Healthcare coverage preventing RE..

[24601NoMore]

Hey, gang.

W*rk has gotten to the point that it's taking years off my life, so it's high past time to RE - at the ripe old age of 54.

I'd RE TOMORROW if I could figure out how to pay for the HC without taking a huge chunk out of my retirement savings.

Curious what approaches the rest of you who have already RE'd (or are thinking of RE) are taking..here's my list..

- Manage income to < 4X FPL; get subsidies (still sucks - HUGE cost even after subsidies for anything that's not a HMO with ridiculous deductibles).

- Health Sharing - scares the bajeebus out of us. BIL is using this for his < 65 DW and I just can't see doing something with no contractual guarantee of reimbursement. Oh, he's saving a bundle monthly over the ACA exchange plans, but what if a major illness hits - are they ever truly going to get reimbursed?

- Something outside of the ACA exchange (is there such a thing any longer? I keep reading about healthcare brokers..does anyone have any good info on that option?)

Really frustrated by the insane costs..it's literally $24K premiums for the 2 of us before subsidies..with $3,500 - $6K pp deductibles. WHO CAN AFFORD THAT?

So, in the meantime..I continue to slog away at a j*b that I absolutely hate and which is probably killing me.

Appreciate any and all suggestions/help.

TIA..

 

[Senator]

No offense, it's not healthcare that is preventing you from retiring, It's lack of money for it. Healthcare is just another expense of early retirement.

I have VA healthcare.

 

[24601NoMore]

No offense, it's not healthcare that is preventing you from retiring, It's lack of money for it. Healthcare is just another expense of early retirement.

I have VA healthcare.

Understood, but I remember the days very good HC cost < $8K/yr for 2, before our lovely .gov "fixed" the system. $26K plus $6K pp deductibles yearly is not something anyone who's not very wealthy can absorb. That's totally insane.

 

[ocean view]

Why is ACA off the table for you? Since you have worked some in 2018, you may not get a large PTC this year, but next year when you presumably only have passive income you could pay very little for ACA.

 

[Physics Guy]

I'm in a similar situation in that I'm "retiring" in 3 months at age 52. The quotes are because I will still be employed but it will not be a job with insurance.

It looks my options are ...

1. State Extended Coverage as a former teacher with 10+ years of service but not retirement age (effectively COBRA but it continues as long as I pay) for $1700 per month (Bronze plan covering family)

2. ACA plan for slightly more per month with a subsidy that is likely to be fairly significant

3. Other options like the health sharing that you listed. I will not be taking these options.

The kicker is that the state plan is more expensive per month now; possibly a lot more expensive. However, it allows me to get subsidized state coverage when I officially retire as a teacher at age 60. The cost of all plans will go down if/when my kids get their own coverage.

So - long term cost control at the expense of short term pain or go with the currently cheaper option and hope that nothing explodes in health care costs.

 

[ceciledian]

If you are eligible for subsidies it’s affordable, MAGI around $64,000 and under depending where you live. We were on the exchange last year without subsidies, this year we opted for the plan offered by the contract house I work for, costs us $17k in premiums with $6350 deductible each. Since it’s an employer plan we are not dinged for our ages (58, 60) like we are in the individual market. I tried to find an off market plan last year but was not successful. I have about two more months to work then I will re-retire and we will go on cobra. I anticipate when that runs out one of us will get another job just to get insurance and we will rinse repeat until we’re both eligible for Medicare.

 

[Spanky]

Understood, but I remember the days very good HC cost < $8K/yr for 2, before our lovely .gov "fixed" the system. $26K plus $6K pp deductibles yearly is not something anyone who's not very wealthy can absorb. That's totally insane.

Agreed - the cost is simply exorbitant. It's great for the healthcare insurance industry. United Health Care & its subsidiary Optum have record profits years after years.

 

[bingybear]

I used cobra for 18 months and then ACA using an HSA compatible plan. I did roth conversions up to the top of the 15% bracket instead of getting a subsidy for being below the cliff. I could have taken a smaller roth conversions and stayed under the cliff.

yes the more narrow networks are a bit of a pain and having little coverage away from home sucks. But it doesn't kill RE.

you are right that you won't get mega corp type insurance. But don't compare ACA to mega corp without considering the cost to the company + that you are not getting the benefit of younger employees helping the risk pool.

 

[fritz]

We retired B/4 ACA was in effect (2009 @ 58/57), and purchased individual policies out in the market. We elected to purchase separate policies as I am covered by the VA, but the VA does not normally cover emergencies in non-VA facilities. A drop on the street will get you to the nearest hospital, and we figured one of those would easily overrun the cost of just insuring me with a catastrophic type of coverage from BCBS until Medicare (was reasonable back then). Bought DW a more comprehensive coverage style plan - PPO from BCBS. Unknown to us at the time of retiring we ended up with minor preexisting conditions at the time, but VA coverage was adequate and DW's toe (yes, toe) previous cyst exclusion was a not a big concern. FYI - we were on BCBS with work and found that purchasing individual policies from BCBS was something quite different.

When affordable care act came along, we thought things would get better for us with costs/coverage (wrong)... First came the notice of cancellation of coverage by BCBS - stating we will have to buy off the exchanges. Second came the increased cost surprise for terrible coverage on the exchange. Costs were double, and deductibles and coinsurance were outrageous on ACA vs. previous policies. They've only gotten worse. We've had our policies cancelled twice that I can remember on the ACA, and had to chose even more costly and worse coverage policies. I'm on Medicare now and DW will be in April. Couldn't even buy DW a temporary policy as they usually don't cover any preexisting conditions and don't qualify as creditable coverage under the ACA rules (you will be fined by the govt. for not having creditable coverage). This goes away next year (2019) IIRC.

My policy was over two times as costly on the ACA, and wife's coverage (which is now down to an HMO) runs aro. four times her original cost not on the exchange. Surprisingly, DW's has gone down for out of pocket, as the subsidy has gone up sharply (doubled) for her short last year - 3 mos of 2018. It's about 3/4 subsidy and 1/4 out of pocket. Really have to watch your income as even a little over estimate brings about payback at year end on your taxes, not to mention going over the cliff and paying full boat. Remember, SS is counted towards income with the ACA (thanks Mr. president for getting that added back in at the last minute).

Hopefully, this will get better for those looking at RE going forward after 2019, but healthcare costs for us (people with no ailments) were huge with the intro and ongoing ACA.

 

[SheitlQueen]

I have gotten my coverage through the ACA and will continue to do so until I reach the age when Medicare kicks in.
Yes the deductible is high but I never get ill and I don't use the insurance, other than routine stuff which is covered at 100%. If I ever do fall ill and need $7000 for the deductible, that is what my retirement savings/emergency fund is for. I pay $265 a month for a silver plan, which is pretty affordable.

 

[MichaelB]

There were some posts on an unrelated proposal by BC Idaho that weren't relevant to the OP topic, so a new thread was started with them, here http://www.early-retirement.org/forums/f52/new-blue-cross-idaho-proposal-90845.html

This thread is a request for help on an individual situation, so it would be helpful to stay on topic.

 

[DROPOUT]

We are a young family hoping to retire early (Mid 30's with 2 young kiddo's) ~ Our insurance for a family of 4 was going up from $1550/month to $2750/month to have the same Silver Cigna Plan.

We decided to go the healthshare route with a non ACA Conforming Health Insurance Plan. Here's our current breakdown.

Old ACA Plan (No Dental): $2,750/month

Non ACA Plan (Through TN Farm Bureau) [Med + Dental]: $590/month
Healthshare Plan (So we don't have to pay the penalty/tax: $495/month

So ~ We are now spending just shy of $1,100/month as opposed to $2,750 and our deductible and co-pays have been cut in half. We can also file an exemption due to the health share.

 

[ivinsfan]

I thought when you use a health share you couldn't have regular insurance ....what does the non ACA plan cover

 

[Mr._Graybeard]

To me, health insurance should be insurance against something catastrophic -- that's what insurance is supposed to do. A bronze ACA plan fills that bill. The premiums for our bronze-level coverage has gone lower every year since 2014. For 2018, The monthly premium is $0.00 after subsidy.

 

[garyt]

No offense, it's not healthcare that is preventing you from retiring, It's lack of money for it. Healthcare is just another expense of early retirement.

I have VA healthcare.

Semantics. It's healthcare.

 

[DROPOUT]

I thought when you use a health share you couldn't have regular insurance ....what does the non ACA plan cover

Healthshare is not considered "Insurance" ... This is why you specify you have no insurance should you go to the doctor/hospital/etc...

Prior to us signing up for the healthshare plan ~ we asked about carrying other insurance and they said that wouldn't be a problem.

Non ACA plan covers everything most plans covered prior to ACA. They won't cover pre-existing, and therefore, there is a 6-8 week underwriting time frame for acceptance. Otherwise ~ we have less of a copay, and a small individual/family deductible. We've been quite happy so far with no issues

 

[DROPOUT]

Here's the info. Farm Bureau used to have ACA plans. This year is the first year they pulled out and are only offering non ACA plans.

https://www.fbhealthplans.com/individual-family-plans

 

[joeea]

Curious what approaches the rest of you who have already RE'd (or are thinking of RE) are taking

We saved a sufficient portfolio such that we are no longer worried about health insurance premiums. We have enough to cover whatever premiums come our way.

That said, the ACA plans with the subsidies we currently receive are extremely affordable in my state. And in a few years we'll be on Medicare anyway.

So, in the meantime..I continue to slog away at a j*b that I absolutely hate and which is probably killing me.

Maybe you simply need to find yourself a new job. Not everyone is in a position to retire as early as they might prefer.

 

[Midpack]

Understood, but I remember the days very good HC cost < $8K/yr for 2, before our lovely .gov "fixed" the system. $26K plus $6K pp deductibles yearly is not something anyone who's not very wealthy can absorb. That's totally insane.

It’s been a very long time since “good HC cost < $8K/yr for 2.” And though ACA didn’t make HC affordable for most, you can blame the HC industry themselves for US HC costing about twice all other developed countries while delivering poorer outcomes. It’s very much a for profit business first, helping people is a means to profits nowadays...

 

[Bir48die]

Hey, I completely get it. If my wife didn't have insurance until Medicare I'd still be working. Can afford my own but would have put a real crimp on the budget. Many here were able to get subsidies by pulling from taxable accounts. With deferred comp and my wife's pension we cannot keep MAGI below the level needed so, it's just a cost of retiring early. I'm of the camp of doing Home Depot or something <30 hours a week to get some type of insurance plan

 

[IMATERP]

I retired this past December at 57. I'm paying $330 a month for insurance through my wife's employer (a local hospital.). At age 60, the State covers my healthcare for the rest of my life. That is why I made the decision back in 2004 to take a job with the State. The writing was on the wall, even back then.

I

 

[Dtail]

A little out there, but any thoughts to moving to a state with a much lower ACA net cost?
Florida is one example. Perhaps drastic, but throwing out another idea.

 

[ClayMore]

I’ll need to solve for this starting 2020. From a pure $$ standpoint, expat is by far the most affordable. We have made a few trips to Yucatán Caribbean coast and care services as well as insurance is a fraction of USA. I can afford ACA exchange plans at full price but shelling out 30k/yr for essentially nothing is simply offensive to me. The US system is so bloated with overhead, profit margin, and tort defense that it is obscene. Since most people don’t ever really deal with the cost, the business model is perversely distorted. I am no lover of government redistribution but it seems that parts of this dilemma could be improved, e.g. ER visit for minor wounds. In Mexico, a few stitches and wound meds are about $20, setting and casting a broken arm about $30. Catatrophe policies are in the $200/mo range. Our system is so out of whack. It’s sad.

 

[Aerides]

Understood, but I remember the days very good HC cost < $8K/yr for 2, before our lovely .gov "fixed" the system. $26K plus $6K pp deductibles yearly is not something anyone who's not very wealthy can absorb. That's totally insane.

Not really.
statistical chances are: Pre-ACA that would have been one of those "catastrophe only" policies with a hellava lotta fine print and exclusions (ie, things you need). or priced at 45 vs. 55, etc. Or not even close to viable comprehensive coverage.

Anyhoo, yes, most of us plan for about 20k +/- per couple at least for now, per year. Manage your post-retirement agi to sub-subsidy levels and that will help a lot.

 

[ClayMore]

I just spent an hour crafting a great post that was voided because I quoted a too old post. Please enjoy a good chuckle on account of the ignorant noob! At least it was a bit of cathartic release for me!