How Do Early Retirees Pay for Medical

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pshonore
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Re: How Do Early Retirees Pay for Medical

Post by pshonore »

Rob54keep wrote: Thu May 07, 2020 6:34 am If you a military veteran (honorable discharge), you may qualify for veterans benefits (VA Care). There may be some costs depending on your income. However, your spouse would not be covered.

https://www.va.gov/health-care/eligibility/
If you read down further to in that article to "Is there anything that will make me more likely to get these benefits?", you will see that a lot of folks will be last in line. But I certainly agree that disabled Vets, POWs, combat folks, etc should be first.
ADent1
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Re: How Do Early Retirees Pay for Medical

Post by ADent1 »

tibbitts wrote: Wed May 06, 2020 9:45 pm My guess is that at least outside of Bogleheads, a high percentage of early reitrees have had employer/government/military pensions that included partially or fully funded healthcare.
Maybe in the past.

I work for a large company (Fortune 50) and they have eliminated retiree medical, pensions, and even sick leave over the last 10-15 years.

We still do have health care - $460/month including dental.
musicmom
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Re: How Do Early Retirees Pay for Medical

Post by musicmom »

We are so fortunate and we know it.

I retired at 63 last year from long career in a healthcare system.
We pay $160 / month for retiree health that covers us both.
Its my primary till next year.
Its secondary for DH age 69 on Medicare already.

Next year, when I enroll in Medicare, retiree will transition to secondary for me also.
So, our total premiums will actually go UP when I get Medicare.
Although we do have $1M in IRA, and modest SS, numbers would have been very tight without retiree coverage.

We do pay $126 month for dental for us both.
JonnyB
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Re: How Do Early Retirees Pay for Medical

Post by JonnyB »

Spirit Rider wrote: Fri May 08, 2020 11:28 am
Rich Mountain wrote: Fri May 08, 2020 8:28 am The ACA subsidy requires you to earn a minimum to qualify. So... say the minimum income for a 2020 subsidy was $17k. Your estimated income from a combination of a side business (self-employed), a part-time job, and investment income had qualified you, putting you in that minimum range for a subsidy, and you received a subsidy and got your policy in place. But then COVID-19 hits, and those estimated income numbers fall, putting you below the minimum. What then happens to your subsidy for 2020? How does the ACA and IRS treat this scenario, which will be common this year? Insights?
If you fall below the minimum ACA MAGI, which is 100%/138% of the ACA FPL depending on the No/Yes of Medicaid expansion in your state. Then you will have to pay back 100% of any premium subsidy, but not any cost sharing subsidy you received.
This does not seem to be the way the IRS treats a change in income. You do not have to pay back an advance subsidy if your income declines below the threshold. On your Form 8962 for Premium Tax Credit, the IRS evaluates your eligibility month by month. If you start off the year with a higher income that makes you eligible for a subsidy and then later have a lower income, then you do not have to pay back the subsidies for the months you were eligible. This assumes you made a good faith estimate of your income at the beginning of the year and immediately notify the Marketplace when your income circumstances change.

When your income decreases below the threshold (100%/130%) you have a qualifying event that allows you to change your insurance plan. You have the option of continuing your current marketplace plan but without subsidy. Or, if you are in a state with expanded Medicaid, you automatically become eligible for essentially zero-cost Medicaid.

If you are not in a state with expanded Medicaid you are out of luck and will likely have absolutely no coverage unless you are a single parent with a child.

But you do not have to pay back advance subsidies for the months before your income decrease.

https://www.ecfr.gov/cgi-bin/text-idx?S ... 2&rgn=div8
Last edited by JonnyB on Fri May 08, 2020 6:29 pm, edited 1 time in total.
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willthrill81
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Re: How Do Early Retirees Pay for Medical

Post by willthrill81 »

Silk McCue wrote: Fri May 08, 2020 2:10 pm
willthrill81 wrote: Thu May 07, 2020 12:09 am
That's the route we would very likely take. It's extremely important for those considering this option to be aware of the limitations and exclusions, but it can be far more cost effective.
I have a great deal of respect for you based upon your postings on various topics here at Bogleheads and I'm keenly interested in your feedback regarding the following:

I have had CHM Gold with Brothers Keeper for the past 8 years and my wife has fully paid traditional health insurance through her workplace but will be retiring at the end of the year. We will be close to 60/62 at that time (neither of us health issues of any consequence). The cost to continue her insurance would be about $9k per year with a $3k deductible. To add me would double that so really not an option we are interested in.

Back in December I began getting serious about figuring out health "coverage" in retirement. Up to that point I had simply planned on my wife getting a CHM Gold plan prior to retiring and running with that until we respectively reach 65 but began to question the approach due to "what if's" such as sickness/diagnosis with very high prescription costs. BTW - regardless of the naysayers here I have full confidence in CHM to meet their commitments.

I took time to look at ACA plans and reworked our retirement planning Excel sheets to accommodate managing our taxable income to qualify for ACA subsidies. This included some modest drawdowns from our Roth accounts in those first few years and that approach is certainly manageable. Premiums based on rates at that time provide us with HSA Bronze level plan with $6k deductibles for about $200 or $400 per month combined depending on how we manage Taxable income. She will have a solid COLA'd pension of about $42k year 1 (joint and survivor). The premium is certainly manageable but the out of pocket expense looks a little rough although we would certainly be able to pay it if need be. Note: If my wife has true insurance in retirement she will receive a flat $150 per month taxable income added to her pension payments. Were she not to have true insurance she would get the subsidy once on Medicare.

I'm looking at three alternatives: 1) CHM Gold only as originally planned, 2) Discontinue CHM and get a Bronze HSA plan and deal with the deductible if that becomes an issue 3) Get a Bronze HSA plan and backstop the high risk with CHM Gold. The $150 per month subsidy would apply to options 2 and 3.

I'm interested to know what your considered thoughts about using CHM are and what concerns if any that you have regarding relying on CHM or similar market provider under various bad news medical situations and how you plan to deal with/mitigate them should you go that route. I'm very interested in any and all feedback you want to give me on what I have shared regarding where my thinking is.

Thank you for your time.

Cheers
Thanks for the kind words.

How much would you be paying for both of you to be on the CHM gold plan? I cannot find that out easily from their website.

Also, I'm not very familiar with CHM, so I cannot help you there. But it seems that you are very comfortable with them.

Straight away, I don't see the need for option 3 at all. You should be able to handle the deductible for even a bronze HSA plan, especially for only 3-5 years and since neither of you have any chronic health issues.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
marcopolo
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Re: How Do Early Retirees Pay for Medical

Post by marcopolo »

Random Poster wrote: Fri May 08, 2020 2:18 pm
marcopolo wrote: Thu May 07, 2020 9:19 pm Alternatively, you could retire in or move to a state (Just like you might have to move if you lost your job) that has more friendly view of supporting broad access to health insurance. MA had Romney Care, I believe NJ and NY had guarantee issue, HI recently passed regulation largely mimicking ACA protections, etc.

One may end up paying more for health insurance if ACA goes away (we have budgeted a healthy sum for that), just like you might end up with a lower income if you lose your job.

So, yes there is risk, you do need to have alternate plans, but i see no reason to be a deer in the headlights over it.

Now, if one has no desire to retire (early or otherwise), and thinks the only meaningful and fulfilling thing anyone can do their life is to keep working, then one can come up with all sorts of scary reasons to not retire.
I think that all of this is much easier said than done.

As it is now, just figuring out what health insurance costs under the ACA is difficult for someone evaluating possible housing locations, as the premiums are based, at least in part, on one’s zip code. And those premiums change each year. So what may be inexpensive in one area compared to another area today may be comparatively expensive next year.

And then, when things change negatively, you suggest to just move? As if that doesn’t have its own (potentially large) transaction costs, and then what guarantee is there that the state to which you move won’t end up changing things negatively later on either?

Quite frankly, the whole system is a complete mess for most people and there is no amount of alternative planning that one can really do to reasonably protect or insulate oneself from the potential changes that may be made. Unless your alternative plan is to just die when the costs become too unaffordable, which I suspect is what some people think that the solution should be.
Things change in life all the time, we adapt. You are looking for guarantees? Do you invest in the market? What if it crashes and stays that way for a long time?

Up thread several people mentioned how they were going to retire but decided not to because of uncertainty around the ACA. To me, that seems a lot like the person that wants to get into the market, but is sitting on the sideline because the market may crash soon. They have both had good reason to do that since probably at least 2014. Who knows, the market will certainly crash at some point. The healthcare/insurance industry will almost certainly change in the future, maybe for the worse, maybe for the better. I plan to be flexible and adapt if necessary (may not be), rather than be held hostage by fear. Others may choose differently. To each their own.
Once in a while you get shown the light, in the strangest of places if you look at it right.
Silk McCue
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Re: How Do Early Retirees Pay for Medical

Post by Silk McCue »

willthrill81 wrote: Fri May 08, 2020 6:11 pm
Thanks for the kind words.

How much would you be paying for both of you to be on the CHM gold plan? I cannot find that out easily from their website.

Also, I'm not very familiar with CHM, so I cannot help you there. But it seems that you are very comfortable with them.

Straight away, I don't see the need for option 3 at all. You should be able to handle the deductible for even a bronze HSA plan, especially for only 3-5 years and since neither of you have any chronic health issues.
Thanks for the feedback. I agree with your assessment. After I took the time to organize my thoughts and put them down in writing to present to you the choices became much more clear to me and you have confirmed that.

BTW - CHM Gold is $172 per month per individual. (recently raised from $150 which has been in place for over a decade). CHM has been around for decades.

Cheers
randomguy
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Re: How Do Early Retirees Pay for Medical

Post by randomguy »

michaeljc70 wrote: Fri May 08, 2020 11:56 am
randomguy wrote: Fri May 08, 2020 11:52 am
Well with cancer, you generate a qualifying event and get real health insurance. Same thing if you develop some life long disease and they refuse to cover your 100k/year drug. I will let you decide if this is a moral approach or not. And figuring out the risk that you 50k health sharing bill will not be covered (i.e. it is a very lightly regulated industry) is also impossible to say. I
That might be workable in some situations, but it is hard to generate a qualifying event from the back of an ambulance.

There have been numerous articles and lawsuits regarding sharing ministries not paying. $50k....okay...but what about $500k? I have had family members have hospital bills that high (and they lived to tell about it). If you know the risks and are willing to take them, then that is fine.
Definitely. There have been cases of HSM paying out 500k+ also. Or people with health insurance being rushed to the ER and getting balanced billed fo 50k. In theory HSM should be able to offer somewhat reasonably priced "Insurance" since they are allowed to exclude people based on criteria that insurance carriers can't do right now. How much faith you have in the HSM doing the math correctly (and buying insurance for the cases when they have bad luck) is going to be a tough thing to quantify.
Silk McCue
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Re: How Do Early Retirees Pay for Medical

Post by Silk McCue »

FYI

Christian Healthcare Ministries has shared $4.5 billion dollars for members needs. They were the first and longest sharing ministry.

https://www.chministries.org/how-it-wor ... t-sharing/

Cheer
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willthrill81
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Re: How Do Early Retirees Pay for Medical

Post by willthrill81 »

Silk McCue wrote: Fri May 08, 2020 6:41 pm
willthrill81 wrote: Fri May 08, 2020 6:11 pm
Thanks for the kind words.

How much would you be paying for both of you to be on the CHM gold plan? I cannot find that out easily from their website.

Also, I'm not very familiar with CHM, so I cannot help you there. But it seems that you are very comfortable with them.

Straight away, I don't see the need for option 3 at all. You should be able to handle the deductible for even a bronze HSA plan, especially for only 3-5 years and since neither of you have any chronic health issues.
Thanks for the feedback. I agree with your assessment. After I took the time to organize my thoughts and put them down in writing to present to you the choices became much more clear to me and you have confirmed that.

BTW - CHM Gold is $172 per month per individual. (recently raised from $150 which has been in place for over a decade). CHM has been around for decades.

Cheers
I don't think that spending an additional $354 for CHM gold is worth it if you're going to also have a bronze ACA policy in force.

If you're able to get a bronze ACA policy for $200-$400/month, I would probably lean in that direction over just having the CHM gold for the two of you. If there isn't a price advantage for an HSM, I'd go with insurance.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Silk McCue
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Re: How Do Early Retirees Pay for Medical

Post by Silk McCue »

willthrill81 wrote: Fri May 08, 2020 7:44 pm
I don't think that spending an additional $354 for CHM gold is worth it if you're going to also have a bronze ACA policy in force.

If you're able to get a bronze ACA policy for $200-$400/month, I would probably lean in that direction over just having the CHM gold for the two of you. If there isn't a price advantage for an HSM, I'd go with insurance.
I agree. ACA only will likely be our path.

Thanks again.

Cheers
visualguy
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Re: How Do Early Retirees Pay for Medical

Post by visualguy »

michaeljc70 wrote: Fri May 08, 2020 3:19 pm
AerialWombat wrote: Fri May 08, 2020 3:15 pm
michaeljc70 wrote: Fri May 08, 2020 11:38 am
AerialWombat wrote: Thu May 07, 2020 8:08 am
willthrill81 wrote: Thu May 07, 2020 12:09 am

That's the route we would very likely take. It's extremely important for those considering this option to be aware of the limitations and exclusions, but it can be far more cost effective.
Yes, this is very true. Even other members often fail to take the time to really learn what it is and how to use it. But I think people with real health insurance have the same challenge sometimes.

I view it as a major medical plan only. Broken leg coverage, as I call it. It’s great for me because I’ve already made certain decisions about end of life care and how I will address terminal illness.

It would not be appropriate coverage for folks that might face seven figure cancer treatment, for example.
How do you determine that you won't get cancer, have a heart attack or something else very costly?
I have already made certain decisions regarding what level of medical care I am willing to seek. I will never incur the expense of cancer treatment or any number of expensive surgeries. Thus, I do not need any sort of coverage to pay for them.
I think it is easier to say I am not going to get a $200k surgery and will just die when you aren't in that position. You could also not be conscious and unable to make that decision. Of course we all hope we don't need expensive treatments or surgeries.
Right - I also don't think the "no treatment" approach really makes sense.

There are effective treatments for quite a few serious medical conditions. It is horrible to be in a situation where you have to "just die" when you could be treated, and then live for additional good years.

Another aspect of this is that you do need to get treatment in many cases even just to avoid living with horrible pain and/or disability. The untreated disease may not do you the favor of finishing you off quickly, and instead subject you to prolonged and unbearable torture or unnecessary disability.

Once one digs deeper into the "no expensive treatment" strategy, I don't see how they can conclude it's reasonable as a general strategy.
Last edited by visualguy on Fri May 08, 2020 8:31 pm, edited 1 time in total.
SVT
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Re: How Do Early Retirees Pay for Medical

Post by SVT »

Tool-Time wrote: Wed May 06, 2020 4:56 pm 62 and ready to retire due to minor health reasons. Wife (61)will still work for a year. $2M in 401k, stocks and IRA. Wife has $300,000 pension. No kids. How do early retirees pay for their medical?
https://www.whitecoatinvestor.com/healt ... etirement/
desiderium
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Re: How Do Early Retirees Pay for Medical

Post by desiderium »

DesertMan wrote: Thu May 07, 2020 3:54 pm
desiderium wrote: Thu May 07, 2020 10:22 am This is an interesting debate. As a high bracket tax payer, I too get uncomfortable sometimes seeing all the efforts by those with well-funded retirements manage their income in order to qualify for ACA.
You might want to consider doing the same thing. Sounds like you work for a great company but we are going through a recession and it doesn't hurt to have a backup plan in case things go south.
Agree a backup plan is important for everyone. That's really the point of the ACA. I am as pandemic-proof as it comes in terms of employment security, though there are misfortunes other than job disappearing that may hasten retirement. In my complete post I was not criticizing people for taking subsidy benefits according to the rules. There will likely be many unplanned early retirements in the next couple of years, and accessing affordable health care will remain an active topic.
Ron Ronnerson
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Re: How Do Early Retirees Pay for Medical

Post by Ron Ronnerson »

My situation is backwards from most. I’m currently employed and get insurance through the ACA. My employer offers health insurance but the employee must pay 100% of the cost. For my family of three, it would cost us $2,000/month to get insurance through my work. In contrast, our share of premiums for a silver plan on the ACA costs a little under $4/month to cover the family. My employer fully pays for health insurance of retirees, however. The system is set up almost to encourage retiring sooner rather than later. I’m a public school teacher in the Bay Area.
BrooklynInvest
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Re: How Do Early Retirees Pay for Medical

Post by BrooklynInvest »

ACA subsidies are one thing for early retirees to ponder.

To me the bigger concern are the protections against allowing insurers to discriminate against people with preexisting conditions.

If these protections go away and my insurer can legally drop me after I develop a preexisting condition then I've got a big risk... as does my family.
Jags4186
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Re: How Do Early Retirees Pay for Medical

Post by Jags4186 »

randomguy wrote: Fri May 08, 2020 11:52 am
michaeljc70 wrote: Fri May 08, 2020 11:38 am
AerialWombat wrote: Thu May 07, 2020 8:08 am
willthrill81 wrote: Thu May 07, 2020 12:09 am
AerialWombat wrote: Wed May 06, 2020 8:45 pm Health sharing ministry.
That's the route we would very likely take. It's extremely important for those considering this option to be aware of the limitations and exclusions, but it can be far more cost effective.
Yes, this is very true. Even other members often fail to take the time to really learn what it is and how to use it. But I think people with real health insurance have the same challenge sometimes.

I view it as a major medical plan only. Broken leg coverage, as I call it. It’s great for me because I’ve already made certain decisions about end of life care and how I will address terminal illness.

It would not be appropriate coverage for folks that might face seven figure cancer treatment, for example.
How do you determine that you won't get cancer, have a heart attack, etc?
Well with cancer, you generate a qualifying event and get real health insurance. Same thing if you develop some life long disease and they refuse to cover your 100k/year drug. I will let you decide if this is a moral approach or not. And figuring out the risk that you 50k health sharing bill will not be covered (i.e. it is a very lightly regulated industry) is also impossible to say. I
These not-insurance, insurance plans should be illegal for the scenario you describe above. If someone chooses to pay for non-comprehensive coverage but then, through various rules in the system, are able to switch to real insurance should the need arise (and at that point, I'd argue it is not insurance and should not be called that), it increases the costs for everyone else in the insurance system.

I know there's no right answer and one needs to work the system to their benefit, but it certainly isn't "right". Our healthcare system is so messed up.

Switzerland essentially has "Obamacare" but the big difference is that everyone must buy from the exchange, no one gets insurance from their employer. A system like that could make sense here. Employers would need to increase everyone's wages equivalent to the healthcare costs they're currently paying, though. That would be a tough thing to enact and enforce.
michaeljc70
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Re: How Do Early Retirees Pay for Medical

Post by michaeljc70 »

Jags4186 wrote: Sat May 09, 2020 11:43 am
randomguy wrote: Fri May 08, 2020 11:52 am
michaeljc70 wrote: Fri May 08, 2020 11:38 am
AerialWombat wrote: Thu May 07, 2020 8:08 am
willthrill81 wrote: Thu May 07, 2020 12:09 am

That's the route we would very likely take. It's extremely important for those considering this option to be aware of the limitations and exclusions, but it can be far more cost effective.
Yes, this is very true. Even other members often fail to take the time to really learn what it is and how to use it. But I think people with real health insurance have the same challenge sometimes.

I view it as a major medical plan only. Broken leg coverage, as I call it. It’s great for me because I’ve already made certain decisions about end of life care and how I will address terminal illness.

It would not be appropriate coverage for folks that might face seven figure cancer treatment, for example.
How do you determine that you won't get cancer, have a heart attack, etc?
Well with cancer, you generate a qualifying event and get real health insurance. Same thing if you develop some life long disease and they refuse to cover your 100k/year drug. I will let you decide if this is a moral approach or not. And figuring out the risk that you 50k health sharing bill will not be covered (i.e. it is a very lightly regulated industry) is also impossible to say. I
These not-insurance, insurance plans should be illegal for the scenario you describe above. If someone chooses to pay for non-comprehensive coverage but then, through various rules in the system, are able to switch to real insurance should the need arise (and at that point, I'd argue it is not insurance and should not be called that), it increases the costs for everyone else in the insurance system.

I know there's no right answer and one needs to work the system to their benefit, but it certainly isn't "right". Our healthcare system is so messed up.

Switzerland essentially has "Obamacare" but the big difference is that everyone must buy from the exchange, no one gets insurance from their employer. A system like that could make sense here. Employers would need to increase everyone's wages equivalent to the healthcare costs they're currently paying, though. That would be a tough thing to enact and enforce.
It isn't that easy to generate a qualifying event (if already not covered by insurance). Looking at the list for the most likely things that could be used you'd have to move, get married, get divorced, have a death in the immediate family, have/adopt a baby, etc. If you rent I guess moving is the easiest thing but if you have a lease....
mnnice
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Re: How Do Early Retirees Pay for Medical

Post by mnnice »

Assuming that the OP has family coverage through his spouse’s job this is really a very short time frame to bridge to Medicare. I says this as a person that has been semi-retired for six years and have had to figure out my own insurance since September of 2014.

The OP had this year to figure out a strategy to withdraw funds to manage income during any time that they need or want ACA. If the OP has home equity they would be able to take borrow against it as a way to help offset any difference between available taxable dollars and desired lifestyle. It’s requires thinking and planning but it is not that hard. I would/will gladly take it over full time employment between now and 65.
Jags4186
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Re: How Do Early Retirees Pay for Medical

Post by Jags4186 »

michaeljc70 wrote: Sat May 09, 2020 11:49 am
Jags4186 wrote: Sat May 09, 2020 11:43 am
randomguy wrote: Fri May 08, 2020 11:52 am
michaeljc70 wrote: Fri May 08, 2020 11:38 am
AerialWombat wrote: Thu May 07, 2020 8:08 am

Yes, this is very true. Even other members often fail to take the time to really learn what it is and how to use it. But I think people with real health insurance have the same challenge sometimes.

I view it as a major medical plan only. Broken leg coverage, as I call it. It’s great for me because I’ve already made certain decisions about end of life care and how I will address terminal illness.

It would not be appropriate coverage for folks that might face seven figure cancer treatment, for example.
How do you determine that you won't get cancer, have a heart attack, etc?
Well with cancer, you generate a qualifying event and get real health insurance. Same thing if you develop some life long disease and they refuse to cover your 100k/year drug. I will let you decide if this is a moral approach or not. And figuring out the risk that you 50k health sharing bill will not be covered (i.e. it is a very lightly regulated industry) is also impossible to say. I
These not-insurance, insurance plans should be illegal for the scenario you describe above. If someone chooses to pay for non-comprehensive coverage but then, through various rules in the system, are able to switch to real insurance should the need arise (and at that point, I'd argue it is not insurance and should not be called that), it increases the costs for everyone else in the insurance system.

I know there's no right answer and one needs to work the system to their benefit, but it certainly isn't "right". Our healthcare system is so messed up.

Switzerland essentially has "Obamacare" but the big difference is that everyone must buy from the exchange, no one gets insurance from their employer. A system like that could make sense here. Employers would need to increase everyone's wages equivalent to the healthcare costs they're currently paying, though. That would be a tough thing to enact and enforce.
It isn't that easy to generate a qualifying event (if already not covered by insurance). Looking at the list for the most likely things that could be used you'd have to move, get married, get divorced, have a death in the immediate family, have/adopt a baby, etc. If you rent I guess moving is the easiest thing but if you have a lease....
The easiest one I could think of is asking to be laid off/potentially quitting your job. If you truly have a catastrophic injury, that would seem to make the most sense.
BrownEyedGirl_27
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Re: How Do Early Retirees Pay for Medical

Post by BrownEyedGirl_27 »

My in-laws retired at age 60 and are part of a medical cooperative. They’re not paying much into it annually according to what they told me when I asked them. They have a pension and investments to live on.
"Your mind has a mind of its own. At the very moment when you are most convinced of your own rationality, you may be feeling rather than thinking your way toward a decision.” | Jason Zweig
michaeljc70
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Re: How Do Early Retirees Pay for Medical

Post by michaeljc70 »

Jags4186 wrote: Sat May 09, 2020 12:20 pm
michaeljc70 wrote: Sat May 09, 2020 11:49 am
Jags4186 wrote: Sat May 09, 2020 11:43 am
randomguy wrote: Fri May 08, 2020 11:52 am
michaeljc70 wrote: Fri May 08, 2020 11:38 am

How do you determine that you won't get cancer, have a heart attack, etc?
Well with cancer, you generate a qualifying event and get real health insurance. Same thing if you develop some life long disease and they refuse to cover your 100k/year drug. I will let you decide if this is a moral approach or not. And figuring out the risk that you 50k health sharing bill will not be covered (i.e. it is a very lightly regulated industry) is also impossible to say. I
These not-insurance, insurance plans should be illegal for the scenario you describe above. If someone chooses to pay for non-comprehensive coverage but then, through various rules in the system, are able to switch to real insurance should the need arise (and at that point, I'd argue it is not insurance and should not be called that), it increases the costs for everyone else in the insurance system.

I know there's no right answer and one needs to work the system to their benefit, but it certainly isn't "right". Our healthcare system is so messed up.

Switzerland essentially has "Obamacare" but the big difference is that everyone must buy from the exchange, no one gets insurance from their employer. A system like that could make sense here. Employers would need to increase everyone's wages equivalent to the healthcare costs they're currently paying, though. That would be a tough thing to enact and enforce.
It isn't that easy to generate a qualifying event (if already not covered by insurance). Looking at the list for the most likely things that could be used you'd have to move, get married, get divorced, have a death in the immediate family, have/adopt a baby, etc. If you rent I guess moving is the easiest thing but if you have a lease....
The easiest one I could think of is asking to be laid off/potentially quitting your job. If you truly have a catastrophic injury, that would seem to make the most sense.
Does that work? I thought you had to also lose your health insurance which isn't possible if you never had it in the first place.
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MP123
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Re: How Do Early Retirees Pay for Medical

Post by MP123 »

michaeljc70 wrote: Sat May 09, 2020 12:33 pm
Jags4186 wrote: Sat May 09, 2020 12:20 pm
michaeljc70 wrote: Sat May 09, 2020 11:49 am
Jags4186 wrote: Sat May 09, 2020 11:43 am
randomguy wrote: Fri May 08, 2020 11:52 am

Well with cancer, you generate a qualifying event and get real health insurance. Same thing if you develop some life long disease and they refuse to cover your 100k/year drug. I will let you decide if this is a moral approach or not. And figuring out the risk that you 50k health sharing bill will not be covered (i.e. it is a very lightly regulated industry) is also impossible to say. I
These not-insurance, insurance plans should be illegal for the scenario you describe above. If someone chooses to pay for non-comprehensive coverage but then, through various rules in the system, are able to switch to real insurance should the need arise (and at that point, I'd argue it is not insurance and should not be called that), it increases the costs for everyone else in the insurance system.

I know there's no right answer and one needs to work the system to their benefit, but it certainly isn't "right". Our healthcare system is so messed up.

Switzerland essentially has "Obamacare" but the big difference is that everyone must buy from the exchange, no one gets insurance from their employer. A system like that could make sense here. Employers would need to increase everyone's wages equivalent to the healthcare costs they're currently paying, though. That would be a tough thing to enact and enforce.
It isn't that easy to generate a qualifying event (if already not covered by insurance). Looking at the list for the most likely things that could be used you'd have to move, get married, get divorced, have a death in the immediate family, have/adopt a baby, etc. If you rent I guess moving is the easiest thing but if you have a lease....
The easiest one I could think of is asking to be laid off/potentially quitting your job. If you truly have a catastrophic injury, that would seem to make the most sense.
Does that work? I thought you had to also lose your health insurance which isn't possible if you never had it in the first place.
Not to mention that an early retiree probably doesn't have a job to quit. :happy
Jags4186
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Re: How Do Early Retirees Pay for Medical

Post by Jags4186 »

michaeljc70 wrote: Sat May 09, 2020 12:33 pmDoes that work? I thought you had to also lose your health insurance which isn't possible if you never had it in the first place.
Honestly, I don't know. I guess I forgot you're getting your coverage through a health ministry not the employer (although I would think if you're employed you wouldn't be at a health ministry, you'd be on your employer's plan, so it may be a moot point.)

What's interesting is that I was thinking that perhaps we made a non-qualify mid-year insurance a few years ago and we were never asked for verification. Long story short, my wife and I were on my employer's health insurance. When my employer's open enrollment came in June, the prices had gone up so much that it was better for us to be on my wife's employer's insurance. Her open enrollment was in January. We just declined my employer's coverage come my open enrollment and her company was able to add us mid plan year without a problem.
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Re: How Do Early Retirees Pay for Medical

Post by LadyGeek »

^^^ Good points, as COBRA coverage is a continuation of your current employer's plan coverage. If there was nothing to begin with, COBRA can't help.
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hirlaw
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Q

Post by hirlaw »

COBRA can extend past 18 months in certain situations.

Our case is an example. My wife and I were both on her "megacorp" health insurance plan. When my wife retired at age 64, we both went on Cobra. A few months later, she turned 65 and went on Medicare. At that time, I was only 63. Normally, Cobra would only last 18 months. However, COBRA can be extended for up to 36 months upon the occurrence of certain "qualifying events." One of these qualifying events, is if the employee (here, my wife, who was the insured employee), becomes eligible for Medicare.

Below is from a Dept. of Labor FAQ on the topic:
"When the qualifying event is the end of employment or reduction of the employee's hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee's spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date his/her employment ends (termination of employment is the COBRA qualifying event), COBRA coverage for his/her spouse and children would last 28 months (36 months minus 8 months)."
randomguy
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Re: How Do Early Retirees Pay for Medical

Post by randomguy »

BrooklynInvest wrote: Sat May 09, 2020 11:40 am ACA subsidies are one thing for early retirees to ponder.

To me the bigger concern are the protections against allowing insurers to discriminate against people with preexisting conditions.

If these protections go away and my insurer can legally drop me after I develop a preexisting condition then I've got a big risk... as does my family.
Your insurer can't legally drop you when you get sick in all the states I am aware of. They have to issue you a new policy every year. But switching insurance companies could become impossible (i.e. you can't move) . And your insurance rates might skyrocket as the pool you are in keeps getting sicker and sicker (i.e. new patients will enroll in a new cheaper plan that doesn't have all those sick people in it).
randomguy
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Re: Q

Post by randomguy »

hirlaw wrote: Sat May 09, 2020 1:05 pm COBRA can extend past 18 months in certain situations.

Our case is an example. My wife and I were both on her "megacorp" health insurance plan. When my wife retired at age 64, we both went on Cobra. A few months later, she turned 65 and went on Medicare. At that time, I was only 63. Normally, Cobra would only last 18 months. However, COBRA can be extended for up to 36 months upon the occurrence of certain "qualifying events." One of these qualifying events, is if the employee (here, my wife, who was the insured employee), becomes eligible for Medicare.

Below is from a Dept. of Labor FAQ on the topic:
"When the qualifying event is the end of employment or reduction of the employee's hours, and the employee became entitled to Medicare less than 18 months before the qualifying event, COBRA coverage for the employee's spouse and dependents can last until 36 months after the date the employee becomes entitled to Medicare. For example, if a covered employee becomes entitled to Medicare 8 months before the date his/her employment ends (termination of employment is the COBRA qualifying event), COBRA coverage for his/her spouse and children would last 28 months (36 months minus 8 months)."
Cobra can also only last 6 months if your previous employer goes out of business. Ask me how I learned about that one:)
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Re: How Do Early Retirees Pay for Medical

Post by randomguy »

Jags4186 wrote: Sat May 09, 2020 11:43 am
I know there's no right answer and one needs to work the system to their benefit, but it certainly isn't "right". Our healthcare system is so messed up.

Switzerland essentially has "Obamacare" but the big difference is that everyone must buy from the exchange, no one gets insurance from their employer. A system like that could make sense here. Employers would need to increase everyone's wages equivalent to the healthcare costs they're currently paying, though. That would be a tough thing to enact and enforce.
Any change will result in winners and losers which makes reworking the system very hard. For example imagine a company is paying 12k/year for health insurance/employee and we switch over to ACA. The 25 year buys a policy for 4k/year. The 60 year old buys one for 20k. The 25 year old is thrilled to be getting 8k more to spend. The 60 year old though isn't as happy about spending 8k more. Starting from scratch, nobody would design our system. But morphing from where we are to something else is hard. Just look at the last decade for how hard change is and how much various interests will fight.
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Re: How Do Early Retirees Pay for Medical

Post by rterickson »

Jags4186 wrote: Sat May 09, 2020 12:38 pm What's interesting is that I was thinking that perhaps we made a non-qualify mid-year insurance a few years ago and we were never asked for verification. Long story short, my wife and I were on my employer's health insurance. When my employer's open enrollment came in June, the prices had gone up so much that it was better for us to be on my wife's employer's insurance. Her open enrollment was in January. We just declined my employer's coverage come my open enrollment and her company was able to add us mid plan year without a problem.
Your non-simultaneous open enrollment was the qualifying event that that allowed her plan to add you.
xxsocraticxx
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Re: How Do Early Retirees Pay for Medical

Post by xxsocraticxx »

SevenBridgesRoad wrote: Thu May 07, 2020 12:07 am
WhyNotUs wrote: Wed May 06, 2020 11:15 pm
SevenBridgesRoad wrote: Wed May 06, 2020 8:33 pm Only slightly "early" at age 61. ACA, and we have a good insurance plan here unlike some states.

Planned ahead so that we are (mostly) living off cash from taxable account until age 65 (enough dividends in taxable to avoid the lower threshold, which would mean Medicaid). We manage our Modified Adjusted Gross Income (MAGI) to achieve maximum Advance Premium Tax Credit. Brings a $2,100 a month premium (married couple) down to $2/month last year and slightly more this year at $3/month. Subsidy is based on taxable income (MAGI). Working well for us.
Glad it is, since I am paying for it through my taxes I want to make sure that you are satisfied.
Totally satisfied. I understand your criticism, but if you are trying to make me feel guilty, it won't work. All tax deductions and credits are paid for by others. A large percentage of the threads and conversations on Bogleheads are about legally avoiding taxes by taking full advantage of the laws as they are written. You may have never taken a tax break for mortgage interest, or never have funded a tax-advantaged IRA or 401K or HSA, or any other legal tax strategy. If so, you may cast the first stone.
Good answer. I will be following in your footsteps.
rec630
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Re: How Do Early Retirees Pay for Medical

Post by rec630 »

Paid for out of savings/investment/pension. Got Rif'ed and went through severance and retirement. Retirement plan inncludes a medical and dental benefit...for now. Used to be free based on number of years worked. Now it keeps getting worse, e.g. modified benefits, cost, etc with the changes every year, but I guess not so bad compared to new employees benefits. I pay a percentage of employee cost until age 65 when the plan becomes secondary to Medicare.
MandyT
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Re: How Do Early Retirees Pay for Medical

Post by MandyT »

Here's a summary of my situation:

viewtopic.php?f=2&t=200423&p=3073542#p3073542

My university is "public" (seemingly receiving less public funding every year) and is currently suffering as a result of additional holdbacks of state funding for FY20 plus cuts for FY21. There was a virtual "Town Hall" meeting for concerns of retirees last week; I was left with the impression that they are committed to fully funding the pension and keeping retiree medical insurance. Even in the event that that changes in the future, things are so miserable on campus that I literally don't think I would have made it to 2022, so I'm grateful that I retired when I did.

My situation is unusual, but I think its relevance is that I took a fairly sizeable haircut on my pension and retired three years earlier than planned because retiree medical insurance was that high a priority to me.
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