Older Americans may have to postpone retirement under New health bill

[ejman]

Before the ACA, qualifying and finding affordable health insurance was a huge topic on this and other ER forums. There are probably hundreds if not thousand of older posts on the subject on this forum alone. On the Reddit financial independence forum the potential ACA changes are a game changer for many who wanted to ER.

As I've posted elsewhere, I ER'd in 2002, long before ACA. It surprised me to no end that I could not find health insurance at any price due to preexisting conditions that I thought were minor. I contacted every insurer offering policies in my area. All rejected us. I ended up having to create a business just so I could get a "group" plan for the two of us. Lousy very expensive coverage but that was the best I could do. If I had known beforehand the difficulties in obtaining health insurance I would have delayed my retirement.

 

[Fedup]

Which provision? Do you have a link or reference?

I think I've heard either Price or Ryan said on TV. I found the link. Phase 3
https://www.speaker.gov/general/three-phases-repeal-and-replace

 

[MichaelB]

I think I've heard either Price or Ryan said on TV.

That's rhetoric, not a proposal under consideration. AFAIK (again) neither of the two bills under consideration include any reference to changing or allowing an exception to the McCarran-Ferguson Act.

 

[daylatedollarshort]

As I've posted elsewhere, I ER'd in 2002, long before ACA. It surprised me to no end that I could not find health insurance at any price due to preexisting conditions that I thought were minor. I contacted every insurer offering policies in my area. All rejected us. I ended up having to create a business just so I could get a "group" plan for the two of us. Lousy very expensive coverage but that was the best I could do. If I had known beforehand the difficulties in obtaining health insurance I would have delayed my retirement.

We know people that went back to full time work for the same reason. Ironically, their conditions were the types often stress related, though managed with medication. They though they were pretty healthy for their ages, too. How many age 50+ people, even athletic ones, do not have some kind of adverse health condition past or present in their medical records?

 

[easysurfer]

I'm already retired and under the current ACA. I've decided to wait and wait and wait about the new health bill until the smoke clears and settles to really pay any attention to what's happening. Otherwise, that'll be like drawing conclusions to a baseball game and only after the first pitch was thrown .

 

[Chuckanut]

Part of the problem is that many in the press and the political world are having a screaming match rather than a good solid discussion on fixing the ACA. Thus, we the public are very confused as to what the proposed changes will do.

The British members here can correct me, but I believe their system was unpopular with many at the start and has been corrected/fixed/fine-tuned many times since it was introduced.

 

[photoguy]

I don't understand the interest in cross state insurance competition nor see how that would lower insurance premiums for equivalent level of coverage.

The experience at CoveredCA suggests that a big part of the problem is lack of competition at the provider level

In July, when new 2016 rates for Covered California health care plans were announced, Northern California consumers faced additional sticker shock: Those who stay with their existing plan can expect their average premiums to jump 7 percent, compared with only 1.8 percent in Southern California.

What accounts for the price difference between north and south? It’s simple, some experts say: lack of competition. Northern California tends to be dominated by larger hospital chains such as Sutter Health and Dignity Health, while Southern California has smaller hospital alliances and more independent doctor groups.

Two halves of California have wide gap in health costs | The Sacramento Bee

 

[travelover]

Part of the problem is that many in the press and the political world are having a screaming match rather than a good solid discussion on fixing the ACA..........

I think that posing this as "the press" against "the political world" is not accurate.

 

[jimbee]

I don't understand the interest in cross state insurance competition nor see how that would lower insurance premiums for equivalent level of coverage.

I don't understand how competition between insurance companies can affect premiums much, either. The ACA requires 80% of premiums to be paid out as benefits. That leaves 20% that can be affected by insurance company competition. That 20% includes operating costs and profits. Taken to a ridiculous extreme, assume the insurance companies don't have operating costs or make any profit, the premiums drop 20%. That isn't enough to make premiums affordable for a lot of people.

The big problems are the costs of service, and the make up of the insured pool in ACA marketplace insurance. The first problem isn't being addressed, and the second can't be until the majority of health insurance can be separated from employers. I don't see that happening.

 

[Pilot2013]

I've said multiple times, the ACA was not in existence a few "short" years ago, yet people figured out how to ER.

I'll be more blunt. If you can't make a plan to ER without counting on other peoples money in the form of "subsidy", then you need to go back to FIRECALC, and build another plan.

 

[jimbee]

I've said multiple times, the ACA was not in existence a few "short" years ago, yet people figured out how to ER.

I'll be more blunt. If you can't make a plan to ER without counting on other peoples money in the form of "subsidy", then you need to go back to FIRECALC, and build another plan.

I'll be blunt too. The only text in this thread using the word subsidy is yours.

 

[LastOfTheBoomers]

I'm trying to run the numbers for DW and I

Current ACA plan is 1103 a month or 13236 a year. We are over the cutoff by about $19k - pesky LTCG at end of year gets us.

If I divide the current premium by 3 and then multiply by 5 it becomes 1838 a month.

Multiply that by 12 and then subtract the new tax credit - the result is 14560

So the yearly cost goes up 1326

I guess this is the worst case scenario.

Has anyone else ran their numbers?

Frankly if they kept the current ACA plan and did the HSA enhancements that would work out pretty well.

 

[gerntz]

- That insurance companies could charge 5x for older customers doesn't mean they will; i.e., they may find it better to charge younger people 1/3 of older ones for their best miz of customers.
- No reason for young-uns to subsidize olders. Olders are the ones with $$$ by & large.

 

[gerntz]

I don't understand the interest in cross state insurance competition nor see how that would lower insurance premiums for equivalent level of coverage.

The experience at CoveredCA suggests that a big part of the problem is lack of competition at the provider level





Two halves of California have wide gap in health costs | The Sacramento Bee

IMO, it's nice to know market forces do work for health care costs. Who knew?

 

[Pilot2013]

I'll be blunt too. The only text in this thread using the word subsidy is yours.

Touche. Although I would argue ACA is synonymous with "that" word.

The point is still the same. There are multiple different topics here, all about the ACA change. I just point out that people did this whole FIRE thing before this came about.

I would have "gamed" the system just like everyone else on here (holding taxable income down to get the best "deal" on the kickback for premium coverage). So I am not giving a holier than thou statement, but I'm not going to shoot those that are trying to change it either. It has to start somewhere.

I also agree that both the ACA, and the new proposal are WAY too focused on paying for premiums through "breaks" of some kind, rather than cost control.
I'm just not smart enough to know the answer to that part of the problem.

I avoided subsidy the whole post! Oops.

 

[Fedup]

The Ex-CEO of Aetna on CNBC said selling across state line is not a silver bulletin, but he seemed to imply it might help, but not 100%.

 

[jimbee]

I'm just not smart enough to know the answer to that part of the problem.

Me either.

I avoided subsidy the whole post! Oops.

 

[Midpack]

I don't understand how competition between insurance companies can affect premiums much, either. The ACA requires 80% of premiums to be paid out as benefits. That leaves 20% that can be affected by insurance company competition. That 20% includes operating costs and profits. Taken to a ridiculous extreme, assume the insurance companies don't have operating costs or make any profit, the premiums drop 20%. That isn't enough to make premiums affordable for a lot of people.

I understand what you're saying re: insurance costs. As you know, it's the underlying costs of procedures, and the staggering variation in those costs that are the root of the issue. By restricting competition between insurance providers, you help medical providers keep prices high.

Add the trend with hospitals being bought out as the industry consolidates. That removes competitive pricing between hospitals, even across state lines.

Now imagine the extreme cost variance below. If you need a hip replacement in a state/hospital system where it costs $125,000, even if your insurance providers knows it costs $11,000 a state or two away - they can't do anything about it. And we all pay.

Competition across state lines may not be a silver bullet, but it could only help in time. The underlying costs of health care in the US are much higher than all other developed countries, and we don't have better outcomes to show for it. If we don't get at underlying costs, the rest won't make it more affordable.

Here's an experiment. Call up dozens of hospitals all over the country. Tell them your grandmother needs a hip replacement and ask: How much will it cost? The answers are stunning. If you can manage to get an answer, it might range anywhere from $11,000 to 125,000. This very experiment was described in an article published online yesterday by the Journal of the American Medical Association, the Internal Medicine edition.

 

[jimbee]

I understand what you're saying re: insurance costs. As you know, it's the underlying costs of procedures, and the staggering variation in those costs that are the root of the issue. By restricting competition between insurance providers, you help medical providers keep prices high.

Add the trend with hospitals being bought out as the industry consolidates. That removes competitive pricing between hospitals, even across state lines.

Now imagine the extreme cost variance below. If you need a hip replacement in a state/hospital system where it costs $125,000, even if your insurance providers knows it costs $11,000 a state or two away - they can't do anything about it. And we all pay.

Competition across state lines may not be a silver bullet, but it could only help in time. The underlying costs of health care in the US are much higher than all other developed countries, and we don't have better outcomes to show for it. If we don't get at underlying costs, the rest won't make it more affordable.

Well, I did mention cost of services is one of the big problems, in the paragraph you snipped.

I don't see how allowing insurance companies to offer policies across state lines (which has been allowed in a limited fashion by the ACA since January 2016) can induce competition between medical providers in different states.

 

[eroscott]

Which provision is this? Do you have a link?

They have to do it in mulitiple parts and the first is the "easy" one. In the others they need 60 votes.

http://www.msn.com/en-us/news/polit...ans’-hands-on-obamacare/ar-AAo4zlr?li=BBnb4R7

Sure, Republicans would like to do it all at once — peeling off this section of the Band-Aid has been painful enough. But they can't. That's because of a special budget rule called reconciliation, which forces them to make a decision: undo some of Obamacare with a simple majority vote in both chambers, or undo all of it and face a 60-vote majority threshold — a majority Republicans don't have and won't get — in the Senate.
<snip>
The ability to buy insurance across state lines, an attempt to lower drug prices and malpractice liability protections for health-care providers, “can't be done through this current bill,” Trump press secretary Sean Spicer acknowledged this week.
<snip>
Ryan outlined three phases in which health-care reform would be achieved: first, via the special budget procedure known as reconciliation, of which the current measures are a part; then, through regulations at the Department of Health and Human Services; and finally, the passage of other bills that will need bigger backing and could include the ability to buy insurance across state lines.

 

[travelover]

............ By restricting competition between insurance providers, you help medical providers keep prices high.................

Is this true? I was under the impression that bigger insurance companies could bargain harder for lower prices. It would seem that many small insurers each would have little leverage against a big medical system.

 

[cathy63]

I'm trying to run the numbers for DW and I

Current ACA plan is 1103 a month or 13236 a year. We are over the cutoff by about $19k - pesky LTCG at end of year gets us.

If I divide the current premium by 3 and then multiply by 5 it becomes 1838 a month.

Multiply that by 12 and then subtract the new tax credit - the result is 14560

So the yearly cost goes up 1326

I guess this is the worst case scenario.

Has anyone else ran their numbers?

Frankly if they kept the current ACA plan and did the HSA enhancements that would work out pretty well.

I think you've actually identified one of the best case scenarios here, because your numbers are predicated on the young person's premiums remaining the same as what they pay now. A worse case is that rates go up substantially due to decreased regulation or fewer healthy people buying insurance. For every $1 that the young person's premium increases, yours can go up $5. A $100/mo increase at the lower end of the scale could add up to $500/mo or $6K/yr on top of that $1326.

 

[samclem]

I don't understand how competition between insurance companies can affect premiums much, either. The ACA requires 80% of premiums to be paid out as benefits.

I 100% agree that the big driver of HI cost is the underlying cost of care. But insurers can affect the cost of care, and increasing competition among insurers can induce them to help reduce care costs.
Imagine there's one insurer in a market, and lots of medical care providers. The insurer has very little incentive to drive down the underlying cost of care--the insurer effectively gets a 20% "commission" on top of whatever the medical costs are. They can charge higher premiums if MRIs cost $500 than if they cost $100. And they can pass it all on to policyholders, who have no choice but to pay it. But if there's competition between insurers, the insurers have a reason to get a good deal on the MRI, knee replacements etc because customers will be shopping among many insurers in a competitive marketplace for the best value. So the insurers will seek to get the best value, too.
The market can work, but I have big concerns that enough info will be available to consumers, in a readily digestible manner, to allow competition to work.

 

[Al in Ohio]

The three elements of health care are
Universal
Accessible
Affordable
No country has gotten more that 2 of the three. Why do Canadians come across the border? because they do nt want to wait to get treated

I have spent time in Canada. That's way overblown. The vast majority of Canadian's love their healthcare system and in fact have greater satisfaction with their care. Also the Canadian med system is proven to have less mis- diagnoses and lab errors. Emergency care and routine care wait times are only slightly longer (days) while appointments for specialists for elective procedures can take 4 weeks or longer. Very few Canadians travel south in actuality for care in the US. They truly laugh at our health care system in comparison to theirs. They like the Netherlands have 3 out of 3 of the above criteria pretty close. I am pretty sure there are more, but those more well traveled will weigh in is my guess.

 

[Al in Ohio]

From the article: "Given that possible change, experts say pre-Medicare workers are likely to stay in their jobs longer to keep their employer-sponsored health insurance, even though they may be ready to retire in other ways — financially and emotionally, for instance — to retire."

This is the first time I have ever heard/read that someone might need to be emotionally ready to retire. I think I was emotionally ready to retire at 18. I just didn't have the money.

I don't read that as either financially or emotionally, but literally as written: "financially AND emotionally", which I believe you have to be both, or your not qualified.