BEFORE ACA - what did retirees do?

[agh1]

how was the pension eliminated?

Frozen and then a few years later terminated. Many jobs were outsourced and people laid off along the way. It was a privately held company bought out by a private equity outfit.

 

[travelover]

With the current feelings on ACA, even if it was abolished, the replacement would probably look somewhat similar but just not be called......

I'm not so sure. We saw a number of alternatives proposed in 2017 and 2018 that left many without health care insurance.

 

[MichaelB]

They submitted cert petitions for SCOTUS to hear the case. They still need the process to be expedited, otherwise it falls outside of the current term. I’m not an attorney and have no idea whether the Supreme Court will agree there is a compelling need to see the case now. A good overview of the process can be seen here https://www.healthaffairs.org/do/10.1377/hblog20200106.206114/full/

If that were to happen, and the lower court ruling upheld, there would be nothing to replace the ACA. Insurers would be free to do pretty much as they wished unless new regulations are passed.

 

[daylatedollarshort]

With the current feelings on ACA, even if it was abolished, the replacement would probably look somewhat similar but just not be called......

I wouldn't bet my health insurance on that outcome. If I didn't live in a state where the governor is moving toward single payer or a state that had laws against individual policy pre-existing condition clauses pre-ACA, I'd be thinking about my ER fall back plan for health insurance before the Medicare years now.

 

[2retireearly]

Using the ACA to allow people to retire early, wasn't the purpose of ACA and probably has skewed their demographics considerably. I retired at 56, a few months before ACA took place. I had the option of Retiree (pre65) health care from my company(s), but it was more expensive than I had hoped it would be. Some people on this website gave us all the idea of living off our cash..reducing our taxable income, and taking advantage of ACA. It was deemed 'an unforeseen event' by those that wrote and pushed through the ACA. It wasn't written to aid people to retire way pre 65. But man did I take advantage of it! My 'dirty little secret'. My monthly premiums were $90/mo for good insurance! The next year I was burned, as I was offered a contract job from work..too good to refuse...and I wasn't looking for work. I took it, so BAM, I had a big subsidy to pay back. I, then the next year, went on to my companies pre65 plan, which actually is very low prem (my other company had much higher prem for pre65). But, bottom line, I only took early retirement, because I had 2 past companies that offered me pre65 insurance. Otherwise, before aca, I wouldn't have been able to retire early...(I had past cancer)...So if I had waited, then I wouldn't have been on this site, as this site is for EARlY retirement (pre65).

 

[W2R]

I took a job in the private sector that promised a pension and retiree health insurance. After almost 25 years on the job, the company was sold. Bye pension. Bye retiree health insurance. Even those already retired lost their health insurance.

Right! Bingo. You are understanding exactly what I was saying. That was why I didn't take the higher paying, more prestigious, more intellectually challenging job (in the private sector) that was my other option.

 

[GenXguy]

They submitted cert petitions for SCOTUS to hear the case. They still need the process to be expedited, otherwise it falls outside of the current term. I’m not an attorney and have no idea whether the Supreme Court will agree there is a compelling need to see the case now. A good overview of the process can be seen here https://www.healthaffairs.org/do/10.1377/hblog20200106.206114/full/

If that were to happen, and the lower court ruling upheld, there would be nothing to replace the ACA. Insurers would be free to do pretty much as they wished unless new regulations are passed.

I've been following this as well.

From the above link: Update: On January 6, 2020, the Supreme Court directed the plaintiffs and the Trump administration to respond to the request for expedited consideration made by the California-led states and the U.S. House of Representatives. The response is due to the Court on January 10 by 4pm ET.

There has already been a response from the Trump administration and Republican attorneys general.

https://www.politico.com/news/2020/01/10/supreme-court-obamacare-case-097332

In briefs filed Friday to the Supreme Court in a lawsuit that seeks to overturn the law in its entirety, the US Department of Justice and a separate group of Republican state attorneys general both asked the court not to take on the case this year.

Now, to see what the Supreme Court decides to do.

 

[Dtail]

I wouldn't bet my health insurance on that outcome. If I didn't live in a state where the governor is moving toward single payer or a state that had laws against individual policy pre-existing condition clauses pre-ACA, I'd be thinking about my ER fall back plan for health insurance before the Medicare years now.

I hear ya.
I do always have a Plan B. Developed in my career. lol
The maximum I would have to pay is 4 years before Medicare.
DGF is already on Medicare along with SSDI.

 

[NoOneGetsIt]

I am NOT in any way trying to have a political discussion. I'm seriously curious.

Very possible I may retire next year - my age would be 45 and I find myself rather thankful that no matter how costly or imperfect ACA plans are.....at least I can buy insurance without having an employer.

Then I see there's some powerful folks trying to end ACA as we speak.

My question.... if ACA goes away - what do early retirees do for insurance? Yes, COBRA - but that is only 18 months.

If COBRA runs out, and you don't have a job - how do you buy insurance especially with pre-existing condition? Thanks

We retired at 50 in 2012. Before ACA you could buy Health Insurance on the open marketplace. We had no pre existing except I had high cholesterol and hubby hypothyroid. We paid $1800 for the YEAR with a $8k deductible.

 

[NoMoreJob]

I retired before ACA. We bought individual insurance in the individual insurance market. While we were healthy and would have likely passed underwriting, luckily our state prohibited medical underwriting. We had a high deductible policy, like I had at work.

For 2012 we paid $556/month (for two) and for 2013 we paid $629/month. Our first year of ACA was $682/month until we got onto a cat plan that was $472/month in 2014 and that same cat plan is $662/month in 2020.

Who knows what will happen but medical underwriting is very unpopular so I don't see it returning for people who are continually insured but I can see it coming back for people who hope to game the system by not buying health insurance until they are sick (and IMO it should).

Our experience very closely mirrors pb4uski's. What we didn't have with private insurance prior to the ACA was coverage for pre-existing conditions. We didn't have any but once a condition popped up I assume that starting with the next year's coverage the condition could have been non-covered. If I'm correct, this was a big risk we lived with at the time that we do not live with now (actually just my wife since I am not on Medicare). On the other hand, our area's ACA policies now only offer local networks of doctors which exclude the better doctors and clinics. So we are better off in terms of pre-existing conditions but worse off in terms of quality of health care available to us as well as cost of coverage and deductibles.

 

[Mulligan]

I worked in HR during my senior year in college. Part of my job was to add people to the company insurance, pay the insurance company and bill former employees for Cobra. I can tell you for sure that none of the employees had a clue how much they were being subsidized until they became former employees and found out what Cobra was going to cost them. It was always a HUGE shock and my company did not charge the extra 2% fee they were allowed to add. Almost everyone believed that the company contribution was less than what the employee paid and this was simply not the case.

With group insurance the healthy employee & the employee with healthy family members subsidize those who cost more because there is just one rate for each category-employee only, emp + spouse, etc. In the individual ACA market this is less true because in most states the cost of the policy increases with the age of the insured. Obviously it was even worse when taking a person's actual health history into account was allowed.

Ha, I had a similar conversation with a friend. He was complaining his employer sponsored insurance was being raised from $100 to $150 a month (includes vision and dental) with a $200 yearly medical deductible . He didnt believe me when I said he couldnt get that plan for $800 a month on his own.
Healthcare is expensive and the only one can save is to cost shift it unto someone else. Like an ACA subsidy, employer, or Medicare/Medicaid. Sometime this year I am going to cost shift myself. Getting on that plan that my friend was complaining about, as my GF works for same employer, ha.

 

[GaryM]

FEHB for some, I am sure other pensions or defined benefit programs also allowed some form of carryover of health benefits for retirees.

 

[bencasey]

I bought my own insurance my whole life so I don't know what you're talking about. I was a freelancer and except for a few years when the union on the show I was working on provided insurance, if you worked a certain number of hours in 6 month period, I paid for it myself.

 

[ncbill]

As for what retirees did before ACA.... I chose a job working for the federal government (rather than a much higher paying, vastly more prestigious, and more intellectually stimulating job that I was also offered) because of the benefits offered with the government job. Well, and job security too. Anyway these benefits that came with the federal job included a pension and reasonably priced health insurance that I could eventually carry over into retirement at the same price as when working.

I thought that medical costs were going to go through the roof for demographic reasons, and had predicted that out loud to everyone who would listen to me from the 1970's or 1980's on, over and over until I was blue in the face. Nobody listened but I truly believed it even if everyone else told me I was a total idiot for thinking that, which they did as often as they possibly could.

I still decided to act on the assumption that medical costs were going to skyrocket, whether that assumption turned out to be correct or not, thank goodness. There was no ACA, and federal employment/retirement seemed like the best choice for me under the circumstances.

I worked two years beyond FI, in order to qualify for federal retiree health insurance. Those were two doggone tough years and every day seemed like a century. So when people say, "Oh my, you were so LUCKY to get that health insurance" I am likely to get a strange look on my face.

The above is why I've pushed my kids to stay long enough for military retirement, either active or Guard/Reserves.

They already owe several years military service for their undergrad education...even staying in the Guard/Reserves gets them dirt-cheap health insurance, regardless of their day job.

 

[Big_Hitter]

Frozen and then a few years later terminated. Many jobs were outsourced and people laid off along the way. It was a privately held company bought out by a private equity outfit.

but you still received your accrued pension, correct?

 

[agh1]

but you still received your accrued pension, correct?

The company timed the plan termination to their advantage with changing laws etc so we got less than had been previously quoted in annual statements as our current cash value. I would have been far better off if I had access to a 401k during that quarter century. It was a rule of 90 plan so 35 years would have been required for full retirement with most of the benefit accruing during the final 7 years or so.

The loss of the promised retiree health insurance just makes it all worse. At the time I was laid off people who were 5 years older than I but with 10 years less on the job were allowed to stay on the "retiree" health insurance until it was eventually eliminated. Their spouses were also covered for life at no charge to them.

 

[Rianne]

I wouldn't bet my health insurance on that outcome. If I didn't live in a state where the governor is moving toward single payer or a state that had laws against individual policy pre-existing condition clauses pre-ACA, I'd be thinking about my ER fall back plan for health insurance before the Medicare years now.

+1 Illinois has a lot of problems, but current Governor is set on affordable HI. We have 2 years to medicare and both of us have pre-existing conditions. It's my understanding states can form their own HI plans, is that right? When Mit Romney was Massachusetts Govenor he did this...from Wikipedia but thought I would post instead.



"Romney was at the forefront of a movement to bring near-universal health insurance coverage to the state, after a business executive told him at the start of his term that doing so would be the best way he could help people[75] and after the federal government, due to the rules of Medicaid funding, threatened to cut $385 million in those payments to Massachusetts if the state did not reduce the number of uninsured recipients of health care services.[5][75][76] Despite not having campaigned on the idea of universal health insurance,[77] Romney decided that because people without insurance still received expensive health care, the money spent by the state for such care could be better used to subsidize insurance for the poor.[78]



After positing that any measure adopted not raise taxes and not resemble the previous decade's failed "Hillarycare" proposal, Romney formed a team that beginning in late 2004 came up with a set of proposals more innovative than an incremental one from the Massachusetts Senate and more acceptable to him than one from the Massachusetts House of Representatives that incorporated a new payroll tax.[5][75][76] In particular, Romney successfully pushed for incorporating an individual mandate at the state level.[79] U.S. Senator from Massachusetts Edward M. Kennedy, who had made universal health coverage his life's work, gave Romney's plan a positive reception, which encouraged Democratic legislators to work with it.[75][76] The effort eventually gained the support of all major stakeholders within the state, and Romney helped break a logjam between rival Democratic leaders in the legislature.[75][76]


On April 12, 2006, Romney signed legislation that mandates that nearly all Massachusetts residents buy or obtain health insurance coverage or face a penalty (up to approximately $2000 for 2008 or equal to half of the lowest cost premium offered) in the form of an additional income tax assessment. The bill established a regulatory authority called the Commonwealth Health Insurance Connector Authority to implement the law and establish insurance standards. For residents below certain income thresholds and without adequate employer insurance, state subsidies were established, by using funds previously designated to compensate for the health costs of the uninsured.[80][81][82]



Legislation, effective on July 1, 2007, requires health insurance for all state residents, provided a plan is available to the individual that is deemed affordable according to Commonwealth Health Insurance Connector Authority. In Massachusetts, a roughly $800 million fund known as the "uncompensated care pool" was used to partially reimburse hospitals for expenses related to treating uninsured patients. The fund's revenue comes from an annual assessment on employers, insurance providers and hospitals, plus contributions of state and federal tax dollars.



Governor Romney's plan redirects money from this fund to subsidize health insurance costs for low-income residents of Massachusetts. The Romney Administration consulted with Massachusetts Institute of Technology professor Jonathan Gruber to study the state's population and health care needs. They determined that there was enough money in the "free care pool" to implement the Governor's plans, but that it would require more people to buy health insurance at full price in order to pay into the subsidized fund.[83]


The legislature amended Romney's plan, adding a Medicaid expansion for children and imposing an assessment on firms with 11 or more workers who do not offer health coverage. The assessment is intended to equalize the contributions to the free care pool from employers that offer and do not offer coverage. The General Court also rejected Romney's provision allowing high-deductible health plans.


Romney vetoed eight sections of the health care legislation, including a $295-per-person fee on businesses with 11 employees or more that do not provide health insurance.[84][85] Romney also vetoed provisions providing dental and eyeglass benefits to poor residents on the Medicaid program, and providing health coverage to senior and disabled legal immigrants not eligible for federal Medicaid.[86][87] However, the state legislature overrode all of the vetoes.[88]
Romney said of the measure overall, "There really wasn't Republican or Democrat in this. People ask me if this is conservative or liberal, and my answer is yes. It's liberal in the sense that we're getting our citizens health insurance. It's conservative in that we're not getting a government takeover."[75] The law was the first of its kind in the nation and became the signature achievement of Romney's term in office.[76] When Romney's official portrait was made for the Massachusetts State House, the composition included a leather binder with a medical seal representing the healthcare legislation.[1]


(Within four years, the law had achieved its primary goal of extending coverage: in 2010, 98.1 percent of state residents had coverage, compared to a national average of 83.3 percent.[89] Among children and seniors the 2010 coverage rate was even higher, at 99.8 percent and 99.6 percent respectively.[89])

 

[Bamaman]

That's what my mom did. Moved to France and finagled her way onto their plan (I don't know all of the details involved, but it was no easy process - especially considering she wasn't fluent in French).

Our niece married a Belgian working in suburban London. She was on the National Health System of U.K. When she came down with uterine cancer, their protocol was radiation/chemo--and didn't include much needed surgery. We buried her in Memphis 10 months later.

 

[Bamaman]

I pay for my 32 year old daughter's BCBS Individual Blue 500 health insurance including dental. It's gone up to $371 a month for $500 deductible and $2000 maximum outlay per year. Obviously, it's not ACA insurance, and if ever cancelled it will no longer be available. Needless to say, I'm not complaining about the pricing--other than to have to pay to keep her covered at all.

 

[johnhkc]

I am NOT in any way trying to have a political discussion. I'm seriously curious.

Very possible I may retire next year - my age would be 45 and I find myself rather thankful that no matter how costly or imperfect ACA plans are.....at least I can buy insurance without having an employer.

Then I see there's some powerful folks trying to end ACA as we speak.

My question.... if ACA goes away - what do early retirees do for insurance? Yes, COBRA - but that is only 18 months.

If COBRA runs out, and you don't have a job - how do you buy insurance especially with pre-existing condition? Thanks

Before ACA, any pre-ex exclusion could only last 18 months under federal law. Starting in the 19th month of your new plan, the condition is no longer considered pre-ex. However, the rate could still be much higher. You could do COBRA and an HSA plan at the same time then once COBRA expires, use your HSA/HDHP plan.

 

[agh1]

Before ACA, any pre-ex exclusion could only last 18 months under federal law. Starting in the 19th month of your new plan, the condition is no longer considered pre-ex. However, the rate could still be much higher. You could do COBRA and an HSA plan at the same time then once COBRA expires, use your HSA/HDHP plan.

Are you speaking of employer insurance? Because in the individual market you just could not buy the insurance at all.

Also, I only had an HSA option for 6 weeks of my employment followed by 18 months of Cobra. ACA does not offer HSA here.

 

[ziggy29]

Are you speaking of employer insurance? Because in the individual market you just could not buy the insurance at all.

Well, under the old rules (HIPAA, AKA Kennedy-Kassebaum), in most cases it did not specifically guarantee it for individual plans unless you were an "eligible individual". To be an eligible individual, you would have had to have at least 18 months of prior creditable group coverage with a gap of less than 63 days (and had to exhaust COBRA). In many states that defaults to the state risk pool.

It also did not guarantee that individual coverage, even for eligible individuals, would be remotely affordable, just that it would have to be made available -- and for many folks, 18 months of COBRA would definitely not be affordable. ACA has currently made this a moot point, but if it is ever dismantled, these provisions of Kennedy-Kassebaum were never explicitly repealed and are still on the books.

https://www.kff.org/other/state-ind...0&sortModel={"colId":"Location","sort":"asc"}

 

[johnhkc]

Golden Rule was our private HI, as described in earlier post. Starting out healthy with no problem whatsoever, I ended up costing them $200K+ in 2013-2014 with my illness. I never had any problem with them regarding the claims. Never had to talk with anybody there. On the Web, I later found out that healthcare providers liked Golden Rule because they paid promptly.

...

PS. I like the Golden Rule policy I had. Very simple. Until I reached $10K/year, I paid everything. Above it, they paid everything. No copay. All or nothing.

That's the plan I still have. In Missouri, the HSA plans are guaranteed renew. Under federal law, all HSA plans must have the same premium for everyone of the same age (i.e. group rates). So I get individual ownership at group rates, guaranteed renew, low premiums (grandfathered under ACA) and tax deductibility (I "work" at my own LLC). At age 51, premium after tax incentives is approx $210 per month, $5K deductible.

At age 39 when I started, premiums were $89.28 per month minus HSA deduction minus tax deduction for premiums = -$22 per month!

 

[agh1]

Well, under the old rules (HIPAA, AKA Kennedy-Kassebaum), in most cases it did not specifically guarantee it for individual plans unless you were an "eligible individual". To be an eligible individual, you would have had to have at least 18 months of prior creditable group coverage with a gap of less than 63 days (and had to exhaust COBRA). In many states that defaults to the state risk pool.

It also did not guarantee that individual coverage, even for eligible individuals, would be remotely affordable, just that it would have to be made available. ACA has currently made this a moot point, but if it is ever dismantled, these provisions of Kennedy-Kassebaum were never explicitly repealed and are still on the books.

https://www.kff.org/other/state-ind...0&sortModel={"colId":"Location","sort":"asc"}

I did not have a gap but I was required to provide full medical history going back almost 20 years in order to get the individual plan. In that time one of my doctors had passed away. The insurance company said I had to find the records. I could not. Even the building where his office had been was no longer there. During all this back and forth the wait time for insurance on the new job passed so I just went with that. It may be that they had to offer you the coverage but they could do underwriting to set the price. Pre-existing conditions could make that price too high for many/most people to pay.

 

[johnhkc]

Are you speaking of employer insurance? Because in the individual market you just could not buy the insurance at all.

Also, I only had an HSA option for 6 weeks of my employment followed by 18 months of Cobra. ACA does not offer HSA here.

HSA plans are not individual market - they're all grou p market. Under federal law, in order to be HSA-compliant, all people within a state are in the same group. (If not the state, then within the same ratings area.)

I researched all of this crap before I retired in 2008 but my focus was on HSA plans so I don't know anything about all the other plan types.