A friend needs advice

[rrs26ja]

A friend of mine is 66 and he is retiring and going to sign up for medicare. His wife is only 62 so she doesn't qualify for medicare. He is looking for guidance for health insurance for his wife. His wife got a quote from IBM where he use to work and still has his 401k for $900 per month for health insurance. I am looking for guidance from others for what worked for you.

 

[RetiredHappy]

It depends on his income as to whether she qualifies for ACA premium subsidies. If he makes "too much", then she won't get subsidies and $900 per month at 62 yo is pretty good. I turn 62 this year and I pay about $1,300 per month with no subsidies. Ask him to go check out ACA, or Covered California if they live in California.

 

[rrs26ja]

It depends on his income as to whether she qualifies for ACA premium subsidies. If he makes "too much", then she won't get subsidies and $900 per month at 62 yo is pretty good. I turn 62 this year and I pay about $1,300 per month with no subsidies. Ask him to go check out ACA, or Covered California if they live in California.

Thanks, they live in NY, I wonder if they have ACA in NY?

 

[Mark1]

It depends on his income as to whether she qualifies for ACA premium subsidies. If he makes "too much", then she won't get subsidies and $900 per month at 62 yo is pretty good. I turn 62 this year and I pay about $1,300 per month with no subsidies. Ask him to go check out ACA, or Covered California if they live in California.

+1
Another point of reference, my megacorp retirement insurance would be $1,065 without the company subsidy, so $900 is not out of line.

 

[aja8888]

Thanks, they live in NY, I wonder if they have ACA in NY?

The ACA is a federal program. Just don't get too hung up on the word "Affordable"!

 

[RetiredHappy]

Thanks, they live in NY, I wonder if they have ACA in NY?

ACA is nationwide, also known as Obamacare. Healthcare.gov. Some states have set up their own exchanges. California is called Covered California. New York will be called something else.

 

[MichaelB]

A friend of mine is 66 and he is retiring and going to sign up for medicare. His wife is only 62 so she doesn't qualify for medicare. He is looking for guidance for health insurance for his wife. His wife got a quote from IBM where he use to work and still has his 401k for $900 per month for health insurance. I am looking for guidance from others for what worked for you.

Your friend has 60 days after separation to get health insurance from IBM. This is called Cobra. The coverage is good for up to 18 months, it’s the same policy they would have received when working, and IBM can charge the full unsubsidized cost and add an additional 2% for overhead. Once the 18 month period ends, the friend can enroll in an individual ACA policy.

Your friend can also get the individual ACA policy right now. Enrollment is normally in November for the following calendar year, but exceptions are made when changed in employment status affect one’s insurance. The N.Y. State ACA Marketplace is here NY State of Health, The Official Health Plan Marketplace

 

[folivier]

Also compare the out of pocket costs for her IBM coverage and ACA. My company covered both of us until 65. The cost was $800/mont or so for just her but the coverage was much better than ACA.

 

[ratface]

another thing to keep in mind is that ACA policies tend to have very high deductibles but not necessarily a deal breaker if she is in good health. You can also tailor your level of coverage by exploring and comparing the Bronze, Silver, and Gold plans. My personal experience was that Cobra was a little cheaper for me for the first 18 months and then I used a Bronze higher deductible plan for another 3 years to get me to Medicare. It depends a lot on location and what is offered in their area. The ACA Website is fairly easy to navigate and she can comparison shop for hospitals and specific doctors if that is important to her. Additionally HMO plans can be a little cheaper but it's a bit of a gamble on what your health brings because you may be tied to a network. But really The ACA website will make all the comparisons for her and she can make an informed decision. I recommend sitting down with her, creating an account on the site and just do some shopping without committing.

 

[Spock]

Depending on how long the friend has been at IBM, there are a number of old programs (I don't remember the acronyms cuz I don't qualify for them) for retiree healthcare coverage. The retiree will get a half-inch thick manual to wade through to figure out which applies to them.

ACA/COBRA: When I "retired" from IBM, ACA coverage what much cheaper than COBRA.... IIRC correctly the 1st 6 months of COBRA where free but then the following 12 months were at IBM cost+x% admin expenses. So I dropped COBRA and went ACA when the free period ended. ACA subsidies and thus final costs will depend on what the their retirement income is.

 

[LakeRat1]

My wife retired at 59.5, I retired at 52, I am 8 years younger than my wife.... After Cobra was exhausted 18 months, we signed up with Christian Healthcare Ministries ....... We went from paying $1200+ with a high deductible down to, at the time $300 for the both of us ..... Today, my wife is 70, I am 62 and still with CHM .... I pay $267 Per month

 

[orbops]

I use this site to come up with a quick estimate of costs for ACA.

Health Insurance Marketplace Calculator | KFF

The Health Insurance Marketplace Calculator, updated with 2024 premium data, provides estimates of health insurance premiums and subsidies for people purchasing insurance on their own in health insurance exchanges (or “Marketplaces”) created by the Affordable Care Act (ACA).

www.kff.org

I've been retired for 8 years when I turned 50, and have used ACA for many years. I've paid as little as $10/month for both of us with an HDHP plan and have used bronze and silver plans. Keep in mind that with an HDHP plan, you can have an HSA and use that deduction against your AGI. It's great if you're healthy, but if you need medical services - then assume you'll hit your high deductible limit.

I thought I was healthy, and the year I had an HSA, I ended up having quadruple bypass surgery and easily hit the max out of pocket limit. Now I get a silver plan with a lower deductible, and just assume I'll pay the max out of pocket each year for budgeting purposes.

 

[a60dan]

In NY, the Essential Plan is well worth investigating if he can manage his taxable income.

It’s not an ACA plan, and only need to qualify once per year.

If you are disqualified the next year, there is no penalty.

Essential Plan Information | NY State of Health

Essential Plan Update: Important Changes in April 2024OverviewNY State of Health's Essential Plan includes comprehensive benefits with $0 monthly premiums and very low-cost sharing. The Essential Plan:

info.nystateofhealth.ny.gov

 

[aaronc879]

The ACA is a federal program. Just don't get too hung up on the word "Affordable"!

There are a lot of millionaires on this forum paying less than $100/mo on ACA, some paying $0/mo. It works well for a lot of people.

 

[aja8888]

There are a lot of millionaires on this forum paying less than $100/mo on ACA, some paying $0/mo. It works well for a lot of people.

It's the deductibles that are expensive.

 

[aaronc879]

It's the deductibles that are expensive.

I have a $0 deductible, $1800 Max OOP. Silver plan

 

[disneysteve]

It's the deductibles that are expensive.

We’re paying $1,000/mo less for our ACA plan than we paid for COBRA. Yes the deductible is higher but it’s still way more affordable to have ACA than COBRA coverage.

 

[aja8888]

My daughter and her husband were paying in the neighborhood of $12,000 in deductibles a few years ago when they were on it. The premiums were cheap. The "You can keep your doctor" thing did not materialize.

 

[aaronc879]

My daughter and her husband were paying in the neighborhood of $12,000 in deductibles a few years ago when they were on it. The premiums were cheap. The "You can keep your doctor" thing did not materialize.

I kept my doctor but I had to sign up for one of the plans that they were a part of. You can't just sign up for any plan and expect your doctor to automatically be included.

 

[pb4uski]

^^^ The fact that you might have to do some homework and utilize some common sense makes it too "complicated" for many Americans.

 

[Aerides]

Premiums are meaningless without many other factors:

Deductible
Quality of network
HMO/PPO/EPO, etc.
HSA eligibility

This isn't something you can do for him, he and his wife need to do their homework.

Healthsherpa is a good place for them to shop for possible marketplace plans, and the annual enrollment is coming up soon.

That said, continuing employer coverage for 3 years is probably a decent deal all around, even if the premiums are higher.

 

[disneysteve]

My daughter and her husband were paying in the neighborhood of $12,000 in deductibles a few years ago when they were on it. The premiums were cheap. The "You can keep your doctor" thing did not materialize.

We stayed on the exact same plan we had when I was working - Aetna Whole Health - so nothing changed in terms of providers or network. The only difference was much lower premiums but higher OOP costs. Even though we’ve had some bigger bills this year, we’re still ahead of where we would have been on COBRA as we haven’t spent $12,000 OOP and that’s what we’ve saved on premiums.