Am I the only one having to work until 65 just for healthcare?

[joeea]

Everyone has expenses that they have to find a way to get covered before they can afford to retire (early or otherwise). Healthcare is just one of them.

 

[RunningBum]

Everyone has expenses that they have to find a way to get covered before they can afford to retire (early or otherwise). Healthcare is just one of them.

I can't think of another expense that was either covered or subsidized heavily, considered critically needed by most, and with unpredictable increases soundly trouncing inflation in many, many cases. Add to that the uncertainty of coverage at all if everything returns to pre-ACA days. I don't think you can pass healthcare off as just one of many expenses. It's pretty unique, and huge.

 

[pb4uski]

I'm in Ohio and our Obamacare stinks, so I'm working simply for the paid healthcare. I have two years until Medicare, so it's not terrible, but I wish I had other options. My supplied healthcare is simply excellent and I can't touch it with a marketplace policy. I wish our government would simply stay out of healthcare insurance so we can plan with some actual hard data from year to year.

A few things to consider.

For ER, health insurance is part of the price of freedom. Is two years of not working and having time to do what you want worth the cost? It was for me.

My unsubsidized ACA cost is less that COBRA would have been... in both cases with high deductibles. Check out healthsherpa.com for plans available in your area.

When comparing costs, be sure to look at the combination premiums and deductibles and co-pays based on your likely use of the plan... we have a HDHI plan with high deductibles but we are both in good health so our actual medical service costs are less than $1,000 a year. We know some people in good health who brag about their excellent coverage but totally lose sight of the fact that they pay much more in premium in a year than they would with a bronze plan and whatever medical services that they use.

Finally, remember that health insurance is not to pay every little bill.. but to protect your wealth from an expensive medical illness and get you access to negotiated rates for healthcare services.

 

[gauss]

OP,

You will have a hard time convincing most of us here that ACA is bad for ER's. In fact, its existence allowed me to retire early. Not having ACA would subject me to the risk that our employer would cancel retiree coverage and/or that I would get really sick then have my premiums soar based upon this.

That being said if, for whatever reason, you are happy with your employer-sponsored health insurance, then good for you! I saw somewhere in thread that PPOs are no longer being offered in some markets. I personally would not like an HMO, but I certainly would not be willing to work for 2 more years, especially at age 63, to avoid an HMO.

Have you done much research on ACA plans on how the insurance companies cannot charge you more if you get sick? Most of the alternatives to ACA being floated do not contain this important provision.

Have you looked into how if your income (MAGI) is less than 400% of the Federal Poverty Level (FPL), then you will pay no more than 10% of your income on premiums -- or ~ 2% if your income is closer to 150% of FPL. Remember that qualified Roth distributions and funds taken from after-tax investments will not influence MAGI except for any capital gains that you may incur.

ACA is a complicated beast but definitely not a bad deal for ERs -- IMHO.

-gauss

 

[FreeBear]

A couple of perspectives.

A buddy of mine would have half my withdrawal rate and is 5 years from medicare, but keeps w*rking only for health insurance. He's a moderate healthcare user and goes for all the doctor-recommended tests & screens. This is clearly a common view, perhaps majority opinion, at least in the "real word" beyond the small confines of the FIRE community.

I FIRE'd decades away from Medicare, in part enabled and inspired by ACA. I see ACA as mainly health bankruptcy insurance. I avoid doctors and screening unless I show symptoms, and have been healthy for decades. My biggest risk is maintaining our health and energy long enough to enjoy our active outdoor pursuits. Running out of time is a bigger risk than running out of money or even decent healthcare, regardless of cost. This makes me an outlier in real world.

Several friends are small business owners. Some struggle financially, others do very well. All are on ACA plans, with and without subsidy. The limited networks/no PPO are a headache and unsubsidized cost makes the eyes water. They are moderate healthcare users. Still, they get on with their lives, not the end of the world.

I feel better off than my small business friends since I have the same so-so insurance but I don't have to w*rk
On the other hand, I envy those with inexpensive big gov. or Megacorp Cadillac retiree health. I guess it's a matter of perspective...

 

[6miths]

I wish our government would simply stay out of healthcare insurance so we can plan with some actual hard data from year to year.

I am so thankful that our government is involved in healthcare. I am happy to not to have had to worry about healthcare ever for myself, DW, my children, my parents.... I am happy to have retired at 52 and still have the same coverage I did at 50. I was happy to be a healthcare worker in the employ of the government. But I suppose there is something to be said for having such a wide spectrum of choices.

 

[sengsational]

PPACA allowed me to retire at 54. I thought there would be a tidal wave of job locked people doing the same thing.



As to the quality of available ACA plans, I don't have much choice, but I don't care what the price is, as long as the second lowest silver plan stays priced high.



As to which doctors are available to me, there are two mega practices in my geography. Doctors are like blackjack dealers... people ascribe a lot of juju, but when it comes down to it, they are a machine. The presiding overlord tells them what the rules are, and they must follow those rules. In our sick care system, it's a dual overlord of medmega and insuremega that's the controlling force.



This is written by someone who rarely uses the system, so I'm really just buying the max out of pocket for the smallest premium. Some of my relatives have complained about crummy policy choices, but when I pulled back the curtain, it was that they didn't like the high deductible. But when I found their expected number of doctor visits was like 3 per year, and the premium was way cheaper, the light bulb went on. It's a transition from the old way, but if you put the expected usage and premiums into the equation, it can be a great deal, especially with the PTC.


If you want a health care doctor nowadays, your probably going to have to go to a concierge doc. You might find one that would buck the system, though. I had one like that, still go to him, but he was beaten down in the last few years by "the system" and he's acting more like the "sick care" cog I was talking about above.

 

[Walt34]

I wish our government would simply stay out of healthcare insurance so we can plan with some actual hard data from year to year.

Be careful what you wish for. You might get it.

Granted that the choices in your specific location are not the best, but a lot of other people are very grateful for the ACA, even with all it's flaws and imperfections. Without the ACA hundreds of thousands (millions?) of people with preexisting conditions had to either stay employed where they could get insurance until age 65 or do without insurance of any kind. That could be an awful choice to have to make.

 

[Dtail]

It is a little radical, but a few ER folks do move to places with better ACA choices/rates as a key consideration.
We got lucky, as FLA was always the choice.

 

[joeea]

I can't think of another expense that was either covered or subsidized heavily, considered critically needed by most, and with unpredictable increases soundly trouncing inflation in many, many cases. Add to that the uncertainty of coverage at all if everything returns to pre-ACA days. I don't think you can pass healthcare off as just one of many expenses. It's pretty unique, and huge.

It is just one of many expenses.

As you indicate, the future of healthcare is uncertain. In the face of that uncertainty you could keep working rather than retiring early, move to some place with a different healthcare system, or you could make sure your portfolio is large enough to handle whatever happens and hope for the best.

I'm not sure there are any other viable options in our current healthcare system.

 

[scrabbler1]

A few things to consider.
Finally, remember that health insurance is not to pay every little bill.. but to protect your wealth from an expensive medical illness and get you access to negotiated rates for healthcare services.

+1000.

THIS is the most important part of having health insurance. Simply having it limits the costs of my more routine medical procedures and doctor visits, while making my prescription drugs (particularly one expensive one) affordable. And, I am protected from "the big one," a big medical event which could severely damage me financially instead of costing me the max OOP, a much more affordable ~$6,000 a few years ago following a 12-day hospital stay (instead of the ~$80k it would have cost me).

Because I retired in 2008 before the ACA and the exchanges was enacted, I was subject to all the awful conditions in effect at the time in 2008-2013. While I maintained uninterrupted coverage the whole time and was healthy for those years (I got sick in 2015), I saw a 50% increase over a 2 year period (2010-2011). Thanks to the ACA, my HI has been Affordable. I am paying now what I was paying in 2010 (excluding the small premium subsidy; I am near the top MAGI limit to get one).

I am only 55, so I have another 10 years of the ACA before I qualify for Medicare. I hope the ACA remains viable enough despite efforts to undermine and weaken it and make it needlessly costlier.

 

[badatmath]

I don't know why people assume ACA complaints are about cost. I have exactly 1 provider in my county - an HMO with a poor reputation. I don't care if its free it is not good enough to rely on in my book.

 

[24601NoMore]

I guess it's all a matter of perspective and also the plans available in your geography..

The cheapest PPO I can find for me and DW is $14K/yr premiums with $6,500 PER PERSON deductibles. That's like not even having insurance as you'll need to have a major HC issue to even have the first annual bill paid.

How anyone can call that "Affordable" (as in the 'A' in ACA) is beyond me. It's more per month than our mortgage used to be. Thank God we now have that paid off and can shift our $$s to HC premium payments, but still..

(And, yes, I realize we could choose to limit our AGI to < 4X FPL and get subsidies..that really isn't the best choice given our other expenses - I've run the numbers both ways..income < 4X FPL for subsidies and income > 4X FPL and paying through the nose. In the long run, it's better to be > 4X FPL, but the yearly cost is INSANE, IMHO and I totally understand OP and others wanting to continue working for the HC).

ETA: because of the crazy deductibles, we're actually going to do COBRA for the first 18 months. That's roughly the same premium cost but at least we actually get "some" coverage as the deductibles are normal - $500 for me, $1,500 for DW. Beats the heck out of $6,500 per person on the ACA plans.

BTW, I DO realize this is "the price of freedom" and have budgeted accordingly for it - but it still tweaks me off no end that I have to shovel out roughly $75 - $100K over the next 5 years till DW gets to Medicare and another $50K+ for the 5 years after that until I do. That's significant and definitely NOT "affordable".

 

[ShokWaveRider]

For me I will be on Medicare in 2019. I have an ACA plan in 2018. for me Medicare is way more expensive than my current ACA plan. $340 a month more actually (at 2018 rates).

 

[MRG]

I guess it's all a matter of perspective and also the plans available in your geography..

The cheapest PPO I can find for me and DW is $14K/yr premiums with $6,500 PER PERSON deductibles. That's like not even having insurance as you'll need to have a major HC issue to even have the first annual bill paid.

How anyone can call that "Affordable" (as in the 'A' in ACA) is beyond me. It's more per month than our mortgage used to be. Thank God we now have that paid off and can shift our $$s to HC premium payments, but still..

(And, yes, I realize we could choose to limit our AGI to < 4X FPL and get subsidies..that really isn't the best choice given our other expenses - I've run the numbers both ways..income < 4X FPL for subsidies and income > 4X FPL and paying through the nose. In the long run, it's better to be > 4X FPL, but the yearly cost is INSANE, IMHO and I totally understand OP and others wanting to continue working for the HC).

ETA: because of the crazy deductibles, we're actually going to do COBRA for the first 18 months. That's roughly the same premium cost but at least we actually get "some" coverage as the deductibles are normal - $500 for me, $1,500 for DW. Beats the heck out of $6,500 per person on the ACA plans.

BTW, I DO realize this is "the price of freedom" and have budgeted accordingly for it - but it still tweaks me off no end that I have to shovel out roughly $75 - $100K over the next 5 years till DW gets to Medicare and another $50K+ for the 5 years after that until I do. That's significant and definitely NOT "affordable".

'Tis but thy name that is my enemy;
Thou art thyself, though not a Montague.
What's Montague? It is nor hand, nor foot,
Nor arm, nor face, nor any other part
Belonging to a man. O, be some other name!
What's in a name? That which we call a rose
By any other word would smell as sweet;
So Romeo would, were he not Romeo call'd,
Retain that dear perfection which he owes
Without that title. Romeo, doff thy name,
And for that name which is no part of thee
Take all myself

 

[ShokWaveRider]

I guess it's all a matter of perspective and also the plans available in your geography..

The cheapest PPO I can find for me and DW is $14K/yr premiums with $6,500 PER PERSON deductibles. That's like not even having insurance as you'll need to have a major HC issue to even have the first annual bill paid.

How anyone can call that "Affordable" (as in the 'A' in ACA) is beyond me. It's more per month than our mortgage used to be. Thank God we now have that paid off and can shift our $$s to HC premium payments, but still..

(And, yes, I realize we could choose to limit our AGI to < 4X FPL and get subsidies..that really isn't the best choice given our other expenses - I've run the numbers both ways..income < 4X FPL for subsidies and income > 4X FPL and paying through the nose. In the long run, it's better to be > 4X FPL, but the yearly cost is INSANE, IMHO and I totally understand OP and others wanting to continue working for the HC).

ETA: because of the crazy deductibles, we're actually going to do COBRA for the first 18 months. That's roughly the same premium cost but at least we actually get "some" coverage as the deductibles are normal - $500 for me, $1,500 for DW. Beats the heck out of $6,500 per person on the ACA plans.

BTW, I DO realize this is "the price of freedom" and have budgeted accordingly for it - but it still tweaks me off no end that I have to shovel out roughly $75 - $100K over the next 5 years till DW gets to Medicare and another $50K+ for the 5 years after that until I do. That's significant and definitely NOT "affordable".

Why is it folk LOVE to blame the ACA for all THEIR healthcare woes? It is the Insurance companies that are gauging the folk, and NOT providing adequate coverage. ACA just says you need to cover some BASIC items (Quite reasonable really). Insurance companies are the ones that set the prices. If we had a proper system then Insurance and Basic healthcare would not even be used in the same sentence. It should be NOT FOR PROFIT!

 

[rayinpenn]

I am 60 and happy with ACA plans available to me in Central MN.

If you're curious about ACA options and costs, here's a useful calculator:
https://www.kff.org/interactive/subsidy-calculator/

Me 64, her 61 and son in college 20. The calculator says $3,354 a month for a silver plan here in Pennsylvania. My MAGI is too high. Then there is deductible to be met. I have a HC stipend from work and suspect it will end up costing roughly $2,500 a month. My planned retirement date is 1/6/2019.

I absolutely haven’t rushed to retire because thats a insane amount of money that I’d rather pass along to my kids.


Fortunately ill be 65 in July it wii drop to roughly 2 grand that my SS should cover. Pricey.

 

[24601NoMore]

Why is it folk LOVE to blame the ACA for all THEIR healthcare woes? It is the Insurance companies that are gauging the folk, and NOT providing adequate coverage. ACA just says you need to cover some BASIC items (Quite reasonable really). Insurance companies are the ones that set the prices. If we had a proper system then Insurance and Basic healthcare would not even be used in the same sentence. It should be NOT FOR PROFIT!

Because the ACA caused premiums and deductibles to SKYROCKET. I used to be able to buy a decent policy for < $10K for both of us, with reasonable deductibles ($1K or so IIRC).

Now, because the ACA mandates that plans must cover a variety of things that were not in the 'old' plans for EVERYONE - eg: pregnancy (even if you're a man, or outside of child bearing years either of which is obviously ridiculous) and a number of other ill conceived requirements, the costs have increased significantly. The individual mandate, believe it or not, also caused costs to increase - because it forced people to have insurance. (Easy to do - you have a product people HAVE to buy, so cost becomes immaterial). When the mandate was eliminated, many have found that costs are actually starting to stabilize.

Anyway, I don't think skyrocketing premiums and deductibles are anyone's individual issue (ie: "their" problem). I think the problem is much bigger than that, and there needs to be a way for costs to come back down to what is truly "affordable" for people - and $14K with $6,500 pp deductibles is not what most people would call affordable.

Back to the OP's original point - all this is definitely a very fair reason to consider continuing to work - unless you run the math and are comfortable not only with what you know today you will have to spend (wheelbarrows full of money unless you play the AGI game), but what you could also risk having to pay going forward IF you can even continue to get insurance..I know this was the #1 thing holding me on OMY for a long time and I'm still not entirely comfortable with the risk or the cost of what I'm going to need to pay as a result of deciding to ER..

ETA - a simple solution would be to allow insurance companies to once again offer 'catastrophic' plans. Really makes one wonder why the ACA prohibited them from doing so..

 

[Mr._Graybeard]

I guess it's all a matter of perspective and also the plans available in your geography..

The cheapest PPO I can find for me and DW is $14K/yr premiums with $6,500 PER PERSON deductibles. That's like not even having insurance as you'll need to have a major HC issue to even have the first annual bill paid.

How anyone can call that "Affordable" (as in the 'A' in ACA) is beyond me. It's more per month than our mortgage used to be.

Yes, that income cliff is a weak point of the legislation. Somebody ought to fix that.

Actually, we're feeling a little sticker shock this year while transitioning from our free-after-subsidy Bronze ACA plan to Medicare. Looks like DW and I will shell out about $500/mo for Medicare B, a supplemental policy and Medicare D plan starting next year. I wish Medicare had a high-deductible option.

 

[The Cosmic Avenger]

Because the ACA caused premiums and deductibles to SKYROCKET. I used to be able to buy a decent policy for < $10K for both of us, with reasonable deductibles ($1K or so IIRC).

And gas used to be 5 cents a gallon. Premiums were skyrocketing faster before the ACA:

While health insurance premiums have increased since the passage of the Affordable Care Act, the law actually reduced the rate of increases. Between 2002 and 2008, average family premium costs increased by 58%. Since the passage of Obamacare, in 2010, average premium costs have only increased by around 33%. That’s still an enormous amount of money to spend on health care, but it shows the Affordable Care Act is making progress.

Also, the repeal of the individual mandate and removal then restoration of cost sharing has destabilized the markets and caused a lot of the issues that opponents of the ACA like to blame on the act itself:
https://www.policygenius.com/blog/heres-how-much-your-premiums-will-increase-without-obamacare/

 

[Kelor]

You have to work with the current law and control your income for the highest subsidies and cost sharing. You can get a 150 ded and 2450 Out of pocket max on most exchanges if you can control your MAGI(Modified adjusted gross income) to under 32,000. Taxable accounts, Roth accounts, and savings accounts make this possible. It takes some extra effort and planning, but the 2 years of extra time may be worth it.

Good luck with your decision,

VW

+1

How do you efficiently prevent your dividends from violating the MAGI numbers? I’m in a position where most of my investable assets are non-qualified, so I can’t put my dividend stocks in an IRA, and growth stocks outside of the IRA.

Also, am I correct that if someone retires mid-year, a consideration would be to use cobra for the remainder of the year, and make sure to prepare your cash positions during that year so you don’t experience capital gains for a couple of years to come?

 

[ShokWaveRider]

+1

How do you efficiently prevent your dividends from violating the MAGI numbers? I’m in a position where most of my investable assets are non-qualified, so I can’t put my dividend stocks in an IRA, and growth stocks outside of the IRA.

MYGA.... Deferred CD type Annuity. (These are not your mother's high fee, high commission products)

https://www.immediateannuities.com/deferred-annuities/

 

[jollystomper]

I worked 2-3 years longer primarily to put money away in anticipation of high post-retirement health insurance costs. My pension and interest/dividend/cg income makes us ineligible for ACA subsidies. In addition, we wanted to keep our same doctors and that will not be possible with ACA insurance.

Our goal was to set aside $25K for each year of retirement before medicare to cover premiums. We did meet that goal but since I became eligible for severance that is saving us about $25 in premiums through the end of next year.

I have a number of former co-workers who have told me they want to retire but are primarily working for health insurance until they reach medicare age. Megacorp insurance is still much cheaper and more comprehensive than ACA even with the subsidy.

 

[scrabbler1]

Because the ACA caused premiums and deductibles to SKYROCKET. I used to be able to buy a decent policy for < $10K for both of us, with reasonable deductibles ($1K or so IIRC).

Now, because the ACA mandates that plans must cover a variety of things that were not in the 'old' plans for EVERYONE - eg: pregnancy (even if you're a man, or outside of child bearing years either of which is obviously ridiculous) and a number of other ill conceived requirements, the costs have increased significantly. The individual mandate, believe it or not, also caused costs to increase - because it forced people to have insurance. (Easy to do - you have a product people HAVE to buy, so cost becomes immaterial). When the mandate was eliminated, many have found that costs are actually starting to stabilize.

Anyway, I don't think skyrocketing premiums and deductibles are anyone's individual issue (ie: "their" problem). I think the problem is much bigger than that, and there needs to be a way for costs to come back down to what is truly "affordable" for people - and $14K with $6,500 pp deductibles is not what most people would call affordable.

Back to the OP's original point - all this is definitely a very fair reason to consider continuing to work - unless you run the math and are comfortable not only with what you know today you will have to spend (wheelbarrows full of money unless you play the AGI game), but what you could also risk having to pay going forward IF you can even continue to get insurance..I know this was the #1 thing holding me on OMY for a long time and I'm still not entirely comfortable with the risk or the cost of what I'm going to need to pay as a result of deciding to ER..

ETA - a simple solution would be to allow insurance companies to once again offer 'catastrophic' plans. Really makes one wonder why the ACA prohibited them from doing so..

I guess it does depend a lot where someone lives. For me, paying $7,000 a year in premiums with a $7,000 deductible is a great deal for several reasons. First, my old, pre-ACA policy was beginning to enter a death spiral - premiums had risen 50% in 2 years to $8,400 per year (I forget what the deductible was) by 2011. If they had risen at a relatively modest rate of 10% per year every year after that, I'd be paying double that ($16k), for ONE person. The ACA brought things under control again.

As I wrote earlier, the deductible being $6k or $7k per year is pretty meaningless. My OOP costs which go to the deductible are under $1k. Where I benefit hugely simply by having insurance are the reductions from the no-insurance prices of doctor bills, lab costs, and drug costs. Between the cost write-downs and direct insurance-paid amounts, I end up paying $8k less than the original provider charges.

The functional repeal of the individual mandate has driven up premiums because it has driven the younger, healthier people away from the individual market, leaving an older, sicker group of people remaining. I had posted a link to a report from the NY insurance department about how health insurers broke down their filed increases into 2 parts - one of them was the effect of the repeal of the individual mandate. The overall average filed change of ~+24% was evenly split between the two effects. Similarly, catastrophic plans would drain the younger, sicker people from the more typical plans and drive up rates for the older, sicker people remaining.

As for required procedures under the ACA, I sometimes wonder why certain expensive conditions (i.e. pregnancy) only certain subgroups of people can acquire have to be borne by others. Then again, wouldn't women wonder why they have to pay for prostate surgeries. There would be sex discrimination issues if we started parsing coverages this way. However, I do object to having to pay for pediatric dental even though I am childfree (and have to pay full freight for my own dental visits).

 

[ShokWaveRider]

Why is spreading the load in Healthcare a bad thing, but OK for Auto, Home etc.? I would think it all works itself out in the wash. Prices would then most likely be a lot more stable.