BEFORE ACA - what did retirees do?

[MichealKnight]

I am NOT in any way trying to have a political discussion. I'm seriously curious.

Very possible I may retire next year - my age would be 45 and I find myself rather thankful that no matter how costly or imperfect ACA plans are.....at least I can buy insurance without having an employer.

Then I see there's some powerful folks trying to end ACA as we speak.

My question.... if ACA goes away - what do early retirees do for insurance? Yes, COBRA - but that is only 18 months.

If COBRA runs out, and you don't have a job - how do you buy insurance especially with pre-existing condition? Thanks

 

[Doribe]

I have a healthy relative that retired well before medicare age. He bought high deductible health insurance. He paid cash and learned how to get better deals from private doctors. I don't know what one would do with preexisting conditions and medical bill far larger than income. Once your money is gone there is the Medicaid route.

 

[street]

Paid out of the nose!
I did expense/budget 25K a year for HI for 9 years till I was 65. One year into retirement I changed my plan of income and became a pauper and was eligible for ACA. I would of been able to afford open market HI but ACA has made a huge difference on expenses.

 

[pb4uski]

I retired before ACA. We bought individual insurance in the individual insurance market. While we were healthy and would have likely passed underwriting, luckily our state prohibited medical underwriting. We had a high deductible policy, like I had at work.

For 2012 we paid $556/month (for two) and for 2013 we paid $629/month. Our first year of ACA was $682/month until we got onto a cat plan that was $472/month in 2014 and that same cat plan is $662/month in 2020.

Who knows what will happen but medical underwriting is very unpopular so I don't see it returning for people who are continually insured but I can see it coming back for people who hope to game the system by not buying health insurance until they are sick (and IMO it should).

 

[davebarnes]

If you had a policy, you stuck with it. No matter how much your premiums went up.
Because the alternative was always: FU. No insurance for you.

 

[statsman]

It would have been the same retiree medical plan, in place well before ACA, that I started in 2017. It was almost free (90% premiums covered) for 30+ year retirees through 2010. Then ACA came along, and the premiums spiked. A little better than ACA, but nowhere near close to what they were (and probably would have been). Any belief they drop if ACA is reversed? Yeah, me neither.

 

[harley]

Many didn't retire until covered by Medicare. I stayed with megacorp for 2 years after I was FI in order to qualify for retiree medical coverage (pre-ACA). We had pre-existing conditions and couldn't get anything like affordable coverage outside of the corporate umbrella. Looking forward to a significant savings when Medicare kicks in at the end of this year.

 

[FrankiesGirl]

There's always been individual private insurance policies out there. Most of the big names would write you a policy.

They just used to be across the board more expensive, allowed to cap total payouts and exclude preexisting conditions and whatever else they liked. One of the key issues was no gap in coverage or your issues/coverage was considered lapsed so job hopping or being out of work for any length of time was scary and discouraged if you did have a chronic/preexisting condition.

You could get minimal (called catastrophic) coverage and technically can still do so; either an ACA bronze, or go outside the ACA and get a non-ACA compliant policy now as the penalty for not having has been removed.

Another workaround was starting their own company (and negotiating health insurance for the company employees, even if it was just them or them and spouse), religious/ministry coverage (medi-share or similar; open to all, but has restrictions). Some folks qualify for coverage due to serving in the armed forces, and some through super sweet government/corporate jobs as long as they meet the length of employment requirements. There were LOTS of ways, but none of them a perfect solution.

Most retirees just waited until full retirement age and got on medicare. FIRE wasn't a real option unless you were willing to gamble with health coverage. The ACA was a game-changer.

 

[MRG]

I retired just as ACA was law and talked to a broker about what to do. She had a reputation for getting megacorp folks plans and promised she could cobble together a bunch of stuff. That what folks who had preexisting conditions had to do.

Luckily underwriting seems to be as popular as Blockbuster video in this era. I don't think people will accept it again; regardless to what happens with health insurance.

 

[RunningBum]

I had a good health history, so I was able to get a relatively cheap insurance policy. I looked into a group policy from IEEE (a techie group), I believe, but their rates were very high. Probably due to no underwriting. If ACA were to go away, I'd worry that I'd no longer qualify or at least I'd be in a higher rate pool. I'd have been content with a catastrophic health plan.

I know friends who continued working just to stay on a medical plan.

 

[2017ish]

We would have done the same thing as now. Farm Bureau health plans. Non-ACA compliant. Much cheaper. Theoretically, more out of pocket, but all that we desire is catastrophic coverage or Major Medical.

ACA is outrageously priced in Nashville, TN area. We had it for six months during the pre-existing condition waiting period for our insurance.

 

[scrabbler1]

I retired in late 2008, before the ACA. I had found a decent individual HI policy but its premiums rose 50% in the next 2 years and was beginning to put a strain on my budget (and making me fearful that it would totally bust my budget in a few years if it kept up). After 4 months of paying those big premiums in 2011, I switched to a cheap, bare-bones, hospital-only policy to get me through the end of 2013. The ACA had been passed already, thankfully, but the exchanges would not become available until 2014.


My goal was to remain healthy for the next 2 1/2 years and I did. When I joined the exchange, I got a more comprehensive policy, like the one I had before I dropped it in 2011. And while its premium was much higher than the bare-bones, hospital-only policy, its premium was a lot lower than what I had been paying in 2009. I qualified for a small premium subsidy, barely a few hundred dollars per year.


Good thing I got that better policy because I got sick in 2015. I maxed out my OOP but was on the hook for only ~$6,000 for what would have cost me around $88k (mostly hospital, so much of it would have been covered under the bare-bones policy; however, a lot of the bills would not have been covered).


After several years of small and larger rate increases, for 2020 I am now paying what I was paying in 2011, but I will qualify for a subsidy which will pay about half of it. I am still 9 years away from Medicare.

 

[CyclingInvestor]

I retired at 48 in 2006. After 18m of COBRA, I bought a regular policy fairly easily for a bit more than COBRA. Premiums rose about 10% per year until ACA, when they dropped slightly, then resumed their ascent. Back then coverage was guaranteed if you kept continuous qualifying coverage.

 

[daylatedollarshort]

Five states did not allow pre-existing condition exclusions, some here had retiree health insurance through former employers, some may have been able to get individual policies, and many (most?) states had group coverage without pre-existing condition exclusions for small businesses of 1 or 2 employees. We had COBRA and then a COBRA conversion policy. The COBRA conversion and small group coverage, which was another option for us, were very expensive. With the deductibles, max out of pocket, out of network costs (one we planned on and one surprise one, the kind now banned by law in California), and some medical travel we had a $50K medical year before the ACA on a COBRA conversion policy.

We had friends who retired early give up (pre-ACA) and decided to go back to work for the health insurance. We were considering moving outside the country, at least until Medicare age. For not much more than $50K a year in annual expenses we could live in many developed countries, including medical care, instead of just spending $50K on medical care alone in California. But then the ACA came along and last year our Bronze plan premiums were $2 a month. I was also considering some kind of low stress retirement job just for the health insurance, but DH would rather have moved than go back to work.

 

[Bamaman]

Health insurance. Cannot afford it. And cannot afford to be without it.

I've had my 32 year old daughter on BCBS for years, and a Cadillac policy is $377 a month, including dental. They tell me yearly that if I drop the coverage, it will not again be available.

Medishare might be another alternative.

 

[NW-Bound]

We started ER with pre-ACA insurance with a $10K deductible. I do not recall what the premium was exactly when we started in 2006, but it was perhaps around $500/month. In [-]2010[/-] 2014, the last year we had the policy, the premium was $914/month for two.

The policy did not cover existing conditions, but did not require underwriting, only that we had continuous health insurance prior to the policy.

PS. I corrected the year we last had the pre-ACA policy.

 

[footenote]

High-risk pools were an alternative in some states. That's what I used here in Minnesota pre-ACA. There was little choice of carriers or plans, but at least it was robust insurance at a reasonable (subsidized) premium.

(If the recent court decision (nicknamed "Texas Hold 'Em") results in ACA being declared unconstitutional, some states may (at least short-term) set up high risk pools again for those of us with pre-existing conditions.)

 

[Gumby]

Waited until we were eligible for my retiree health insurance. A non-subsidized (we are over the subsidy cliff) ACA compliant Silver standard plan for us would cost $27,252/yr in premiums, with an annual deductible of $8600. So it was a strong incentive to stay at work for those last few years.

 

[pb4uski]

[-]Health[/-]Wealth insurance. Cannot afford it. And cannot afford to be without it. ..

FIFY

 

[intent]

We were considering moving outside the country, at least until Medicare age. For not much more than $50K a year in annual expenses we could live in many developed countries, including medical care, instead of just spending $50K on medical care alone in California.

That's what my mom did. Moved to France and finagled her way onto their plan (I don't know all of the details involved, but it was no easy process - especially considering she wasn't fluent in French).

 

[Aerides]

If COBRA runs out, and you don't have a job - how do you buy insurance especially with pre-existing condition? Thanks

Pre ACA there was a regular private HI market, and from my preliminary research the costs for us would have been in the same range as a non-subsidized ACA plan. We have some minor things, but nothing on most "pre-existing" lists as dis-qualifiers.

In addition to individual insurance, however, there were group options, and we have a micro-side-business that would have let us explore things like that - such as a chamber of commerce group or something. Never got that far because the ACA came before we retired. And catastrophic policies had more offerings.

If we had neither option due to pre-existings or whatever, I could have stayed at MC till 55 to keep retiree insurance. But that would have been an awfully big bridge as we REd at 47.

 

[Telly]

2002, long pre-ACA, I was suddenly provided with an Early-ER "opportunity", due to the crash of an industry. Late forties, missed any kind of retirement $ from megacorp by a little over a year. Turned out that didn't matter after all, as they terminated the retiree medical $ in stages shortly thereafter. My termination benefits, as I was over age 45 and had many years of credit, included 6 months totally paid HI on the family plan that I was on. And then could run COBRA for 18 months beyond that.

While on the 6 months paid, I researched private HI. Did not look good. DW would not be picked up due to BMI of 30 at that time, even though she was very healthy. I was no problem (then), as I had no conditions, no surgeries ever, no medications, no nothing, perfect! Our kids were put through underwriting with a magnifying glass. Even for the most trivial, coverage of that whatever (though no coverage was needed!) would be excepted for 6 months. Went with Golden Rule, which was bought by UHC not long after. Put DW on COBRA, she was a SAHM, who wanted to go back to work when youngest was in high school for a year or two. She did, and received employer coverage then, went with an HD plan there.

Private HI started out OK, it was a high-deductible policy on me and the kids. No premium increase in the first year. But oh boy, after that, both the $ increases and the ever-shortening time frame between increases became ridiculous. Became obvious that the situation was on the curve to untenable. Joined DW's employer plan, and the kids dropped off one by one when graduating college and getting their own employers coverage.

DW's employer plan was really cheap for worker alone, was subsidized by the plan hitting spouse and family coverage pretty hard. DW's employer has levels of plans, some are low deductible with incredible monthly premiums! She hears people there say things like "oh, I have to have a low deductible, I can't come up with like $500 just like that!!!" Yeah, and as you can imagine, they are paying incredible $ per month every month via payroll withholding for "that $500". Duh! She has tried to point that out to some people, no go, gave up, pushing the rope.

When I went on Medicare, her HD HI premium went waaay down, just the employee again.

Back in the early 2000s, the health care mess was just dawning on a few, so it seemed to me. Most, dare I say near all? people who were being covered by an employer plan were oblivious to the mess. I think many are still oblivious. One slender thread is holding them up out of the monster's jaws.

 

[KB]

I had 13 years of paying for my Health Insurance before Medicare. I had Health Insurance through my employer and liked the plan, so I applied to convert to a Family plan with my two teenagers. I kept that plan continuously until I was able to get Medicare.

I dropped the kids as they aged out or moved away, which converted from a Family plan to an Individual plan. And the plan cost went up each year.

 

[MichaelB]

Prior to the ACA there were separate rules for business, small business and individual. Federal regulations required insurers to provide policies to businesses, and state implementation allowed insurers to offer more limited policies to very small businesses, usually 3 employees or less.

Insurers were free to deny insurance to individuals, which they did, based on “pre-existing conditions” or loss of continuous coverage.

Insurers were required to provide a coverage enrollment option to individuals benefiting from Cobra.

Prior to ACA there were no minimum coverage requirements, so insurers could offer policies with limited coverage alongside those with more comprehensive coverage.

The result of this was individual coverage was much less expensive than employer sponsored coverage, because so many people were excluded and coverage was limited. Employer sponsored coverage was much more expensive, in line with current rates, because coverage was much more comprehensive and underwriting could not exclude potential health care users.

The ACA cannot just “go away”, because it is a comprehensive set of regulations affecting much more than just the sale of insurance to individuals. If insurers are no longer required to sell to individuals without underwriting, it’s pretty safe to say they will stop doing so. In this case there is no fall back, and it is IMO not safe to assume things would return to rules in place pre-ACA. More likely, insurers would offer (and regulators would allow) the sale of policies that offer less than comprehensive coverage. Less costly, don’t cover as much. There are many examples of such policy options pre-ACA. My experience with them in NY state showed them to be pretty bad. Very skimpy, quite inadequate to cover to incredibly costly health care needs of someone in the US.

Other than that, it’s very difficult to speculate what health insurance would look like in the absence of essential health benefit requirements and must insure mandates.

 

[harllee]

We retired before ACA. I am very healthy and was able to get a BCBS policy. It was expensive and did not cover much--I think I only had $2000 of drug coverage. DH had a preexisting condition so after Cobra ran out he could not get private coverage. DH had to go on our states high risk pool, expensive awful insurance with a $1 million dollar lifetime cap. DH was looking to go back to work to get health insurance when ACA was passed. ACA was a lifesaver for us and Medicare is even better.