How would early retirees be impacted if the ACA went away?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Locked
Topic Author
NotFatYet
Posts: 6
Joined: Wed Apr 06, 2022 12:22 pm

How would early retirees be impacted if the ACA went away?

Post by NotFatYet »

I have always gotten health insurance through an employer, but for early retirees (i.e., before medicare age), how would insurance work if we didn't have ACA pooling the risk? Would insurance companies simply deny coverage or charge extreme rates for people in their 40s, 50s, and early 60s? What if you have a pre-existing condition? This seems like a major risk factor for early retirement, especially with the GOP.

For example, based on what I've read, a family of 4 would pay about $25-30k per year for health insurance under the ACA / marketplace. And a key point is that pre-existing conditions don't change eligibility or rates under the ACA. From healthcare.gov:

Code: Select all

All Marketplace plans must cover treatment for pre-existing medical conditions.
No insurance plan can reject you, charge you more, or refuse to pay for essential health benefits for any condition you had before your coverage started.
Once you’re enrolled, the plan can’t deny you coverage or raise your rates based only on your health.
Without the ACA, would someone with cancer or some other serious condition be able to get insurance? Why wouldn't insurance companies charge higher-risk customers $100k or $200k or more per year?

How do Bogleheads model this possibility in their FIRE plans? For those who FIREd before the ACA, what did you do for health insurance?
Pepper11
Posts: 231
Joined: Fri Jun 13, 2014 9:22 pm

Re: How would early retirees be impacted if the ACA went away?

Post by Pepper11 »

ACA is great for early retirees.

But in the very unlikely case it goes away, young retirees have the benefit of being of working age if their situation changes and they need workplace health insurance.
jebmke
Posts: 27396
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: How would early retirees be impacted if the ACA went away?

Post by jebmke »

I had retiree health insurance. I retired pre-ACA and this was an important item that concerned us. In my initial planning I had not anticipated having retiree insurance so assumed a large out of pocket cost to buy insurance & co-pays. Initially I was planning to retire in 2006 but my company really wanted me to stay and they pointed out that if I stayed until age 55 I would qualify for retiree health. That sealed it.

In short, HC was a big deal risk to think about back then -- not just cost but access.
When you discover that you are riding a dead horse, the best strategy is to dismount.
User avatar
Watty
Posts: 29455
Joined: Wed Oct 10, 2007 3:55 pm

Re: How would early retirees be impacted if the ACA went away?

Post by Watty »

NotFatYet wrote: Tue Jul 09, 2024 2:24 pm For those who FIREd before the ACA, what did you do for health insurance?
The "what if questions" are not allowed because of the board rules but in the past people who wanted to retire very early and needed health insurance would do things like;

1) Move overseas.

2) Not retire early and work until they were 63.5 year old so that 18 months of COBRA would get you to Medicare.

3) Get an expensive private policy if they could, a problem with that is sometimes even if you had a policy in place an insurance company would decide to retroactively rescind the approval and cancel your policy after a large claim.

4) Get some job like being a school bus driver to get benefits. I know two people who did that after being laid off in their 50s.

5) Have a spouse keep working for benefits.
Normchad
Posts: 6115
Joined: Thu Mar 03, 2011 6:20 am

Re: How would early retirees be impacted if the ACA went away?

Post by Normchad »

I’d go back to work, or move to one of the states that has their own programs.
sailaway
Posts: 8778
Joined: Fri May 12, 2017 1:11 pm

Re: How would early retirees be impacted if the ACA went away?

Post by sailaway »

Normchad wrote: Tue Jul 09, 2024 2:38 pm I’d go back to work, or move to one of the states that has their own programs.
Where is that, besides MA? Or you assuming states that offer their own exchanges would.keep them even without the ACA framework?
Last edited by sailaway on Tue Jul 09, 2024 2:41 pm, edited 1 time in total.
User avatar
Kenkat
Posts: 9773
Joined: Thu Mar 01, 2007 10:18 am
Location: Cincinnati, OH

Re: How would early retirees be impacted if the ACA went away?

Post by Kenkat »

I chose to stay on my employer’s retiree health plan at somewhat higher cost rather than use ACA due to the risk the ACA would be changed in a negative way or eliminated when I still needed. For my employer’s retiree plan, once you leave the plan, you can’t get back in.
Misenplace
Moderator
Posts: 6305
Joined: Mon Feb 01, 2016 8:46 pm

Re: How would early retirees be impacted if the ACA went away?

Post by Misenplace »

This thread has run its course and is locked (not personal nor actionable). General comment threads are off topic in the forums with "Personal" in the title. See: A reminder that non-investing general comment threads are OT
- It must be personal. In other words, you must be asking about your own situation. You can also ask on behalf of someone specific, such as a family member.

- It must be actionable. You must be able to do something specific with the replies that will make a difference in your situation.
If you have a specific question, please ask directly and provide sufficient information for members to supply appropriate advice.

In addition, speculating about possible changes in law are off topic for the forum.
Locked