buying health insurance on your own

[workburnout]

Lets say I have enough money to live off my investments at age 50 or 55 or so. House paid off and low expenses.
I decide to stop working other than very part time (under 10 hrs a week, since I have customers where I get easy residual income that'd make no sense to pass up). Since I'm part time, my company then no longer covers health insurance.

Couldn't I buy health insurance through esurance.com or somewhere else (not ACA coverage - but private regular insurance), and have the same coverage as I always did?

This would cost a few hundred dollars a month premium, but I could afford it.

Or, what am I missing here?

It seems many people keep working longer than they want to for the health insurance.
Why don't they just buy it on their own - if they have enough saved already to live off their investments?
My thought is, a few extra hundred dollars a month premium should be affordable to someone who has saved and invested a lot over the years.

[pb4uski]

In some areas of the country health insurance is reasonably affordable so what you say makes sense. But in other parts of the country, health insurance is $600 - $1,000/month or more per person.

My COBRA plan was $900/month for two when I retired in 2012... we could afford it and I considered it part of the price of freedom. Our actual costs have turned out lower... which is better still.

[MRG]

I'd sure research you assumptions about costs.

[marko]

Quote:

Originally Posted by workburnout My thought is, a few extra hundred dollars a month premium should be affordable to someone who has saved and invested a lot over the years.

As noted, in some areas it can be as much as $1000 a month. I just got on Medicare but DW continues to pay $950 a month. We just stopped paying double that.

For us it is (ahem!) affordable, but for lots of folks it's a lot of money.

[cathy63]

Yes, you can certainly do this now. The current law says that insurance companies have to sell you coverage and cannot deny you due to any pre-existing condition you might have nor can they dump you from their rolls once you acquire a disease.

Many of the people who kept working for insurance in the past were those who simply could not get insurance on the open market because they had diabetes or had survived cancer when they were younger, or they had developed something like an enlarged thyroid that might have to be treated someday.

Some of the people who keep working now believe that the laws that prohibit medical underwriting are on the verge of being repealed, and they don't want to find themselves kicked off their private insurance plans and with no job to provide group insurance.

[workburnout]

Ok, so the problem is if someone had not saved enough, where they are cutting it close in how much they have to spend in retirement, that extra $1000 a month may be too much.

I'm just wondering if I get to the point where I have enough saved/invested to cover that, why it would be a problem.

It is a lot of money, so would need to factor that cost in and not retire if I could not afford it.

Right now working full time I make around $100K a year. That is pretty good as it's metro Atlanta - not a super high cost of living. I can scale back to where I work less, but if I don't produce enough at my company, they will put me over to part time. In my situation, we must earn $50,000 as employees on commission, or we are considered part time. It was $40,000 until recently when they upped it to $50K. I am sure in a few years they will up it again, maybe to $60K. Anyone not earning that commission does not qualify as "full time".

I guess it would eventually make sense to scale back working enough to still make their min. requirement to get the health insurance.

I do not know at what point it would make sense to work less and give up the health insurance. Once my house is paid off in 5 years I will re-evaluate the numbers.
I hate working so much, yet the money is good so it's difficult to decide to quit or scale back.

[workburnout]

Quote:

Originally Posted by marko As noted, in some areas it can be as much as $1000 a month. I just got on Medicare but DW continues to pay $950 a month. We just stopped paying double that. For us it is (ahem!) affordable, but for lots of folks it's a lot of money.

Yes, I have been planning and I really think am am on track for it to be affordable for me in a few years. I just wanted to see if I was overlooking something obvious.

I would never quit totally as I have customers who order, based on business I built over the years, so it would be silly to give them up. However, if I just took that "residual" income, and did not work to generate new business, I would not make nearly as much money as I do now.

Maybe I'd make $40K a year then as years went by that would drop if I did not work to build new business.

A lot can happen in 5-10 years but as of now I think my plan to scale back will work.
All the talk about people worried about healthcare got me wondering.

[athena53]

Another reason people keep working for the insurance is that frequently it's cheaper. I had much better coverage (lower deductible, better network) through my last employer. I even saved another $1,000/year by jumping through appropriate hoops in their Wellness program. Other factors can make it cheaper:

1. A group of employed people is, on average, healthier than the general population since most of them are healthy enough to go to work on a given day. The population buying private insurance includes people who quit working early because they weren't well enough to work anymore.

2. Wellness programs at work can also cut health insurance costs. (Hard to measure since the group willing to jump through hoops to get the discounts is a self-selecting group willing to work out, lose weight, quit smoking, etc. and because many health benefits will be realized over a much longer period).

3. Many employers contribute to the premiums although that's being cut back.

4. Large employers may self-insure up to a large amount (per claim or for the whole company)- in other words, a giant deductible. This lowers the premium because, even though the employer is still paying those amounts, they're not paying the insurance company's expense load on top of those losses, other than claims settlement costs.

I retired 3 years ago and the scramble for health insurance (and having to switch carriers each year as policies and markets changed) was the biggest unhappy surprise even though I'm blessed with excellent health. I'd still do it all over again but I'm grateful that I get Medicare next year.

[scrabbler1]

Health insurance has been my most volatile and unpredictable expense since I ERed back in 2008. Before the ACA thankfully got passed and went into effect fully starting in 2014, I faced really big increases in 2010 and 2011, then I dropped the policy and took a bare-bones policy, leaving me underinsured for a few years until 2014 when I bought an exchange plan. After a reasonable rate increase in 2015, I switched to another company in 2016 (for unrelated reasons). The rate went up for 2017 and will rise more in 2018, making HI nearly my biggest expense.

[workburnout]

Quote:

Originally Posted by athena53 Another reason people keep working for the insurance is that frequently it's cheaper. I had much better coverage (lower deductible, better network) through my last employer. I even saved another $1,000/year by jumping through appropriate hoops in their Wellness program. Other factors can make it cheaper: 1. A group of employed people is, on average, healthier than the general population since most of them are healthy enough to go to work on a given day. The population buying private insurance includes people who quit working early because they weren't well enough to work anymore. 2. Wellness programs at work can also cut health insurance costs. (Hard to measure since the group willing to jump through hoops to get the discounts is a self-selecting group willing to work out, lose weight, quit smoking, etc. and because many health benefits will be realized over a much longer period). 3. Many employers contribute to the premiums although that's being cut back. 4. Large employers may self-insure up to a large amount (per claim or for the whole company)- in other words, a giant deductible. This lowers the premium because, even though the employer is still paying those amounts, they're not paying the insurance company's expense load on top of those losses, other than claims settlement costs. I retired 3 years ago and the scramble for health insurance (and having to switch carriers each year as policies and markets changed) was the biggest unhappy surprise even though I'm blessed with excellent health. I'd still do it all over again but I'm grateful that I get Medicare next year.

Our is 0 cost to employees. It is a high deduc. HSA plan. However, wellness visits are covered at N/C.
They tried that wellness program one year and I hated it but did participate to get the discount - they were going to charge us I forget how much if we did not participate. It was a pain as I ended up getting wrongly charged for a so-called wellness visit - and had to go through HR and jump through hoops to get the erroneous charge removed. Thankfully they stopped the wellness plan for whatever unknown reason.

I guess what you and others are saying tells me I need to think long and hard about cutting back work too much - I have a good deal now - so I may be better off keeping myself full-time - to get that health insurance.

If I think I am cutting it even a little close - I better not scale back work too much too soon. Health ins. cost is a big reason why I need to be cautious.

I could work 20 hrs a week and make $50,000 which would qualify me for the work health ins.
The stress still gets to me, even the hours I'm not working - I tend to worry about things going on at work.

In 5 years I will have house paid off and $800,000 saved at the rate I'm going, no debt and no dependents other than a couple pets. My expenses are low. So maybe then it would make sense to work "part time" around 20 hrs a week, even though my company would still consider me "full time" if I kept earning enough. They don't care the hours I work, all they care about is the dollar amount I bring in, and based full or part time employment on that dollar amount.

If I cut down to much less than that, I would be on my own for health insurance in my early 50's. I think maybe I should wait til I have a lot more saved or maybe around 60 when I'm closer to medicare age to scale back must more than that.

[Ian S]

Quote:

Originally Posted by workburnout Yes, I have been planning and I really think am am on track for it to be affordable for me in a few years. I just wanted to see if I was overlooking something obvious.

As long as you maintain continuous high quality health insurance coverage, don't have any pre-existing conditions and are fairly well-heeled (can afford maybe $15K-20K annually for total medical costs), there's probably not much to worry about no matter what Congress winds up doing. Indeed, there may even be an option to simply purchase a catastrophic policy and pay the first $15K in costs yourself.

[zinger1457]

Quote:

Originally Posted by workburnout Couldn't I buy health insurance through esurance.com or somewhere else (not ACA coverage - but private regular insurance), and have the same coverage as I always did? This would cost a few hundred dollars a month premium, but I could afford it. Or, what am I missing here?

When I checked what was available outside of ACA in my area all I could find were short term plans that were not ACA compliant.

[workburnout]

Quote:

Originally Posted by zinger1457 When I checked what was available outside of ACA in my area all I could find were short term plans that were not ACA compliant.

I checked just now and found the same.

I remember 20 years ago when the longterm ehealthinsurance plans could be bought - I guess now that is not the case in many locations.

Maybe in a few years that will change again.
My preference would be health ins. not be tied to work at all, but I guess that is a whole other conversation.

The way it's set up now, it seems the choices are go with an ACA plan (not accepted by many doctors in my area) or keep working enough to get the health insurance until close to age 65.
Maybe age 63 1/2, and get Cobra for 1 1/2 yrs. if possible.

So if someone under 65 has $10 million dollars, they still have to get ACA?! Unless they own a business or work for a company. That makes no sense to me. I guess maybe they get ACA then pay for a private doctor of their choice out of pocket, but a lot of doctors won't accept cash payers or ACA - must have work insurance or Medicare. That's what it seems like around here, from the very little I know about it.

[jim584672]

The Individual Mandate (> of $695 or 2.5%) is still being enforced by the IRS. The law is still on the books until changed despite Executive Orders. Something to consider when buying non-complying plans.

[Aerides]

You would be very lucky to find anything close to good megacorp type coverage in your state for anywhere under $1000 per month. I'm not talking price, I'm talking low deductibles, low copays, ease of use, annual caps, etc.

Your current provider may no longer offer individual policies - period - in your state. Or maybe they do today, but won't in 2018, or won't in 2019. A lot of providers pull out of a state completely when they pull off ACA.

I looked around as I come off severance benefits next month. I opted to stay on COBRA for me and DH for 18 months which will be just above $1k per month. The only thing that AETNA offered was an HMO version with about 3x my current deductible, for $800 per month... and they've recently pulled out of my state for 2018 so I'd be shopping twice in 6 months.

I've looked at the other providers for 2017. I'd be paying something like $1250 for a plan closer to my COBRA, that would continue to include the hospital and docs I prefer, and isn't HSA eligible (i have a nice HSA account saved I'd). I want a plan that lets me go to Cleveland Clinic if I ever need anything major. I won't qualify for subsidies until at least 2019, and since I have a small business unlikely even then.

so it's far less simple than "I'll just buy my own, price tag be damned".

ETA, since you're looking at 5 years out, I'm willing to bet the entire landscape will have changed. It might be better or worse, but it will be different. It's a moving target for now, which is another reason I'm staying on cobra to give myself a nice runway while things get sorted.

[meierlde]

Note that before the ACA at least the American Association of Petroleum Geologists had a plan that was available to members (actually to members of a number of geology related organizations) I wonder sort of thing might come back? It offered a 50% upcharge for those who failed medical underwriting. Apparently professional organizations could offer insurance in the past, and might do so in the worst case again.

[athena53]

Quote:

Originally Posted by meierlde Apparently professional organizations could offer insurance in the past, and might do so in the worst case again.

Interesting thought. It's just another type of group coverage except that the group is members of a professional organization rather than employees of a company. I remember those policies. My guess is that they died out due to adverse selection. When you sell a policy to an employer, every employee is covered. In other organizations, I think that only the people who wanted/needed the coverage bought it so the insurers got the less-healthy members. You'd think there would be a demand for it- many professionals are solo practitioners, either consultants or contract workers in the "gig economy".

[meierlde]

Quote:

Originally Posted by athena53 Interesting thought. It's just another type of group coverage except that the group is members of a professional organization rather than employees of a company. I remember those policies. My guess is that they died out due to adverse selection. When you sell a policy to an employer, every employee is covered. In other organizations, I think that only the people who wanted/needed the coverage bought it so the insurers got the less-healthy members. You'd think there would be a demand for it- many professionals are solo practitioners, either consultants or contract workers in the "gig economy".

Actually the ACA killed these policies in the geoscience area. ( A lot of folks in exploration work as independents and try to sell prospects to companies to drill). This is where the override royality comes from the independent sells the prospect to a driller for x% of the proceeds.

[Bir48die]

I am nearing the end of my Cobra in November. Company policy through BCBS. I thought "why not just keep same company and do an individual policy". Then the Oregonian has an article where BCBS is pulling out of non corporate biz in 15 counties including metro area. So, will be forced to look elsewhere. Luckily our area has multiple options.

[LastOfTheBoomers]

I know Cobra can be extended to 36 months in certain cases but I've always wondered why you couldn't stay on it longer - you are paying the full amount - you've been part of a group to begin with - why not make it 36 or 48 months for everyone?