits and medicine, with the occasional screening thrown in.

Any recommendations?

 

[Meadbh]

Wow.

 

[huusom]

I'm in the same boat and decided to go back to work. If nothing changes, by 2014 when the insurance exchange part of the healthcare reform package takes effect we'll be able to get subsidized health insurance (hopefully less).

 

[TromboneAl]

Run the numbers on the high-deductible plan, and do some what ifs. Here's the spreadsheet I used 5 years ago.

 

[dgoldenz]

What type of medical conditions? You can PM them if you'd rather not post it here. I'd recommend talking to an independent agent in your state that knows the market and which companies might accept you without excluding the pre-ex. Just be careful of what you sign up for and make sure the agent knows what he's talking about.

If the pre-ex conditions are an auto-decline with all companies, your choices would boil down to going back to work, finding another job with benefits (Starbucks has benefits for part-timers, as an example), or changing plans if they will let you.

 

[frank]

How do you afford those premiums and at what point do they become unaffordable and or unsustainable?

 

[M Paquette]

How do you afford those premiums and at what point do they become unaffordable and or unsustainable?

Man, I wish I knew. The OP isn't the only person in that boat.

DW and I will land in HIPAA-land for our insurance next year. We've been turned down for conventional high deductible plans as being 'high risk.' (I have the traditional enlarged prostate/normal PSA, and OMG! a benign, noncancerous, non-precancerous polyp was found when they ran the [-]garden hose[/-] colonoscope through me several years ago. DW had leg vein ligation surgery a couple years ago. That's all it took to get us flagged in the MIB, the back-end customer database shared among some 600 insurers.)

We're looking at 16,800 annually right now for a family of three based on quotes I just got, with DD on a cheaper high deductible plan, and DW and I on the cheapest HIPAA plan. Yeah, ouch. Like OP, this will be our largest annual expense by far.

Now, add in that pesky 12% a year medical insurance hike, and by the time I reach age 65, the annual cost will be somewhere around $41,600. That's a lot to pay for casualty protection and a well visit every couple of years. I'm not surprised to find lots of folks opting for the 'pay cash, hope, pray, and fall back on the "free ER"' plan.

 

[Martha]

THe issue is whether you can buy on the open market. I am like Paquette. I can't. So my spouse and I pay roughly $12,000 a year, each with a $5000 dollar deductible.

 

[kevink]

Man, I wish I knew. The OP isn't the only person in that boat.

DW and I will land in HIPAA-land for our insurance next year. We've been turned down for conventional high deductible plans as being 'high risk.' (I have the traditional enlarged prostate/normal PSA, and OMG! a benign, noncancerous, non-precancerous polyp was found when they ran the [-]garden hose[/-] colonoscope through me several years ago. DW had leg vein ligation surgery a couple years ago. That's all it took to get us flagged in the MIB, the back-end customer database shared among some 600 insurers.)

We're looking at 16,800 annually right now for a family of three based on quotes I just got, with DD on a cheaper high deductible plan, and DW and I on the cheapest HIPAA plan. Yeah, ouch. Like OP, this will be our largest annual expense by far.

Now, add in that pesky 12% a year medical insurance hike, and by the time I reach age 65, the annual cost will be somewhere around $41,600. That's a lot to pay for casualty protection and a well visit every couple of years. I'm not surprised to find lots of folks opting for the 'pay cash, hope, pray, and fall back on the "free ER"' plan.

Those are indeed stunning numbers. At what point do you decide to throw in the towel/roll the dice and drop coverage, make arrangements with sympathetic doctors to pay cash on the spot in exchange for discounted services and somehow hope to make it until 2014?

I couldn't come up with an answer, which is one of the reasons we are waiting this out living in Mexico. When your projected health insurance premiums alone equal half or more of your projected total spending you know it's time for some serious looking into radical Plan B options. I wish I could offer more help, knowing that our option is completely unacceptable for most back home.

 

[M Paquette]

Those are indeed stunning numbers. At what point do you decide to throw in the towel/roll the dice and drop coverage, make arrangements with sympathetic doctors to pay cash on the spot in exchange for discounted services and somehow hope to make it until 2014?

Anything happening in 2014 doesn't factor into my planning. Oh, sure, I may get a pleasant surprise, but budgeting based on future legislated dates, with the risk of changes between now and then, strikes me as being only slightly more reliable than budgeting based on visits from the Tooth Fairy, Santa Claus, or Nyarlathotep.

A substantial and annually increasing portion of my annual budget is targeted toward medical insurance. With my luck, if i were to 'self insure' I'd contract an expensive, potentially fatal, but completely curable illness the next day. I'll stay covered, while looking overseas and trying to figure out how to prove ancestral ties to Switzerland.

I couldn't come up with an answer, which is one of the reasons we are waiting this out living in Mexico. When your projected health insurance premiums alone equal half or more of your projected total spending you know it's time for some serious looking into radical Plan B options. I wish I could offer more help, knowing that our option is completely unacceptable for most back home.

It sounds to me like you have made a perfectly rational decision. I've gotten the impression from talking to folks out in what we laughingly call the 'real world' that very few people understand what US health care and insurance costs are. Most folks I know locally are either planning to retire to Medicare coverage, or are one of the lucky few to have group retirement medical coverage through a former employer.

 

[haha]

I've gotten the impression from talking to folks out in what we laughingly call the 'real world' that very few people understand what US health care and insurance costs are. Most folks I know locally are either planning to retire to Medicare coverage, or are one of the lucky few to have group retirement medical coverage through a former employer.

I've been researching Medicare options lately, and they are mostly not exactly cheap but they are so much cheaper than what is usually available on the private market. Group Health Cooperative, a large HMO in several Washington counties sells an apparently decent policy, with drug coverage, for $19/mo. The insured also has to pay his Medicare Part B premium, which for new entrants in 2011 is approximately $115/mo. They sell the same or very similar coverage to individuals in the same age group but not Medicare eligible, with underwriting, for $600 or so/month.

Previous to Medicare I had pretty good individual coverage for about $450/mo- which I take it from what I read here would be a huge bargain for someone in his 60s today.

Ha

 

[M Paquette]

I've been researching Medicare options lately, and they are mostly not exactly cheap but they are so much cheaper than what is usually available on the private market. Group Health Cooperative, a large HMO in several Washington counties sells an apparently decent policy, with drug coverage, for $19/mo. The insured also has to pay his Medicare Part B premium, which for new entrants in 2011 is approximately $115/mo. They sell the same or very similar coverage to individuals in the same age group but not Medicare eligible, with underwriting, for $600 or so/month.

Previous to Medicare I had pretty good individual coverage for about $450/mo- which I take it from what I read here would be a huge bargain for someone in his 60s today.

Ha

Thar sounds about right. Uninsured eligible retirees (ones who didn't have work credits paid in toward Medicare) could buy in at $410/month for Part A hospital coverage (2007 rate schedule), and add Part B at the usual rate.

Group Health Cooperative has a pretty good HMO reputation, and has exchange agreements with Kaiser Permanente as I recall, which can very handy.

 

[frank]

I live in the midwest and have part A and B. my hmo is 96. a month plus drug coverage of 31. my wife pays quite a bit more because she is not on ss yet. I notice that some of you were moving abroad or thinking of it to recieve affordable healthcare. do you think it will be cheaper over there? do the people who moved to mexico realize better or cheaper healthcare? can anyone through out some numbers as far as costs in which countries? the group health coop sounds like a heck of a deal to me, but are the rates on everything in this country going to keep growing exponentially until we can no longer afford the insurance and let the insurance companies that collected such enormous premiums for years just walk away with the profits when medical costs in almost any country are so much cheaper than here?

 

[Ed_The_Gypsy]

Mexico.

 

[frank]

good reply. I started out with nothing and will be back there shortly.

 

[kevink]

I'd say at least 20% of the expats I've met here at Lake Chapala describe themselves as health care refugees. Often they're in their early 60's (occasionally late 50's), which can feel like a long way fro 65 when your premiums are going through the roof (especially if you can't drop insurance due to pre-existing conditions). Most were spending at least as much on insurance premiums alone in the U.S. as they are now for food and rent combined down here.

From all reports care and costs in Thailand are exponentially better than here, but that's a very long trip. Frequent ER forum posters Billy and Akaisha have wonderful info on these topics:

Medical Tourism

This time of year about half the snow birds down here are from Canada, with a smattering of Europeans. They of course grouse about the shortcomings of their own health care systems, but across the board can't believe the kinds of costs we Americans face - uniquely in the civilized world. With 50 million of us (and growing, rapidly) without health insurance one would think some sort of tipping point will be reached. Not holding my breath.

 

[M Paquette]

I live in the midwest and have part A and B. my hmo is 96. a month plus drug coverage of 31. my wife pays quite a bit more because she is not on ss yet. I notice that some of you were moving abroad or thinking of it to recieve affordable healthcare. do you think it will be cheaper over there? do the people who moved to mexico realize better or cheaper healthcare? can anyone through out some numbers as far as costs in which countries? the group health coop sounds like a heck of a deal to me, but are the rates on everything in this country going to keep growing exponentially until we can no longer afford the insurance and let the insurance companies that collected such enormous premiums for years just walk away with the profits when medical costs in almost any country are so much cheaper than here?

The quotes I have for our 'family of three' give us a cost of 16,800/year for DW and I on HIPAA, and DD on a high deductible HSA plan. In Luzern, Switzerland, the annual rate for the 3 of us on a plan with copay/deductible capped at $1000 annually each, with accident coverage is 7,000 - 8,000 annually for the family for most companies (lowest outlier 5,753; highest 11,896). That's for a system where anyone in-country 90 days or more is mandated to have medical insurance, with essentially all private insurance companies, but a mandated basic level of coverage from all those companies. Edit: There is no government subsidy or other external discount figured into those quotes. That's strictly actual cost.

(Cue the apologists who will now explain why it is to our benefit to have the highest costs in the world.)

 

[haha]

(Cue the apologists who will now explain why it is to our benefit to have the highest costs in the world.)

That will not be me. Hands down, we have the worst imaginable system that even attempts to be a system.

Ha

 

[Rich_by_the_Bay]

We are just 3 years and 5 years from Medicare and went with an HSA this year (retired). With the catch-up we can deposit $7150 per year and certain preventable services are covered. With a little luck, after we start Medicare benefits, the unused contributions (let's hope) can be used for Medicare premiums.

Do the math that applies to your situation. The tax savings on $7150 per year x 3 is not trivial: it is the equivalent of lowering monthly cost by around $150, and the lower premium does about the same. We don't have important pre-existing conditions but found the HSA to be the least of evils. Still paying over $1000 per month.

Good luck. You are in a ground zero situation for how the current system is flawed, but hopefully health care reform will help you out down the road.

 

[frank]

what do you think is going to be happening to benefit retirees is 2014? every year insurance costs go up by 10-15 or even 20%. when this new insurance program arrives do you think it will cut our costs or just lock where they are at that time, or continue to rise?

 

[RetirementColdHardTruth]

Guys. I am new here. I have exactly the same concerns. Health insurance is one thing that scares the shizzle out of me. I have been a contractor for many years and last year I too a full time position as the yearly cost of insurance was topping 22k plus the fist 5k out of pocket for each of us. Wife 1child and myself.

I am Australian so if I hit my goals of having my nest egg row by 2015 and the health care changes don't fix this problem iwill have to head back to Australia where private top level coverage is only 345 a month. That is much more manageable. It is expensive to live in Australia but if I don't have to live near a city the costs go down significantly due to housing costs drop dramatically.

Secondly working in my favor is the housing bubble that currently hasn't popped but is showing signs of weakness since November 2010.

Now if the USD just gets back on strength I could even leave sooner.

 

[Corporate ORphan]

I am in the same boat and would love to hear any suggestions people might have.

I will be going off COBRA this year and I too am scared of the what the med insurance is going to cost. When should I start looking? THe government subsidy expires in May. Cobra expires in August.

I didn't think my husband or I (both 55) had any pre-existing conditions but after reading some of these posts it sounds like we do.

We are in a big city in Missouri right now but would like to move where there are more outdoor recreationally activities. Are any states better for getting reasonably priced decent health insurance? We were thinking of the PNW.

 

[dgoldenz]

I am in the same boat and would love to hear any suggestions people might have.

I will be going off COBRA this year and I too am scared of the what the med insurance is going to cost. When should I start looking? THe government subsidy expires in May. Cobra expires in August.

I didn't think my husband or I (both 55) had any pre-existing conditions but after reading some of these posts it sounds like we do.

We are in a big city in Missouri right now but would like to move where there are more outdoor recreationally activities. Are any states better for getting reasonably priced decent health insurance? We were thinking of the PNW.

You should start looking now. While you have a subsidy until May that will save you in the short term, waiting until then to buy could leave you with a lot higher expenses in the long term if your health changes between now and then making you uninsurable. You would then have to get on a HIPAA plan that would likely be very expensive (depends on your state rules). Your state's Blue Cross/Blue Shield company will probably have some of the lowest premiums, but coverage might not be portable to another state if you plan on moving. A company like United Health One would be portable as long as the state you're moving to is part of their coverage area. I think UHO currently sells in ~45 states, though Washington state might be one that they don't...

Try to find an independent broker in your state that knows the underwriting guidelines, state HIPAA rules, and portability of what's available in your state. Won't cost you a dime and could help put you in the right direction.

 

[DeborahB]

I went on COBRA when I retired. I know I have 16 months after COBRA runs out and before Medicare will kick in. I'm paying $475 for excellent coverage on COBRA (just for me).

I recently played with an insurance application on www.ehealthinsurance.com 800-977-8860. Someone called me that evening because I hadn't completed it and asked if I needed help. I told him my situation which includes cancer 15 years ago. He said I should exhaust COBRA (this has to do with HIPAA). Then I will be ineligible for group insurance.

About 2 months before COBRA runs out, I should apply for insurance on their site and that some companies were much more lenient than others in underwriting. He told me they weren't on commission, FWIW... The man who called seemed intelligent. He wasn't an underwriter - I asked.

I'm not trying to plug this site, but it was interesting info. I started the app. for one of the AARP Aetna plans on the site - he said Aetna happened to be fairly reasonable about underwriting. It was just a coincidence because I'm on the Aetna network now, that's why I chose that one.

The prices you see are not necessarily the prices you will get - they go up from there depending on your health history. I hope this helps.

You can also go straight to the AARP site for health insurance.

There's also a high-risk pool in my state, in which I will have guaranteed acceptance if I am refused other coverage. It's very expensive and has high deductibles but it would keep me from bankruptcy in case of a medical disaster. I budgeted a LOT for medical for those 16 months after COBRA.

 

[dgoldenz]

I recently played with an insurance application on www.ehealthinsurance.com 800-977-8860. Someone called me that evening because I hadn't completed it and asked if I needed help. I told him my situation which includes cancer 15 years ago. He said I should exhaust COBRA (this has to do with HIPAA). Then I will be ineligible for group insurance.

About 2 months before COBRA runs out, I should apply for insurance on their site and that some companies were much more lenient than others in underwriting. He told me they weren't on commission, FWIW... The man who called seemed intelligent. He wasn't an underwriter - I asked.

Every agent is paid a commission...sounds like he's telling you he works in the call center and gets paid hourly, while eHealth takes the commission on the sale. Seems like reasonable advice though, so I'm guessing he won't be working at eHealth long when he figures out he can make more money on his own.

If you had cancer 15 years ago, you might still be able to get fully underwritten coverage instead of HIPAA. A HIPAA plan at age 63 is probably going to cost an arm and a leg, so you should still find an independent agent that can find out for you which companies may accept a history of cancer 15 years ago. United Health One, for instance, only asks about the last 10 years on the application.