Retiring before medicare age in the usa, what did/will you do?

[orchid55]

Generally if you are over 50, COBRA will be cheaper than an unsubsidized ACA policy. Another plus for COBRA is that it usually has a more robust network and lower deductibles and max out of pocket costs.

 

[Marita40]

Generally if you are over 50, COBRA will be cheaper than an unsubsidized ACA policy. Another plus for COBRA is that it usually has a more robust network and lower deductibles and max out of pocket costs.

Exactly my finding.

 

[PaunchyPirate]

Sorry for the slight hijack, but I have an ACA MAGI question: Let's say I tell the guvment that I will make $35K next year. How close to that am I allow to vary, and still get the supplement? Like, lets say I make $34K or $36K. Thanks.

You can be over your estimate all the way up to the cutoff cliff limit, which, I think, is $49,960 for a single person for 2020. However, the subsidy is on a gradually decreasing scale up to that cliff. So at tax time, you pay the difference between what you actually got and what your final income said you should get. If you earn $1 over the cliff, your entire subsidy goes away and is added to your taxes due.

 

[scrabbler1]

You can be over your estimate all the way up to the cutoff cliff limit, which, I think, is $49,960 for a single person for 2020. However, the subsidy is on a gradually decreasing scale up to that cliff. So at tax time, you pay the difference between what you actually got and what your final income said you should get. If you earn $1 over the cliff, your entire subsidy goes away and is added to your taxes due.

As someone who has experienced all 3 scenarios, I can say you are correct. In the 6 years of the ACA exchanges and subsidies, I have undershot my income estimate, overshot the estimate but didn't go over the cliff, and overshot the income estimate and gone over the cliff.

 

[PaunchyPirate]

As someone who has experienced all 3 scenarios, I can say you are correct. In the 6 years of the ACA exchanges and subsidies, I have undershot my income estimate, overshot the estimate but didn't go over the cliff, and overshot the income estimate and gone over the cliff.

I wildly overshot my $40,000 estimate in 2019 (my first year on ACA). But I did it intentionally when I decided in December of 2019 to sell a losing stock - Boeing. The cap gains pushed me over the cliff, but I decided the loss of subsidy would be less than the further loss in the stock. Once over the cliff, I decided to go even further over and sell off some other stocks I wanted to.

So my $40,000 estimated income ended up being way off. Needless to say I had to pay back about $5,000 at tax time. Fun year. For 2021, I’m back to estimating $43,000 and I think I will end up being about $5000 under that. So I should get some added subsidy refunded at tax time.

 

[Gumby]

I stayed working as long as I did primarily in order to qualify for retiree medical insurance from my last employer.

 

[Ronstar]

I had DW’s work retirement health insurance

 

[scrabbler1]

I wildly overshot my $40,000 estimate in 2019 (my first year on ACA). But I did it intentionally when I decided in December of 2019 to sell a losing stock - Boeing. The cap gains pushed me over the cliff, but I decided the loss of subsidy would be less than the further loss in the stock. Once over the cliff, I decided to go even further over and sell off some other stocks I wanted to.

So my $40,000 estimated income ended up being way off. Needless to say I had to pay back about $5,000 at tax time. Fun year. For 2021, I’m back to estimating $43,000 and I think I will end up being about $5000 under that. So I should get some added subsidy refunded at tax time.

Your tale about cap gains pushing you over the cliff is somewhat similar to mine. In 2016 I had a large cap gain distribution but stayed under the cliff, not by much. In 2017 and 2018, those cap gain distributions pushed me over the cliff. In 2019, it looked like I could do some careful sales to take some cap losses and barely avoid the cliff. But the estimates came in too low so that I couldn't avoid the cliff, so I sold off the whole fund (an actively managed stock fund I had been in since 1996, 12 years before I ERed). I incurred a huge cap gain with all the taxes, but with the cliff it doesn't matter if I go over by $1,000 or $100,000. I bought into a similar stock fund except that it's an index fund which incurs very few cap gains (and few dividends). This has put me back onto the subsidy train, a train which has grown a lot in value in the last few years compared to 2014-2016 (when it wasn't worth a lot).

 

[pacergal]

I stayed working as long as I did primarily in order to qualify for retiree medical insurance from my last employer.

+1, same here

 

[JK7255407]

I retired at 59.5 years old in January of 2020. I had subsidized Cobra from my former employer for 8 months at $550/month, then premiums went to over $1600/month.

Our monthly income went to levels low enough to qualify for Medical Assistance (medicaid) where we live (Minnesota) and we have taken advantage of that. We pay nothing for a good health plan, there are no significant deductibles.

Unlike another reply in this thread, Minnesota will only go after your estate for reimbursement if you go into a long term care situation.

In 2021 we will begin to take withdrawals from our IRA accounts. We will need to manage our income to less than $34.4K/year in order to qualify for what is called Minnesota Care, which has a $160/month premium for the 2 of us.

Best of luck to the original poster, and everyone else!

 

[NoEZmoney]

Cancer hapens

After reading several replies of folks saying they're healthy and aren't worried about insurance. My story, I'm healthy workout no issues and then one day simple blood test indicated possibility of cancer. Biopsy indicated stage 2 cancer and underwent surgery. Thankfully I had Insurance otherwise I would have been on the hook for about $70,000 worth of healthcare. Don't fool around. You can be going great and carefree one day and the next day your world falls apart. Get adequate insurance and get annual check-ups cuz if I hadn't gotten an annual check-up I wouldn't be posting this right now. BTW, I was just 50 when I was diagnosed.

 

[Emerson11]

Be prepared for huge premium increases

I retired in 2009 at age 47. My monthly BCBS premium for an HSA high deductible PPO plan was $329, which included my college age daughter. For 2021, my premium will be nearly $800/mo. with no dependants on the plan. My health insurance, not even counting the $6800 deductible, is by far my largest expense. Those who self pay don't have negotiating power, they subsidize all those who get a gov't subsidy, and they are required by law to buy coverage they don't need. (Example, I have maternity coverage.)

 

[folly]

ACA act plan. Buy bronze plan with largest deductible. Open a HSA (Health Savings Plan). The HSA reduces your income with the $ you fund it with, thus making you MAGI lower. You can fund the HSA with interest and divd monies.

 

[meleana]

ACA plan is what I did as opposed to expensive COBRA. We are not collecting SS, have no pensions and just living off cash until I turn 65 next June. Qualified for full subsidies for a silver plan.

$40 per month. Low or no copays. No deductibles or referrals. EPO.

 

[folly]

I forgot to mention in my previous post...I use a local clinic in the small remote town I live in, and they give me a discount. I had no idea they did this. It is like a sliding scale system. They ask for u to fill out a form which only wants your income, not assets. Based on that they apply a discount to services and if you use their pharmacy, you get a discount their as well. It pays to ask questions. My DH had a hospital stay where our insurance at the time left us with around 8k out of pocket. We asked about programs to help and they gave us a load of forms, we filled them out, provided documentation and they reduced the bill. Another time we ask if there was a discount if we paid the balance all at once, she gave us a hefty discount. It pays to ask questions.

 

[ERhoosier]

I retired initially at 56, took COBRA, then was on ACA for a year and realized (unsubsidized) ACA premiums were $$$$ for honestly pretty spotty coverage (HIGH deductibles/OOP max, VERY narrow networks, NO out of area coverage except for emergencies, minimal coverage for ancillary services). Went back to w@rk for access to better care (DW & I have some health issues and good docs were turning down our ACA plan). I will finally retire for good when I get within 18mo of Medicare, which is really not ER
ACA option depends GREATLY on your region and overall health. And income (subsidy eligibility). In my area, ACA plans are $$$$ & networks are worse than Medicaid. ACA in other regions can be a very good option.
FWIW- I seriously doubt SCOTUS will throw out the entire ACA.
And COBRA cost varies GREATLY between companies.

 

[PointBreeze]

Went with heavily subsidized ACA plan, but you will need to manage your income (MAGI) to be able to receive the large tax subsidies.

This. I manage my income and pay $184/month for a Gold plan with an $800 deductible.

 

[carty1]

I was lucky enough to get under my wife's plan. She's still working. He He He.

 

[rk911]

retired at 55 and was able to stay on employer's plan until 65...but i paid the premium....roughly $400 p/m. plan b was to buy insurance directly from provider rather than thru ACA.

 

[GATime]

Just retired a couple of weeks ago and plan on taking Cobra for at least until next year and perhaps the full 18 months. It's a good PPO and cheaper than than the ASA plans in my area that are all crappy HMO's. Hoping offerings will change in the future but for now in GA, the plan are terrible. I plan to do some consulting work next year so will not qualify for any subsidy. If there are other alternatives, would like to hear.

 

[dawdmorgan]

Healthshare Plan

I don't think it's been mentioned yet, but you should definitely look into a Healthshare Plan. I retired at 44 and due to our MAGI we don't qualify for subsidies - and without subsidies the ACA is not "affordable". Anyway, we found our solution with the healthshare coverage. They are exempted from ACA rules, so don't need to cover pre-existing conditions, maternity, drug rehab, etc... and are hence more like private insurance used to be and very affordable. Our high deductible plan ($9k/year) runs about $250/month for a family of 4. Last time I checked ACA for me with no subsidy it was about $1,500 per month for the least expensive plan - and a $6,000 deductible!

Downsides as many here have stated are it's not regulated as insurance by states, so there is a higher risk of bankruptcy, fraud, etc... but you can research the various companies offering this type of plan online and decide for yourself. They also don't cover pre-existing conditions and other items mentioned, but if you are relatively young and healthy that is kind of the point. I just need catastrophic insurance since we don't even go to the doctor every year. We have saved almost $100k so far versus an ACA plan. It also doesn't qualify as an HSA, but you can put your savings in an investment account instead...

Last thought is if you are worried about getting cancer or some other chronic and expensive illness, you can always go back to ACA at the beginning of each year. My deductible is $9k, and I have $100k now of savings in case something like that happens. YMMV

 

[camfused]

^^^^ @dawdmorgan Which particular one are you in?

 

[dawdmorgan]

^^^^ @dawdmorgan Which particular one are you in?

Altrua Healthshare - copper plan. Forgot to mention other benefits: They do negotiate rates for you just like an insurance co, but the rates may be slightly higher than BCBS for instance. I've felt the negotiated rates are pretty competitive, and I always call and try to get it down further myself! They do have a "network" of providers, but you can go to any doctor you want and they negotiate directly with them. They also have free telemedicine included, but we haven't used yet. Other downsides: They don't cover prescriptions or vaccinations. We use the Good Rx app for prescriptions...

 

[Starsky]

I've used the ACA. I know it's not perfect, but I do get a small subsidy and with all my pre-existing conditions it's a relative bargain. I'm in So Cal, so there are lots of options and access is very good. I know it's not like that everywhere.
California has done a great job implementing the ACA and I probably wouldn't have been able to completely retire without it - and if I did retire without it, I'd be 100% dead. It's unfortunate that every state has not embraced the law equally, but hopefully it will get better everywhere as the ACA is improved and more and more people realize the benefit. I believe the ACA is here to stay in California, regardless of what happens in Washington D.C., and it is definitely a huge part of the retirement calculus for us - perhaps even a deciding factor. (At least until I'm 65)

 

[Shardo]

Paid $837/month for megacorp retiree health insurance for 7 yrs. Luckily, I could afford it and it was comparable to the cost of obamacare with a smaller deductible.