Health insurance postwork premedicare

[SecondAttempt]

Sorry, trying to do my own research but the internet is unclear on this. Let's say I have insurance with a $2000 deductible, 30% coinsurance, $0 copay, and $6900 OoPM.

Ok, and let's say I have a heart attack and emergency quadruple bypass as mentioned above. How much does it cost me for the year. My thought is $2000+$6900=$8900. Is that correct?

 

[Aerides]

Sorry, trying to do my own research but the internet is unclear on this. Let's say I have insurance with a $2000 deductible, 30% coinsurance, $0 copay, and $6900 OoPM.

Ok, and let's say I have a heart attack and emergency quadruple bypass as mentioned above. How much does it cost me for the year. My thought is $2000+$6900=$8900. Is that correct?

Your OOPM may be the same as your deductible - but they don't add together. Out of Pocket Max is the most you will spend that year, unless you have something that isn't covered at all.

If not, if Ded. is less, then OOPM is still the max, but you might meet your deductible, and continue to have co-pays, until you hit the OOPM. I don't have copays in my plan, they are the same dollar amount (ded and oopm)

 

[PaunchyPirate]

Sorry, trying to do my own research but the internet is unclear on this. Let's say I have insurance with a $2000 deductible, 30% coinsurance, $0 copay, and $6900 OoPM.

Ok, and let's say I have a heart attack and emergency quadruple bypass as mentioned above. How much does it cost me for the year. My thought is $2000+$6900=$8900. Is that correct?

I would expect you to pay $6900. That is your out of pocket maximum for the year. Unless you have expenses that are not covered by insurance.

 

[CRLLS]

1) Hospital bills 650K
2)Insurance company has contracts for or negotiates 165K for the procedure.
3)The hospital agrees to accept 165K as full payment. Regardless of who pays it, the bill will be satisfied.
4)The insurance company will require you to pay the lesser of: 30%*165K(copay) plus 2,000 (your annual deductible, if not already met) = 51,500, or 6,900 (your annual MOOP). Your total obligation is to pay 6,900 to the hospital. The insurance company will pay the remainder of 165,000-6,900=158,100. How the hospital deals with the difference is up to their accounting and not anyone else's concern. They have been made whole per their contract/negotiation with the insurance company.

This contract/negotiation between the insurance company and the doctors for lowered pricing is the biggest reason to have at least the lowest insurance coverage. Higher if you can afford it. With no insurance, you would have had to pay 100% of the full 165,000. Instead, you effectively paid 1.2% of the rack rate bill.

 

[SecondAttempt]

I greatly appreciate all the responses and explanations. I spent much of this weekend educating myself but am still nowhere near as wise as you folks. But I had budgeted for much higher expenses out of ignorance years ago so updates to my retirement plan spreadsheet were positive. I still have a lot to learn though.

How do folks budget for out of pocket maximum? I am tempted to assume I have to spend 25% of that every year while in reality it would be more like 100% in one year if I had a serious illness in the 5 years I expect to be on ACA. Based on my personal analysis I will COBRA for 18 months and have an out of pocket maximum of $2500 those years which is in the noise. Of the 5 years I do ACA, the final year I could go on my partner's retirement insurance. Premium would be about the same but maximum would be closer to the $2500 I have now.

 

[jim584672]

If you get a Silver plan at 200% FPL or lower it has Cost Sharing Reductions that make the max OOP much lower.

 

[gauss]

I would expect you to pay $6900. That is your out of pocket maximum for the year. Unless you have expenses that are not covered by insurance.

And recall that the ACA does place a maximum per person OOP on all compliant policies. The amount is adjusted annually I believe. Knowing the ACA value that applies simplifies shopping for plans.

This may even preempt the written terms of your HI plan.

DW and I had family coverage through her employer. Stated OOP max for the family plan was maybe $14,000. DW had complicated brain surgery last year and I fully expected to pay $14,000. Nope. Only ~ $7,000 of her bills were our responsibility. (There was a regulation clarification a few years ago that individual OOP max's applied within family policies and could not be more than the ACA individual OOP max). Now granted I had to pay a few hundred dollars out of pocket for my own health care last year, but way better than paying the full $14,000 "family" OOP max.


-gauss

 

[CRLLS]

For the purposes of Firecalc and other calculators, I include our Max OOP every year regardless of it being Cobra, ACA, Medicare. It is just part of our annual expenses just like groceries or insurance. If I don't actually spend it, I am ahead. It becomes money we didn't withdraw and spend. As far as a budget goes, we do plan our income and expenses every year, but don't track it in any detail.

 

[Scuba]

Your OOPM may be the same as your deductible - but they don't add together. Out of Pocket Max is the most you will spend that year, unless you have something that isn't covered at all.



If not, if Ded. is less, then OOPM is still the max, but you might meet your deductible, and continue to have co-pays, until you hit the OOPM. I don't have copays in my plan, they are the same dollar amount (ded and oopm)

^^^ This. OOPM includes the deductible and once the OOPM is hit for the year, insurance pays for everything.

 

[Scuba]

I greatly appreciate all the responses and explanations. I spent much of this weekend educating myself but am still nowhere near as wise as you folks. But I had budgeted for much higher expenses out of ignorance years ago so updates to my retirement plan spreadsheet were positive. I still have a lot to learn though.

How do folks budget for out of pocket maximum? I am tempted to assume I have to spend 25% of that every year while in reality it would be more like 100% in one year if I had a serious illness in the 5 years I expect to be on ACA. Based on my personal analysis I will COBRA for 18 months and have an out of pocket maximum of $2500 those years which is in the noise. Of the 5 years I do ACA, the final year I could go on my partner's retirement insurance. Premium would be about the same but maximum would be closer to the $2500 I have now.

For us, despite DH already hitting the OOPM and my being very close to it already due to my rotator cuff surgery, we are saving an equivalent amount by not being able to travel as well as drastically reducing our entertainment and dining out spending. We will continue to be optimistic and budget for travel and entertainment, knowing that if one of us has a serious health issue, that budget will be reallocated to healthcare.

 

[COcheesehead]

I greatly appreciate all the responses and explanations. I spent much of this weekend educating myself but am still nowhere near as wise as you folks. But I had budgeted for much higher expenses out of ignorance years ago so updates to my retirement plan spreadsheet were positive. I still have a lot to learn though.

How do folks budget for out of pocket maximum? I am tempted to assume I have to spend 25% of that every year while in reality it would be more like 100% in one year if I had a serious illness in the 5 years I expect to be on ACA. Based on my personal analysis I will COBRA for 18 months and have an out of pocket maximum of $2500 those years which is in the noise. Of the 5 years I do ACA, the final year I could go on my partner's retirement insurance. Premium would be about the same but maximum would be closer to the $2500 I have now.

I have a line in our budget for deductibles or out of pocket max. If we don’t use it, we don’t use it. I also budget for a pair of eye glasses every year. Same thing. Better to over budget, than under budget.

 

[TripleLindy]

Healthcare coverage prior to Medicare is the most challenging part of early retirement for us. Income is difficult to predict and is subject to market dynamics. Further complications are introduced by the use of MAGI instead of AGI to determine income level for ACA subsidy qualification. We take the subsidy, but most years have to pay it back, primarily because of a tax exempt bond fund that is factored into MAGI but not AGI. I’m now out of that fund.

We subscribe to a Bronze plan because my wife and I are relatively healthy. I’ve been retired for 5 years and only once have I hit my out of pocket max, and that was due to 2 ortho surgeries in 1 year. (FYI - competitive pickleball is not as low impact as suggested �&#56898.

So consider premiums of $18k - $20k per year, plus a deductible of $8500. That puts anyone not qualifying for a subsidy at more than $25k in expenses BEFORE a single penny of coverage is applied. I could have paid for either surgery out of pocket for slightly more than my premium plus deductible, but insurance is required to account for the unexpected, like a cancer diagnosis. It’s a broken system that most people are not exposed to because their healthcare is subsidized - either by their employer or the government, like Medicare. If more people were exposed, there would be more pressure to fix it.

I’d prefer to find a catastrophic coverage plan that would cover things like auto accidents, major surgeries, cancer, etc., but not general care. The catastrophic plans on the ACA site have income and/or other limits - I don’t remember the specifics, only that we didn’t qualify. Plans outside of the ACA are littered with pre-existing condition clauses and border on fraudulent.

I have 5 more years until Medicare eligibility and my wife has 6. We’re fortunate in that we can afford ACA coverage, but it still strains the budget.

 

[COcheesehead]

Healthcare coverage prior to Medicare is the most challenging part of early retirement for us. Income is difficult to predict and is subject to market dynamics. Further complications are introduced by the use of MAGI instead of AGI to determine income level for ACA subsidy qualification. We take the subsidy, but most years have to pay it back, primarily because of a tax exempt bond fund that is factored into MAGI but not AGI. I’m now out of that fund.

We subscribe to a Bronze plan because my wife and I are relatively healthy. I’ve been retired for 5 years and only once have I hit my out of pocket max, and that was due to 2 ortho surgeries in 1 year. (FYI - competitive pickleball is not as low impact as suggested ��).

So consider premiums of $18k - $20k per year, plus a deductible of $8500. That puts anyone not qualifying for a subsidy at more than $25k in expenses BEFORE a single penny of coverage is applied. I could have paid for either surgery out of pocket for slightly more than my premium plus deductible, but insurance is required to account for the unexpected, like a cancer diagnosis. It’s a broken system that most people are not exposed to because their healthcare is subsidized - either by their employer or the government, like Medicare. If more people were exposed, there would be more pressure to fix it.

I’d prefer to find a catastrophic coverage plan that would cover things like auto accidents, major surgeries, cancer, etc., but not general care. The catastrophic plans on the ACA site have income and/or other limits - I don’t remember the specifics, only that we didn’t qualify. Plans outside of the ACA are littered with pre-existing condition clauses and border on fraudulent.

I have 5 more years until Medicare eligibility and my wife has 6. We’re fortunate in that we can afford ACA coverage, but it still strains the budget.

I went to a broker our first year on ACA. He kept showing us this huge subsidy we’d get. I pointed out to him that tax free income, of which we had a lot, would count against us. He argued it would not. I asked to look at his summary sheet that he had in front of him explaining what comprised MAGI. There at the bottom, it showed muni income. His excuse was that he didn’t get a lot of folks with muni bonds. Idiot. We still got a subsidy though, small as it is.
I over estimated our income and try and manage it closely, so we should be OK this year.

 

[SecondAttempt]

For us, despite DH already hitting the OOPM and my being very close to it already due to my rotator cuff surgery, we are saving an equivalent amount by not being able to travel as well as drastically reducing our entertainment and dining out spending. We will continue to be optimistic and budget for travel and entertainment, knowing that if one of us has a serious health issue, that budget will be reallocated to healthcare.

While that is disappointing for you and the future us. That was kind of my line of thinking as well. If I have a mjor health problem one year that makes me reach my maximum, my travel costs are likely to be much lower than planned.

 

[gauss]

I’d prefer to find a catastrophic coverage plan that would cover things like auto accidents, major surgeries, cancer, etc., but not general care. The catastrophic plans on the ACA site have income and/or other limits - I don’t remember the specifics, only that we didn’t qualify. Plans outside of the ACA are littered with pre-existing condition clauses and border on fraudulent.

I have 5 more years until Medicare eligibility and my wife has 6. We’re fortunate in that we can afford ACA coverage, but it still strains the budget.

If you don't mind forgoing the premium tax credit (PTC) for an ACA plan (ACA catastrophic plans are not eligible for subsidies), then an ACA catastrophic plan may be easier to obtain than you realize.

The main ACA catastrophic plan limit is age, however there are broad exemptions available. The exemptions seemed to line up with the ACA exceptions to the penalty for not having health insurance. Given my volunteer tax preparation work, I was quite familiar with the exemptions.

In my case I was able to get an exemption for "death of a family member". They don't specify how close the relationship has to be, The death has to be within the past few years and can be used for all the years that are within the window.

I was able to get a $1400/month policy for DW and myself for about $1100. I believe that the savings come from the fact that the ACA limits premium by age to a maximum of 3:1. The insurers, left to their devices, would charge a larger premium for age.

 

[teej1985]

If you don't mind forgoing the premium tax credit (PTC) for an ACA plan (ACA catastrophic plans are not eligible for subsidies), then an ACA catastrophic plan may be easier to obtain than you realize.

The main ACA catastrophic plan limit is age, however there are broad exemptions available. The exemptions seemed to line up with the ACA exceptions to the penalty for not having health insurance. Given my volunteer tax preparation work, I was quite familiar with the exemptions.

In my case I was able to get an exemption for "death of a family member". They don't specify how close the relationship has to be, The death has to be within the past few years and can be used for all the years that are within the window.

I was able to get a $1400/month policy for DW and myself for about $1100. I believe that the savings come from the fact that the ACA limits premium by age to a maximum of 3:1. The insurers, left to their devices, would charge a larger premium for age.

Yikes. How much would a bronze ACA plan cost you?

 

[COcheesehead]

Wow, that seems high. We pay about $800 a month for a gold plan for two. Age 59 and 61.

 

[livingalmostlarge]

depends really on what your income in retirement will be. If you can get subsidies i would think ACA is better deal.

 

[gauss]

Yikes. How much would a bronze ACA plan cost you?

Wow, that seems high. We pay about $800 a month for a gold plan for two. Age 59 and 61.

Both of my figures are without any subsidies and are for 2 adults. The $1,400 is the rate for a very similar bronze plan and the $1,100 figure is for the catastrophic plan.

It is a PPO plan from the major insurer in the area, who I assume, has negotiated favorable rates with the local providers.

-gauss

 

[Emerson11]

post medicare health insurance post Obama care

I'm 61 and have been buying health insurance for myself and/or my children since 2007. In 2007, I was able to get a high deductible, HSA Blue Cross policy for aprox. $350/mo that covered myself and my two college age children. After Obama care, similar insurance has dramatically increased every year because I must now pay for coverage for pediatric dental, prenatal, etc. etc. (not possibly need or wanted.) In 2022, I've been paying $891/mo for the same type of hsa policy for ONLY MYSELF. The deductible has approximately doubled to $8000. Long and short -- I now have to budget $20k per year for insurance.
By the way, I qualify for an ACA subsidy, but because my income is entirely from dividends, cap gains and interest, it's impossible to meet the filing requirements for income proof.

 

[PaunchyPirate]

… By the way, I qualify for an ACA subsidy, but because my income is entirely from dividends, cap gains and interest, it's impossible to meet the filing requirements for income proof.

If this is the case, You know you will get the subsidy credit when you file your 2022 taxes, right?

Proof requirements vary by exchange (I.e. Federal or individual states). In my 4 years, I’ve never had to provide any proof other than a simple paragraph indicating where my income was coming from. And that was only on my first year of ACA. Sorry to hear that yours is not so easy.

 

[Emerson11]

To obtain a reduced "catastrophic" BCBS rate, the requirements are that I state my income per month for the coming year -- not an estimate, but a stated amount. My monthly income varies widely. I can't guess even within a reasonable range, especially given the turmoil in the markets the last few years. The stated penalties for being incorrect are scary, and so I've been dissuaded from attempting the process. I'm not aware of any credit after already paying for insurance during the taxable year. Perhaps I and my tax preparer are missing something.

 

[jim584672]

By the way, I qualify for an ACA subsidy, but because my income is entirely from dividends, cap gains and interest, it's impossible to meet the filing requirements for income proof.

You should be able to upload 1099s from the last year and an explanation / attestation.

 

[PaunchyPirate]

To obtain a reduced "catastrophic" BCBS rate, the requirements are that I state my income per month for the coming year -- not an estimate, but a stated amount. My monthly income varies widely. I can't guess even within a reasonable range, especially given the turmoil in the markets the last few years. The stated penalties for being incorrect are scary, and so I've been dissuaded from attempting the process. I'm not aware of any credit after already paying for insurance during the taxable year. Perhaps I and my tax preparer are missing something.

I don’t know catastrophic plans, but with normal plans, if you are buying a plan via an ACA exchange AND your income qualifies you for a subsidy, if you don’t take it in advance, it will be reconciled for you when you file federal taxes. You will get a credit in the amount of your annual subsidy. If you are choosing to buy a plan NOT VIA the ACA exchange, then you surrender the subsidy.

 

[Emerson11]

Thank you for the information. I'll bring to attention of my tax preparer. Clearly they don't make this information easy to know for someone with unpredictable income. My tax prep guy is a cpa and he's known my situation. It seems that the ACA system is geared to those with pensions and/or predictable income.