x-factor in early retirement: medical insurance

[p27159]

I am in my early 50s, and my wife is in her mid-40s. We have a nice nest egg, mostly because we lived well below our means and invested well, plus a small inheritance from my mother-in-law grew into a fairly sizeable chunk. Theoretically we could probably retire right now, but I want a little more of a cushion in case the market turns bad (since I have no pension to fall back on for guaranteed income). But the one x-factor in all this is medical insurance. I have worked for large companies my entire life and always had pretty good insurance. The issue is that my wife has a pre-existing heart condition. With Obamacare in place, we would be able to get insurance and not be denied or charged thru the roof based on the pre-existing condition. Now that the mandate has been repealed, I figure Obamacare is going to implode sooner rather than later. Given that the Republicans CLEARLY do not have a palatable replacement in mind (due to the disaster of their proposed plan a few months ago), I have no idea what will happen next. It would really s*ck if I have to work until I'm in my mid-70s until my wife is eligible for Medicare (assuming they don't raise the age in the next 20 years) just because of this. And, or course, there's no guarantee I can continue to work that long. My company may lay me off, or I may develop a medical condition preventing me from working etc.

I am wondering if anyone knows how things were before Obamacare, if I was currently insured and then get laid off, and then went on COBRA for as long as I could to stay insured, would I have been denied coverage due to the pre-existing condition if I didn't ever let my insurance lapse? Of course, there's no guarantee that we would even go back to THAT system either, but I am just curious if there's a decent chance that I would be able to get insurance, and therefore be able to retire early.

I know my situation right now isn't as dire as many others affected by pre-existing conditions, but it's still a major thing for us. I don't want to turn this into a political discussion, as this can certainly turn the thread into an ugly exchange between the two political ideologies that seem to be embattled more and more as time goes on.

 

[Teacher Terry]

Cobra is only for a certain period of time and then you face having the same issue. When I was on Cobra ( a long time ago) they covered pre-existing conditions. Some people have gotten p.t. jobs such as at Starbucks because they offer health insurance. Even though ours is expensive I am glad that I receive HI through my previous employer because this will be a huge issue for many people.

 

[RunningBum]

Before Obamacare, if private insurance was your only option after Cobra expired, you would have been at risk of not being insurable. It's also possible you would've just paid a higher rate.

I'm not even certain that once you had private insurance if they were required to keep you. As I recall there were some games being played with jacking up rates for certain policies to try to squeeze people out. I don't remember details.

 

[scrabbler1]

Before Obamacare, if private insurance was your only option after Cobra expired, you would have been at risk of not being insurable. It's also possible you would've just paid a higher rate.

I'm not even certain that once you had private insurance if they were required to keep you. As I recall there were some games being played with jacking up rates for certain policies to try to squeeze people out. I don't remember details.

Sounds a little like a "death spiral" we have heard a lot in the last few years. After I ERed in late 2008, I had a somewhat affordable individual policy before they raised the premium by 20% in 2010 and by nearly 25% in 2011, raising my monthly premium to nearly $700 per month. If those rates of increase persisted for a few more years, it would have put some great strains on my budget, if not busted it. I surely hadn't budgeted for those high rates of increase in my ER plan.

In the middle of 2011, I switched to a low-cost, bare-bones hospital-only plan I kept through the end of 2013, before the ACA's exchanges came aboard.

 

[Bamaman]

You say your wife has a heart condition. Has she worked 10 years in the past, or 40 quarters? Is she able to work now? Do you think she might be eligible for Social Security disability? Those on SSD are eligible to get on Medicare two years after they are deemed "disabled.". Would this be an option?

 

[Sunset]

OP - will you be able to retire from a large company that has a retiree medical coverage ?

 

[Letj]

You say your wife has a heart condition. Has she worked 10 years in the past, or 40 quarters? Is she able to work now? Do you think she might be eligible for Social Security disability? Those on SSD are eligible to get on Medicare two years after they are deemed "disabled.". Would this be an option?

Is that the case even if you are wealthy?

 

[MRG]

Is that the case even if you are wealthy?

Medicare doesn't care.

 

[GalaxyBoy]

Check the FAQ forum. There are some excellent, very detailed posts still there about buying health insurance that date from the pre-ACA era. Look for the ones marked "(FAQ Archive)."

 

[gauss]

I feel for you. This is one of the reasons, as a proponent of ER, that I was so in favor of the ACA. It basically allows those outside of employer group plans and government sponsored insurance the same ability to purchase Insurance with community rated premiums. This is the opposite to medical underwriting where the premiums can be narrowly set to you to reflect your actual cost -- which IMHO is not insurance at all.

I believe that some states (New York) comes to mind had community rated premiums in their states insurance regulations prior to ACA. You may wish to research this. If worse came to worse, perhaps you could establish residency in one of these states to get the insurance you need in the gap until you qualify for employer group insurance or government sponsored insurance.

You could also investigate the various Health Sharing Ministries to see how they handle preexisting conditions and find out if they medically underwrite when they set premiums.

The idea about qualifying for SSD disability, if the disease becomes serious and DW is no longer able to work and participate in employer group plan, to enable early access to Medicare is also an option I have uncovered in the days after our most recent Presidential election. As mentioned their is a two year lag from the actual date that SSD is awarded, however, as previously mentioned.


I waited until the results of the 2012 Presidential election were decided until I ERd. I never thought that we would be having these discussions about repealing ACA after that point. Never say Never.

It is a shame that we are risking going back to a society where you are unable to purchase medical insurance outside of a workplace regardless of your need for the income.

-gauss

 

[Montecfo]

Under prior law, if you stayed insured, you could not be denied coverage when seeking new insurance (healthcare portability). But that is geared of course to people with access to coverage. So Cobra was (and is) and effective bridge to new insurance.

There was no guaranteed access.

I tend to think there is no going back to those days. By this I mean I believe Americans will always have insurance options. Cost will be an issue.

You cannot assure people will have coverage when they need it, and also not require them to buy it (or not impose meaningful penalties for failing to) without blowing up the cost for everyone.

 

[bingybear]

I think it was early 2013 when I called to see what med insurance would cost if I left work (on my own or not). This was a few months after getting a pacemaker. I had insurance thru work with the same insurer, but in a different state. They wanted to know if I was looking for a denial letter so I could get in high risk pools. The gave me a quote (noting the only reason they would take me was I had insurance thru them at the time) that was many times the cost with several times the the deductible that I had at work. It as similar to the cheapest bronze plans for coverage and about 14k/yr just for me. They noted not to put the wife under the same plan as she would inherit my rates. Sh could get a plan more similar to my work plan at 350-400 a month with lower deductibles. They did note that after a few years I could get a review on my rating.


I don't think the old portability was accessibility to coverage. When you changed employers and thus employer's insurance, this documented your continuous coverage so the pre-existing conditions were covered. But in the individual market they could still deny coverage or jack rates, IIRC.

 

[exnavynuke]

I think it was early 2013 when I called to see what med insurance would cost if I left work (on my own or not). This was a few months after getting a pacemaker. I had insurance thru work with the same insurer, but in a different state. They wanted to know if I was looking for a denial letter so I could get in high risk pools. The gave me a quote (noting the only reason they would take me was I had insurance thru them at the time) that was many times the cost with several times the the deductible that I had at work. It as similar to the cheapest bronze plans for coverage and about 14k/yr just for me. They noted not to put the wife under the same plan as she would inherit my rates. Sh could get a plan more similar to my work plan at 350-400 a month with lower deductibles. They did note that after a few years I could get a review on my rating.


I don't think the old portability was accessibility to coverage. When you changed employers and thus employer's insurance, this documented your continuous coverage so the pre-existing conditions were covered. But in the individual market they could still deny coverage or jack rates, IIRC.

Continuous coverage was great, as long as you could afford the prices... people with pre-existing conditions could get insurance but it would cost more than many people's annual income to pay the premiums back in the day..

 

[joeea]

I tend to think there is no going back to those days.

By this I mean I believe Americans will always have insurance options. Cost will be an issue.

That seems exactly like "those days" to me. There were always insurance options - if you could somehow afford them.

Some politicians have used the term "access to insurance" as code for this scenario.

 

[Pilot2013]

Back to those days might be one of 2 things:

Planning accordingly to cover insurance costs so that you can ER (like everyone did before ACA) or;
Keep working to 65 and go on to Medicare.

ER was done before tax based supplement was available.

 

[bingybear]

Back to those days might be one of 2 things:

Planning accordingly to cover insurance costs so that you can ER (like everyone did before ACA) or;
Keep working to 65 and go on to Medicaid.

ER was done before tax based supplement was available.

do you mean medicare?

 

[Pilot2013]

do you mean medicare?

Yep! Corrected.

 

[p27159]

disability

You say your wife has a heart condition. Has she worked 10 years in the past, or 40 quarters? Is she able to work now? Do you think she might be eligible for Social Security disability? Those on SSD are eligible to get on Medicare two years after they are deemed "disabled.". Would this be an option?

My wife works part time, she is not disabled and can continue to work. The problem is, her line of work generally will not come with health benefits.

 

[p27159]

retiree medical? ha ha!

OP - will you be able to retire from a large company that has a retiree medical coverage ?

Retiree medical is a thing of the past, I am afraid. Not very many companies offer that perk anymore.

 

[p27159]

Under prior law, if you stayed insured, you could not be denied coverage when seeking new insurance (healthcare portability). But that is geared of course to people with access to coverage. So Cobra was (and is) and effective bridge to new insurance.

There was no guaranteed access.

I tend to think there is no going back to those days. By this I mean I believe Americans will always have insurance options. Cost will be an issue.

You cannot assure people will have coverage when they need it, and also not require them to buy it (or not impose meaningful penalties for failing to) without blowing up the cost for everyone.

When you say "you could not be denied coverage when seeking new insurance", could they just offer you insurance with some crazy high premium (say $40K/yr) to effectively price most people out?

I agree that the mandate is basically what made Obamacare work. I can't believe how many people out there don't really understand the basics of health insurance. I am not a big fan of forcing people to do things, but the government does this all the time. We are forced to pay taxes, we are forced to pay auto insurance if we want to drive a car, etc. These are all for the common societal good. Health insurance is the same in that regard, but people are so short-sighted that they can't think about all these scenarios we have discussed if they personally aren't in that situation themselves.

 

[p27159]

When you say "you could not be denied coverage when seeking new insurance", could they just offer you insurance with some crazy high premium (say $40K/yr) to effectively price most people out?

I saw another post after this one that confirmed what I was asking here. I pretty much figured this was the case. I don't really have the option to move to a state that might have insurance (like I think Mass does). I am a bit depressed now. But I am hopeful people will come to their senses and figure out a way to modify Obamacare to make it work, but without the mandate, I don't see how. And clearly nobody else seems to have any good alternatives. Single payer is out there now as another option being discussed again, which I suppose is Medicare for all. We'll see what happens with that, but there was so much opposition to the government getting into healthcare before, that I don't see it changing much now.

 

[brucethebroker]

This is a topic that comes up quite often. There are no guarantees when you retire, and it isn't just health care.

SS retirement benefits might be cut in the future. Pension funds could go bankrupt. The stock market might go down to a historic low for a decade. Interest rates will change. Housing markets will jump around.

Many of here have health conditions that were taken into consideration before retirement/semi-retirement. Some left the workforce to retire, and others did not. The only guarantee is to hold out for Medicare. And even that could change in the future.

It is good that you are seeking advice before making such a critical decision. Good luck.