ACA longevity

[SJhawkins]

Nothing in life if a given, but how long would you feel comfortable relying on the ACA, 1,5,10 years?

With the latest pile of cash thrown at it last week or was it the week before it seems it will be here for a good long time, in what form that may be is anyone's guess.

Example/thought, 10 years out to Medicare, with healthcare being most people's biggest line item/concern how confident are you it will still look the same 10 years from now?

Taking a gamble on 5 years is perfectly sane in my mind, 10 years some of that fuzziness goes away.

Another way to put it, if you were dependant on the ACA for a early retirement how many years are ypu willing to chance it?


Thoughts

 

[aaronc879]

I would expect the subsidy cliff to come back and plan accordingly. As long as you do that then I think you are set until Medicare. I don't think the subsidies will get worse than they were pre pandemic. I think the US is more likely to go to a Medicare-for-all type plan than going back to a pre-ACA type setup. I don't think either will replace the ACA within the next couple decades but who knows.

 

[MichaelB]

The ACA gave us guaranteed access for all and subsidy for some. The guaranteed access seems pretty well established, so IMO it’s more likely to continue than go away.

I think for financial planning purposes one should always be prepared for the loss of a subsidy and a solid plan should be able to pay the full cost of one’s lifestyle.

 

[GenXguy]

Another way to put it, if you were dependant on the ACA for a early retirement how many years are ypu willing to chance it?

Thoughts

This is a concern of mine also and is originally what caused me to delay retirement beyond my original plan of June 2019 as the ACA lawsuit made its way through the courts.

Going forward, you should only count on the ACA being the law of the land through the end of 2025.

There's a very real chance that after the 2024 election, a change in government will lead to the ACA being repealed in 2025 for it to end at the end of the year. It barely survived last time. So in 2026, things could go back to how they were.

Also, Medicare for All is extremely unlikely to ever clear all the hurdles needed to pass in the form of something you would really want for quite a few years to come. The current Medicare age could be raised to 67 or higher. And even if not, things are happening with it that are resulting in less health care expenses getting covered:

https://www.early-retirement.org/fo...ional-medicare-to-advantage-plans-114780.html

https://thehill.com/blogs/congress-...threat-to-medicare-youve-never-even-heard-of/

 

[ShokWaveRider]

Also, Medicare for All is extremely unlikely to ever clear all the hurdles needed to pass in the form of something you would really want for quite a few years to come. The current Medicare age could be raised to 67 or higher. And even if not, things are happening with it that are resulting in less health care expenses getting covered:

Messing with Medicare other than increasing coverage and bolstering the longevity would be catastrophic for those involved.

 

[ivinsfan]

I don't think the concern is with ACA in general. I might be concerned about narrowing networks, lack of specialists, and the big one Medicare for all type program which for some people will dramatically increase the cost of care. But if it's actual access to health care I wouldn't concern myself with that.


However in 10 years there's zero chance it will look the same as it does now.



I actually disagree with GenXguy but he is not alone in his thinking.

 

[Aerides]

Every year it survives, the better the odds it sticks around longer. I am more confident that it will be here for the long haul now than I was when I retired, and I still have 12 years to go before medicare. No candidate has mentioned repealing it again, I don't expect to see them try, it's just too popular.

 

[OldShooter]

... Taking a gamble on 5 years is perfectly sane in my mind, 10 years some of that fuzziness goes away.

Another way to put it, if you were dependant on the ACA for a early retirement how many years are ypu willing to chance it?

Thoughts

WADR, viewing things like this as a "gamble" is not the right approach. IMO our plans should be resilient enough to handle events that are possible but maybe not highly likely. Nassim Taleb's word for this is "antifragile."

... I think for financial planning purposes one should always be prepared for the loss of a subsidy and a solid plan should be able to pay the full cost of one’s lifestyle.

Exactly. One's plans probably cannot absorb all possible bad things occurring at once, but that is not likely. A good plan should be resilient to a few bad things happening during the plan's life.

A nonfinancial example: DW and I have only minor mobility issues, but our new house is deliberately "ADA Lite." Doorways are all 36" and the house is relentlessly one level. Floor height is the same throughout, including in the garage. Entry from the outside will not involve any steps. There are two very seldom used stairways (basement and loft bedroom); both are 36" wide and able to accept stair lift systems. Walk-in shower has no threshold and has both conventional and hand showers. I.e., the house is reasonably resilient to future mobility and strength issues.

 

[ivinsfan]

Messing with Medicare other than increasing coverage and bolstering the longevity would be catastrophic for those involved.

Technically Medicare for all would be expanding Medicare not messing with it. I can see the insurance people coming around to that idea if they think people can be convince to buy an Advantage type plan where the insurance comapnies get a monthly payment from the government for extra coverage.

 

[SJhawkins]

The ACA gave us guaranteed access for all and subsidy for some. The guaranteed access seems pretty well established, so IMO it’s more likely to continue than go away.

I think for financial planning purposes one should always be prepared for the loss of a subsidy and a solid plan should be able to pay the full cost of one’s lifestyle.

I do agree with this, been paying our own way for, well, ever. But I have to admit the ACA carrot would make for a more early retirement more possible, hence the gamble.

 

[monte1022]

DW and I are 56/53. She is leaving work end of 22 and I will follow sometime in or at the end of 23. We do worry about the longevity of the ACA a lot. Our risk mitigation plan for no ACA centers around keeping our healthcare licenses active ie. going back to w*rk in some capacity. If close to medicare then perhaps we will suck it up and pay whatever is necessary. I could always work at Lowes if they still offer part-time health ins. We wrestle with this item the most.

 

[old medic]

I'm hoping it will stay another 6 years... then Medicare. Wife will have Insurance as part of her retirement benefits..
If ACA goes away, we would look at taking SS earlier.

 

[street]

I would say it is around for the long haul also. It has weathered the courts etc. but I could see a change in qualifying for it. Like the change in income for the year to total money assists.

 

[jim584672]

Checking my magic 8 ball, "unclear".

I need 7 more years. Doubtful it goes away.

 

[MRG]

After turning 65 this year its less emotional for me. I think it's here to stay after 8 years. I don't know of subsidies will be but I don't think it can be unraveled at this time.

 

[karen1972]

I depend on the ACA as in it will be here to ensure I can actually get coverage from somewhere other than an employer, that I'm not overly concerned about.

I do not however depend on the subsidy to ensure my retirement doesn't derail. 7 years in to retirement I'm actually shocked the subsidy has held. I actually prefer this 8.5% rule but don't expect it to stick around past 2025.

Of course, I do hope they do something for people 60+. I just don't see how its not cheaper to re-direct that subsidy money back into Medicare when someone over 60 can be receiving $12k+ in subsidies a year.

 

[ncbill]

I would expect the subsidy cliff to come back and plan accordingly. As long as you do that then I think you are set until Medicare. I don't think the subsidies will get worse than they were pre pandemic. I think the US is more likely to go to a Medicare-for-all type plan than going back to a pre-ACA type setup. I don't think either will replace the ACA within the next couple decades but who knows.

+1

If the 'family glitch' is ever eliminated ACA would be cheaper (subsidized) than our current employer-provided health insurance.

Any news on that for 2023?

 

[Pellice]

And, another point, should the ACA go away, we would likely not go back to "pre-ACA." That was itself changing, as companies divested themselves of responsibility for health care (often by outsourcing). ACA came about in part as a response to the decline of employer-based health care. Either something similar would have to be devised, or people would be without health care, since purely private insurance would probably be unaffordable to most.

 

[SecondCor521]

+1

If the 'family glitch' is ever eliminated ACA would be cheaper (subsidized) than our current employer-provided health insurance.

Any news on that for 2023?

There are proposed regulatory fixes. Whether these will be implemented is not yet known as far as I know:

https://www.federalregister.gov/doc...oyer-coverage-for-family-members-of-employees

 

[GenXguy]

And, another point, should the ACA go away, we would likely not go back to "pre-ACA." That was itself changing, as companies divested themselves of responsibility for health care (often by outsourcing). ACA came about in part as a response to the decline of employer-based health care. Either something similar would have to be devised, or people would be without health care, since purely private insurance would probably be unaffordable to most.

A lot of people would be without health care.

Perhaps there would be something like the American Health Care Act, which really slashed the subsidies for low income older people vs. what those people get under the ACA. But there won't necessarily be a replacement - it could just be repealed, which is what they were hoping the courts would effectively do for them after they set the mandate penalty to $0 in the Tax Cuts and Jobs Act of 2017.

 

[Exchme]

I predict ACA (or an even more socialized system) will remain and the subsidy ramp (instead of a cliff) will remain, it's just too easy to find folks that are trying hard to do the right thing and reach for the American dream who would have a real problem otherwise.

What I doubt is long for the world though is using only income as a test for premium credits. Frankly, the average voter that doesn't have much saved up would be surprised that millionaires can get a subsidy. Eventually some politicians will decide they are Shocked!, Shocked! at this too and demagogue it. So I would budget for paying the full price.

 

[EastWest Gal]

The most vital aspect of the ACA (and Medicare, frankly) is guaranteed access. Prior to the ACA, your insurance company could cut you out when you got sick, unless you were on an employer's plan. This discouraged entrepreneurs and small businesses, and kept people stuck in jobs they did not want just for the sake of health insurance. It also allowed college students and young adults just starting out in jobs to stay on their parents' insurance.

With the launch of the ACA, we saw an exponential drop in uninsured women (who also could not access prenatal care) at the hospital. With that we saw fewer newborns admitted to neonatal intensive care and far fewer unmanaged pregnancy complications.

Personally, we will hit Medicare age in 2024 so I'm not planning on budgeting full price. Previously plan was to beef up cash so I paid full price every other year and live off the cash every other year until Medicare age. This would cut our overall premiums by about 40% when averaged out over the years.

 

[swakyaby]

If early retirement depended upon an ACA subsidy, I would not feel comfortable retiring.

 

[SecondAttempt]

The ACA gave us guaranteed access for all and subsidy for some. The guaranteed access seems pretty well established, so IMO it’s more likely to continue than go away.

There is still a pretty big political divide over ACA so I don't think I would bank on it sticking around. I hope it does but you never know. I personally would be comfortable with 5 years but not 10. I think there is 0 chance it is eliminated before 2025 but could easily see it going away in that year and phased out over 2-3 years.

 

[FLSUnFIRE]

I don't think ACA will go away (maybe in name but that would just be politicians playing their games). It has pretty broad support and the basic pieces are here to stay; it has been here long enough that it is "the way things are" for the average American. The individual mandate is gone which was the most contentious piece (along with I hate the people who passed it but every year that mentality is watered down as there are new people to hate). ACA, Medicare, tax policy, macro economic environment, etc will always change/evolve and long term are not very predictable and not actionable so I don't worry about it. Speaking of public policy... I just finished my tea, time to walk to the poll to vote in the FL Primary.