Healthcare Gap Support Recommendation

[refi]

Need help in selecting the right health care coverage, please direct me somewhere else if this has been asked a million times:

I'm:

• 44,m, single household, FIRE'd in September
• relatively healthy, but will need some dental work upcoming
• 700k in HYSA/Cash equivalent, so a healthy amount of interest, say $28k year
• 10k/yr stock dividends
• About $200k/yr in RE Net Income, but $0 on Tax return (offset by depreciation and repairs)
• May take up some side hustle work for fun that could yield maybe $50-100k

Trying to read all the literature, My options seem to be:

• COBRA: I was able to finagle a severance package out, so my company paid COBRA just expired, so now my option is to continue at $700/mo which seems kind of pricey
  
• State-Offered Medicare program: Not to game the system, I could probably deploy my cash and then my monthly income would lower. This would also limit me from the flexibility of taking up income producing side quests that produce money.
  
• ACA Health Care: Again, it seems like I would need to stay between 100%-400% of the FPL to qualify to any subsidy, so it would be like Medicare, but would not be as low limits.

Questions:
1) Should I deploy my cash in order to lower my total income in order to limit interest and get a better subsidy either Medicare or ACA?

2) What would you recommend as the best options? Thinking ACA would make the most sense, I shouldn't just try to shift around too much cash to maximize every cent (but if i can do it, then try), just go w/ what the marketplace offers at the current time when I enroll?


Anyways, probably should have researched more earlier, but have been Post-FI'ing too hard TIA!

 

[jim584672]

You can check the subsidy estimator:
https://www.kff.org/interactive/subsidy-calculator/

The 400% FPL income cutoff no longer exists, but may return in 2026.

I think you mean MediAID when you say Medicare. Medicare is for old people.

 

[VanWinkle]

Medicaid looks at both income and assets in most states so that may be unavailable. The 700 a month for a decent health care plan may not be that much more than the ACA with subsidies based on over 300% of poverty level. I would look at the calculator listed in the reply above and do the math on how well you can control taxable income to get the highest subsidy.

DW

 

[gauss]

You do get to change your health insurance coverage every year and you can manage your income every year.

The point is that this is not a once in a lifetime decision. So something to keep in mind.

With the 400% FPL temporarily removed, you will pay no more than between 0% and maybe 9% of your income (technically ACA MAGI) on health insurance premiums. The % would be based on your ACA MAGI income level.

IRS form 8962 "Premium Tax Credit" and its associated instructions will spell out how this all works.

Medicaid looks at both income and assets in most states so that may be unavailable.
DW

Are you sure about this for the Medicaid Expansion for ACA? I know this is true for LTC, but for ACA the Medicaid considered only income not assets (unless this has changed).



-gauss

 

[jim584672]

Medicaid looks at both income and assets in most states so that may be unavailable. The 700 a month for a decent health care plan may not be that much more than the ACA with subsidies based on over 300% of poverty level. I would look at the calculator listed in the reply above and do the math on how well you can control taxable income to get the highest subsidy.

DW

Expansion Medicaid* has no resource test, it is a simple income test of < 138% FPL ($1,732 a month for a house of one). The current law is the second lowest cost Silver plan will not exceed 8.5% of income. The percent gets lower at lower income levels.

*Does not apply in the orange states.
https://www.kff.org/medicaid/issue-...medicaid-expansion-decisions-interactive-map/

 

[CardsFan]

You do get to change your health insurance coverage every year and you can manage your income every year.

The point is that this is not a once in a lifetime decision. So something to keep in mind.

-gauss

OP needs to check, but I think that once the COBRA coverage is cancelled, that is the end of that option. So, yeah, you can change between ACA plans, but you might lose one option.

 

[Aerides]

OP needs to check, but I think that once the COBRA coverage is cancelled, that is the end of that option. So, yeah, you can change between ACA plans, but you might lose one option.

Once you go on Cobra, you cannot cancel it mid-stream, except during open enrollment. IE, if the OP ends his job and takes COBRA today, he is not eligible for the ACA until Jan1 2025, and would enroll in November of this year - he can't swap in, say, August, because he wants to.

BTW, that's the option I'd normally recommend. It allows you time to breathe and stay with a known option. Price aside, and $700 for cobra is a nice price IME. Mine was $1000, and that was 8 years ago. And it's almost definitely a good price compared to an un-subsidized ACA plan in most markets.

As far as the ACA, OP can shop options now on healthsherpa, and plan for income next year for estimating purposes. Also look at the different deductibles, whether to go HSA, and the doctors in the plans. And yes, if it sucks the first year, try again the next, there is no 20 year decision being made.

 

[CardsFan]

Once you go on Cobra, you cannot cancel it mid-stream, except during open enrollment. IE, if the OP ends his job and takes COBRA today, he is not eligible for the ACA until Jan1 2025, and would enroll in November of this year - he can't swap in, say, August, because he wants to.

Yeah, I answered as if OP was on a retiree plan, not COBRA. If it is COBRA, then it will end in the not too distant future in any event.

 

[Fermion]

Do you have anything at all in tax deferred? 401k/IRA/Roth

Do you have 10 years of credits for SS, or what is your approx. age 62 SS payment?

 

[ivinsfan]

Why don't you just look for an ACA marketplace plan estimate your income and go from there? Are you telling us that at the moment you have no HI? Time to get moving on this.


Why do say healthcare gap? You need HI for the next 20 years until Medicare kicks in.

 

[gauss]

OP needs to check, but I think that once the COBRA coverage is cancelled, that is the end of that option. So, yeah, you can change between ACA plans, but you might lose one option.

Good catch. Thank you.
-gauss

 

[badatmath]

You can cancel cobra by not paying . . . right? This is what I was told for my dental anyway.