Early retirement while facing unknown health insurance future?

[OrcasIslandBound]

Hello, just wondering if others, like my family, are making changes to their ER plans because of the unknown future regarding health insurance. My own decision is to wait and see regarding retiring early until I know what sort of health insurance I will be able to obtain and hold onto before "pulling the plug". Right now I have a great health coverage through my job. So stay working until 63 1/2(?) so that I can cobra the health insurance under Medicare? A reasonable plan except if I get fired or laid off. Also, would have preferred to retire sooner than that. Your thoughts?

 

[Bir48die]

Budget enough to go on the open market and buy insurance.

 

[OrcasIslandBound]

Budget enough to go on the open market and buy insurance.

Wouldn't that be challenging with any pre-existing conditions my family might have?

 

[Carpediem]

If ACA was still going to be in place, when were you thinking about retiring? This year?

 

[OrcasIslandBound]

If ACA was still going to be in place, when were you thinking about retiring? This year?

Probably around the 1st of next year. DW doesn't want to give up on possibly moving back to SoCal just yet. Not sure she wants to stay in PNW for the long haul. Supporting two houses is not really sustainable for us.

 

[Bamaman]

When our MegaCorp retired everyone 55 and over, they let us "purchase" their subsidized healthcare @ $420 per month. Fortunately I had a HRSA account that paid for my insurance except for 2 mos. prior to Medicare. The price of Cobra was out of sight.

The politics of the future is just developing. Maybe we'll know shortly what the country will be facing from the healthcare front. Hang in there 6 months and things may get a little clearer.

 

[W2R]

Hello, just wondering if others, like my family, are making changes to their ER plans because of the unknown future regarding health insurance. My own decision is to wait and see regarding retiring early until I know what sort of health insurance I will be able to obtain and hold onto before "pulling the plug". Right now I have a great health coverage through my job. So stay working until 63 1/2(?) so that I can cobra the health insurance under Medicare? A reasonable plan except if I get fired or laid off. Also, would have preferred to retire sooner than that. Your thoughts?

I retired in 2009, but was FI in 2007. I waited two long years for eligibility for federal retiree health insurance because the only other option back then was private health insurance at a high price. I could afford it, but like now, the future for health care costs seemed uncertain. It was a VERY tough two years, I thought, as I continued to LBYM and save.

Still, my situation had its silver lining. Due to two more years of earning and saving and due to also getting a pension I would not have been eligible for in 2007, I ended up with more financial wherewithall than I would have had in 2007. It's fun to feel "well set" in retirement. A 2007 retirement would have been a bare bones retirement, and not nearly as much fun, I suspect.

 

[Carpediem]

Hang in there 6 months and things may get a little clearer.

^ That is the approach I'm currently taking. I was/am considering the possibility of retiring this summer but healthcare is too much of an unknown cost for me to feel comfortable at this point. I need to wait to see how things shake out first. COBRA is still an option but a very expensive one @ ~$1300 per month.

 

[OrcasIslandBound]

I retired in 2009, but was FI in 2007. I waited two long years for eligibility for federal retiree health insurance because the only other option back then was private health insurance at a high price......

Agreed, if you can get a kind of corporate or government health insurance, you are much better off. Unfortunately, not an option in my case.

 

[W2R]

Agreed, if you can get a kind of corporate or government health insurance, you are much better off. Unfortunately, not an option in my case.

Well, your anticipation of Medicare ("government health insurance" for those over 65) would be the analogy I was thinking of. You can wait and get Medicare, just like I waited and got retiree insurance, and you might be better off financially and have more fun once you do retire.

 

[OrcasIslandBound]

Well, your anticipation of Medicare would be the analogy I was thinking of. You can wait and get Medicare, just like I waited and got retiree insurance, and you might be better off financially and have more fun once you do retire.

4.5 more years.......

 

[W2R]

4.5 more years.......

You are talking about retiring at 63.5, and I retired at 61.5. I see 2 years more, and someone who is feeling a bit down this morning (and rightfully so) about the delay in retirement.

 

[MichaelB]

You are talking about retiring at 63.5, and I retired at 61.5. I see 2 years more, and someone who is feeling a bit down this morning (and rightfully so) about the delay in retirement.

+1

 

[Midpack]

Budget enough to go on the open market and buy insurance.

Seems like the best plan.

 

[Carpediem]

A 2007 retirement would have been a bare bones retirement, and not nearly as much fun, I suspect.

Orcas.... As I've mentioned, I'm in a similar situation as you. I could probably roll the dice and budget a large monthly amount for HC and go ahead and retire early. And because I *probably*would be okay (90+ % confidence level), I can taste ER like it's happening tomorrow. But the quoted statement above brings me back to reality. Based on my own calculations, I could wait to retire in 2021 and have a *much* more comfortable/fun retirement. I still would have to pay a couple of years of high HC costs before Medicare but I would be in a better position financially to handle it. So for me, it's currently a head (wait for ER) vs. heart (RE now) internal battle.

 

[OrcasIslandBound]

Yes, perhaps I should look at the delay as only being 2 additional years.

Or I could attempt to buy insurance on the open market around December for coverage that would start on first of the year, 2018.

Or hang in there for a while and see what shakes out. Probably what I'm going to do. Probably, realistically for at least two years.

 

[Gotadimple]

OrcasIslandBound,
You know the reality is that we don't know what will happen. But in all of life we don't know what will happen. Certainly with the current cost of health care you can research policies and prices, and have some sense of what it will cost on the private market. Then at least you 'know' where you stand financially, and whether that impacts your retiring early.

- Rita

 

[MRG]

OrcasIslandBound,
You know the reality is that we don't know what will happen. But in all of life we don't know what will happen. Certainly with the current cost of health care you can research policies and prices, and have some sense of what it will cost on the private market. Then at least you 'know' where you stand financially, and whether that impacts your retiring early.

- Rita

Exactly.

Anything can change! You plan the best you can and take chance. Nothing is set in stone.

 

[2017ish]

Nothing is assured with respect to individual market for insurance--regardless of whether new legislation passes. Depending upon your state/zipcode, the ACA may be teetering (as it is here), or simply outrageous if you aren't eligible for subsidies. Off-exchange options are available, but have downsides--as do the faith-based coops.

Some areas/zips are in much better shape than others.

Basically, nothing substantive (in this area) has changed with respect to my planning in the past several years. Just have a huge chunk of projected budget for healthcare and health insurance and the ability to shift more funds to it (and/or find less painful ways to deal with it) if we choose to remain domiciled in our present location.

Bottom line is that DW and I are nearing our late 50's and have too many things on the trip list that require relative youth. At some point, one must embrace Admiral Farragut's quote upon entering Mobile Bay.

 

[OrcasIslandBound]

A little off topic, but somehow I need to figure out how to change my name. I'm now here in Orcas island, so the name OrcasIslandBound isn't really right any more.

I will investigate the private insurance options later after I have a little more confidence in the stability of this industry.

 

[jim584672]

If I was you I would keep working. The entire insurance market might become destabilized if things are not handled carefully. Right now I see that as a real possibility.

 

[eta2020]

I will investigate the private insurance options later after I have a little more confidence in the stability of this industry.

You can be confident of one thing. They are businesses whose objective is not your health but their profit.

 

[OrcasIslandBound]

You can be confident of one thing. They are businesses whose objective is not your health but their profit.

Yes, actually it goes a step further. I think it would be in their best interest to have my family wiped out financially if one of us comes down with a major catastrophic illness, rather than have them pay for it.

 

[OrcasIslandBound]

If I was you I would keep working. The entire insurance market might become destabilized if things are not handled carefully. Right now I see that as a real possibility.

Yes, keep on working 4 1/2 more years....

 

[OrcasIslandBound]

The real question is what about all those people who already retired and are on the ACA plan? Are you going to have to go back to work to get health insurance? Are you going to wait and see what happens? Is it possible that your health insurance will be cancelled? Are you a bit nervous about this future?