When you know medical costs will be high?

[Truckinalong]

Long time lurker and ER planner. Used to post like 20 years ago on the long gone original retire early forum. I am 44, DW is 37, in theory could pull plug in 5 years assuming ACA stays as is of course.

We are pre-existing central, I have history of atrial fibrillation (currently none due to successful ablation) and she has sickle cell anemia (does well due to genetic factors).

What I can't wrap my head around is assuming double 7 figures invested and dividend/bond interest that could support out lifestyle (No kids, paid off house) how to protect or deal with the real likelihood of higher medical costs than average and end of life costs (more likely for her). Though, if I have learned anything who knows. Took me 4 years and big deductibles to sort out the AF and she has required no care at all. Life is weird that way. I would have though exact opposite if you asked me 15 yrs. ago when we got married.

We worry about leaving the other destitute. We envision a bronze plan with high deductible but if that was not there then what, we could end up in a medicaid asset spend down scenario very young.

What strategies could we use now given our desired timeline or am I realistically doomed to be working forever despite excellent financial planning to date.

Help! Oh, if I can wrap my head around this I hope to become a valued contributor in the more upbeat sections of this forum!

Thanks

 

[Teacher Terry]

I really don’t see the ACA as going away unless it gets replaced with Medicare for everyone.

 

[Truckinalong]

I'd love to believe that too. That said we all probably got to a place of being able to contemplate ER by planning for the worst.

Simple scenario in my head, I am 55, she is 48, sickle cell reels it's ugly head and she needs significant care, my atrial fibrillation gets beyond a point where I am needing a lot of care or countless other scenarios in between, ACA is gone, we can't buy insurance due to preexisting, holy cow, it gives me chills thinking about it.

Or ACA exists and one of us needs LTC at a young age. Maybe I am over worrying as the closer it comes to being a reality the more I think about details and my healthcare scare over last 4 years has sort of removed my ability in past to assume the best. For some I think at this point it is easier to be optimistic on this one, statistically speaking for me we have some real costs ahead of us.

 

[GrayHare]

One thing is to be sure you each have 40+ work-quarters done so that you'll qualify for Social Security Disability should it become necessary.

 

[Truckinalong]

One thing is to be sure you each have 40+ work-quarters done so that you'll qualify for Social Security Disability should it become necessary.

Yes, we've both been employed (and paying in SS) 25 years for me, 18 or so for her. Me no interruption, her maybe about 6 months interruption over 10 years ago.

 

[Teacher Terry]

We both have a lot of chronic health issues but luckily have insurance through my former employer. So many people depend on the ACA that it would be political suicide to do away with it but I certainly understand the worry.

 

[Truckinalong]

ACA certainly was a game changer in planning, while expensive, prior to ACA she would have been denied for any policy and now I would too.

 

[W2R]

OK, here's a strategy that almost nobody here followed except for me, so it probably isn't the best, but it's one option. I think it would require working until you are about 57, though.

Like you, I was very concerned about health care costs in retirement. There was no ACA at all when I was doing my planning. So, in 1999 at age 51 I took a job working for the federal government. It was not the most interesting or the highest paying job I could find, and I had to go where the job was. Still, this job had great retiree benefits I thought, and job stability as I grew older. After 10 years of federal employment, I was old enough and had enough time in, to qualify for retirement benefits so I retired. Those benefits included retiree health insurance. The pension is tiny but the health care benefit has been great, and now I am on Medicare.

No worries about ACA for me, since I have never been on it. Although, I must admit, I agree with Teacher Terry that it probably isn't going anywhere because it would be political suicide for the politicians.

 

[Truckinalong]

Great strategy, not sure I want to reinvent (comfortable middle mgr. in mega corp. with good benefits now and flexibility) to put in 10 or 20 years to get that benefit, but great idea. I posted this as it will get me to think about things I may not have. Thanks.

 

[W2R]

Great strategy, not sure I want to reinvent (comfortable middle mgr. in mega corp. with good benefits now and flexibility) to put in 10 or 20 years to get that benefit, but great idea. I posted this as it will get me to think about things I may not have. Thanks.

Believe me, I understand. I would argue about your benefits being good, though. To me the most important feature of good benefits would be good employee/retiree health insurance benefits, without having pre-existing conditions suddenly coming into play and without being forced to go to ACA in retirement.

Since retiree health care is such a big deal for us, I just kind of think that those may not be the best benefits you can get. And if it was me, I'd leave for better benefits even if the pay is lower (which it was, for me anyway).

 

[Truckinalong]

To me the most important feature of good benefits would be good employee/retiree health insurance benefits, without having pre-existing conditions suddenly coming into play and without being forced to go to ACA in retirement.

I agree. And think about that a lot. That said I will have access to company health insurance at full price if I quit today. Something we get part of what they call "rule of 60". Age plus vesting years worked greater than 60 allows access to full cost company plan which as of now is more than an ACA plan would be. This had value for those with pre existing before ACA, now I am not sure it has a lot of value.

Right now I am actually on DW's BCBS plan as it is "free". She is only charged $100 per month by company and they contribute $1,200 to ACA annually.

But to your point, the worry is all about when her or my corporate gig policies no longer are an option.

 

[W2R]

I agree. And think about that a lot. That said I will have access to company health insurance at full price if I quit today. Something we get part of what they call "rule of 60". Age plus vesting years worked greater than 60 allows access to full cost company plan which as of now is more than an ACA plan would be. This had value for those with pre existing before ACA, now I am not sure it has a lot of value.

Right now I am actually on DW's BCBS plan as it is "free". She is only charged $100 per month by company and they contribute $1,200 to ACA annually.

But to your point, the worry is all about when her or my corporate gig policies no longer are an option.

Well, it seems to me that your options for retiree health insurance that we have so far identified may be:

(1) depending on ACA; or
(2) opting to access your unsubsidized company plan at full cost in retirement; or
(3) taking a much less ideal federal job and retiring with low cost full health insurance at about age 57.

I do understand your anguish about it, since I had to work about two years past FI to qualify for the retirement health insurance I was talking about. Those were two very long years. I hope you can figure out a way around this.

 

[Truckinalong]

The federal thing is really too late. If i was to work till 57, I'll stay in my field and frankly have plenty of money at that point to bridge to medicare.

So realistically it seems, I have a large roll of the dice to retire "truly early" that I need to accept. What's the worst, I forfeit over a ton of money saved over 20-30 yrs. to the government in a medicaid spend down scenario and live in the same house poor as can be for the rest of my years. Seems lovely ;-)

Option #4,

We end up with some sort of federal/medicare health insurance option before age 65, hell 55 would be nice.

 

[ivinsfan]

I thin you need to wait at least 3 or 4 years and worry about it then. Seems like spinning your wheels and extra stress to put too much thought into it now.

 

[Truckinalong]

I thin you need to wait at least 3 or 4 years and worry about it then. Seems like spinning your wheels and extra stress to put too much thought into it now.

I agree in theory, really my point was to make sure there was nothing I was not thinking of with respect to a young retiree no kid couple with chronic health issues that I might not be thinking of.

It really comes down to build the war chest as large as it can be and need to hope a bit for some good political and health luck.

Given no kids, we have even discussed does it make more sense for us not to be married but committed to looking out for one another of course. An early medicare divorce so to speak. Sad that we have to think about such things but it is what it is.

This is a smart group of people so I figured I could spread my stress and anxiety out

 

[MikeD]

I just read this thread. I had a horrible day yesterday with health issues and a night of interrupted sleep from wife's issues so I am reading and thinking with an UNcustomarily clouded head.

We are a DINK family and have many, very severe and expensive health issues.

Does Medicare, paying 80% and a part D and an advantage type plan cover a lot of the high cost?

Mike D.

 

[REWahoo]

Does Medicare, paying 80% and a part D and an advantage type plan cover a lot of the high cost?

Yes, but you will likely be far happier and have much more control over your choice of providers with a part D plan and Medigap policy (Medicare supplement plan) rather than a Medicare advantage type plan. See the many threads here discussing the pros/cons of advantage plans vs. Medigap plans.

 

[MikeD]

Thanks.

I am still foggy and may have confused the two.

But my point was meant to be that high retiree medical costs can be effectively mitigated with Medicare and some of the associated augmentation plans.

Is that right? I sure hope so. It's my plan!

Mike D.

 

[REWahoo]

But my point was meant to be that high retiree medical costs can be effectively mitigated with Medicare and some of the associated augmentation plans.

Is that right?

Yes, that is correct.

 

[Truckinalong]

Correct, those of us who want to retire before medicare with high cost conditions have choice somewhere between gambling and huge unknown costs.

 

[ivinsfan]

I just read this thread. I had a horrible day yesterday with health issues and a night of interrupted sleep from wife's issues so I am reading and thinking with an customarily clouded head.

We are a DINK family and have many, very severe and expensive health issues.

Does Medicare, paying 80% and a part D and an advantage type plan cover a lot of the high cost?

Mike D.

I don't know your age, but it's complicated, when you are nearing 65 go to a good broker and tell them exactly what you want and how much you are willing to pay...they will help you. Before then start doing a little reading so you know how the system works...