[Retiring before 65: How do you deal with health insurance?]

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rgs
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[Retiring before 65: How do you deal with health insurance?]

Post by rgs »

[Moved into a new thread from: Anyone disenchanted with retirement? --admin LadyGeek]

For the folks that retire before 65, how do you deal with health insurance? Do you have retiree benefits (I doubt this unless part of a union) or do you go with ACA market place or something else? If ACA, what is the rough monthly cost in premiums? Thanks
MathWizard
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by MathWizard »

Relatives have used Cobra to retire at 63.5.

I can stay on my employer's group HMO policy if I pay full freight. That is a bit over $1500/month for me and my spouse.

I'm not yet retired, but am getting ready to.
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bengal22
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by bengal22 »

First I used cobra combined with HCTC
Then when HCTC was mothballed I used ACA.
Then when HCTC was unmothballed I used HCTC again

I also worked 6 month special assignment out of country to build up cash reserve so I could keep income down for ACA.
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averagedude
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by averagedude »

If you are a married couple and you can keep your MAGI under $65000, your premiums may be 0 under the affordable care act. You may be able to keep your MAGI low if you are frugal, have no debts, and have money in ROTH accounts to withdraw from. This is our plan, although govermment changes in ACA could cause us to develop another plan.
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munemaker
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by munemaker »

rgs wrote: Sun Mar 24, 2019 7:37 pm [Moved into a new thread from: Anyone disenchanted with retirement? --admin LadyGeek]

For the folks that retire before 65, how do you deal with health insurance?
One word: ObamaCare
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telemark
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by telemark »

The cost for ACA plans is going to depend on where you live, but you can browse current plans in your area at the healthcare.gov site without needing to create an account. I'm paying about $600/month for a bronze plan, and the ACA subsidy covers most of that.
SteveinVanvcouverWA
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by SteveinVanvcouverWA »

I recommend a Direct Primary Care (DPC) practice. Direct Primary Care is a membership in which you get virtually unlimited access to a primary care physician for an affordable monthly fee, typically $50-100 per month. DPC practices typically include deeply discounted meds and labs as well as imaging studies. Find a DPC practice hear you:
https://mapper.dpcfrontier.com

I recommend you combine the DPC membership with a health sharing ministry, an alternative to health insurance in which individuals band together to pay each others' health bills. These are a safety net for the bigger ticket items such as hospitalization, cancer treatment and surgery. Here is a comparison of the options:
http://ochnahealth.com/health-cost-sharing-2019/
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by catdude »

I retired at 55 from a large local government, and I get health insurance coverage thru my ex-employer. When I was working, I paid 20% of the premium; now that I'm retired, I pay 30%, which is fair IMO.

I'm the first to admit that I'm a lucky dog.
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ag1
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by ag1 »

I have a question about ACA. It might be unique to new York but probably not.
When I check ACA options I see bronze level plans with pricing for my family ( two adults, 3 kids) ranging from 2100 us to 3500 with seemingly no difference in coverage. They are all bronze. Why does this happen? Is the difference in doctor network so much to justify the price gap.
Is there a good answer or a place to do any research on this?


Cheers
Retired2013
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by Retired2013 »

ag1 wrote: Mon Mar 25, 2019 6:48 am I have a question about ACA. It might be unique to new York but probably not.
When I check ACA options I see bronze level plans with pricing for my family ( two adults, 3 kids) ranging from 2100 us to 3500 with seemingly no difference in coverage. They are all bronze. Why does this happen? Is the difference in doctor network so much to justify the price gap.
Is there a good answer or a place to do any research on this?


Cheers
In NY, for a family of 5, Federal Poverty Level (FPL) is $30,170. If you can keep your MAGI between 138% - 200% of FPL ($41,635 - $60,340) you would then be put on the NYS Essential Plan. No ACA plan. Premiums between 138% - 150% FPL is $0.00, no deductibles or copays. Between 150% - 200% FPL you pay $20 per month per person, no deductible and a small co-pay.

Can you then pull extra money from a Roth account or savings account?
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by scrabbler1 »

I retired 10 years ago at age 45. I have been on the individual market for the last 10 years, the last 5 on an ACA silver plan. After barely qualifying for a small premium subsidy from 2014-2016, I went over the subsidy cliff in 2017 and 2018. The lost subsidy has been growing in 2017 and 2018, from a few hundred dollars annually to nearly $2,000 in 2019, if I go over the cliff again. Going over the cliff the last 2 years has cost me any advance premium subsidy, so I am paying the full amount this year, $647 per month.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by randomguy »

ag1 wrote: Mon Mar 25, 2019 6:48 am I have a question about ACA. It might be unique to new York but probably not.
When I check ACA options I see bronze level plans with pricing for my family ( two adults, 3 kids) ranging from 2100 us to 3500 with seemingly no difference in coverage. They are all bronze. Why does this happen? Is the difference in doctor network so much to justify the price gap.
Is there a good answer or a place to do any research on this?


Cheers
I am guessing some are an HMO while others are EPO/PPOs along with the differences in Dr networks and drug lists. You have to read the plan docs to learn all the differences.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by MikeG62 »

rgs wrote: Sun Mar 24, 2019 7:37 pm [Moved into a new thread from: Anyone disenchanted with retirement? --admin LadyGeek]

For the folks that retire before 65, how do you deal with health insurance? Do you have retiree benefits (I doubt this unless part of a union) or do you go with ACA market place or something else? If ACA, what is the rough monthly cost in premiums? Thanks
Early retired three years ago (I was 53 and DW was 51). First year we elected COBRA. After that we have been buying insurance in the marketplace. We do not qualify for subsidies so we buy directly from BCBS (of NJ) - I see no need to stick a middleman in between us and BCBS if no savings. Rates are identical to what we would pay had we obtained the same coverage through the ACA.

Last year (2018) premiums increased a lot (like almost 25%). They offered a host of (what seemed like) one-off reasons for it. We split our coverage in 2018 - DW continued with silver level plan (cost is ~$750/mo) and I chose to move to a bronze level HSA (cost ~$665/mo) - she goes to the doc's much more than me. My dropping from silver to bronze HSA saved me about $165 per month (and offset about 1/2 of the ~25% increase). Rates for our plans actually decreased in 2019 (around 7.5%) in 2019 - due to some changes lawmakers instituted in NJ. This reduction is being offset by ~2/3rds due to the fact that we are one year older (so higher age factor).

I budget OOP's at $500 per month. For 2016 and 2017 we came in well below this level. In 2018 we were over it (due to what I hope are one-off things).

Hope this helps.

It is what it is - it's expensive and a real unknown in term of the annual increases. My advice is to make sure your budget has plenty of buffer (pad) to cover higher costs going forward (at least until you are medicare eligible).
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by michaeljc70 »

MikeG62 wrote: Mon Mar 25, 2019 8:45 am
rgs wrote: Sun Mar 24, 2019 7:37 pm [Moved into a new thread from: Anyone disenchanted with retirement? --admin LadyGeek]

For the folks that retire before 65, how do you deal with health insurance? Do you have retiree benefits (I doubt this unless part of a union) or do you go with ACA market place or something else? If ACA, what is the rough monthly cost in premiums? Thanks
Early retired three years ago (I was 53 and DW was 51). First year we elected COBRA. After that we have been buying insurance in the marketplace. We do not qualify for subsidies so we buy directly from BCBS (of NJ) - I see no need to stick a middleman in between us and BCBS if no savings. Rates are identical to what we would pay had we obtained the same coverage through the ACA.
I don't know that I'd call the exchange a middleman as they make no money off the policy. The exchange is more of a gatekeeper for subsidies and referral service for plans. If there is no way you will get a subsidy, then I don't blame you for going directly to the insurer. However, one year I did that and my income was way lower than expected and I couldn't get the subsidy.
cyclist
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by cyclist »

Just retired at 62, DW is 61, and just signed up for ACA.
By keeping our MAGI under 400% of poverty ($65.8k) we are eligible for over $1,300/month in subsidies.

We opted for the most expensive HMO plan, which was about half the cost of continuing our existing coverage under COBRA after the subsidies.

Be SURE that you won’t go over the cliff, though, or you lose all of the subsidy at once.

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Re: [Retiring before 65: How do you deal with health insurance?]

Post by susa »

We eliminated all income (MFJ over 60) and convert about 20k annually from IRA to Roth IRA.

Selected Blue Cross Silver Plan and pay $31/mo for 2 persons.

Have done this for several years now and plan to continue until Medicare. We also use annual blood testing promotions (ie. LEF) and stack these with credit card rebates (ie. AMEX) and as an example, had over $3k in lab testing (Blue Cross rates) but paid ourselves (not reported to insurance) out of pocket less than $300 (of which AMEX rebated $75) and then used the 7 page comprehensive report for our annual visit, handed it over to doctor who scheduled no-fee follow-up lab work from Quest Labs
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by MikeG62 »

michaeljc70 wrote: Mon Mar 25, 2019 9:08 am
MikeG62 wrote: Mon Mar 25, 2019 8:45 am
rgs wrote: Sun Mar 24, 2019 7:37 pm [Moved into a new thread from: Anyone disenchanted with retirement? --admin LadyGeek]

For the folks that retire before 65, how do you deal with health insurance? Do you have retiree benefits (I doubt this unless part of a union) or do you go with ACA market place or something else? If ACA, what is the rough monthly cost in premiums? Thanks
Early retired three years ago (I was 53 and DW was 51). First year we elected COBRA. After that we have been buying insurance in the marketplace. We do not qualify for subsidies so we buy directly from BCBS (of NJ) - I see no need to stick a middleman in between us and BCBS if no savings. Rates are identical to what we would pay had we obtained the same coverage through the ACA.
I don't know that I'd call the exchange a middleman as they make no money off the policy. The exchange is more of a gatekeeper for subsidies and referral service for plans. If there is no way you will get a subsidy, then I don't blame you for going directly to the insurer. However, one year I did that and my income was way lower than expected and I couldn't get the subsidy.
Fair enough. However, it is still another party between me and the insurer. If no benefit received why take the risk of things somehow getting screwed up (as you are introducing another touch point (set of hands) in the process). Also, I discovered this year in talking to BCBS that I could only auto renew if buying the insurance directly from them. If I went through the exchange, I'd have to re-enroll every year. Not saying that is a ton of work, but no work by contracting directly is better than some work by dealing with the ACA. Lastly, for us our Muni bond income alone places us at the max for the subsidy. Then when adding dividends on equities and interest on treasuries and MMF's (not to mention Roth conversions) there is zero chance of us qualifying for the subsidy. I recognize that everyones situation is different, but one needs to realistically evaluate whether they can qualify for the subsidy before defaulting to enrolling through the ACA website and whether doing things to stay below the threshold (assuming they are) is in their best interest (i.e., if it means passing on things like Roth conversions for example).
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JTColton
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by JTColton »

In exchange for a modest contribution of 20 years of service to Uncle Sam I'll have zero deductible full coverage HC for my entire family for $595/yr starting at 38.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by vtMaps »

We had a few years of Obamacare before we were both on Medicare. We decided to keep our AGI in the low $30k range in order to have large premium subsidies and very generous cost sharing reductions.

Our lifestyle exceeded our $30k AGI income, so we spent down our emergency fund for a couple of years. The last two years before Medicare we went into debt, rather than raise our income by taking IRA distributions. It was all 0% car financing and credit card debt. We paid off all of our debt as soon as we were both on Medicare... took IRA distributions to the top of the 12% bracket.

Compared to Obamacare, Medicare is more expensive for us. Of course, the only reason Obamacare was so inexpensive is because we were living beyond our means :oops:

Actually, that's not really true, we were living beyond our income. We had the means (IRA savings) to afford our lifestyle, but it didn't make sense to tap that means until after we were on Medicare.

--vtMaps
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J295
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by J295 »

Affordable care act bronze plan for early retirees husband and wife

Last year the net out-of-pocket premium for a $24,000 annual premium policy was $0 due to premium tax credit. Keep modified adjusted income below approximately $65,000
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by FelixTheCat »

I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by mariezzz »

randomguy wrote: Mon Mar 25, 2019 7:41 am
ag1 wrote: Mon Mar 25, 2019 6:48 am I have a question about ACA. It might be unique to new York but probably not.
When I check ACA options I see bronze level plans with pricing for my family ( two adults, 3 kids) ranging from 2100 us to 3500 with seemingly no difference in coverage. They are all bronze. Why does this happen? Is the difference in doctor network so much to justify the price gap.
Is there a good answer or a place to do any research on this?


Cheers
I am guessing some are an HMO while others are EPO/PPOs along with the differences in Dr networks and drug lists. You have to read the plan docs to learn all the differences.
Plus differences in deductibles, coinsurance, copays for visits, lab tests, specialists, ER, facility fees, etc. etc.
For prescriptions: differences in pharmacy formulary, what you pay toward prescription drugs at each tier, whether you have to meet a pharmacy-specific deductible, and so on.

Of course, each state has its own laws as well that may apply.
You have to read each contract carefully (100+ pages) for each plan in order to even begin to understand what the differences between them are.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by mariezzz »

FelixTheCat wrote: Mon Mar 25, 2019 12:44 pm I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
Just do a search - I've seen threads on bogleheads which have discussed this.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by mariezzz »

JTColton wrote: Mon Mar 25, 2019 12:17 pm In exchange for a modest contribution of 20 years of service to Uncle Sam I'll have zero deductible full coverage HC for my entire family for $595/yr starting at 38.
Unless that changes.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by GerryL »

randomguy wrote: Mon Mar 25, 2019 7:41 am
ag1 wrote: Mon Mar 25, 2019 6:48 am I have a question about ACA. It might be unique to new York but probably not.
When I check ACA options I see bronze level plans with pricing for my family ( two adults, 3 kids) ranging from 2100 us to 3500 with seemingly no difference in coverage. They are all bronze. Why does this happen? Is the difference in doctor network so much to justify the price gap.
Is there a good answer or a place to do any research on this?


Cheers
I am guessing some are an HMO while others are EPO/PPOs along with the differences in Dr networks and drug lists. You have to read the plan docs to learn all the differences.
When you get past 65, if you decide to go with traditional Medicare and start shopping for a Medigap supplement, you will find that the prices of the plans in the same tier (i.e., letter) vary widely, even though they are required to offer the same coverage. Nothing to explain the difference except what the company thinks it can charge and make a profit -- or more profit.
Retired2013
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by Retired2013 »

FelixTheCat wrote: Mon Mar 25, 2019 12:44 pm I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
In general, google the "Federal Poverty Level" (FPL) for the year. The amounts change every year.

For 2019, a family size of 2, the FPL is $16,910. You can get a subsidy if your MAGI is below 400%. $16,910 x 400% = $67,640.
In general, if your income is below 138% of FPL ($16,910 x 138% = $23,336) as a couple, then you could be on Medicaid.

So for a family size of 1, FPL is $12,490. $12,490 x 400% = $49,960. $12,490 x 138% = $17,236. The closer you get to the $17,236 MAGI, the larger your subsidy. Your best deal is usually between the 138% - 200% FPL for your family size.
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Spinola
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by Spinola »

Cobra, or retire to Canada, or a European country..
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by seed4great »

FelixTheCat wrote: Mon Mar 25, 2019 12:44 pm I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
This is for a couple. MAGI for maximum subsidy you get as a single would be around $20K, but $30K would be still reasonable.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by RickBoglehead »

As noted, you can use COBRA for 18 months.

We have elected to delay our retirement to 2 years from now when DW qualifies for medical benefits from the state due to being employed in the teaching profession. Those benefits are superior to any we could purchase on our own, and we expect to pay $18,000 a year for 2, then $11,000 a year for one on Medicare and one pre-Medicare, then $6,000 a year for both on Medicare.

Hadn't planned on making ten years, but when she got to 8 we can't see her leaving before getting this benefit. Difference between leaving now and in 2 years is roughly $200k PV over the next 25.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by seed4great »

Spinola wrote: Mon Mar 25, 2019 1:43 pm Cobra, or retire to Canada, or a European country..
In Canada, there will be Canadian tax which is higher than US (you pay the highest one, according to the double taxation treaty). The only European country which does not impose tax on non-EU citizens for 10 years is Portugal.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by RickBoglehead »

vtMaps wrote: Mon Mar 25, 2019 12:21 pm We had a few years of Obamacare before we were both on Medicare. We decided to keep our AGI in the low $30k range in order to have large premium subsidies and very generous cost sharing reductions.

Our lifestyle exceeded our $30k AGI income, so we spent down our emergency fund for a couple of years. The last two years before Medicare we went into debt, rather than raise our income by taking IRA distributions. It was all 0% car financing and credit card debt. We paid off all of our debt as soon as we were both on Medicare... took IRA distributions to the top of the 12% bracket.

Compared to Obamacare, Medicare is more expensive for us. Of course, the only reason Obamacare was so inexpensive is because we were living beyond our means :oops:

Actually, that's not really true, we were living beyond our income. We had the means (IRA savings) to afford our lifestyle, but it didn't make sense to tap that means until after we were on Medicare.

--vtMaps
I would love to see that math someday. So going into debt (ignore the zero percent car loan) with credit cards for some period saved you enough money by getting subsidized on Obamacare that you came out ahead? Wow.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by randomguy »

FelixTheCat wrote: Mon Mar 25, 2019 12:44 pm I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
Income and spending are only loosely related. Sell a 100k of stock with 75k cost basis and you can spend 100k with 25k of income. Bonds and Roth work similiarly
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by JackoC »

randomguy wrote: Mon Mar 25, 2019 3:56 pm
FelixTheCat wrote: Mon Mar 25, 2019 12:44 pm I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
Income and spending are only loosely related. Sell a 100k of stock with 75k cost basis and you can spend 100k with 25k of income. Bonds and Roth work similiarly
True and by same token if you just have enough assets, including dividends from appreciated stock in taxable accounts which would just generate taxable capital gains if you moved the money into something else, there's no way to keep income under the ACA cliff regardless of how little you spend.

Tactical nuances of keeping under the cliff are highly relevant for some people, but for us there was fortunately/unfortunately never any chance of getting premium subsidies. We were semi-(our cover story at least :happy ) retired before ACA and paid through the nose for health insurance post COBRA, and have continued to pay through the nose under the ACA. Again fortunately/unfortunately our state NJ had sky high private insurance rates pre ACA (guaranteed issue adverse selection death spiral) but they haven't increased as much as other states since the ACA. Now $1540 a month for couple approaching the max rate by age pre Medicare, high deductible (though that also means we can offset the cost a bit with HSA tax deduction).
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by vtMaps »

RickBoglehead wrote: Mon Mar 25, 2019 1:52 pm I would love to see that math someday. So going into debt (ignore the zero percent car loan) with credit cards for some period saved you enough money by getting subsidized on Obamacare that you came out ahead? Wow.
All the debt was 0%, including the credit card debt. I figure we saved at least $10k per year on health care by keeping our income so low. It's not just the premiums we saved on... the cost sharing reductions made the copays and deductibles negligible.

The down side of our strategy was that we gave up space in the 15% (now 12%) tax bracket where we could have done Roth conversions.

--vtMaps
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rk6
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by rk6 »

MikeG62 wrote: Mon Mar 25, 2019 8:45 am
Early retired three years ago (I was 53 and DW was 51). First year we elected COBRA. After that we have been buying insurance in the marketplace. We do not qualify for subsidies so we buy directly from BCBS (of NJ) - I see no need to stick a middleman in between us and BCBS if no savings. Rates are identical to what we would pay had we obtained the same coverage through the ACA.
Hi MikeG62 - I am in central Jersey and am an early retiree also - can I ask why you did COBRA first (ACA not mature yet?) and then why you went with BCBS instead of Amerihealth?

I am early 50s, and am comparing COBRA with UHC at $660 (for "silver") equivalent vs BCBG at $520 ("bronze") vs Amerihealth at $420 ("bronze"). My preferred HC provider is BCBG Tier 1, but I am an overall infrequent user of health services, just annual checkups and flu shots etc. The coverage is for myself only, DW has other arrangements.

Retiree insurance from my Megacorp employer (24 years) is about $1100/month, for the equivalent of UHC Silver.

Thanks
Last edited by rk6 on Mon Mar 25, 2019 8:30 pm, edited 1 time in total.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by MikeG62 »

rk6 wrote: Mon Mar 25, 2019 6:27 pm
MikeG62 wrote: Mon Mar 25, 2019 8:45 am
Early retired three years ago (I was 53 and DW was 51). First year we elected COBRA. After that we have been buying insurance in the marketplace. We do not qualify for subsidies so we buy directly from BCBS (of NJ) - I see no need to stick a middleman in between us and BCBS if no savings. Rates are identical to what we would pay had we obtained the same coverage through the ACA.
Hi MikeG - I am in central Jersey and am an early retiree also - can I ask why you did COBRA first (ACA not mature yet?) and then why you went with BCBS instead of Amerihealth?

I am early 50s, and am comparing COBRA with UHC at $660 (for "silver") equivalent vs BCBG at $520 ("bronze") vs Amerihealth at $420 ("bronze"). My preferred HC provider is BCBG Tier 1, but I am an overall infrequent user of health services, just annual checkups and flu shots etc. The coverage is for myself only, DW has other arrangements.

Retiree insurance from my Megacorp employer (24 years) is about $1100/month, for the equivalent of UHC Silver.

Thanks
Sure thing rk6.

I went with Cobra as the coverage I had with my old employer was quite good (it was a customized BCBS plan, far better than what I could get on the open market - although it was expensive). In addition, my wife and daughters (who were under my plan at the time) were set with their doctors and I was not looking to do anything which would cause them to look for new ones.

I left my employer in Feb of 2016, so COBRA was going to run out in August of 2017. This meant I was going to need to move away from COBRA at some point in 2017 regardless. In addition, my former employer changed their health insurance offering for 2017 - moved away from BCBS to a much less attractive offering. For those two reasons I decided to select a plan from those that were being offered to NJ residents. I used the ACA marketplace to identify insurers who were offering plans in NJ and compared them. I choose BCBS for several reasons. First, my wife had her doctors and all of them were in the network. So no changes for her. Switching to Amerihealth would have necessitated some changes. Second, I asked around (friends and employees in doctors offices) and no one had anything good to say about Amerihealth. Most feedback I heard was to stay away from them. So I am not surprised you are finding they are cheaper (sometimes you get what you pay for).

I deal directly with BCBS as I said in my prior post. I would not say I am thrilled with them, they are expensive (deductibles and co-pays and OOP’s) and I am not fond of the Tier structure. However, I think it’s the lesser of the evils for us.

Hope that helps provide some color.
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rk6
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by rk6 »

Thank you MikeG62 for taking the time to post such a detailed reply. The results of my research on the companies, along with the analysis steps I have gone through so far, mirror what you found/did. We do not have children and DW has coverage elsewhere so I only have myself to worry about.

I do plan to do part-time/short-period consulting gigs (IT work) which will most likely not include any benefits, so I don't want to bounce around from provider to provider during any given year, more for paperwork and hassle reasons than cost, and I anticipate having the same scenario as you where COBRA runs out in 18 months so I am thinking why not just go to ACA now.

If you had to do it over again now (meaning select a post-employment plan), but with the current prices and now more mature NJ marketplace in mind, and including knowledge of what Murphy is proposing for a state ACA exchange, even though that will take a year, would you still stop off at COBRA first, or would you go straight to BCBS?
Last edited by rk6 on Mon Mar 25, 2019 8:32 pm, edited 4 times in total.
G3VALD1G
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by G3VALD1G »

Self employed using liberty healthshare. Couldn't be happier. I know it's capped at a million, but most insurance are also capped in their own respective ways.
SlowlySaving
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by SlowlySaving »

Retired2013 wrote: Mon Mar 25, 2019 1:41 pm
FelixTheCat wrote: Mon Mar 25, 2019 12:44 pm I see people mentioning keeping their MAGI below 65K for couples. How did you figure it out? I'm single living in CA.
In general, google the "Federal Poverty Level" (FPL) for the year. The amounts change every year.

For 2019, a family size of 2, the FPL is $16,910. You can get a subsidy if your MAGI is below 400%. $16,910 x 400% = $67,640.
In general, if your income is below 138% of FPL ($16,910 x 138% = $23,336) as a couple, then you could be on Medicaid.

So for a family size of 1, FPL is $12,490. $12,490 x 400% = $49,960. $12,490 x 138% = $17,236. The closer you get to the $17,236 MAGI, the larger your subsidy. Your best deal is usually between the 138% - 200% FPL for your family size.
Great thread! Thanks to everyone who has contributed!
I am not officially retired but may need to look at these options once my wife retires in 5 years.
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Elric
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by Elric »

I always told my wife that she couldn't retire until she had enough years with the Federal government to qualify under their plans. She did that, but with retiring early, couldn't sign up for that health insurance until later this year (unless she also wanted a large pension hit). So we did COBRA for a year, now paying through the nose for an ACA plan, but in less than a year, will be back on the Federal employee program. Health insurance planning until then was something we made sure we had covered before choosing to retire early.
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sawhorse
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by sawhorse »

Spinola wrote: Mon Mar 25, 2019 1:43 pm Cobra, or retire to Canada, or a European country..
You are often not eligible to participate in their national health plan unless you have been living there for a period of time. Even if you are a Canadian citizen, if you haven't lived there for many years, you can't just move there for retirement and take part in their national health plan. There is also the problem of getting a visa if you don't plan to work there if you are not a citizen.
G3VALD1G wrote: Mon Mar 25, 2019 8:26 pm Self employed using liberty healthshare. Couldn't be happier. I know it's capped at a million, but most insurance are also capped in their own respective ways.
This wouldn't work for people with potentially expensive pre existing conditions - and pretty much all pre existing conditions are potentially expensive - as pre existing conditions are not covered for the first three years. Many people in their 60s have pre existing conditions.

In addition, Liberty Healthshare covers no mental health and only 45 days of prescription coverage for a new diagnosis, according to a chart linked above. After that, you are fully responsible for prescription costs. Prescriptions can easily cost thousands per month. In a recent trend, prescriptions that cost $30 today can cost $10k tomorrow. Getting them from Canada is an option if you live close to the border and/or have a common drug that you can order online. But even if you can order the drug online from Canada, it might not be feasible. In very hot or very cold months, it might not be an option due to temperature requirements for drugs. In addition, drugs like injectables in a vial can't be easily transported across the border.
MikeG62
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by MikeG62 »

rk6 wrote: Mon Mar 25, 2019 8:18 pm Thank you MikeG62 for taking the time to post such a detailed reply. The results of my research on the companies, along with the analysis steps I have gone through so far, mirror what you found/did. We do not have children and DW has coverage elsewhere so I only have myself to worry about.

I do plan to do part-time/short-period consulting gigs (IT work) which will most likely not include any benefits, so I don't want to bounce around from provider to provider during any given year, more for paperwork and hassle reasons than cost, and I anticipate having the same scenario as you where COBRA runs out in 18 months so I am thinking why not just go to ACA now.

If you had to do it over again now (meaning select a post-employment plan), but with the current prices and now more mature NJ marketplace in mind, and including knowledge of what Murphy is proposing for a state ACA exchange, even though that will take a year, would you still stop off at COBRA first, or would you go straight to BCBS?
rk6, presented with the same COBRA coverage I had back in 2016, I do not believe I would have made a different choice if making that decision today. As I said, we had a Cadillac plan of sorts with broader/better coverage than what is available now under the ACA. The premium under COBRA was around $2,100 per month (DW, me and two children). Today we are paying premiums of about $1,400 (with no dental) for just two people. Only advantage to my current plan is that I have opened an HSA as I have the bronze high deductible plan for myself (DW has the traditional silver plan). So I am saving ~$4,500 per year in an HSA (I now have with Fidelity).

If you are going to consult, then you may well be able to deduct (above the line) your self-employed health insurance premiums. There has been debate on these forums as to whether COBRA premiums qualify for that above the line deduction. See here for more background on that:

viewtopic.php?f=2&t=272323&p=4369864&hi ... A#p4369864

I for one believe it does, but a plan in your name should have a zero risk of disallowance with the IRS.
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Cheyenne
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by Cheyenne »

We used the ACA up until we reached age 65 two years ago. We were fortunate that the premiums were still affordable then.
rk6
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by rk6 »

MikeG62 wrote: Tue Mar 26, 2019 6:53 am
rk6, presented with the same COBRA coverage I had back in 2016, I do not believe I would have made a different choice if making that decision today. As I said, we had a Cadillac plan of sorts with broader/better coverage than what is available now under the ACA. The premium under COBRA was around $2,100 per month (DW, me and two children). Today we are paying premiums of about $1,400 (with no dental) for just two people. Only advantage to my current plan is that I have opened an HSA as I have the bronze high deductible plan for myself (DW has the traditional silver plan). So I am saving ~$4,500 per year in an HSA (I now have with Fidelity).
Thanks again MikeG62 for the extremely useful information and taking the time to reply.

Regards
protagonist
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by protagonist »

If you are in a position where you can minimize your income (index funds, tax-deferred bonds, etc), you might be able to qualify for cheap health insurance. That may not be a wise financial decision, however....depends on your personal situation.

I retired at 55 and live in MA, so benefited from "Romneycare" prior to going on Medicare. Almost all of my income came from interest and capital gains distributions. I had a fair amount of tax deductions from depreciation of rental real estate which further reduced my income. I don't recall ever paying more than $100-150/month for "Romneycare" (which was, IMHO, superior to Medicare), and some years I didn't pay anything for it. I pay more for Medicare. I believe the ACA works the same way.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by Rudedog »

Just retired. Illinois has "spousal coverage", so my wife who is 59 can stay on my employer's COBRA until she qualifies for Medicare. I am 62 and a half, presently on COBRA, which will run out in June, 2020. On or before then I plan to get a plan using ACA for the year and a half until I can qualify for Medicare. See if your state requires "spousal coverage", several states do. Monthly premiums are about $ 1,550. Income currently too high for subsidy as wife still works.
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by JackoC »

MikeG62 wrote: Mon Mar 25, 2019 8:06 pm
rk6 wrote: Mon Mar 25, 2019 6:27 pm
MikeG62 wrote: Mon Mar 25, 2019 8:45 am
Early retired three years ago (I was 53 and DW was 51). First year we elected COBRA. After that we have been buying insurance in the marketplace. We do not qualify for subsidies so we buy directly from BCBS (of NJ) - I see no need to stick a middleman in between us and BCBS if no savings. Rates are identical to what we would pay had we obtained the same coverage through the ACA.
Hi MikeG - I am in central Jersey and am an early retiree also - can I ask why you did COBRA first (ACA not mature yet?) and then why you went with BCBS instead of Amerihealth?
Sure thing rk6.

I went with Cobra as the coverage I had with my old employer was quite good (it was a customized BCBS plan, far better than what I could get on the open market - although it was expensive).

...I used the ACA marketplace to identify insurers who were offering plans in NJ and compared them. I choose BCBS for several reasons. First, my wife had her doctors and all of them were in the network. So no changes for her. Switching to Amerihealth would have necessitated some changes.
To add another NJ experience, COBRA plan from my employer, this was pre-ACA, was much cheaper for better coverage than private insurance in NJ, so we stuck with that till it expired.

Over the years since we've had BCBS, Amerihealth and Health Republic (latter is not around or offering anymore?). One year each of the non-BCBS plans, because one or another was cheaper that year. It didn't work out that well, and seemingly less well as time went on and insurers have gone to basically no coverage at all outside their networks. Just not enough providers are in the networks of non-BCBS, at least the people we'd see in our part (close-in NY area) of NJ. So now I just go BCBS Omni Bronze, not the cheapest but providers are likely to take it. And it's not a lot more.

I renew on the ACA site, but it doesn't make a big difference either way (with no chance of subsidies) since they don't charge you anything. I think actually it renews automatically if you don't do anything. But I'm on the ACA site anyway to see if something else is enough cheaper to consider.
G3VALD1G
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by G3VALD1G »

G3VALD1G wrote: Mon Mar 25, 2019 8:26 pm Self employed using liberty healthshare. Couldn't be happier. I know it's capped at a million, but most insurance are also capped in their own respective ways.
This wouldn't work for people with potentially expensive pre existing conditions - and pretty much all pre existing conditions are potentially expensive - as pre existing conditions are not covered for the first three years. Many people in their 60s have pre existing conditions.

In addition, Liberty Healthshare covers no mental health and only 45 days of prescription coverage for a new diagnosis, according to a chart linked above. After that, you are fully responsible for prescription costs. Prescriptions can easily cost thousands per month. In a recent trend, prescriptions that cost $30 today can cost $10k tomorrow. Getting them from Canada is an option if you live close to the border and/or have a common drug that you can order online. But even if you can order the drug online from Canada, it might not be feasible. In very hot or very cold months, it might not be an option due to temperature requirements for drugs. In addition, drugs like injectables in a vial can't be easily transported across the border.
[/quote]

That's true, it's not an option for everybody. But I've referred many 50-60 year olds to it in the past. So far I haven't heard back any complaints. If things get complicated and the health condition changes, here in NY there are many ways of how to deal with the transfer from liberty. Knowledgeable insurance broker and health advocates have good strategies...
JackoC
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by JackoC »

G3VALD1G wrote: Mon Mar 25, 2019 8:26 pm Self employed using liberty healthshare. Couldn't be happier. I know it's capped at a million, but most insurance are also capped in their own respective ways.
I couldn't say if that's the right solution for somebody else, but ACA/state compliant insurance is not capped in my state (NJ), isn't allowed to be. And that lack of a cap is an important reason we have health insurance at all. Although it's also important that having insurance means you get billed something like the real price for stuff below the OOP limit, not the 'list price' that's 2-10 times higher that also shows on your Explanation of Benefits. I guess almost nobody actually pays those bogus 'list prices' in full, but you're still starting the negotiation from a much higher level. Anyway if there was a plan with a $50k or $100k OOP annual* limit, priced accordingly lower, I'd be all over it, as long as it had no cap on lifetime benefit. The plan we have now, $1540/month for couple has an unnecessarily low $13k OOP annual family limit, but there isn't a 'catastrophic' plan that's practical for us in our state.

I realize cumulative >>$1mil lifetime health bills, while possible, are unlikely. It's just that that's what we could not afford, and basic insurance theory says to only insure yourself against costs you literally could not afford.

*which is why Out of Pocket limit and lifetime cap aren't directly comparable, a $100k annual OOP could conceivably cost you $1mil if you paid $100k/yr for a >$100k/yr cancer drug that extended your life for 10 yrs (drugs that expensive exist, though they generally don't extend life that long).
bearcub
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Re: [Retiring before 65: How do you deal with health insurance?]

Post by bearcub »

Part of my severance was 13 months of health insurance. Been in the ACA ever since. Works for some, not so good for others. Depends on your income + medical needs. Best wishes.
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