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Old 08-22-2016, 01:55 PM   #1
Sid
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Early retirement and medical insurance

Well it looks like I will be finically set to retire in less than four years from now.
Since I will be financing all aspects (no pensions) of our retirement I will be looking at funding 5 full years of health insurance for my wife and I before Medicare kicks in. I have been searching the web and visiting various sites to try to get a handle on approximately how much that will be. We are both non-smokers in excellent health.
It's beginning to look like I would need to be a tax expert prior to understanding and qualifying for any deductions and subsidies. Right now I expect the total dollar amount to be in excess of 50K for the five years and that does not include the deductible.
Can anyone who has gone through a similar situation offer advice? How accurate were your online assumptions compared to real life? Is COBRA for 18 months is a good value? What steps did you take when you were in my shoes? Finally, any regrets or actions you wish you had done prior?
Thanks in advance....
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Old 08-22-2016, 02:03 PM   #2
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Congrats on impending retirement!!!
Wow, Ive heard health care in the US is high!
I wont complain about the cost of travel insurance
on our next trip south!!.
Fred
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Old 08-22-2016, 02:33 PM   #3
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I'm looking at that subject right now

things are changing and changing fast. So far, for 2017, it looks like obama care plans won't cover you out of state. so unless you plan to travel within one state and within your insurance coverage area, you would be out of luck with obamacare. I have one broker quote me a cost around $600/mo for nationwide PPO coverage. Of course the devil is in the details, so stay tuned.
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Old 08-22-2016, 04:23 PM   #4
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Originally Posted by larryc View Post
things are changing and changing fast. So far, for 2017, it looks like obama care plans won't cover you out of state. so unless you plan to travel within one state and within your insurance coverage area, you would be out of luck with obamacare. I have one broker quote me a cost around $600/mo for nationwide PPO coverage. Of course the devil is in the details, so stay tuned.
According to the "Obamacare website multi state coverage is available and the "Obamacare" plan is designed for participants that travel.
Your PPO plan may not be multi state but my Blue Cross Blue Shield plan is . I retired early and had no problem using my health plan anywhere in the US including prescription drug coverage . I paid for my medical costs out of pocket when traveling and was reimbursed when I returned home and filed a claim.
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Old 08-22-2016, 04:31 PM   #5
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I was told that was not the case for PPO for me, but I'd be buying from CO. And neither of us knows what 2017 will bring. I sure hope you are right, because it would save me a boat load of money.
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Old 08-22-2016, 04:39 PM   #6
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Originally Posted by steve dunham View Post
According to the "Obamacare website multi state coverage is available and the "Obamacare" plan is designed for participants that travel.
Your PPO plan may not be multi state but my Blue Cross Blue Shield plan is . I retired early and had no problem using my health plan anywhere in the US including prescription drug coverage . I paid for my medical costs out of pocket when traveling and was reimbursed when I returned home and filed a claim.
I checked with my daughter on this. She spent several years as a case manager at BC/BS, and now works for a health insurance agent. She said: "This is not true.
All plans cross states. There are some carriers that will be pulling out of the exchange next year, but the plans that are still available will be multi state plans."

That said, most of us (including her) worry that Obamacare is going to continue becoming more costly AND ungainly.
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Old 08-22-2016, 04:46 PM   #7
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Originally Posted by Ellpea in CA View Post
That said, most of us (including her) worry that Obamacare is going to continue becoming more costly AND ungainly.
Since the 3 year boondoggle federal funding for the insurance companies that were so exciting getting big checks AND enrolling another 30+ million customers is ending, now they're starting to pull out as without the taxpayer bonus checks, they can't make any money with the whole bunch of older sicker people (who of course signed up) to care for.

Arizona rate is supposedly going up 65% next year, nationwide 35% increases according to a health show I listened to last week.

We use a BC/BS PPO, it's expensive, but it works anywhere. No Medicare Part A for us.
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Old 08-22-2016, 05:18 PM   #8
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No Medicare anything for me yet and I'm paying COBRA rates for the next 14 months. Any insurance is better than no insurance because if you get seriously ill (every day is a gift), everything you have ever worked for goes out the window in very short order.


Stay well, eat well and exercise. Keep your heads out of the clouds and more down to earth. Your physical future may depend on it.
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Old 08-22-2016, 06:14 PM   #9
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Sid,

That $50,000 for 5 years of medical coverage starting in 4 years may be on the real optimistic side. $50,000/60 months = $834 per month premiums for husband and wife. I know some couples who are paying over a $1,200 a month right now.

Take the COBRA and you may want to delay retirement or find a job that has at least some insurance coverage at that time. It would be real nice to have that $50,000 to spend during retirement rather than give it to Obama.

I am on Medicare so I don't relate to these insurance issues too well, but it sounds like they are overblown as Obama clearly said premiums would go down by $2,500, you could keep your insurance plan, as well as your Dr. and his ratings are over 50%, so people must be lovin it!
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Old 08-22-2016, 10:48 PM   #10
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Careful...

It's difficult to discuss health insurance in the USA without getting into the politics of it - not impossible, but difficult. Please be respectful and stick to the OP's questions, which were:
Quote:
Originally Posted by Sid View Post
  • Can anyone who has gone through a similar situation offer advice?
  • How accurate were your online assumptions compared to real life?
  • Is COBRA for 18 months a good value?
  • What steps did you take when you were in my shoes?
  • Finally, any regrets or actions you wish you had done prior?
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Old 08-22-2016, 11:26 PM   #11
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The cost for the Obamacare are based on a couple of things. One is income level, the more you have the more it cost.

The other part of the cost is exactly which plan you are choosing. Plans with high deductibles are going to be the lowest in cost.

I would suggest you start with your state's website to see which companies are participating and what your income level looks like for buying power and/or possible supplements from the state. Then use some of the phone numbers for the companies on that website and find out if they are hosting some local meet and greet events. They do a lot of those events in the fall as that is coming up on the time when people can change plans.

I personally prefer to meet the agents at the meet and greets versus having someone come to my house. Sometimes they sign up local people in the area as agents without running much of a screening on the person. That person might never have attended any seminars on the product they are representing. But the people they send out from their home office to chair face to face public events have more experience with the product they are representing and are more skilled with the discussion process. Go talk to several companies, it will deepen your understanding and expand your options. Go there with a written list of questions and cover each and every one of them. Use a voice recorder if you like so you don't have to struggle to remember what was said. If the event is too busy and they get too disrupted then ask if you can meet with them at a later time in another place.

Do not hesitate when confused about what they are saying to ask them to state it another way. Do not hesitate to tell any person you are talking to on the phone to talk more slowly. They say the same things so often that their words run right into each other and become meaningless to anyone but themselves. Just ask them to slow down a bit. Rapid fire information about something you are not familiar with adds significantly to the confusion so speak up quickly if they go into that mode.

Dental and vision care. Many of the Snow bird types who head south for the winter walk across the border into Mexico for this care as the cost savings can be quite good. There are quite a few videos and website chats about it. There are secure, paid parking lots on the US side and the clinics are a short walk from the Custom's service. No language problems as the staff speak English.
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Old 08-23-2016, 06:59 AM   #12
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Thirty some years ago our Union started a retirees medical fund and a medical savings account . This pre-planning / saving allowed my wife and I to retire early (61) with medical insurance and have supplemental medical insurance when we went on Meducare.
Retiring early or at normal retirement age takes planning.
Our health plan cost over $1000/ month when we were working and came out of my pay check . Trying to make it on SS and pay $1000 / month in premiums is almost impossible.
My youngest daughter is on Mn Care which has premiums she can afford. Before Mn Care she went without insurance and the ER was her primary physician.
Saving for retirement means saving to pay for health insurance and using pre tax dollars to do that makes sense to me.
Sometimes early retirement is an unobtainable goal.
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Old 08-23-2016, 09:29 AM   #13
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Well there are of course the tax penalties to consider so you need to have a qualifying plan. Plans get cheaper the more risk/costs you are willing to accept. As they do with all insurance. You car, home, camper all get cheaper the higher your deductible and the lower the limit on coverage. The deductible is a cost or co-pay, the limit on coverage is the risk.

What I am suggesting is you weigh how often you see a doctor, what medications you regularly take, and what percentage of any major illness or hospitalization you are willing to assume as your own risk.

Medication coverage can be the joker in the deck. I was prescribed an antibiotic eye cream, nothing radical or new and found that without insurance that tube cost many times its weight in gold. Lot of people only see the insurance co-pay on a drug which may only be $5 - $20 while the actual cost is hundreds of dollars. So if you take a fairly routine drug for something or know of a condition that might in the next 5 years require drug treatment it is worth investigating what that would cost with say a much cheaper 50% co-pay.

Might also want to check on and eliminate any cross coverage. E.G your auto insurance may only cover your medical costs not covered by other insurance, or it might be primary coverage if the injuries involve auto (yours or any other auto depending on the coverage) When you go on Medicare which specifically excludes coverage in your auto the auto insurance jumps a fair amount. If you compare you may find that coverage from one source is less expensive than from the other for the same hospital/treatment coverage amounts if they result from an auto related accident.

It is a balancing act, if you have money saved for retirement, and something happens how much can you take from that nest egg? What will you have to give up if you do? Compare that to how much the insurance costs will dip into the nest egg. Buy whichever suits your budget for money and risk.

Don't forget to consider if you will want a supplemental plan for Medicare. Lot of folks figure they are a waste of money, others prefer the more complete and broader coverage they provide for the additional cost which they pay out of pocket. This could potentially be an ongoing cost going forward even after your 5 years.


You might want to consider that idea of part time or project based work, even seasonal work for a few years, either to cover expenses or continue to build or buffer nest egg during transition. Stuff you might not consider such as driving a school bus gives you 3 months a year off for travel and pay is generally half decent. A small business or non-profit might have a flexible part time professional position. My mother went from Budget director for a large enterprise to doing bookkeeping and tax paperwork for a small business when she retired. Lot less stress, more free time, extra money for traveling and such.
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Old 08-23-2016, 09:50 AM   #14
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Individual health care...

Find a good health insurance broker. Ask friends or interview several. It will not cost you anything to use their services as they get paid by the insurance company usually at rates set by your state. We found their recommendations to be very helpful as they tend to have a broad exposure to a lot of company's plans. You still need to do some research on your own but a reputable insurance broker can help simplify the search.
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Old 08-23-2016, 11:45 AM   #15
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I'm 62 and although we could manage if I quit working today, I'm planning to work until 65 for Medicare eligibility. Health insurance is a major part of the calculation. My wife left her job this year, so both she and my 19 yr old son are on my company plan.

I'm on an HSA plan through work and hope to build enough of a balance to help pay for future medical costs.

Neither of us have pensions, so the general plan is to delay claiming SS until the maximum payout age (70.) To that end, we will live off of our income investments, asset sales and maybe some part-time work.

Health care costs in the US are whack.
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Old 08-23-2016, 12:35 PM   #16
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Escapees at Escapees.com has numerous members who have no domicile address other than their Escapee membership. If you go to Escapee's web site you'll find rversinsurance.com and Texas blue cross, both are affiliated with Escapees. We have not bought health insurance center thru either group.

We're old enough to have Medicare. The cost of Medicare for the two of us is about $9,000 a year for prescription, part A and part B. Part B is by far the most expensive part.

We've had it for 9 years and virtually not paid a dime out of pocket, get coverage anywhere including our trips out of the country. Our only abnormal medical events were with skin cancer and a torn meniscus.

Insurance is probably our biggest single expense. Prescription and part A are automatically withdrawn from SSI. Part B from our checking account.



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Old 08-23-2016, 12:39 PM   #17
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I have insurance through the Affordable Care Ace or Obamacare. The insurance is just for myself until February 2017 when my Medicare kicks in. My wife is already on Medicare and also has a Plan "F" policy. I hope I have described that correctly because it's very confusing.

Let me say that it's better to have Obamacare insurance than no insurance at all. Without the subsidy, I don't feel that I could afford health insurance. With that said Obamacare has plenty of problems.

I have two stories to relate. First, I had to estimate my 2016 earnings to get a subsidy. I estimated pretty close and my subsidy pays roughly half my premium. After I chose my policy and signed up, we found out that if we earn more than my estimated earnings, I would have to pay back all or part of the subsidy. AND in certain situations, the reimbursement could actually be more than I received as a subsidy because the premiums are re-figured at market rates and not the rates negotiated by the health care plan. I had planned to work part time (with no benefits), but I can't do that without losing the subsidy AND possibly being liable for a large retroactive back-payment. Incidentally, drawing on an IRA or a 401k is counted as earnings, so I am being more frugal that I ever have, trying to stay under my budget. Even so, it's taking some creative planning and a little borrowing to get by. It's very hard to find information on this issue, but it does appear in some places. My wife found it in her Jane Bryan Quinn financial guide. We went to an accountant, but even he said he would have to study up on the issue. About all he could say was 'Yes it's true and be careful.'

Second story. My wife recently needed an appendectomy. That was a big surprise for us, since it's not common for people of our age. We are starting to get the statements that show what Medicare and her subsidiary insurance paid. For example, the doctor charged $3000 for the procedure. Medicare said it would pay $500. The doctor accepted that as payment in full. So Medicare paid $500, but we would have been charged $3000 if we had not had insurance. Part of the administration of the anesthesia was billed at $1500. Medicare paid $200 which was accepted as payment in full. We would have been billed the full $1500 if we didn't have insurance. The point is that the hospitals and doctors are way over-charging to compensate for diminished payments from insurance companies, or from billings that go into collection. I guess the lesson is that you better have insurance. I'll keep further comments to myself.
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Old 08-23-2016, 01:17 PM   #18
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Doctors will negotiate. An adult grandson was hospitalized in FL. The bill was $15,000, they happily took $1,500.

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Old 08-23-2016, 01:33 PM   #19
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Long history of health care regulations, but worth the read

Sometimes it's good to know how we got to this point.

https://mises.org/blog/how-governmen...e-so-expensive
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Old 08-23-2016, 02:24 PM   #20
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If somehow you find yourself paying out of pocket for a prescription, for whatever reason, and you have AAA auto insurance, you might get a substantial discount if you mention the AAA insurance. I've gotten a $250 emergency refill on an antibiotic at CVS for $150. Surprised me. The clerk simply asked if I had a AAA card, , I said yes, showed her the card, and saved a bunch.


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