High Max OOP, ACA and early retirement

Floralscent

Dryer sheet wannabe
Joined
Dec 29, 2024
Messages
12
Location
MN/MO
My husband and I, like many others, are considering an ACA plan in early retirement. Our ER will happen mid to late 2025 and after searching ACA plans, I noticed we qualify for a subsidy and I am grateful. When reviewing the plans, however, I am absolutely astounded by the very high deductibles and max out of pocket amounts. There are some plans with a low deductible ($1,000 or $1,500) but most are much higher and the max OOP is near $18,000- I assume that's $9k pp.

I have had a number of health challenges the last 4 years, in-patient hospital stays and surgeries, and as a result have met my employer provided insurance MOOP each year- deductible $3,300 and MOOP was $4,200. My past 4-year medical history likely makes me think of the whole picture relating to large medical costs- monthly premium, deductibles, co-pays and large MOOP and the trouble one could get into with the high MOOP should a hospital stay or surgery be needed.

Am I missing a key piece to these ACA plans?
Who can afford those high out of pocket costs each year if health is not perfect?
Why is nobody talking about these high MOOP costs?
 
$18K is usually the family MOOP with the individual amount being half of that. Hopefully both family members don't reach their max every year. If they do, then you might be a candidate for a Gold or Platinum plan which would have a lower MOOP.

Otherwise, you need to have saved enough for retirement to be able to handle lumpy expenses. Sometimes a lumpy expense is a new roof or a new car, but it can also be a year where you have higher than usual medical costs.
 
I believe your situation is exactly why many people work as long as possible.
My case, retired @ 57. Purchased a bronze ACA plans with almost zero premium cost. At 62 I needed surgery for an ongoing orthopedic issue. My deductible was over $8,000. I was glad and able to pay it.
Otherwise, we have almost perfect health.
ACA with low premiums and high deductibles has been fine with us.
 
Buy a Gold or Platinum plan, or get a Silver plan with income under 200% FPL for cost sharing reductions (CSRs are only with Silver plans). Medicaid is another option.
 
We were not willing to accept a lifestyle that would have reduced our IRA withdrawals (much less conversions) to the point that we would qualify for subsidies. Therefore, we found the ACA plans to be way too expensive, and went with nonqualified plans. DW was able to pass health underwriting and get a high deductible plan that limited her OOP to about 6 or 8K. Mine was 24,000. Both of these were individual plans. Naturally, her healthcare expenses since 2017 have averaged FAR higher than my worst year. :cool:

It's just another cost of life. One needs to plan to be in a position to pay for medical/insurance costs, new roofs, new[er] cars, and the like.
 
I am just completing my 2nd policy year on a ACA subsidized plans. I chose silver plans and found plans that were both cheap and low deductible (like a typical copay based indemnity type plan) and reasonable max OOP of maybe $1000-1200? Premium was also low. And this was with Blue Cross and Cigna which both have wide networks here.

It seemed very reasonable to me. But your situation may be different as offerings vary widely.
 
Back in 2015, my Silver ACA plan had a MOOP of $6,400, one I was happy to pay when I spent 12 days in the hospital for 3 different health issues, all of which got resolved of at least put under control. Without insurance, I would have been on the hook for about $80k. Meanwhile, my ACA Silver plan cost me about $400 per month net of the small subsidy I was getting at the time.
 
Welcome to "affordable care", available to all, if you can afford it.

Prepare to spend more than you expected/hoped if there's a problem, especially chronic. After several years of the high deductible plan working well, things turned south for 2 of the family a few years ago. Between premiums and deductibles, it has been brutal.

For planning purposes, my recommendation is to assume you'll pay the deductibles every year for a while.

As mentioned, look at plans other than HD and see if they will be a better and more affordable choice.
 
I am just barely squeezing in under the 200% threshold, but my silver plan has a $3000 max out of pocket for in-network, which I hit last year.

My deductible was $1000 last year and is $500 for 2025. I know I'll be hitting that. I'm not sure about hitting the max out of pocket again in 2025, though.
 
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Thank you for the great advice and for giving me more to think about. Also, maybe I need to explore further for better coverage.

Does anyone use an agent vs the ACA website and finding a plan that works for you?
 
Don't be discouraged by high deductible. I've had Blue Shield of CA high deductible bronze PPO plan this year with ACA. Although the plan say you have to pay 100% out of pocket for everything except preventive care until $7K deductible is met, in a reality I never paid the full amount. Some part was always paid by insurance, sometime small sometime not that small. The next year I'll be on similar Anthem BC EPO plan and it is yet to see how much it will pay and does it even cover all doctors I use (although coveredca say it does).
 
Don't be discouraged by high deductible. I've had Blue Shield of CA high deductible bronze PPO plan this year with ACA. Although the plan say you have to pay 100% out of pocket for everything except preventive care until $7K deductible is met, in a reality I never paid the full amount. Some part was always paid by insurance, sometime small sometime not that small. The next year I'll be on similar Anthem BC EPO plan and it is yet to see how much it will pay and does it even cover all doctors I use (although coveredca say it does).
Might want to look closely at those EOBs. Negotiated rates certainly help bring down the OOP.

Since ER, HD plans were fine for us until they weren't. Many years we never hit the max. But when things turned south, it was $15k toward deductibles/OOP as neither of the two with problems hit their individual deductibles and the family deductible was $18K.

What I spent on health care the last 4 years (including premiums) could have paid cash for a nice Benz. Good thing I'm happy with the Honda. ;) Reminds me how fortunate I was to still have employer coverage during the late wife's cancer treatment.
 
Another thing to consider is that your true maximum out of pocket includes what you pay for premiums as well as deductibles, co-pays and the stated maximum out of pocket. A spreadsheet could help you compare the different ACA options to see what your true maximum out of pocket is.

As others have stated, if you can get your MAGI low enough you can get a policy with low premiums and low deductibles/MOOP.

The deductibles will continue to rise each year because the plans are not allowed to be too generous. Each plan must stay within the set federal guidelines( 60%, 70%, etc.) of care that they pay for. As underlying health expenses rise, the deductible must rise.
 
We went on an ACA plan this year. The OOP is higher but the premium is half of what we paid on COBRA so it balances out. If we don’t hit max OOP for both of us, we come out ahead. No complaints here. The ACA plan is saving us a decent amount.
 
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Be thankful they outlawed "stacked deductibles" on family policies.

Early in the ACA, if you had two people, each with $7K deductible, they wouldn't start paying until you hit $14K. Yep, they got away with that for a while! Meanwhile, if you bought two separate policies for the exact same price as the two person family policy, they'd start paying at $7K.
 
Another thing to consider is that your true maximum out of pocket includes what you pay for premiums as well as deductibles, co-pays and the stated maximum out of pocket.
My stated out of pocket maximum included deductibles, co-pays, coinsurance, and pharmacy. All those costs were included when I hit my out of pocket maximum. Only the premiums were additional to the out of pocket max.
The deductibles will continue to rise each year because the plans are not allowed to be too generous.
Surprisingly, my deductible for the "most like" plan to what I had for 2024 has a $500 deductible for 2025 vs. $1000 for 2024. Still Health Alliance. Copays/coinsurance is the same, OOP Max is still $3000, but premium is higher, with MAGI being just under 200% of the poverty level again. The higher premiums add up to more than the savings on the deductible by about $200. I know I'll hit the deductible just from the yearly minimal with blood tests and appointment(s), which aren't considered preventive.
 
Yes, if you have a low MAGI, then you are eligible for plans with both low premiums and low deductibles. If you don't have a low MAGI then the plans available to you will have much higher deductibles. Last time I checked for my area, the deductibles were $9100 per person.
 
Yes, if you have a low MAGI, then you are eligible for plans with both low premiums and low deductibles. If you don't have a low MAGI then the plans available to you will have much higher deductibles. Last time I checked for my area, the deductibles were $9100 per person.
Not sure if you were responding to me, but my point wasn't the absolute dollar amount, but that the deductible actually dropped to half from last year for the plan from the same company with everything else being equal except a higher premium.
 
We are both mid-low consumers of healthcare, having only reached deductible one year in the 6 or 7 on the ACA. We opt for this plan with a high deductible because it's HSA eligible - and when we have big lumpy healthcare expenses, we can dip into our HSAs with no regret.

Depending on where you live, you might have other options. Some might have higher premiums with lower deductibles, or the reverse. And some states have a lot more choices than others.

If you are someone who expects to meet their deductible every year, then, yes, unless you have other plan options, that's going to pinch.
 
I’ve been on a high deductible HSA-eligible ACA bronze plan during ER. Besides the premiums, my out-of-pocket expenses averaged $2,000 a year, so not bad I thought. But this year, I received an early stage cancer diagnosis in February, so I reached my maximum out of pocket by June. Seeing all my subsequent bills get covered in the 2nd half of 2024 was a pleasant surprise, as that never happened before.
 
We were all on A HSA qualified HDHP. I posted 8 years ago or so when my one son kept breaking bones in sports injuries and the other son had an ameloblastoma tumor. We came close to the high deductable for the one son and hit it with the other. But I'd say aside money in the HSA.

The son with ameloblastoma has6 a reoccurrence... I've since switched him to a gold plan. Hubby graduated to Medicare. Younger son and I are still in HDHP. Most years we have low out of pocket. On party because both boys use the on campus health centers first.
 
Here's a link to my rant at the time.



Hind sight we are still ahead after 10 years comparing insurance premiums. I just had some bad years in a row
 

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