High Deductible Health Plans & Retirement

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LuigiLikesPizza
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High Deductible Health Plans & Retirement

Post by LuigiLikesPizza » Sun Aug 12, 2018 4:29 pm

I'm planning to retire in the second half of 2019, so I am looking ahead and making plans.

I have been using a HDHP with an HSA, but wondering if, for 2019, I should consider going with a traditional lower deductible plan.

The reason for this is that I plan to have extensive health screenings prior to retirement, while still using the employee health benefits and it seems that my overall health expenses will be greater in 2019 and even more so, if the screenings or checkups result in further tests, treatments, etc.

Just wondering how others handled any health care related issues prior to that final end of employment?

Thank you.

47Percent
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Re: High Deductible Health Plans & Retirement

Post by 47Percent » Sun Aug 12, 2018 6:11 pm

When I hear about Cadillac health insurance plans, I am only reminded of the poor folks who end up driving (old) Cadillacs for whatever reason, but end up paying a ton in operating costs.

Unless your company is subsidizing your non HDHP plan heavily, it won't make economic sense. From the fact that you are in HDHP now looks like that is not the case. If you are in fact getting HSA pre-tax topline reduction in income, it would be very unlikely that a non HSA plan would make overall economic sense.

Your mmv.
Last edited by 47Percent on Sun Aug 12, 2018 6:54 pm, edited 1 time in total.

livesoft
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Re: High Deductible Health Plans & Retirement

Post by livesoft » Sun Aug 12, 2018 6:33 pm

Only one procedure or E.R. visit is all that one needs to hit their deductible, so that means the 2nd, 3rd, 4th, ... procedures are essentially free.
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InMyDreams
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Re: High Deductible Health Plans & Retirement

Post by InMyDreams » Sun Aug 12, 2018 9:00 pm

LuigiLikesPizza wrote:
Sun Aug 12, 2018 4:29 pm
... I plan to have extensive health screenings prior to retirement
Depending on the screening, it may still be covered under an HDHP plan without meeting deductible.
"All Marketplace health plans and many other plans must cover the following list of preventive services without charging you a copayment or coinsurance. This is true even if you haven’t met your yearly deductible"
https://www.healthcare.gov/preventive-care-adults/

There can be a real gotcha with colonoscopies, tho. You may go in thinking you are doing a screening, and sometimes it becomes diagnostic...

HereToLearn
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Re: High Deductible Health Plans & Retirement

Post by HereToLearn » Sun Aug 12, 2018 11:10 pm

I agree with your inclination to move to a lower deductible plan. The doctors may identify problems that require additional testing and it is amazing how quickly CT scans and skin biopsies add up.

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FiveK
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Re: High Deductible Health Plans & Retirement

Post by FiveK » Mon Aug 13, 2018 12:44 am

LuigiLikesPizza wrote:
Sun Aug 12, 2018 4:29 pm
I have been using a HDHP with an HSA, but wondering if, for 2019, I should consider going with a traditional lower deductible plan.
Depends on the specific terms of your alternative, and perhaps on your expected total medical expenses.

Might be worth putting your numbers into a couple of comparison tools, e.g., Health Savings Account (HSA) vs. Traditional Health Plan and the 'HDHP Analysis' tab of the personal finance toolbox spreadsheet.

MikeG62
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Re: High Deductible Health Plans & Retirement

Post by MikeG62 » Mon Aug 13, 2018 7:18 am

livesoft wrote:
Sun Aug 12, 2018 6:33 pm
Only one procedure or E.R. visit is all that one needs to hit their deductible, so that means the 2nd, 3rd, 4th, ... procedures are essentially free.
I wish my health insurance were this good (from a cost sharing perspective). Once I hit my deductible, my cost share is 50 cents on the dollar until I hit the out-of-pocket maximum. I have a bronze level plan (BCBS of NJ).
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livesoft
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Re: High Deductible Health Plans & Retirement

Post by livesoft » Mon Aug 13, 2018 9:56 am

Our family out-of-pocket max is only slightly higher than the individual high deductible, so for us it was easy to meet the deductible and the OOP in the sense that one only had to be really sick just one time, but not in the sense of finding cash to pay them. OTOH, all the providers were able to set up 0% interest payment plans.
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FIREchief
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Re: High Deductible Health Plans & Retirement

Post by FIREchief » Mon Aug 13, 2018 12:00 pm

Keep in mind that some (most?) employers may only offer COBRA coverage to continue the plan you are in upon retirement. If you are in an HMO plan and want 18 months of coverage, you may be stuck paying much higher COBRA premiums than if you are in an HDHP. Check with your benefits staff. Mine were (and remain) largely incompetent and it is possible to call three times and get three different answers. Good luck!
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JBTX
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Re: High Deductible Health Plans & Retirement

Post by JBTX » Mon Aug 13, 2018 5:55 pm

It depends on the specific plans and how you plan to insure yourself in retirement.

I have seen some plans were the HDHP was almost a no brainer, where the savings in premiums was more than the additional out of pocket cost. I have seen others where the HDHP premiums are only modestly cheaper.

Also, when you retire, are you going on cobra or on a separate private policy? If on cobra your deductibles will carry over into cobra.

If you are retiring mid-year, and you are not doing cobra, I'd agree that going lower deductible probably makes sense. Otherwise with an HDHP you still have a full year deductible and out of pocket but only 6 months of HDHP lower premiums.

If you plan on cobra you should find out the full cost of both plans to compare how much you will save with HDHP on premiums vs estimated additional out of pocket expenses.

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Artful Dodger
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Re: High Deductible Health Plans & Retirement

Post by Artful Dodger » Mon Aug 13, 2018 6:53 pm

JBTX wrote:
Mon Aug 13, 2018 5:55 pm
It depends on the specific plans and how you plan to insure yourself in retirement.

I have seen some plans were the HDHP was almost a no brainer, where the savings in premiums was more than the additional out of pocket cost. I have seen others where the HDHP premiums are only modestly cheaper.

Also, when you retire, are you going on cobra or on a separate private policy? If on cobra your deductibles will carry over into cobra.

If you are retiring mid-year, and you are not doing cobra, I'd agree that going lower deductible probably makes sense. Otherwise with an HDHP you still have a full year deductible and out of pocket but only 6 months of HDHP lower premiums.

If you plan on cobra you should find out the full cost of both plans to compare how much you will save with HDHP on premiums vs estimated additional out of pocket expenses.
I agree with this.

You haven't really posted enough info on your options. When insurance companies develop rates for plans, they look at the pool of claims incurred by the individuals enrolled. Their goal is to set a premium that will cover their exposure for each plan. A high deductible plan will have more risk transferred to the enrolled member, therefore it generates a lower rate. Plans with lower deductibles and rich first dollar benefits (office, ER, prescription copays) leave more risk with the insurer and will require a higher rate. Assuming there is no employer HSA contribution, no employer premium subsidy, and tax consequences are minimal, there should be no difference to the "average" enrollee which plan he takes. I will add there is some evidence that high deductible plans have a slightly lower loss ratio due to some members skipping or foregoing care due to the higher deductibles, and that may be reflected in the rates. Most of the hoped for savings due to "consumer driven healthcare" never materialized, and rate credits have pretty much been baked out of the process.

You need to put together a comparison of the two options you are considering to include -
Deductible
Coinsurance
Out of pocket limit
For the traditional plan include the above, and include any copayments (office visits, outpatient testing, inpatient admission, ER, Prescription drugs, etc)

Put together a list of expected medical care based on past history, and then add a cost for the other expected procedures you mentioned in your post.

For each plan, make a list of what your share will be for these medical costs. Ie. In the HDHP plan, what will be your deductible, coinsurance, and likely out of pocket. Do the same for the traditional plan. Add to each plan, your cost for the premiums. Finally, for the HDHP plan, add an expected tax savings for your HSA contribution. Since you'll be retired, I'm assuming no employer HSA contribution. This should give you a better idea of what to expect.

3feetpete
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Re: High Deductible Health Plans & Retirement

Post by 3feetpete » Mon Aug 13, 2018 8:09 pm

If you are going to be on medicare, consider plan B covers 80% of the cost with only a nominal deductible. The supplemental plans cover only the remaining 20%. For me the high deductible plan F saves $1,000 in premiums. I would have to incur over $5,000 in medical expenses in order for my out of pocket to be over the $1,000 I save by using a high deductible plan F.

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