Health Insurance, Age 60-65 Advice

[CKw4itlb]

Hello. I'm a new poster and I've scanned a lot of the sites and threads, and can't seem to pinpoint one that guides me with my specific scenario.

I'm 60, retired since 2017, and have been paying for my retiree health insurance through my employer, having the monthly costs deducted from my monthly pension. For 2021, the costs are almost $5K. I'm trying to decide if ACA or open market might yield better rates for similar coverage in general--I know most rates aren't finalized until November.

My income from part-time jobs and my pension is generally under $15K, though pandemic unemployment benefits pushed me over $20K in 2020 and 2021. When I check the "under $17K" box on the ACA site, it automatically refers me to Medicaid of which I'm certain I wouldn't qualify.

Regardless of whether I go ACA or private route, I'll still get my supplemental insurance benefit of up to $200 a month from my former employer...but of course, if I decide to abandon the current coverage, I'll lose it.

I'm not sure if it's advisable to abandon my existing coverage for what might be a gamble. I'm very healthy, but anything can happen in just under five years.

Any experiences and insights would be appreciated. Thank you.

 

[PaunchyPirate]

Hello. I'm a new poster and I've scanned a lot of the sites and threads, and can't seem to pinpoint one that guides me with my specific scenario.

I'm 60, retired since 2017, and have been paying for my retiree health insurance through my employer, having the monthly costs deducted from my monthly pension. For 2021, the costs are almost $5K. I'm trying to decide if ACA or open market might yield better rates for similar coverage in general--I know most rates aren't finalized until November.

My income from part-time jobs and my pension is generally under $15K, though pandemic unemployment benefits pushed me over $20K in 2020 and 2021. When I check the "under $17K" box on the ACA site, it automatically refers me to Medicaid of which I'm certain I wouldn't qualify.

Regardless of whether I go ACA or private route, I'll still get my supplemental insurance benefit of up to $200 a month from my former employer...but of course, if I decide to abandon the current coverage, I'll lose it.

I'm not sure if it's advisable to abandon my existing coverage for what might be a gamble. I'm very healthy, but anything can happen in just under five years.

Any experiences and insights would be appreciated. Thank you.

If your ONLY income is $15-20k from the sources you mention above, then you will likely be forced to use Medicaid if you choose to leverage the ACA health insurance.

 

[jimbee]

If you hava a 401k or IRA, you could consider annual conversions to a Roth IRA. Convert enough to get a Silver ACA health insurance plan with premium tax credits and cost-sharing reductions. Check with an income of 200% of the federal poverty level (changes based on your federal income tax filing status). You can get an estimate of the costs for 2021 plans at this site: https://www.healthcare.gov/see-plans/#/

 

[Aerides]

For 2021, the costs are almost $5K. I'm trying to decide if ACA or open market might yield better rates for similar coverage in general--I know most rates aren't finalized until November.

While you might be able to find cheaper premiums, even if you have income that supports getting on the ACA, the deductible might make the actual annual cost a wash. And that would also come with the expense of changing doctors and navigating new plans which can be a source of frustration.

In your shoes, if I had 5 years to go, I'd stick with what I had and ride it out till Medicare. If it ain't broke, as they say.

 

[Dtail]

If you hava a 401k or IRA, you could consider annual conversions to a Roth IRA. Convert enough to get a Silver ACA health insurance plan with premium tax credits and cost-sharing reductions. Check with an income of 200% of the federal poverty level (changes based on your federal income tax filing status). You can get an estimate of the costs for 2021 plans at this site: https://www.healthcare.gov/see-plans/#/

+1.
I would at least check out the ACA plans in your area. In terms of doctors who accept the ACA plans, it ranges quite a bit depending where you live.
As one example, the doctor acceptance rate in many parts of Florida is excellent and I have never found a doctor who turned down my ACA coverage.
As mentioned above, a small Roth conversion is an easy way to get over the Medicaid threshold and qualify for the ACA non medicaid plans.

 

[Alan]

While you might be able to find cheaper premiums, even if you have income that supports getting on the ACA, the deductible might make the actual annual cost a wash. And that would also come with the expense of changing doctors and navigating new plans which can be a source of frustration.

In your shoes, if I had 5 years to go, I'd stick with what I had and ride it out till Medicare. If it ain't broke, as they say.

We were in a similar position with my retiree health insurance and at age 58 I looked into ACA plans and while I could get lower premiums the coverage even for the most expensive ACA plan was terrible, plus we would have to change doctors and travel much farther for GP appointments. We decided to stick it out with our existing plan.

It is definitely worth looking into, costs nothing to get quotes.

 

[pb4uski]

Hello. I'm a new poster and I've scanned a lot of the sites and threads, and can't seem to pinpoint one that guides me with my specific scenario.

I'm 60, retired since 2017, and have been paying for my retiree health insurance through my employer, having the monthly costs deducted from my monthly pension. For 2021, the costs are almost $5K. I'm trying to decide if ACA or open market might yield better rates for similar coverage in general--I know most rates aren't finalized until November.

My income from part-time jobs and my pension is generally under $15K, though pandemic unemployment benefits pushed me over $20K in 2020 and 2021. When I check the "under $17K" box on the ACA site, it automatically refers me to Medicaid of which I'm certain I wouldn't qualify.

Regardless of whether I go ACA or private route, I'll still get my supplemental insurance benefit of up to $200 a month from my former employer...but of course, if I decide to abandon the current coverage, I'll lose it.

I'm not sure if it's advisable to abandon my existing coverage for what might be a gamble. I'm very healthy, but anything can happen in just under five years.

Any experiences and insights would be appreciated. Thank you.

Believe it or not, $416/month for health insurance is a very reasonable monthly premium. What are your deductibles and co-pays? If I were you, I would stick with what you have.

At your income level, you probably would qualify for Medicaid since Medicaid is based on income and not assets. Alternatively, if you have tax-deferred money, you could either withdraw or do Roth conversions to get your income above the Medicaid limit, and at a level that you would get a highly subsidized ACA policy.

If you stick with your employer plan and you have tax-deferred money, you should consider doing low tax cost Roth conversions if once SS and RMDs start those will push you into a higher tax bracket.... federal tax will be less than 12% of the amount converted if you keep your total income under $53,075 in 2021.

 

[CKw4itlb]

Thank you for your responses, all.

My current deductible is $1,500 a year. I have about $2,300 in a carryover HSA, and that is used for any doctor visit that is not an annual physical, flu shot, Covid shot, shingles shot. I occasionally have dipped into it for an eye doctor, podiatrist, dermatologist visit, upon occasion. Fingers crossed that I remain healthy.

SO, Roth conversion. How would that assist with Medicaid issues? I typically earn less than $10K from my part-time jobs, and my small pension yields just over $6K per year. I have assets in the market and savings well above my state's Medicaid threshold--I own too much, I'm sure.

Open market. A couple or more years ago, I put out a random inquiry on a site which necessitated providing my phone number. Huge mistake. I'm curious what the market costs are, and as long as I'm healthy, don't mind a higher deductible as long as I can see some REAL cash savings with premiums.

It might very well be that if it ain't broke, don't fix, and November seems to be the time to fill in other blanks.

 

[MBAustin]

You have a pretty darn good plan IMHO. I'm paying over $1K per month for my "subsidized" retiree medical with a $3,500 deductible that pays nothing until you hit the $3,500 (I have to pay full price for prescriptions and anything other than the required preventative care). I would stick with it if I were you.

 

[GTFan]

With your income if you can get over the ACA minimum (I'm guessing 138% FPL in your state) you're likely going to get a very cheap (or free) Silver plan with low OOP cost. On the flip side, your doctors etc. may not be in-network.

It never hurts to go to healthsherpa.com and check out the ACA options with income that qualifies you for cost-shared Silver plans, especially those that have your providers.

 

[ShokWaveRider]

Believe it or not, $416/month for health insurance is a very reasonable monthly premium. What are your deductibles and co-pays? If I were you, I would stick with what you have.

That is what my Medicare + Part G + D costs. A Great deal. Stick with it.

 

[ivinsfan]

Thank you for your responses, all.

My current deductible is $1,500 a year. I have about $2,300 in a carryover HSA, and that is used for any doctor visit that is not an annual physical, flu shot, Covid shot, shingles shot. I occasionally have dipped into it for an eye doctor, podiatrist, dermatologist visit, upon occasion. Fingers crossed that I remain healthy.

SO, Roth conversion. How would that assist with Medicaid issues? I typically earn less than $10K from my part-time jobs, and my small pension yields just over $6K per year. I have assets in the market and savings well above my state's Medicaid threshold--I own too much, I'm sure.

Open market. A couple or more years ago, I put out a random inquiry on a site which necessitated providing my phone number. Huge mistake. I'm curious what the market costs are, and as long as I'm healthy, don't mind a higher deductible as long as I can see some REAL cash savings with premiums.

It might very well be that if it ain't broke, don't fix, and November seems to be the time to fill in other blanks.

You are a household of one? Do you have cash saving or are you living on less then 16K a year? because your HI costs alone are 5K...Are you giving us true picture of your taxable income?



It's hard to know without the full picture but in your case, if you have large tax deferred assets IMO you'd be better off keeping your coverage and either pulling from an IRA or doing Roth rollovers to raise your taxable income and fill out these lower brackets before you hit RMD+SS+pension income.

 

[jim584672]

SO, Roth conversion. How would that assist with Medicaid issues? I typically earn less than $10K from my part-time jobs, and my small pension yields just over $6K per year. I have assets in the market and savings well above my state's Medicaid threshold--I own too much, I'm sure.

Expansion Medicaid only looks at income, not assets. Elderly, disabled and blind Medicaid looks at both income and assets. Twelve states have no expansion so it won't be an option in those states.

If your Providers are in your Medicaid Managed care plan it is excellent coverage with a $200 a year max OOP.

 

[pb4uski]

...SO, Roth conversion. How would that assist with Medicaid issues? I typically earn less than $10K from my part-time jobs, and my small pension yields just over $6K per year. I have assets in the market and savings well above my state's Medicaid threshold--I own too much, I'm sure. ...

Medicaid is based on income, not assets... you can have $1m in the bank and still be on Medicaid.

Roth conversions... transfers from tax-deferred tIRAs or a 401k et al... are income. So if before Roth conversions your income is $16k a year and to get away from Medicaid you need $20k of income the just do a $4k Roth conversions and your income is now $20k.

 

[pb4uski]

... It's hard to know without the full picture but in your case, if you have large tax deferred assets IMO you'd be better off keeping your coverage and either pulling from an IRA or doing Roth rollovers to raise your taxable income and fill out these lower brackets before you hit RMD+SS+pension income.

+1

 

[CKw4itlb]

Ivinsfan,

Yes, a household of one. Besides my already-mentioned income streams, I withdraw monthly amounts from my retirement savings, managed by Vanguard. Once I collect social security, that amount will drop dramatically.

I guess I'll wait and see what the real numbers are come November. The responses so far seem to overwhelmingly think that I'm better off with what I already have. Thanks everyone for your responses!

 

[EastWest Gal]

Do you have any investments outside of IRA and 401K? After tax investments generate income in the form of dividends and capital gains. You said you have "assets in the market". What income does that generate?

Taking money out of your IRA/401K will increase your income above Medicaid threshold, either through taking a distribution or doing a Roth conversion. As has been mentioned, any money taken out of those accounts is considered to be earned income for ACA and tax purposes.

I choose my specific ACA plan yearly based on which hospital systems and physicians are in-network. After looking at our state ACA website, I then go to the doctors' websites and hospital websites and see who is in-network. If there is any doubt, I also call the billing offices.

 

[ivinsfan]

Ivinsfan,

Yes, a household of one. Besides my already-mentioned income streams, I withdraw monthly amounts from my retirement savings, managed by Vanguard. Once I collect social security, that amount will drop dramatically.

I guess I'll wait and see what the real numbers are come November. The responses so far seem to overwhelmingly think that I'm better off with what I already have. Thanks everyone for your responses!

When you say retirement savings do you mean IRA/401 type or tax referred because that's all taxable income. It needs to be included in ACA income number.

 

[Aerides]

I guess I'll wait and see what the real numbers are come November. The responses so far seem to overwhelmingly think that I'm better off with what I already have. Thanks everyone for your responses!

It's not necessarily that it's better, but that it's probably good enough not to bother, if the pricing comes out somewhat close. If you had told me I could stay on my employer coverage for $5k per year from retirement to Medicare I would not have let you finish your sentence before I signed up. And that's from someone who is pretty happy with my ACA plan.

But do have poke around on November 1. Most plans let you see if your existing docs are in there. And if you're not 100% sure about income, but close, you can put in an "estimate" to see what it would be like if you qualify.

 

[Dtail]

Ivinsfan,

Yes, a household of one. Besides my already-mentioned income streams, I withdraw monthly amounts from my retirement savings, managed by Vanguard. Once I collect social security, that amount will drop dramatically.

I guess I'll wait and see what the real numbers are come November. The responses so far seem to overwhelmingly think that I'm better off with what I already have. Thanks everyone for your responses!

To provide a more complete response, you would need to state how much monies you pull yearly from an IRA or 401k account. If you aren't comfortable providing that info, that is fine of course.

 

[Murf2]

In my area $18000, 1 person = $36 monthly premium & 700 max OOP. You should at least check out ACA coverage if you can get your income above the Medicaid level.

I have read that you can overestimate your income to get above that level & they don’t do anything to you at the end of the year. I have no experience with this, though.

Good morning
Murf

 

[CKw4itlb]

From my Vanguard (and prior to that, Edward Jones and Merrill Lynch), I withdraw approximately $14K per year. As I understand, this comes not from my Roth (which I still contribute small amounts), nor my tax-deferred accounts (401Ks from prior employers). The funds are managed that were after-tax funds that weren't Roth. I hope that clarifies.

That being the case, would it be accurate to add the $14K to my pension and part-time incomes when I peruse the ACA site for estimates? I'll eagerly look at the November 1 ACA rates and IF there's a plan that would save me a bundle, then it would behoove me to pursue it, especially if there's a significant savings. If savings is negligible, I agree with above posters to let the sleeping dogs lie.

Thank you yet again everyone!

 

[ShokWaveRider]

Medicaid is based on income, not assets... you can have $1m in the bank and still be on Medicaid.

Is this only true for states that implemented Medicaid expansion ... via ACA? It is not so for regular Medicaid. Max $2k assets here in Florida.

 

[ivinsfan]

From my Vanguard (and prior to that, Edward Jones and Merrill Lynch), I withdraw approximately $14K per year. As I understand, this comes not from my Roth (which I still contribute small amounts), nor my tax-deferred accounts (401Ks from prior employers). The funds are managed that were after-tax funds that weren't Roth. I hope that clarifies.

That being the case, would it be accurate to add the $14K to my pension and part-time incomes when I peruse the ACA site for estimates? I'll eagerly look at the November 1 ACA rates and IF there's a plan that would save me a bundle, then it would behoove me to pursue it, especially if there's a significant savings. If savings is negligible, I agree with above posters to let the sleeping dogs lie.

Thank you yet again everyone!

What do your 1099's say...after tax money should still have some gains.

 

[Dtail]

Is this only true for states that implemented Medicaid expansion ... via ACA? It is not so for regular Medicaid. Max $2k assets here in Florida.

Correct.