Transitioning to Retirement - Healthcare Hurdles

[mountainsoft]

This thread is terrifying to me. When I retire, I will be living off savings, with no income other than what my investments may make. I don’t want to be placed on Medicaid. I’m worried I won’t be able to qualify for ACA coverage now. I don’t know why everything has to be so complicated.

I didn't want to be placed on Medicaid either, more for the stigma than any actual coverages. However, from a cost perspective it's nice, full medical coverage, no copays or anything. We can stay with the same Kaiser plan we had when my wife was working, so we shouldn't see much difference.

We're still waiting on the income verification to see what our next step is. Hopefully that goes well and we can be done till the end of the year. Next year we'll have a steady pension income to qualify for ACA coverage.

By the way, I don't mean to scare you more, but some states have not adopted "expanded" Medicaid, which leaves an uncovered gap between Medicaid and ACA. Hopefully you don't fall in that gap, or are in a state with expanded coverage. Thankfully we have expanded coverage here in Washington state, or we would likely have fallen into that gap.

https://www.kff.org/medicaid/issue-...if-all-states-adopted-the-medicaid-expansion/

 

[meleana]

Too late for you now, but best to get a broker/navigator who handles the ACA plans. And they can usually help you transition to Medicare once you come off the ACA plan.

 

[marko]

Everybody qualifies for ACA. My husband got a sweet private insurance plan, but I did not pass underwriting (hypothyroid) so ACA it was. We are living off our investments as well. I did not have to prove my income and it was not complicated to set up ACA.

I must be missing something. I thought to qualify for ACA your income had to be below a certain threshold which is reported at tax time.

When it first came out, a lot of folks on this forum were writing threads on how to reduce their reported income.

So is it that you qualify but once you report your income to the IRS you may get a bill? Our income was always above the threshold so I stopped paying attention. Or was there a change?

Moot now as DW has just one more $1400 monthly payment before going on Medicare.

 

[N02L84ER]

The cliff went away for a few years. I think it comes back in 2025 or 2026. For the next few years, if you exceed the 400% level you lose around 8.5% of the premium tax credit for every dollar above the 400% level.

 

[marko]

The cliff went away for a few years. I think it comes back in 2025 or 2026. For the next few years, if you exceed the 400% level you lose around 8.5% of the premium tax credit for every dollar above the 400% level.

Hmph! Thanks. Still wouldn't have helped us but as noted, too late now.

 

[Aerides]

I must be missing something. I thought to qualify for ACA your income had to be below a certain threshold which is reported at tax time.

When it first came out, a lot of folks on this forum were writing threads on how to reduce their reported income.

So is it that you qualify but once you report your income to the IRS you may get a bill? Our income was always above the threshold so I stopped paying attention. Or was there a change?

It's still pretty much the same, but instead of a hard stop upper cliff on income, it's a bit squishier and you can get some subsidies earning a bit more than you used to.

The issue in this thread is when you estimate under the minimum (125% of the FPL) and are in a state with Medicaid expansion (also part of the overall ACA law) then that coverage applies to you instead of an exchange plan. If in a non-expansion state, you could find yourself in the Gap and not eligible for either, which is why you simply guestimate enough to avoid that.

If you estimate inside the covered ranges of the ACA-Exchange plans, based on the monthly incomes you project and enter at sign up (over 125%, and under wherever the caps are currently) you will receive a subsidy and avoid Medicaid if you wish to. In some cases/states, you might be asked for some evidence of this income if it's a significant change, but saying "I retired that's why" is almost always fine.

If, at tax time, you earned less and came in really below the FPL, there is no impact to you.

If, at tax time, you earned more, you may owe back some of the subsidy credit via your taxes.

 

[jim584672]

It's still pretty much the same, but instead of a hard stop upper cliff on income, it's a bit squishier and you can get some subsidies earning a bit more than you used to.

The issue in this thread is when you estimate under the minimum (125% of the FPL) and are in a state with Medicaid expansion (also part of the overall ACA law) then that coverage applies to you instead of an exchange plan. If in a non-expansion state, you could find yourself in the Gap and not eligible for either, which is why you simply guestimate enough to avoid that.

If you estimate inside the covered ranges of the ACA-Exchange plans, based on the monthly incomes you project and enter at sign up (over 125%, and under wherever the caps are currently) you will receive a subsidy and avoid Medicaid if you wish to. In some cases/states, you might be asked for some evidence of this income if it's a significant change, but saying "I retired that's why" is almost always fine.

If, at tax time, you earned less and came in really below the FPL, there is no impact to you.

If, at tax time, you earned more, you may owe back some of the subsidy credit via your taxes.

The Medicaid line is 138% FPL ($20K for a 1 person house). In non-expansion states you need over 100% FPL to get into the ACA subsidies and avoid the gap.

The 400% FPL income cap (the cliff) returns in 2026 if nothing is done. One dollar over that and you get zilch. The subsidy formula goes back to a less generous earlier version as well.

 

[Teacher Terry]

I know someone locally who’s on Medicaid and she is having a hard time finding any doctor that will take it. Hopefully your experience will be better.

 

[madatrub]

This thread is terrifying to me. When I retire, I will be living off savings, with no income other than what my investments may make. I don’t want to be placed on Medicaid. I’m worried I won’t be able to qualify for ACA coverage now. I don’t know why everything has to be so complicated.

Cant you just convert roths to generate income to get you to the thresholds?

 

[Koolau]

A couple of months after my retirement (with paid supplemental health insurance) Megacorp sent me a notice that our insurance had been cancelled. Of course, I got on the phone right away. Turned out the cancellation was a "mistake." But for a few days, it was very scary indeed.

 

[ivinsfan]

If you apply before the 15th it is the next month, 15th and later would be the month after that. April 14th gets May, April 15th gets June.

Who told you this?

 

[jim584672]

Who told you this?

MAGI 15th of month rule:

"Plan selections that occur by the 15th of a given month will be effective the first day of the following month. If a plan is not selected until after the 15th of the month, plan enrollment will be effective the first day of the second month following plan selection. "

https://www.health.ny.gov/health_car...adm/13adm3.htm

 

[ivinsfan]

MAGI 15th of month rule:

"Plan selections that occur by the 15th of a given month will be effective the first day of the following month. If a plan is not selected until after the 15th of the month, plan enrollment will be effective the first day of the second month following plan selection. "

https://www.health.ny.gov/health_car...adm/13adm3.htm

I see you have a special state plan, which can cause confusion when talking ACA/Medicaid

 

[jim584672]

I see you have a special state plan, which can cause confusion when talking ACA/Medicaid

That is ACA/Medicaid in NY. Traditional Medicaid has slightly different rules.

 

[mountainsoft]

I know someone locally who’s on Medicaid and she is having a hard time finding any doctor that will take it. Hopefully your experience will be better.

Thankfully, Kaiser accepts one of the Medicaid plans, so we were able to keep the same doctors we had through my wife's work insurance. I just received a prescription I refilled and it cost me $0 for a 90 day supply compared to $30 we paid on the old insurance. Sweet.

 

[Koolau]

I know someone locally who’s on Medicaid and she is having a hard time finding any doctor that will take it. Hopefully your experience will be better.

I think this will become more and more common. It always astounds me when I get my E-O-B and find out my procedure was $2000 but the MC discount brought it down to $140 and I end up paying $40 with my supplement. I would think Medicaid is even more cut-throat in required discounts that MC. So far, the medical business has been able to pass these losses along to others, but it can't last forever.

It's easy for the gummint to say, "you'll take this much and like it!" Getting doctors to play along will get harder and harder IMHO though YMMV.

 

[MC Rider]

.............It's easy for the gummint to say, "you'll take this much and like it!" Getting doctors to play along will get harder and harder IMHO though YMMV.

This probably works easier in LOCL areas. In a HCOL area with lots of rich people maybe not so much. One doctor I had in L.A. quit the HMO to go into his own concierge practice. I guess he wanted to work for rich folks and make big bucks, who can blame him?

 

[Koolau]

This probably works easier in LOCL areas. In a HCOL area with lots of rich people maybe not so much. One doctor I had in L.A. quit the HMO to go into his own concierge practice. I guess he wanted to work for rich folks and make big bucks, who can blame him?

If the doc has a good rep in a desirable specialty, the world is his oyster. I can't blame him. W*rking within a concierge practice might well cut one staff member just from not needing to file gummint paper*rk.