Help me out

[Jeffrey]

Ok, I'm 40, married, one small kid. Live in Manhattan. Net worth is 3 million. Wife and I both have big company corporate j**s. I have figured out how to retire in 5 years, except for the health insurance bit. I can't figure out what it will cost me, how to get it, or how to factor it into my retirement calculations. I tried some online sites (maybe not the right ones), but don't really see a lot of options. This is the main thing that I see tying myself to the corporate j*b until 55 (when I get a whole bunch of retirement bennies, that are nice, but that I don't really need financially, except for the health insurance).

Please help direct me where to research further.

 

[TromboneAl]

This thread should help you:

http://early-retirement.org/forums/index.php?topic=8894.0

 

[Mwsinron]

http://www.ehealthinsurance.com/

Should give you an idea for health insurance.

 

[Martha]

Are you planning on staying in New York State? If so, it is a guaranteed issue state, meaning that individual health insurers cannot turn you down based on your health. However, that makes health insurance expensive in New York.

Here is a guide from Georgetown University that will tell you your rights in NY:

http://www.healthinsuranceinfo.net/ny.pdf

 

[chinaco]

Move out of Manhattan and move to some place with a lower cost of living and you could probably retire today!

 

[Jeffrey]

Yes, I have seen the ehealthinsurance site. But I wanted to know if options other than the ones they list existed. Are there health insurance brokers who help you compare plans and have more choices? For example, the 1k a month plan and the 2k a month plan they give seem very similar, but one is twice the price. I did not find their phone reps helpful in explaining the difference. I also priced the health plan I have at Big Company, and it would cost just over 2k a month to continue privately the same policy. I would also like data on inflation in health care premiums, but found that hard to locate.

I know that NY is a guaranteed issue state, I have read the Georgetown site and several pages of back posts. Both my wife and I have pre-existing conditions (fully treated, but existing) and this is important to us. I would prefer to work 5 more years and stay in NYC, but not work much beyond that, assuming I could find a good health plan at about 1k a month, and was confident it was a good company.

Are there any options beyond ehealthinsurance?

 

[Martha]

http://www.tnhis.com/ny.htm

This guide shows average cost in NY for a family where the parents are 35 years old. Unfortunately, it is from 2004 so it is dated.

I would recommend talking to an agent.

Increases in the last few years in health insurance premiums and general health care costs have far outpaced inflation. If the cost increases continue at the same rates, in no time it will be unaffordable for everyone . I think predicting future increases based on the past is going to be tough. For example, cost to employers who provide health insurance to employees increased 87% since 2000.

Here are some ugly stats: http://www.nchc.org/facts/cost.shtml

 

[Martha]

I also suggest reading the NY insurance commissioner site at: http://www.ins.state.ny.us/

 

[Jeffrey]

How does one find a good agent? Yellow pages? Thx

Edit: Martha - I just read your links, which include price information and some idea of health care inflation. In NYC, my family premiums would be about 1900-2300 a month, similar to what I checked my existing Big Company plan to be, if purchased solo. Health care inflation seems to be about 7-8 percent a year, doubling every 8-9 years or so. Barring any social solution, leaving the country etc., it seems I need to budget for these figures, if I do not have Big Company health insurance, or (doing the math in my head, I will calculate more precisely later) at least another million dollars for health care costs, over my basic retirement savings. Did I miss anything?

If I wanted to check health care costs outside NYC, how would I do it? One big problem is the pre-existings, which means that even in a generally lower cost area, we would probably pay more, if we could get insurance. I really like New York, but have looked at Vermont, which I believe also has guaranteed insurance.

Second Edit: I also checked the prices outside NYC, but in NY State. The prices are the same. This is not a NY city premium, but a NY State guaranteed premium (or so it seems to me).

Are there any guaranteed insurance states, with much lower premiums? Unless we solve this cost, or the government changes policy, I do not think retirement in 5 years is prudent, to my regret.

 

[mykidslovedogs]

Can you give me an idea of what kind of pre-existing conditions you have? I'm a Colorado Broker - I might be able to give you a little advice about coverage for your pre-existing conditions outside of NY.

Here is a link for finding an agent:

http://www.nahu.org/consumer/findagent.cfm

Colorado has a decently-priced guaranteed issue plan:

http://www.covercolorado.org/Pages/getaquote.aspx

Do all of your family members have pre-existing conditions? If not, then, if you lived in a non-guarantee-issue, non-community rated state, your dependents could qualify for much, much lower premiums in the individual market. Colorado has a 5000 deductible major medical plan with 100% coverage for preventive care not subject to deductible that runs less than $75/mo for a healthy, 35 year old male or female. We have a $7500 deductible major medical plan with a drug card for only about $45/mo for teenagers and young adults.

Prices really all depend on which state you live in. The more mandates on the carriers, the fewer competitors there are and the higher the premiums become. NY is a prime example of a heavily regulated state when it comes to individual and family insurance.

 

[Martha]

I doubt you would want to move to Minnesota , but Minnesota and a number of other states have risk pools which cover those with pre-existing conditions. Minnesota's risk pool is far cheaper than your NY guaranteed issue plan, plus has higher lifetime limits. A $1000 deductible plan is $290 a month for a person between ages of 45 and 49. http://www.mchamn.com/docs/COM1536-10306.pdf Minnesota has one of the cheapest, if not the cheapest, risk pools. Texas costs more but the coverage is still good. Other states can be very expensive or have low lifetime caps or other benefit limits.

There are other states which provide HIPAA eligible plans where there is no underwriting if you have come off of a group plan and have had a certain time period of credible coverage. A few states like Washington state are reasonable in cost. Unfortunately, most states HIPAA plans are very expensive.

If you are interested in a specific state, post about it and someone might have information. State insurance commissions usually have websites with information as well.

MKs has a good point: be sure you really are uninsurable. You might not be. That is where an agent can be helpful if you do move to another state.

EDIT: who knows what all this will look like 5 years from now when you want to retire. It is hard to plan for health care costs.

 

[mykidslovedogs]

Here's a link to the states that have risk-pools:

http://www.nahu.org/consumer/healthcare/topic.cfm?catID=120

 

[Jeffrey]

So far, I had limited my information search to the places (Vermont, Maine, Washington, New Jersey and of course New York) that www.retireearlyhomepage.com listed as guaranteed insurance states in that site's health insurance section. Colorado and Minnesota were not on that list. But apparently, they have new plans, or some high-risk pools that are equivalent. I did not know this, which gives me a few more options.

Roughly, it seems that health insurance outside NYC, assuming the worst in terms of premiums, is a little under half what I would pay in NYC (roughly 2k a month versus 1k a month, including deductibles and so forth for a whole family). (This makes sense, more or less everything is half the cost outside of NYC.) Both my wife and I have conditions that will not shorten our life or activities if treated, but will require constant costs and monitoring, so a high-deductible plan will not save us much. Insurance companies will not be falling all over themselves to have us as customers. We need to have guaranteed insurance with no ifs, ands or buts about it. We are the people that a profit seeking insurance company will reject if they have any legal option to do so, and we must simply budget the cost and stay in a state that has very strong health insurance protections. Perhaps over the next five years national legistlation will give us more options, but for now these are the facts. We are heavy users of a modern medical system, and I can't even in fairness totally object to paying for it.

I have gone to Colorado Springs on vacation and Minneapolis has a very lively theater scene. However, the more we think about it and I discuss the numbers with my wife, we would strongly prefer to retire right where we are, even if it means working a few more years. We like the city, and have extended family and friends here. I am going to use some retirement calculators with (gasp!) 2200 a month in health insurance premiums, going up at 7.7 percent a year, and see what numbers come out the other end. I will also call a NY health insurance agent to see if I have missed anything, but that seems to be a prudent calculation (barring, as Martha said, some legislation that improves the situation).

 

[Martha]

It is probably time for a review of rights under federal law, HIPAA.

No matter where you live in the U.S., if you are federally eligible you are guaranteed the right to buy individual coverage of some kind with no pre-existing condition exclusion periods. You are also can't be barred from purchasing insurance because you have health issues. To be federally eligible, you must meet all of the following:

´ You must have had 18 months of continuous creditable coverage, at least the last day of which was under a group health plan.

´ You also must have used up any COBRA or state continuation coverage for which you were eligible.

´ You must not be eligible for Medicare, Medicaid, or a group health plan.

´ You must not have health insurance. (Note, however, if you know your group coverage is about to end, you can apply for coverage for which you will be federally eligible.)

´ You must apply for health insurance for which you are federally eligible within 63 days of losing your prior coverage.

Federal eligibility ends when you enroll in an individual plan, because the last day of your continuous health coverage must have been in a group plan. You can become federally eligible again by maintaining continuous coverage and rejoining a group health plan.


The big problem with HIPAA is that it does not regulate cost, so the policies available to you if you are otherwise uninsurable can be very expensive. Also, the coverage may not be the best, with low lifetime limits (as low as 500,000 in a few states) or other limitations. States are allowed a variety of ways to comply with HIPAA. Some states have risk pools that you can buy into, such as Minnesota, Wisconsin, Texas, and many more. I believe 29 states have risk pools, but some may have closed, like Florida's. Other states require insurance companies to offer one or more "HIPAA policies." And there are states like NY and NJ that require all insurance be guaranteed issue. Each states has something, but the something might not be very good or affordable.

 

[Brat]

When you said "Washington" I am presuming you meant Washington State.

In the Seattle area Group Health is a highly regarded health care system. As an HMO they may accept members without regard to pre-existing conditions if they have been continuously covered by health insurance.

 

[Jeffrey]

Martha: "not regulate cost ... not be the best ... low ... limits ... limitations ... closed ... not very good."

Yes, these were the issues that concerned us about non-guaranteed issue states (what I called 'ifs, buts and maybes'). Plus someone concerned about this topic might worry about a trend towards worsening of these issues in the future, as insurance companies try to improve profits. For that reason we assumed we should limit our search only to guaranteed issue states - Washington State, VT, NY, NJ, Maine, New Hampshire, etc. Do you think we are being too cautious or closed-minded?

 

[Freein05]

Prices really all depend on which state you live in. The more mandates on the carriers, the fewer competitors there are and the higher the premiums become. NY is a prime example of a heavily regulated state when it comes to individual and family insurance.

If it were not for the regulations Jeffery would not be able to get coverage at any price.

 

[Gotadimple]

When you said "Washington" I am presuming you meant Washington State.

In the Seattle area Group Health is a highly regarded health care system. As an HMO they may accept members without regard to pre-existing conditions if they have been continuously covered by health insurance.

Actually, all carriers in Washington state may accept members for individual coverage if they have been continuously coverd by health insurance. However, if there is a gap in coverage, then _once_ they have passed the health insurance screening questionnaire, they may be accepted. All carriers can reject an individual with a pre-existing condition if their score on the questionnaire is high enough. Those applicants who are rejected may apply to the state's high risk insurance pool.

 

[mykidslovedogs]

If it were not for the regulations Jeffery would not be able to get coverage at any price.

Again, that depends on the state which you live in. For example, Colorado has very competitive rates for medically underwritten policies AS WELL AS guaranteed issue plans through Cover Colorado (http://www.covercolorado.org). "Cover Colorado" will even take you if you are not truly HIPAA eligible. All you need to qualify is either to have been diagnosed with a pre-qualifing medical condition such as Cancer or Diabetes, OR you need to have been turned down by a private carrier or have been given an exclusion of coverage for a medical condition that you need coverage for. Granted, the lifetime maximums could be higher, but if you are purchasing the policy to get you by for a few years until Medicare, it's not bad coverage.

NY might do well to take some lessons from Colorado.

 

[cute fuzzy bunny]

Do you think we are being too cautious or closed-minded?

No, you're not. The insurance business is like the cell phone biz. Make it complicated, be obscure and roundabout. Charge as much as possible for things that may not be needed. Leave out expensive stuff that you might need in hopes that you wont notice until you need it. Profit.

Having both made the transition from working to single ER with self paid health care and more recently managed the transition of our health care from my wifes old job to her new job...there are a huge number of pitfalls and gotchas.

All that having been said, if you read the materials, do your homework, and make sure you keep good records and do everything you're supposed to do...it, like many other ER worries, will get worked out.

Another aside...do ya REALLY want to work five more years just to secure a retirement in manhattan? That $3M buys you a nice lifetime retirement almost anywhere else in the country. Five good years, possibly the best ones you have left, is a long time.

Last aside...isnt it nice that even though health care costs are going nutty and quickly becoming a retirees largest expense that the escalations are compensated for in the CPI so we all continue to get "real" returns from our CPI indexed investments? I mean...its close enough, right?

 

[Freein05]

Again, that depends on the state which you live in. For example, Colorado has very competitive rates for medically underwritten policies AS WELL AS guaranteed issue plans through Cover Colorado (http://www.covercolorado.org). "Cover Colorado" will even take you if you are not truly HIPAA eligible. All you need to qualify is either to have been diagnosed with a pre-qualifing medical condition such as Cancer or Diabetes, OR you need to have been turned down by a private carrier or have been given an exclusion of coverage for a medical condition that you need coverage for. Granted, the lifetime maximums could be higher, but if you are purchasing the policy to get you by for a few years until Medicare, it's not bad coverage.

NY might do well to take some lessons from Colorado.

I checked the web site and calculated what it would cost for me and my wife. With 1000/2000 deductible the monthly premium would be between $1,600 and $1,700. This is not very cheep. The only thing it does is give you coverage when for profit insurance companies do not want to take a chance. Again this is not a solution to our health care crisis.

 

[mykidslovedogs]

I checked the web site and calculated what it would cost for me and my wife. With 1000/2000 deductible the monthly premium would be between $1,600 and $1,700. This is not very cheep. The only thing it does is give you coverage when for profit insurance companies do not want to take a chance. Again this is not a solution to our health care crisis.

If, fundamentally, you feel it is unfair to pay more for presenting a high risk to the insurance company, then you are right. It is definately not a good solution to our healthcare crisis.

On the other hand, if you live in NY, and if you're only 19 - 35 years old, and in perfect health and living on a somewhat lower income than your average early retiree, it might seem unfair to have to pay $700/mo for your insurance when you could get it for less than $50/mo, in a less regulated environment.

No matter how you look at it, all "solutions" will have trade offs.

Nationalizing can lead to waiting times and tradeoffs in quality of care, particularly for high-tech services....Privatizing results in greater freedom and choice, but some inequity. Hybrid systems, like what we have here in the USA (1/2 Medicare and Medicaid, 1/2 Private), lead to cost-shifting. The big question is, what kind of system will provide the best quality of care to the largest number of people in the most efficient manner?

A system that claims to cover everyone, but leaves everyone waiting, possibly while in pain or potentially worse, for important medical services is not a good solution to me. Neither is a system that leaves millions of people uninsured against their will.

But since there are going to be tradeoffs either way, the question remains, which system leaves the fewest number of people alienated? Ultimately, that's what we all want.

 

[haha]

But since there are going to be tradeoffs either way, the question remains, which system leaves the fewest number of people alienated? Ultimately, that's what we all want.

Actually, I doubt that is true. I think most of us want the system that will work best for us personally, for our family and for the people who we identify as "in our group".

Ha

 

[mykidslovedogs]

Actually, I doubt that is true. I think most of us want the system that will work best for us personally, for our family and for the people who we identify as "in our group".

Ha

Thanks for your honesty, Ha. I really don't feel the same way that you do. I lose sleep over this stuff, and the thought of a truely nationalized system actually really scares me. Not because of my own personal experience or satisfaction with the system as it is today, but because I really believe it (nationalizing) could potentially destroy our medical system as we currently know it for the great majority of people (more-so in the long-run than in the short-run).

 

[haha]

Thanks for your honesty, Ha. I really don't feel the same way that you do. I lose sleep over this stuff, and the thought of a truely nationalized system actually really scares me. Not because of my own personal experience or satisfaction with the system as it is today, but because I really believe it (nationalizing) could potentially destroy our medical system as we currently know it for the great majority of people (more-so in the long-run than in the short-run).

Or, just possibly because you sell private health insurance? Sorry to be harsh when you were so nice, but hello!

Ha