Your Experience/Individual Health Coverage

[toofrugalformycat]

I had to bridge several years between quitting and being old enough to retire on my State plan. I was in my 40s. COBRA was prohibitively expensive. I picked my ancestors poorly and had trouble getting individual coverage. Finally Mutual of Omaha picked me up and I could afford catastrophic coverage, but it took many months to get them to accept my application (they were waiting on something from my doctor).
Then after a year or so they pulled out of the State of Alaska entirely. They gave me one month's notice. I reapplied to several companies, and luckily my insurance broker informed me that when I was rejected and/or given unreasonable exclusions I could apply for the State high-risk pool. This I did, paying hand over fist for catastrophic coverage only (15000 deductible) until I retired.
When applying for individual coverage be prepared to list EVERY doctor visit or procedure you have EVER had. If you miss one they can use it as a basis for rescission if you ever actually make a claim for anything serious. For me it helped to have an insurance broker of my approximate age and same sex, because think about some of the things you might have to list. I tried not to think about where those applications went and who looked at them.

[TromboneAl]

Here's an insurance gotcha. I tried to get DW onto my BCBS 3500 deductible HSA plan, but they denied her because of a prior condition (so she stay on her non-HSA 5K deductible plan).

It turns out this was a good thing. If two people are on the 3500 plan, then it turns into a $7,000 family deductible plan. That is, you have to have combined charges of over 7K before they start paying!!

Also, you can HSA savings for medical expenses for your spouse even if he/she isn't on the plan.

[Billy]

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What is your story and experience with your individual health care coverage in retirement? Have you actually had to use it in a major way? Did you feel you or family member was taken care of as well as you would have been under an employers health plan?

Billy and I were self-employed (1979) and have had our own individual health care coverage since that time, except for the years that Billy was working for Dean Witter Reynolds. When we retired in 1991 prices for COBRA were shocking and so we continued to use individual coverage, shopping every year or two for better prices.

We chose the largest deductibles available at any time, going from $2,500 to $5,000 to our current $10,000.

Over these many years we have used hospital services for ‘major’ events. I must say that personal or fiscal treatment has been inconsistent, depending on the service provider - not because of any insurance we may be carrying. I’ve not (knock on wood) had any issues with the insurance companies.

What I have found in general, is that I must stay on top of the billing departments, and follow the charges, dates, co-pays and services given very closely. Otherwise, these charges can be duplicated or we can receive an over-charge.

If the billing is a large amount, I make it a point to contact the billing department (of the doctors or hospital) right off the bat. I let them know that I am waiting for all the bills to come in so that I can make sense of them first, before I start paying anyone. I have not received any flack for doing this.

What has surprised me the most is the time delay between service received and the billing statement that follows. Yes, I know they go through my insurance company first (or not) but when the doctor’s office or hospital can carry the float of these bills for 2 and 3 months at a time it makes me wonder. We are very aware that we are not the only clients whose bills are being carried. Having been in business ourselves we couldn’t ever consider carrying such a large float of unpaid bills.　

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It turns out this was a good thing. If two people are on the 3500 plan, then it turns into a $7,000 family deductible plan. That is, you have to have combined charges of over 7K before they start paying!!

I wonder if each plan is different - Billy and I are on the same insurance plan, with $10,000 deductible and our family total is $20k (for preferred providers. Out of network is a different total). However, when we individually meet our personal $10k deductible, our insurance kicks in. We do have a cap on Out of Pocket - and after that is met, then our insurance pays 100%.

Akaisha
Author, The Adventurer’s Guide to Early Retirement