Transitioning to Retirement - Healthcare Hurdles

[mountainsoft]

It was supposed to be easy... My wife's employer healthcare would end, and we would sign up with a new plan through the ACA marketplace. I researched more than a year in advance so I would be prepared when the time came. Of course, nothing ever goes as planned.

As per the Washington health plan finder web site, we signed up within 60 days of our income change (we tried about 45 days early). Right out of the gate we were denied coverage because she was still working, even though we specified on the application that she was retiring at the end of April and existing coverage would end. They also started the coverage in April, when we wanted it to start in May. The new estimate was nearly $2000 per month, causing both of us to panic since my wife had already given notice at work and there was no way we could afford that.

After chatting with customer support, we waited till April to apply again so the new plan would start in May (starts the month after you apply, despite what the web site said). Unfortunately, since we're living off of savings between April and September when my wife's pension begins, it put our yearly income below the ACA minimum level for 2023. This meant we were placed on the state's extended Medicaid program instead. Odd, but okay, except they kept sending emails requesting income verification leaving us wondering if we were accepted or not. We finally received our new healthcare cards last week, so as far as we know, we're good to go for now.

Of course, one of my prescriptions is running low, but the refill date was May 2nd and our insurance was running out at the end of April. Or so we thought. I contacted my doc asking for an early refill, only to find out my insurance had already been cancelled. It should have been good till the end of April, but I guess my wife giving plenty of notice back in March worked against us. So I still need to figure out what to do about that.

After contacting the medicaid plan I was able to reassign our existing Kaiser doctors to medicaid. But we won't get our new cards for another 10 days and I still don't know how we actually handle the billing situation, since Kaiser said my insurance was cancelled (Medicaid started Apr 1st?).

There were several other minor issues, but those are some of the sticking points. Far from the easy transition I had envisioned. Then we'll have to go through it all again in eight months when my wife's full year pension will put us above the medicaid income and we'll have to shop for an ACA plan again. What a messy system.

Oh, and the income portion of the application was a mess. They insisted on a monthly average, which was awkward to calculate. Four months of employed income, four months of no income (living off savings), and four months of pension. Our plan didn't exactly work with their system, despite them converting it back to annual income at the end of the application. It's obviously designed for people with a single income stream. Not very flexible.

In any case, next Friday is my wife's last day of work and we're slowly working through the various small details. We're both excited but hangups like these don't provide much confidence for a big leap we're already nervous about.

 

[Aerides]

Couple of points for others in your situation:

Employer insurance often ends on the last day of employment - not the end of the month. Your HR policy should be able to tell you. Mine was the last day too.

Your income estimates do not have to be scientific. You can say "Between the two of us, we guess we'll make about $50k" and just enter 50/12 for each month. You can be wrong, you just run a risk of a clawback if you enter too little, at tax time.

If you enter so little you come out with Medicaid and for any reason don't wan to, or know that this is just a wonky year and don't want to change plans again next year, just up your estimates. There is no later penalty for making less than you expected/hoped.

But at least in your case it looks like you've got it all sorted!

 

[mountainsoft]

Employer insurance often ends on the last day of employment - not the end of the month. Your HR policy should be able to tell you. Mine was the last day too.

My wife's HR department told her insurance was valid through the end of the month, even though her last day is on the 28th. Despite that my wife was told by her doctor that her insurance was ending on the 23rd. And now my insurance has already been cancelled by the 19th. I don't know if it's miscommunication from HR or something through Kaiser, but I'm apparently out of luck till May 1st. I'm covered if there's an emergency, but the doctor reassignment doesn't start till May.

Your income estimates do not have to be scientific. You can say "Between the two of us, we guess we'll make about $50k" and just enter 50/12 for each month. You can be wrong, you just run a risk of a clawback if you enter too little, at tax time.

I tried to be vague enough to keep us above the minimum ACA level, but they required income verification (pay stubs, tax returns, pension estimates, etc.). So there was really no way to work around their messy system.

We had to take her monthly income for four months, stretch that out for a year, and divide by 12. Doable, but awkward. It would have been so much easier just to say she made "X" number of dollars from employment this year.

 

[target2019]

mountainsoft, I feel your pain.

Spouse retired mid-year 2022. With my health problems a concern, I spent a lot of time reading old threads, posts, and so on.

Our private insurance expired on the last day of June, which was her last day of employment. We set up everything to be effective on July1. Still, we had to pay for Medicare starting on June 1. We appealed, and never heard back...

I had this sinking feeling at the start, that nothing would work. But it now all works together (A + B + G).

What happened with your old employer is what happened. Maybe it should not have happened, but it did. And you can't go back with the vast world of healthcare giants.

Prescriptions for standard meds work. Let's say BP med is $6 for 90 days (Mail order). However, there are ways to get this for $12 in many cases through Rx coupons, Mark Cuban, etc. So that may help you short term. I knew our neighborhood pharmacist is pretty good on informing customers of alternate coverages.

 

[Montecfo]

HR should know when insurance will end. Makes no sense for that to have been wrong.

 

[dixonge]

HR should know when insurance will end. Makes no sense for that to have been wrong.

There's *should* and there's reality...

 

[PaunchyPirate]

Another note... get used to shopping for insurance every year. At least until you reach Medicare age. The ACA policies are fluid enough that you need to look at what is available every year and re-do your math to see what plan works best for you. Unless your state does it differently, this process starts on November 1st. Even if you think you want to stay on the same plan (if it is still offered), it is best to review them all to see what has changed. This is just part of the ACA world.

 

[jim584672]

If you applied beginning of April your Medicaid should start May 1st. Your Medicaid Managed Care plan should send you cards or print it from their web site. Medicaid can be retroactive up to 3 months as long as you are eligible in the retro period. Rx should be free or a minimal co-pay, like $1 or $3.

They properly put you in because you reported low monthly income which is what Medicaid goes by.

 

[Trailwalker]

I wonder if the income verification varies by state. We literally had no income verification--just our estimate. We were off by only a little due to higher savers' interest rates. Clawback was about $200.

 

[mountainsoft]

HR should know when insurance will end. Makes no sense for that to have been wrong.

What makes no sense is all the different ending dates we received.

HR said insurance would last till the end of April.

Wife's doctor said insurance was set to end on April 23rd.

My insurance had already been cancelled by the 19th.

Maybe different end dates for employee and spouse coverage's? Who knows. In any case, just having a consistent date would have been nice.

Medicaid wasn't much better. Web site said "Apply up to 60 days in advance", while customer support said we had to apply the first two weeks of April to start May 1st. Then the completed application actually says coverage started April 1st. But I can't see my existing doctor till May 1st.

Like I said, the whole system is a real mess to deal with. Lots of misinformation and inconsistencies.

 

[Montecfo]

What makes no sense is all the different ending dates we received.

HR said insurance would last till the end of April.

Wife's doctor said insurance was set to end on April 23rd.

My insurance had already been cancelled by the 19th.

Maybe different end dates for employee and spouse coverage's? Who knows. In any case, just having a consistent date would have been nice.

Medicaid wasn't much better. Web site said "Apply up to 60 days in advance", while customer support said we had to apply the first two weeks of April to start May 1st. Then the completed application actually says coverage started April 1st. But I can't see my existing doctor till May 1st.

Like I said, the whole system is a real mess to deal with. Lots of misinformation and inconsistencies.

Were you guys on the same policy?

Should not end on different dates.

Should end on her last employment date or end of month, typically.

 

[Which Roger]

OP, can you sell some investments to generate capital gains or the like to increase your income? My ACA application shows a small pension plus investment income to get us where we want to be income-level-wise, and that has never been questioned.

 

[Montecfo]

Was no income verification here.

 

[jim584672]

Was no income verification here.

They have electronic ways to check things behind the scenes.

 

[jim584672]

OP, can you sell some investments to generate capital gains or the like to increase your income? My ACA application shows a small pension plus investment income to get us where we want to be income-level-wise, and that has never been questioned.

If you are trying to avoid Medicaid it is monthly, so you need to make sure the income appears as monthly and not a lump sum.

 

[jim584672]

Medicaid wasn't much better. Web site said "Apply up to 60 days in advance", while customer support said we had to apply the first two weeks of April to start May 1st. Then the completed application actually says coverage started April 1st. But I can't see my existing doctor till May 1st.

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.

 

[Montecfo]

They have electronic ways to check things behind the scenes.

Well, they would have had no way to verify mine. They can tell I guess that it is plausible that my income is what I said.

But if you are correct, why would paystubs, tax returns etc per the OP be needed?

 

[jim584672]

if you are correct, why would paystubs, tax returns etc per the OP be needed?

Part of the verification process. The estimate must be accepted.

 

[Irishgirlyc58]

From Medicaid:

Effective Date of Coverage

Once an individual is determined eligible for Medicaid, coverage is effective either on the date of application or the first day of the month of application. Benefits also may be covered retroactively for up to three months prior to the month of application, if the individual would have been eligible during that period had he or she applied. Coverage generally stops at the end of the month in which a person no longer meets the requirements for eligibility.

 

[jim584672]

From Medicaid:

Effective Date of Coverage

Once an individual is determined eligible for Medicaid, coverage is effective either on the date of application or the first day of the month of application. Benefits also may be covered retroactively for up to three months prior to the month of application, if the individual would have been eligible during that period had he or she applied. Coverage generally stops at the end of the month in which a person no longer meets the requirements for eligibility.

In NY MAGI has the 15th rule. That is probably for Traditional.


"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_care/medicaid/publications/adm/13adm3.htm

 

[Irishgirlyc58]

In NY MAGI has the 15th rule. That is probably for Traditional.


"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_care/medicaid/publications/adm/13adm3.htm

Gotcha!

 

[mountainsoft]

Were you guys on the same policy?

Should not end on different dates.

Should end on her last employment date or end of month, typically.

Same policy. I just checked both of our health accounts at Kaiser. They both say "cancelled", but still show "active status" on the member info page. My wife had a dentist appointment yesterday with no issues, so who knows. Maybe the pharmacy is just being picky since the official refill date is May 2nd, despite me requesting a refill a few days earlier before our insurance expires. No biggy, just odd. I have enough pills to last a few weeks so I can sort this out next month.

 

[mountainsoft]

OP, can you sell some investments to generate capital gains or the like to increase your income? My ACA application shows a small pension plus investment income to get us where we want to be income-level-wise, and that has never been questioned.

Nope, our investments are all in Roth accounts which we won't pull from for at least a few years. The rest of our portfolio is in high interest savings. I intentionally set things up to have as little taxable income as possible in retirement. We'll save on taxes, qualify for property tax and other deductions, and apparently qualify for medicaid for several months.

 

[mountainsoft]

And so the fun continues... Even though we had already been approved, and we already received our medical cards, I received another request for income verification. So, I followed the instructions on the request exactly and sent them the verification they requested. No response, no further reminders, so I assumed all was good.

Then a few days ago I received a new message saying our coverage had been terminated because I didn't send the requested verification. Huh? I sent them weeks ago, and have a copy of the email to prove it.

So, I spent about 30 minutes on a chat, and resubmitted everything. Not feeling very confident, I got on another chat to make absolutely sure this time. Seemed to be okay, though I noticed the updated submission now said "not requesting coverage". Huh? Why would I even apply otherwise. Dumb.

So, more chatting, and digging through some unrelated screens to find the items I needed to toggle back where they were. And now I wait again for the documents to be reviewed.

Of course, the change in my wife's income mid-year has really caused a hassle. First we didn't qualify because she made too much. Then they said to take the four months income and average it over the year (It's on their web site instructions, word for word). Now they say we can't do that without some kind of special letter. After yet another chat, he said just to enter zero for her income since she is retiring.

The whole thing is a mess and I really don't feel confident about any of it. First we're covered, then we're not. Now I have to wait to see if we're covered again.

The funny thing is my online account shows all the income documents I have uploaded already. What else are they expecting to receive?

 

[jim584672]

What matters is your going forward income, they are trying to see if you should go into Medicaid. Since you told them retiring they are thinking no income and they would put you in Medicaid. I don't know your income situation if it is low enough, but that might be proper in your situation. Past months have no bearing on current month income for Medicaid.