Obamacare and Employee retirement healthcare

[azauthor]

maybe it is too early to know but does anyone understand how this new plan will impact the need for retirement HC benefits? I'm eligible when I retire, but will Obamacare make it obsolete? thx

 

[donheff]

maybe it is too early to know but does anyone understand how this new plan will impact the need for retirement HC benefits? I'm eligible when I retire, but will Obamacare make it obsolete? thx

Heck no, but your company may decide that it is reasonable to slash that benefit.

 

[Ally]

We are probably going to lose ours at my work and take the penalty. We are a nonprofit and we don't see how we can provide for everyone, since now only 1/2 choose to take it. The penalty is much less than we pay even now. Luckily, I can probably get on my husband's plan.

 

[Katsmeow]

I really do wonder about this. We have our insurance coverage through DH's retiree coverage. He will go on medicare later this year but I'm years away from medicare. If the retiree coverage went away and I could buy coverage for the kids and me that would be OK but would likely be far more expensive as the retiree coverage is subsidized.

The other fear is that they do away with retiree coverage due to the Act but the Act gets modified and we can't get insurance but the company doesn't reinstate the retiree coverage. That probably isn't likely....

 

[M Paquette]

Heck no, but your company may decide that it is reasonable to slash that benefit.

The PPACA actually includes incentives for companies to continue their retiree medical coverage. The intent is to keep the coverage available for older workers who have retired but are not yet Medicare eligible.

http://www.whitehouse.gov/sites/default/files/rss_viewer/reinsurance_early_retirees_fact_sheet.pdf

The program provides subsidized to employers for retiree coverage until the health insurance exchanges and subsidy system is up and running, at which time the retires will be able to switch to guaranteed issue policies or HMO plans. Retirees with a low adjusted gross income (below 400% of the poverty level) will be eligible for subsidies at that time.

 

[Katsmeow]

The PPACA actually includes incentives for companies to continue their retiree medical coverage. The intent is to keep the coverage available for older workers who have retired but are not yet Medicare eligible.

http://www.whitehouse.gov/sites/default/files/rss_viewer/reinsurance_early_retirees_fact_sheet.pdf

The program provides subsidized to employers for retiree coverage until the health insurance exchanges and subsidy system is up and running, at which time the retires will be able to switch to guaranteed issue policies or HMO plans. Retirees with a low adjusted gross income (below 400% of the poverty level) will be eligible for subsidies at that time.

DH's former employer did apply for and receive one of these subsidies which is why his retiree insurance premium did not go up this year. I got the idea from the information provided to us by megacorp that there were more companies applying for the subsidies than there was subsidy available so it was indicated that there might not be a subsidy next year.

Note the statement in the link:

The program ends on January 1, 2014, when early retirees will be able to choose from the additional coverage options that will be available in the health insurance exchanges.

That sort of supports the idea that companies will get rid of retiree plans when the exchanges come out in 2014. But, for some of us that may be more expensive. Right now, we are paying a little under $300 a month for family coverage. It is a high deductible plan but is probably much cheaper than what would be available through the exchanges. (I am very much glad the Act was upheld but do think that for me it will probably result in higher premiums if the retiree plan goes by the wayside).

 

[Purron]

But, for some of us that may be more expensive. Right now, we are paying a little under $300 a month for family coverage. It is a high deductible plan but is probably much cheaper than what would be available through the exchanges.

Have you run your numbers through this calculator from the Kaiser Health Foundation to see how the costs compare?

Health Reform Subsidy Calculator - Kaiser Health Reform

 

[Mulligan]

Have you run your numbers through this calculator from the Kaiser Health Foundation to see how the costs compare?

Health Reform Subsidy Calculator - Kaiser Health Reform

Wow! I sure wish I didn't hit that link. My yearly premium would go from under $875 a year to over $5100 a year. I don't think the term affordable care act is applicable to me thats for sure. I sure hope my grandfathered policy holds strong somehow for at least 10 years.

 

[samclem]

. I sure hope my grandfathered policy holds strong somehow for at least 10 years.

I think the "durability" of your individual policy will depend on what the insurance company decides is most profitable for them (since they've got nearly total control of whether they'll continue to offer your class/type of policy). If there's more money to be made by pushing you out and using the capacity to make room for somebody paying a higher individual premium (as you would be) and maybe also using the government subsidy, that's probably what will happen.

In general, this is how subsidizing the purchase of a service/product drives up its price. It's the same thing we've seen with higher education and housing (subsidized via low-cost loans). Conversely, placing artificial price caps on a product that set the price below the market level (whether it is MRIs or gasoline) will always produce a scarcity of that product. That's not a judgement of the value of this law, just an observation of how things work.

But I think we all knew this already.

 

[mickeyd]

maybe it is too early to know but does anyone understand how this new plan will impact the need for retirement HC benefits? I'm eligible when I retire, but will Obamacare make it obsolete? thx

I recall someone once saying that you could keep your insurance and doctor, so no change!

 

[Mulligan]

I think the "durability" of your individual policy will depend on what the insurance company decides is most profitable for them (since they've got nearly total control of whether they'll continue to offer your class/type of policy). If there's more money to be made by pushing you out and using the capacity to make room for somebody paying a higher individual premium (as you would be) and maybe also using the government subsidy, that's probably what will happen.

In general, this is how subsidizing the purchase of a service/product drives up its price. It's the same thing we've seen with higher education and housing (subsidized via low-cost loans). Conversely, placing artificial price caps on a product that set the price below the market level (whether it is MRIs or gasoline) will always produce a scarcity of that product. That's not a judgement of the value of this law, just an observation of how things work.

But I think we all knew this already.

Lets say that my insurance company dropped my individual plan. Does this mean that will I will have to take one of the types suggested as being through the Kaiser link, or will there still be options available that might have a less expensive premium. I am finding it hard to wrap my head around the fact that this act could cause me to pay SEVEN times the amount I am currently paying.

 

[donheff]

Wow! I sure wish I didn't hit that link. My yearly premium would go from under $875 a year to over $5100 a year. I don't think the term affordable care act is applicable to me thats for sure. I sure hope my grandfathered policy holds strong somehow for at least 10 years.

Wow, some of you folks get really good deals. I assume these must be highly subsidized by your employers unlike those of us Federal employees and your elected Federal representatives in the House and Senate. I am in the allegedly gold-plated Federal Health Benefits Program and selected one of the more inexpensive standard option plans yet my out of pocket for a family plan is $2400/year. Or do you folks with low payments get lousy benefits? In that case, Obamacare is admittedly pushing you to higher benefits.

 

[rodi]

Katsmeow -

It seems to me that retiree health care plans from megacorps (vs gov't employee) were never guaranteed. My employer had been jacking the rates on the retiree coverage to where it was pretty close to the cobra coverage. In other words, it allowed a retiree to be covered - but not subsidized the way the employee coverage is.

Oh - and the employee coverage has also been shifting more of the premium from the employer to the employee. Used to be the employer paid 80% - now they pay closer to 60%.

This has nothing to do with PPACA... It's just a corporate trend.

Your $300/family plan under your husbands retirement bennies is $200/month less than what I pay for my family as an employee. I have an HMO (Kaiser Permanente) vs your high deductible plan - but the HMO is priced the same as the high deductible plan at my location. If I chose the high deductible I'd be paying $500/month also. If I qualified for the retiree health care (which was frozen 5 years before I hit the rule of 75) I'd be paying over $1000 for a high deductible.

I guess my point is - PPACA will give you options when your husbands employer stops covering retirees... but most employers seem to be dumping retiree health care anyway since it's not mandated/protected by ERISA.

 

[Mulligan]

Wow, some of you folks get really good deals. I assume these must be highly subsidized by your employers unlike those of us Federal employees and your elected Federal representatives in the House and Senate. I am in the allegedly gold-plated Federal Health Benefits Program and selected one of the more inexpensive standard option plans yet my out of pocket for a family plan is $2400/year. Or do you folks with low payments get lousy benefits? In that case, Obamacare is admittedly pushing you to higher benefits.

I have an individual plan unsubsidized $72 a month, $5500 deductible, 0 copay for anything after that, 7 million lifetime cap. It was no deal, just got it through ehealth and its Anthem BCBS. Several other friends of mine have these type of policies, too. I guess I have been very naive until I here what some people are paying on this forum. But I have been fortunate with my health so I haven't really ever spent any money on healthcare. I mean I don't mind paying double for the collective good of society but seven times with a deductible sounds a little penal to me. I am glad this wont take effect for a few years so I will have a chance to stay rational about this, and not just go the penalty route.

 

[Katsmeow]

Katsmeow -

It seems to me that retiree health care plans from megacorps (vs gov't employee) were never guaranteed. .....

I guess my point is - PPACA will give you options when your husbands employer stops covering retirees... but most employers seem to be dumping retiree health care anyway since it's not mandated/protected by ERISA.

I agree it was never guaranteed but the way DH's former employer has handled it is to pull back on coverage and subsidies for newer employees but leave it in place for current employees. The company caps how much of increases in premium it will pay.

That said we are paying under $3500 a year for family coverage which I do realize is subsidized. We do have an in network deductible of $3000.

Looking at the calculator that Purron suggested this indicates that Family Coverage is a little over $19000 a year. I currently work part time. If I plug in our income with me working part time and DH receiving SS we would get no subsidy....

Now, by 2014 we will not need coverage for DH as he will be on medicare so perhaps it will be less.

 

[samclem]

Wow, some of you folks get really good deals. I assume these must be highly subsidized by your employers unlike those of us Federal employees and your elected Federal representatives in the House and Senate. .

Donheff, it looks like Mulligan's insurance is an unsubsidized individual plan. I think he's just healthy and lives in a place with low medical care costs. His premiums under PPACA will be subsidizing those who are unhealthy and choose to live in costlier places.

Does this mean that will I will have to take one of the types suggested as being through the Kaiser link, or will there still be options available that might have a less expensive premium.

The premiums that show up on the calculator are for the silver plan (70% actuarial value). The Bronze plan would be slightly cheaper (it has a 60% actuarial value). I don't know of anything cheaper than the Bronze plan that meets the PPACA requirements.

As some will recall, the law allows folks to claim that their religion objects to this collective government healthcare approach, and if their claim to be a member of an acceptable religion is found acceptable to the government then they won't have to pay the new tax. I'd guess members of this religion could band together and establish their own collective insurance plan/collective health care arrangement. They wouldn't get the subsidies, but I'd guess they'd be free of a lot of government requirements that drive up insurance costs. I'd bet they'd set up monthly religious pilgrimages to cities in other countries with low-cost, high-quality health care services. Charter flights to cut costs. I see a business opportunity. And some court battles.

 

[M Paquette]

Wow! I sure wish I didn't hit that link. My yearly premium would go from under $875 a year to over $5100 a year. I don't think the term affordable care act is applicable to me thats for sure. I sure hope my grandfathered policy holds strong somehow for at least 10 years.

The Kaiser Family site calculator is using a nationwide average for a premium buying what they consider to be a typical plan, similar to what many people have through their employer, or roughly, the Silver plan with 70% actuarial value (plan covers roughly 70% of typical medical expenses; w wide variation in copay and max out of pocket is permitted as long as the end result is at the actuarial target.)

I think most of the high deductible HSA accounts we ER folks tend to go for are Bronze (60% actuarial value or lower), as we are the rare sort of folks who understand that paying out of pocket for routine costs, and using insurance only for catastrophic care generally has the best cost/benefit outcome for folks in good health.

The calculator cost isn't too far off for something like a $1500 deductible/$3000 max out of pocket HSA eligible plan in the Western Region, for example.

 

[Mulligan]

Donheff, it looks like Mulligan's insurance is an unsubsidized individual plan. I think he's just healthy and lives in a place with low medical care costs. His premiums under PPACA will be subsidizing those who are unhealthy and choose to live in costlier places.

The premiums that show up on the calculator are for the silver plan (70% actuarial value). The Bronze plan would be slightly cheaper (it has a 60% actuarial value). I don't know of anything cheaper than the Bronze plan that meets the PPACA requirements.

As some will recall, the law allows folks to claim that their religion objects to this collective government healthcare approach, and if their claim to be a member of an acceptable religion is found acceptable to the government then they won't have to pay the new tax. I'd guess members of this religion could band together and establish their own collective insurance plan/collective health care arrangement. They wouldn't get the subsidies, but I'd guess they'd be free of a lot of government requirements that drive up insurance costs. I'd bet they'd set up monthly religious pilgrimages to cities in other countries with low-cost, high-quality health care services. Charter flights to cut costs. I see a business opportunity. And some court battles.

Sam, they would arrest me on fraud on your religious idea, as they would provide video proof my car never leaves the driveway on Sunday

 

[Mulligan]

The Kaiser Family site calculator is using a nationwide average for a premium buying what they consider to be a typical plan, similar to what many people have through their employer, or roughly, the Silver plan with 70% actuarial value (plan covers roughly 70% of typical medical expenses; w wide variation in copay and max out of pocket is permitted as long as the end result is at the actuarial target.)

I think most of the high deductible HSA accounts we ER folks tend to go for are Bronze (60% actuarial value or lower), as we are the rare sort of folks who understand that paying out of pocket for routine costs, and using insurance only for catastrophic care generally has the best cost/benefit outcome for folks in good health.

The calculator cost isn't too far off for something like a $1500 deductible/$3000 max out of pocket HSA eligible plan in the Western Region, for example.

So there is hope for me that my premium wouldn't be as much as the link suggested then? There has to be other people like me who are faced with rate shock, maybe not though. I am certainly happy for the people who have been shut out from buying affordable insurance, but this will be unchartered territory for me. Heck, my premium is actually $1 less a month than it was 2 years ago when I got on the plan. This is going to take some time for me to absorb this!

 

[samclem]

Sam, they would arrest me on fraud on your religious idea, as they would provide video proof my car never leaves the driveway on Sunday

Services are held online. It's very informal. Wait until you see the "sacred text."

Waiting for the lightning bolt . . .

 

[donheff]

Wow, some of you folks get really good deals. I assume these must be highly subsidized by your employers unlike those of us Federal employees and your elected Federal representatives in the House and Senate. I am in the allegedly gold-plated Federal Health Benefits Program and selected one of the more inexpensive standard option plans yet my out of pocket for a family plan is $2400/year. Or do you folks with low payments get lousy benefits? In that case, Obamacare is admittedly pushing you to higher benefits.

I haven't seen on this thread whether high deductible plans like yours will be permitted under PPACA. If not, you will pay a lot more. If they are allowed, you will probably be able to get a low cost plan (albeit with some other features like no $7M cap) -- no reason why your carrier couldn't offer one.

 

[MBAustin]

I'm paying over $4K/year for my "subsidized" retiree plan - there is only one plan, no choice at all. It is far more insurance than I need - I would much prefer a higher deductible policy with a lower premium and self-insure the high deductible out of the savings. So I'm hopeful that the combination of exchanges giving options plus the removal of pre-existing condition limitations will make it feasible for me to switch after 2014.

 

[Katsmeow]

Well even if the calculator is a silver plan and a bronze plan is 10% cheaper than would seem to cut the premium from over $19000 to around $17000 a year which compares to paying a little under $3500 a year now.... I'm hoping that it won't actually shake out that expensive...

 

[MichaelB]

A few things to keep in mind regarding the calculator and plan offerings

- The bronze plan is equivalent to the current HSA in terms deductibles and of out of pocket.

- There is an additional catastrophic coverage only option for people 30 years and younger.

- When looking at current rates and comparing them to the calculator keep in mind that our rates change age bracket every 5 years, so someone who is 39 would actually be facing a much higher rate in 2014 even in their current plan.

Our rates are about the same today as shown by the calculator. Our coverage is HSA (=bronze) so they probably would be 10% less (i think) and I will be moving into a new age bracket (sigh) which adds $600 to the cost estimate.

 

[Mulligan]

I haven't seen on this thread whether high deductible plans like yours will be permitted under PPACA. If not, you will pay a lot more. If they are allowed, you will probably be able to get a low cost plan (albeit with some other features like no $7M cap) -- no reason why your carrier couldn't offer one.

My only hope is maybe the carrier would like to keep some policies in their portfolio that doesn't have unlimited expense exposure. I will be willing to call them up and beg them to charge me double in lieu of them dropping the policy and having to pick one of those color packages. Right now the only color Im seeing out of these options is red!