Delay retirement to obtain retiree health benefits?

[pacergal]

Yes, to age 60 to be able to purchase health insurance at employee rates until we go on medicare.
It was worth it, as it allowed us to put even more savings into our retirement.

 

[Sunset]

Very unlikely that medical underwriting will be restored if ACA goes away.... plus on top of that 5 states prohibit medical underwriting so your advice is bad advice for people who live in those states.... and overall bad advice IMO.

If ACA goes away, I think health insurance will revert to how it was prior to ACA.
A health insurance company would be irresponsible to it's shareholders to accept any and all that applied as the cost of cancer for example is pretty steep.

Those few years ago, companies did do medical underwriting (evaluate health risk of candidate) and there were lots of stories of people being denied insurance because they had prior conditions or chronic serious issues. Sometimes insurance companies would suddenly drop someone from insurance due to risk of them developing a recurrence of some serious issue like cancer.

States that have outlawed medical underwriting, may find themselves lacking in health insurance companies, leaving only very expensive coverage available.

 

[Go-NoGo]

Did you delay retirement to obtain health benefits from your employer? If so, for how long?

I have delayed retirement to qualify for retiree benefits, it gave me some peace of mind that I would not be burdened with ever increasing premiums.

But everyone's situation is different - I would suggest modelling this in Firecalc, add the additional health care expenses as cost item and also add the additional years of earnings into your portfolio - run it a few times with different estimates of how much you think medical costs are going to be without your employer contribution. You will now have several Firecalc success rate estimates - you can then make a decision if working the extra years really makes a difference or not

 

[zinger1457]

I didn't delay retirement, left work prior to 55 so I wasn't able to retain my employers healthcare coverage. It has worked out OK (so far) in my case, my insurance premium cost prior to ACA was little more than what I paid for my employers plan, since the ACA plans kicked in and with subsidies I'm paying less now than what I would be paying through my employer. Probably close to a wash over the years since I retired. Hoping ACA hangs on for 3 more years, then I'll be on Medicare.

 

[mattwallace24]

We are currently delaying our retirement until we reach 55 to gain access to my companies health plans. We have a unique situation where we plan to retire in the US Virgin Islands which currently has no private health care options due to some quirks in the ACA. Therefore, we either need the laws amended so we can buy health care on the open market or we’ll wait till I can get it through my current employer.

There is one loophole we’re investigating in that you can get coverage if your company has 2 or more employees, so perhaps simply moving my wife’s small business there and employing me will work.

 

[Lienlord]

My MC offers retiree health benefits if you've worked there at least 10 years. It's pretty expensive, but they provide a $100/month subsidy. I will only be here 8 years when I FIRE at 55, and it's not worth working 2 additional years to get the benefit.

 

[pb4uski]

If ACA goes away, I think health insurance will revert to how it was prior to ACA.
A health insurance company would be irresponsible to it's shareholders to accept any and all that applied as the cost of cancer for example is pretty steep.

Those few years ago, companies did do medical underwriting (evaluate health risk of candidate) and there were lots of stories of people being denied insurance because they had prior conditions or chronic serious issues. Sometimes insurance companies would suddenly drop someone from insurance due to risk of them developing a recurrence of some serious issue like cancer.

States that have outlawed medical underwriting, may find themselves lacking in health insurance companies, leaving only very expensive coverage available.

I think you're just wrong... it is more likely that something will replace ACA then we go back to what we had before.

Medical underwriting is so loathed by the electorate that if something replaces ACA that includes health insurance there is no doubt in my mind that medical underwriting will be prohibited in whatever the replacement is.... and even if it isn't prohibited nationally, it is likely that numerous states will jump on no medical underwriting bandwagon.... the fact that ACA prohibits it and the sky hasn't fallen down will encourage states to do it.

While it is true that prohibiting medical underwriting will likely result in some insurers leaving, that is good in that those that leave are the ones that are most inefficient, leaving a bigger piece of pie for those few who stay.

Besides, at the end of the day the problem isn't medical insurance.... the medical loss ratio rules put in place in ACA effectively limit insurer charges for overhead, taxes and cost of capital... the problem is the rising cost of medical services and drugs.

 

[mattbaxx]

We did not postpone retirement for health insurance. I retired at 50 without any, DW retired 3 years later at 51, same.

We are using ACA now and will adjust that as necessary. Good health, good genes, no guarantees, but working longer for health insurance just didn't work for us.

 

[PandaBear]

I am definitely considering health benefits as I plan for my retirement date. My current rate is $430 per month for my family, and then I get 4 years after I retire at that rate.
So the ideal would be to retire at 61, and then continue the rate for 4 years and then be on medicare.
I have the added inducement that my pension bumps up by about 50% from retiring next June (at 58) vs June 2023 (at 61).

So I'm not really sure what to do.....so I'm not sure I should be making recommendations for anyone else!!!

The only thing I will say is I don't want a lean retirement, I would much rather "FatFire". What does "lean" mean for you? I'd rather have a little leeway, especially if I'm talking about retiring in my 50's.

 

[grayv]

I will only be here 8 years when I FIRE at 55, and it's not worth working 2 additional years to get the benefit.

so what is your plan for health insurance?

 

[Just_Steve]

To be honest I would still be working if I didn't get retire health care.

 

[HI Bill]

If ACA goes away, I think health insurance will revert to how it was prior to ACA.
A health insurance company would be irresponsible to it's shareholders to accept any and all that applied as the cost of cancer for example is pretty steep.

So, anyone with a pre-existing condition (or presumably, anyone who gets a new condition while covered under a non-group plan) should be denied coverage for future years to save shareholders $?

I used to thing this way, until about five years ago, when I started to get shots in my eye which cost $18K per year. Without the shots, I'd be blind in one eye. As it is, I'm still w@rking, and a productive member of society. We need to address why a single shot costs $3,300.... I partly blame the Medicare/Medicaid reimbursement procedures for the high cost of health care here per person, rather than just the insurance companies.

When the whole epi pen thing was on the news, they showed the Medicare reimbursement formulas for the epi pen. Ridiculously complicated, and for a drug that's been out as long as epinepherin and that's as cheap to make, it was obvious that we (the taxpayers) are overpaying. Just ask those seniors who travel to Canada to buy their prescription drugs!

One more example...for a physical therapist to drive one mile to a care facility, and give one hour of PT to my mom, Medicare reimbursed something like $600. I'm pretty sure the therapist wasn't pulling in 2,000 hours x $600, or $1,200,000 per year in salary and benefits. That's seriously messed up!

Unfortunately, no one in Congress wants to reform or limit the cost of health care. This should be the first step of health care reform.

 

[catii]

Just go for it. Retirement has proven to be the best health insurance for us. Just run the numbers on which Advantage plan is best, considering your health. We ended up with Humana, & are pleased.

 

[Perryinva]

It really depends on how badly you want to quit working. It was the main thing on my mind for the last 4 years of work, even though I liked my career a lot. I didn’t delay specifically for the HI, but it was a major factor. I had to go to 58 to get full retiree health (gold plan with low deductible), but the premium dropped significantly at age 60 & dropped for each month worked. I was FI at 59, not lean. Mainly I planned on staying/stayed for the steep rise in pension & benefits up til age 62. I couldn’t bring myself to leave so much monthly income increases on the table for my easy, well paid position. An ERP @age61 accelerated all that with a generous severance that made it the equal of retiring at about 63, so with the health insurance premium locked in at under $300/mo until age 65 coupled with a $2k/yr for life stipend for Medicare & Supplement costs it was a no brainer.

Well worth the extra time in my case, like I said, because I enjoyed my job, but not enough to pass that offer up. But a lot of people, even older than I did pass it up. They were just too tied to their work identity. Been retired now for 5 months and I can easily see myself going back in a year after the required “no employment clause” expires for a 21 hr/week with periodic months off, which is a pretty common contract for my type position. Now that I don’t HAVE to work and am FI, it is true for me what they say about the attitude change.

 

[Telly]

I was one of the later ones out the door in an industry crash, which I spun into an Early-ER. I was one age year short of getting any sort of retiree medical help. Soon after the start of the following January, Megacorp announced that they were terminating the retiree medical plan by chopping off big fraction of $$ each year, to zero $ in a few years. Talk about a glide slope! The Retiree's Medical Plan engine went sputtering down into a crash.

Knew of one (then) recent retiree who developed cancer, didn't hear how she made out, she was having to head off to another state to live with her sister, as she would not be able to afford where she was with $$$$$$$$$ bills, and no personal care.

Retiree Medical should not be taken for granted, unless there is some sort of untouchable legal contract, and they, whoever "they" are, will be able to follow through without filing for bankruptcy or otherwise getting out of commitments.

 

[badatmath]

I think my MC will keep offering it long enough for me to benefit (if I not laid off before qualifiying age) because they have it essentially phasing out for newer hires over time. But who know?

 

[Bamaman]

My wife and I recently sat thru a 90 minute question and answer with a large national firm my ex-MegaCorp hired to advise retirees on their Medicare options.

Because I'm a type II diabetic on an insulin pump and because my wife is under pain management care and a 12 year cancer survivor, we went with the expensive Plan F.

We were told that if we went with the Advantage Plan G, we'd have to go through all the questions about our past health history. I would assume coverage is not guaranteed. And after our last experience with HMO's, the last thing we want is to be under an Advantage plan in our last trimester of life.