Did anyone have large medical bills in Early Retirement (pre Medicare)?

[jollystomper]

We have been fortunate with relatively good health so far. We had pretty good Megacorp retiree insurance for that period. Between retirement at 60 and Medicare at 65, our premiums were by far the biggest cost - about 67% of the total. Doctor visits and procedures were only 26%. The most costly procedures during that time were surgery for DW"s thumb, physical therapy for her hands, and a root canal for me.

The percentages since we went on Medicare 3 years ago have been about the same - 69% premiums (Part B + Megacorp MA retiree plan), 27% doctors and procedures. About a quarter of the doctor/procedures expenses were for DW's cataract surgery and lenses.

 

[Koolau]

We averaged roughly $10K/year medical costs from retirement to year 20. We had Megacorp supplemented HI until age 65. Since then, we've had MC and a supplement. The $10K/year is all in - premiums and OOP stuff.

 

[TripleLindy]

$3000 ACA

If you believe that your annual ACA premium will be $3k, I’m assuming your MAGI is well under 400% of the FPL and you qualify for a healthy subsidy. For 2026, 400% of the FPL is $84,500. Go $1 over and you lose all subsidies. That’s a $30k price tag for us, so make sure you fully understand your income producing investments: dividends, interest, capital gains, passive income, etc.

Back to the original question, both my wife and I are healthy, but we’ve also both had injuries and subsequent surgeries (both a knee surgery and I also had shoulder surgery.) Each time, we hit our max OOP (around $8500), so our exposure was capped. Your HSA contribution seems to have you covered unless you have multiple incidences and more than 1 person, which could double the exposure, depending on your coverage.

I also retired at 55 and like you, consider healthcare our greatest risk of exposure. ACA plans limit the exposure, but if you don’t qualify for the subsidy, the premium becomes a significant financial drain.

 

[ERhoosier]

Comments about OOP max are under a bit of a mistaken impression. OOP max is max for COVERED medical expenses, and UNcovered expenses can be $$$. The insurance (inc. Medicare) definition of medically necessary and the providers definition are not always the same- even after all appeals have been exhausted. I've run into that myself & with family members. Uncovered expenses running from a few hundred $$ up into the thousands$$. DW had a huge hit with specialized care our then ACA plan did not end up covering. It was a big issue that pushed me back into megacorp w@rk after my initial FIRE. Now on Medicare with Medigap G but there are still some things Medicare doesn't cover (can very by region-local carrier determinations). The Part D drug coverage cap ($2100 for '26) is better than the old 'donut hole' days.

 

[WhenIsItTime]

My family monthly healthcare participation payment has nearly doubled since I retired 6 years ago for higher deductibles. We had a healthy family pre-retirement. Then, I used my full deductible 2 years in a row. Then my wife used hers the 3rd year. Then my son used 75% of his the 4th year. Those were an additional ~$7k each

Financially: we simply paid, keep paying, plan to pay, hope to see the day are kids come off our plans and on to somebody else's and we join medicare (12 more years!).

Mentally: Thankful our health issues were resolvable and not life altering.

 

[robnplunder]

We have had ACA, for 9 years now. The last year was the only year that we (DW) had a major health issue. She had to pay the maximum out-of-pocket amount, which was about $9000.

 

[BlueberryPie]

If you are buying decent insurance, why worry about large medical issues?
Your bills are much smaller than mine have been for years. However, I have RA as well as type 1 Diabetes. I blow through my deductible and generally hit my OOP maximum by February. Our HSA lasts through November typically.

I budget for it, and it isn't an issue.
You have a good cushion. Just make sure your private insurance is decent and you should be good to go.

Define "decent" insurance? For me the cheapest insurance I can get is $1400 per month per couple, with a $10k OOP per person. So if both my wife and I were in a car accident the premiums+cost of care would be at least $30k. Better than no insurance but not something to take casually.

Insurance that would pay for a knowable expense like routine surgery with a significant out of pocket cost would start at $2200 per month with the better plans at $2800

So I guess I need to "just budget" for $30k in medical expenses.

 

[jrendt]

I retired at 59 1/2 only because I could tap into my employers retiree health plan. It was $527/month. That is a bit, but I was diagnosed with colon cancer 8 months later so it was a good bet. A $50,000 bill would have devastated my retirement savings. I still have that insurance as a secondary now that I am on Medicare as the coverage is very good. It's about $250/month. Medical costs are unreal and if you don't have insurance you get screwed because you pay retail. For my treatment, the insurance only had to pay $25K of the total bill.

 

[FlyingCircus]

And how did you "handle" it? Financially and mentally?

Single, 55, still working
Been tracking expenses and this is my yearly budget...
$55,000 essential expenses
$3000 ACA
$9500 (HSA "contributions")
$20,500 lumpy, fun, etc.
4% of my portfolio spending rate

I don't remember this being discussed, but one of the things that makes me pause is not the paying for health insurance, but actually using it if I have to. Paying for ACA or even setting aside money to budget is fine. An acquaintance of mine recently retired before Medicare, and she had to have major surgeries and is now probably facing some huge medical bills.

My portfolio numbers are fine. My expenses are low. My HSA balance is $17k and $375 goes in every other week through my work. If I got sick while working, I have a job to go back to replenish the account. I have FMLA, etc. I My concern is if I retire at 55 and have a medical situation, that can be depleted quickly. And while I can just pay out of my other accounts, and I've budgeted for it, it is of a mental barrier to get over, like switching from saving to spending after 40 years.

Any stories that may help me along?

My HDHP has a $7500 deductible and a $10K annual out of pocket max, for $8440 a year. So, my "preventive" exams are covered, but everything else is deductible. Planning wise, that means minimum $8440 maximum $18,440 potential at risk.
Biggest reason I have recently gone back to w*rk full time for "about a year" to a lower stress job with great, subsidized insurance as a supplement to a lower salary - tradeoff.

 

[gauss]

Define "decent" insurance? For me the cheapest insurance I can get is $1400 per month per couple, with a $10k OOP per person. So if both my wife and I were in a car accident the premiums+cost of care would be at least $30k. Better than no insurance but not something to take casually.

Insurance that would pay for a knowable expense like routine surgery with a significant out of pocket cost would start at $2200 per month with the better plans at $2800

So I guess I need to "just budget" for $30k in medical expenses.

Well yes -- you should have $30k ready to go in case you need it.

However, if you take the $2800/month plan ($33,600 /year), that money is gone -- even if you are healthy.

Why not get the lower cost and higher OOP plan -- especially if you think there is a significant chance that you will be healthy for the year? Worse case you still are out the $, but perhaps you will have a good year and save nearly 17,000? (ie the difference between the low cost and high cost premiums). Over 5 to 10 years time this can add up to significant savings.

-gauss

 

[Rambler]

Retired 13 years ago at 51. Prostate cancer at 55. Insurance would not approve robotic surgery. I paid out of pocket, because I could, and because my dad almost lost his life during “open” prostate cancer surgery at age 60 (he lost so much blood his heart stopped, and his breathing stopped…thankfully they brought him back and he survived another 26 years). That was 9 years ago. Then it came back, 4 years ago, but we had better insurance, and radiation was covered, after deductible. Fine since then. Then two years ago, I had kidney cancer. Deductibles were high but manageable. One year on immunotherapy post-op. Fine so far, fingers crossed. 6 months and 2 weeks to go until Medicare. But we are doing just fine. Mr. Market has more than made up for the medical blips. (But we are FAT FIRE…YMMV).

 

[FlaGator]

Unsubsidized premiums and OOP were low enough the first few years. After Covid, that changed.

Premiums went up (subsidized or not), and 2 of the 4 people in the house ran right up to, but not over the individual OOP limits on High Deductible plans. Happened for a few years, and premiums continue to increase. Glad I built up the HSA in the 10 prior years.

Medical was the second highest expense category after housing until I downsized, now it's the highest. Still have 2 dependents on the payroll.

 

[athena53]

My family monthly healthcare participation payment has nearly doubled since I retired 6 years ago for higher deductibles.

Yeah, that happened to me, too. Retired at 61. I was fortunate to have few medical expenses before getting Medicare (and fortunately, few after till my heart valve replacement last year) but there were a few dental implants in there. I'd deliberately gone without dental insurance knowing that it didn't do much for major work between the small % reimbursement and the limit on what they'd pay in a year.

I retired at 59 1/2 only because I could tap into my employers retiree health plan.

My brother had that- may have retired a bit after that age- and 3 years after he retired they terminated retiree health insurance. End of story. He and DSIL ended up on ACA, not qualifying for subsidies, at $22K/year. Fortunately they were diligent savers and very frugal so they were able to absorb the costs.

 

[RunningBum]

ER'd in 2011. I rarely saw a doctor while working except for a ruptured appendix in 1986. In 2012 I blew out my knee in a ski accident and paid $8K total medical that year, on top of HI premiums.

Minimal expenses the next few years until I developed a chronic condition in 2016 that has plagued me since, so my expenses have been much higher. Yesterday I slammed into my MaxOOP with outpatient surgery that I wasn't expecting when I signed up last year. So I won't have to pay anything else covered by my HI, but I go on Medicare in November. The surgery could have been delayed until then but quality of life would have suffered, a lot.

I've always done Bronze ACA plans. I'd test them at various medical expense rates and the golds were better only in some ranges, some years narrow, some years wider. HSA was often a tie breaker.

I recall trying to budget for medical over that range of time. I found my spreadsheet but can't easily deciper it. It looks like in 10 years I planned for 1 maxOOP, twice at or near the deductible, 5 times $1-2K, and twice very minimal. I've come out worse, but my portfolio has done better than expected so it hasn't been a big deal. I don't know why I stopped at 10 years when I actually had 14 full and 2 partial years.

Anyway, that still seems like reasonable planning. I don't think you need to plan for worst case every year unless you are unhealthy, but don't count on staying totally healthy.