Just Downsized to ER

[oliverdickens]

I was recently and unexpectedlyreleased out of a private firm as the owner decided that my boss could no longer support my role in the organization. I decided to take the early retirement offer as I am 53 and it allowed me to bridge to a small pension from a previous employer and it will allow me to keep health insurance until I can get that from my previous employer. I had been working 70-80 hrs per week and more was expected, so it was time to go.

I had been planning this for many years and tried it once in 2000 but the stock market implosion forced me to get back into the work. This "dry" run did teach me several things, such as getting a bit more conservative in my investments and not watching CNBC everyday.

Although I will have the opportunity for health insurance with my previous employer, it will be very expensive. Anyone out there have good leads on where to look for options? I know the insurance companies bascially don't want to insure people in the bridge period between 55-65, but would suspect someone on the board has had success in this area.

Also, how many of you think long term insurance is the right thing to do, and when did you start.

Thanks for your advice

 

[Nords]

Although I will have the opportunity for health insurance with my previous employer, it will be very expensive.  Anyone out there have good leads on where to look for options?  I know the insurance companies bascially don't want to insure people in the bridge period between 55-65, but would suspect someone on the board has had success in this area.
Also, how many of you think long term insurance is the right thing to do, and when did you start.

Welcome to the board, Oliver.

There are quite a few threads on these subjects, for which I'd recommend searching with the keywords "health insurance" or "COBRA" and "long term care".

 

[2B]

This "dry" run did teach me several things, such as getting a bit more conservative in my investments and not watching CNBC everyday.

Becky Quick makes CNBC worth watching but you don't need to turn up the sound.

Your old employer is probably charging you their group rate plus a management fee and it probably only has a low deductible option. If your heallth is good you may be better off getting a personal, high deductible health insurance plan.

 

[Rich_by_the_Bay]

Just a caution on the health insurance thing: typically, if you continue on your employer's group policy, you are guaranteed coverage as long as that group policy is in place regardless of your health or age, assuming you pay your premiums. If you let it lapse for any reason you're out for good.

While you may be able to get a cheaper policy on your own, they can drop you any time your contract expires, typically annually. Furthermore, if you develop a health condition, they can raise your premiums drastically if they don't drop you. Then you area really in trouble, cause you have no group policy, no individual policy, and are uninsurable when you need it the most.

So, it may be worth staying on with the former employer's policy just for the relative certainty of availabllity and standard if expensive premiums.

 

[oliverdickens]

Thanks for the advice. I do have group policy with company that downsized me out at regular rates for another 18 months (part of separation agreement) and than can get COBRA for another 18 after that. Than I will go to the company I was with for 21 years prior to this last company for their options, albiet expensive, but not anything like the nightmares I have been reading on this forum.

My main concern is that the private company that downsized me will go broke or the fortune 100 company I worked for prior, will reneg on what I earned, so thinking ahead to other options to be prepared.

What states out there offer quaranteed insurance? Might have to look at that as an option as well since I have some time to work on it.

Thanks to all for the advice

 

[REWahoo]

oliver, http://www.healthinsuranceinfo.net/ is an excellent resource for state-by-state health insurance information. The site is run by Georgetown University.

 

[Dawg52]

While you may be able to get a cheaper policy on your own, they can drop you any time your contract expires, typically annually.

Are you sure about that? My agent who is also our company agent told me once I was approved for an individual policy(BCBS), I could not be canceled for a health problem. I chose to go ahead and obtain an individual policy because I was concerned with the long range future of our company plan. Our company plan has been watered down so much and rates have been jacked up so many times that it is really not much of a plan. I could have stayed on the group plan due me retiring as a company officer.(company benefit)

I discussed this with my agent many times and felt the individual policy would be a better route for me.  

 

[brewer12345]

What states out there offer quaranteed insurance?  Might have to look at that as  an option as well since I have some time to work on it. 

Mostly high cost of living northeast states, and te guaranteed coverage is uniformly quite expensive. I would leave that as a last resort, especially since it will be three years before it is even a question for you.

 

[Martha]

Dog, you are right. Federal law does little to regulate the individual health market. However, it does provide for guaranteed renewability.  Once you have an individual policy, HIPAA restricts when the insurance company can cancel the policy.  However, HIPAA doesn't regulate rates, that is up to each state.

Here is the language from the statute on guaranteed renewability:

``(a) In General.--Except as provided in this section, a health
insurance issuer that provides individual health insurance coverage to
an individual shall renew or continue in force such coverage at the
option of the individual.

``(b) General Exceptions.--A health insurance issuer may nonrenew or
discontinue health insurance coverage of an individual in the individual
market based only on one or more of the following:

``(1) Nonpayment of premiums.--The individual has failed to
pay premiums or contributions in accordance with the terms of
the health insurance coverage or the issuer has not received
timely premium payments.

``(2) Fraud.--The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage.

  ``(3) Termination of plan.--The issuer is ceasing to offer
coverage in the individual market in accordance with subsection
(c) and applicable State law.

``(4) Movement outside service area.--In the case of a
health insurance issuer that offers health insurance coverage in
the market through a network plan, the individual no longer
resides, lives, or works in the service area (or in an area for
which the issuer is authorized to do business) but only if such
coverage is terminated under this paragraph uniformly without
regard to any health status-related factor of covered
individuals.

``(5) Association membership ceases.--In the case of health
insurance coverage that is made available in the individual market only through one or more bona fide associations, the membership of the individual in the association (on the basis of which the coverage is provided) ceases but only if such coverage is terminated under this paragraph uniformly without regard to  any health status-related factor of covered individuals.


There are many ways that insurance companies can try to get around these limitations.  One is to increase rates dramatically for everyone for a particular product, but offer a new policy to those who are healthy.  Another strategy is when faced with a large claim, go through the application for insurance with a fine tooth comb, looking for any omission which the insurer could claim amounts to an "intentional misrepresentation of a material fact."

 

[Martha]

I
Although I will have the opportunity for health insurance with my previous employer, it will be very expensive.  Anyone out there have good leads on where to look for options?  I know the insurance companies bascially don't want to insure people in the bridge period between 55-65, but would suspect someone on the board has had success in this area.

What options are available to you are dependant on where you live and how healthy you are.  Looking at the Georgetown guide that REWahoo mentioned is a good place to see what might be available in your state and what rights you have.  State insurance commissioner websites are also a good source of information. 

Another good place to look and get some initial quotes is www.ehealthinsurance.com.

If you want to share what state you live in, people here might be able to share their experience with buying insurance in that state.   


This guide will tell you in what states are guaranty issue states: http://www.healthinsuranceinfo.net/newsyoucanuse/discrimination_limits.pdf

 

[Rich_by_the_Bay]

Are you sure about that? My agent who is also our company agent told me once I was approved for an individual policy(BCBS), I could not be canceled for a health problem. I chose to go ahead and obtain an individual policy because I was concerned with the long range future of our company plan. Our company plan has been watered down so much and rates have been jacked up so many times that it is really not much of a plan. I could have stayed on the group plan due me retiring as a company officer.(company benefit)

I'll defer to Martha on the legalities of how plans can be dropped or worked around.

As to what's happening on the street, I have had numerous people tell me that their individual policies were not renewed at year's end. Maybe the carrier dropped the plan. Maybe they created a plan to attract new subscribers, then intentionally dropped with the intention of cherry picking the healther subscribers by enticing them into a new plan with a different structure, for example, excluding preexisting diseases which surfaced during the original plan's coverage period. I have also had patients tell me that premiums were raised so much that it was obvious it was intended to squeeze them (and their expensive health needs) out of renewing.

So, please be cautious about declining your ex-employers plan; if it looks decent, sustainable, and competitively priced, there is some reason to hang in there with it. In my case, it is through the state government (I am a university employee) so I figure it is unlikely the whole group will be dropped.

Martha, from your perspective, is that sound general advice (barring individual circumstances to the contrary)?

 

[Martha]

So, please be cautious about declining your ex-employers plan; if it looks decent, sustainable, and competitively priced, there is some reason to hang in there with it. In my case, it is through the state government (I am a university employee) so I figure it is unlikely the whole group will be dropped.

Martha, from your perspective, is that sound general advice (barring individual circumstances to the contrary)?

I agree it is sound advice to be careful about declining your ex-employers plan. I would be unlikely to decline the insurance if as you say it is "decent, sustainable, and competively priced. But, if there are weaknesses in that plan, as in DOG's case, you may be better off with an individual plan. Also, states differ widely on the extent they regulate the individual market, so you should at least know what rights you have in your state--especially concerning premium increases.

 

[Martha]

As to what's happening on the street, I have had numerous people tell me that their individual policies were not renewed at year's end. Maybe the carrier dropped the plan. Maybe they created a plan to attract new subscribers, then intentionally dropped with the intention of cherry picking the healther subscribers by enticing them into a new plan with a different structure, for example, excluding preexisting diseases which surfaced during the original plan's coverage period. I have also had patients tell me that premiums were raised so much that it was obvious it was intended to squeeze them (and their expensive health needs) out of renewing.

There is a product called a temporary insurance policy. Often they provide coverage for six months or a year. It is possible some people are buying these types of policies. Stay away! This type of product was geared for people like students getting out of college and waiting for their first job. Not people who need insurance for the long term.

Florida does not limit how high rates can go for individual policies and rates can increase based on your health status as well as age, so I am not surprised many are getting priced out of the market.

Otherwise, unless you bought a temporary policy, or the plan terminated, you move away, you don't pay your premiums, or you lied to the insurer, federal law does require your individual insurance be renewable. So if a patient says their policy was not renewed, it would be worth while to quiz them as to why. Insurance companies have been know to do what is contrary to the law.

 

[Dawg52]

I'm sure there are plenty of horror stories out there concerning cancellations. All I can do is use my best judgement as to what I have been told by my agent and what I have seen from some of my friends experiences. My agent, who I have known for 16 years, says he has not seen a case where BCBS of MS has cancelled a policy due to a persons health condition. Yes, if one has lied on their application and it surfaces, I'm sure there has been policies cancelled. I told the truth and BCBS has been our company's carrier for years so they had my history when they reviewed my application anyway.

I guess if something happens between now and when I am eligible for Medicare supplements, I can always fall back on our State's Risk Pool policy. It's costly and has limited coverage but its something.

EDIT: Sorry I hijacked the thread.

 

[oliverdickens]

A few asked what state I am in currently. We are in Oklahoma so if anyone has experience in this state, appreciate any hints. We are also not tied to Oklahoma in anyway and will begin to make trips to other states to see if we find a place we like better for all the early retirement reasons

Thanks

 

[Martha]

A few asked what state I am in currently. We are in Oklahoma so if anyone has experience in this state, appreciate any hints. We are also not tied to Oklahoma in anyway and will begin to make trips to other states to see if we find a place we like better for all the early retirement reasons

Thanks

This are health insurance guides for Oklahoma:

http://www.healthinsuranceinfo.net/ok.pdf
http://www.ahirc.org/quickguide_oklahoma.html

In Oklahoma, insurance companies can turn you down based on your health, or can charge you any premium they want to charge, or place an elimination rider on your policy to exclude certain conditions. However, Oklahoma has a high risk pool where you can buy coverage when coming off of a group plan. The premiums are roughly 150% of what a healthy person would pay on the individual market.

One thing in particular to watch for in Oklahoma is if you are able to buy individual insurance, even though they must renew your policy, they can increase your rates based on your health status. So, if your health declines your rates may become unaffordable.