I’ve been playing out different scenarios for the next few years - one involves leaving my current work at 62 (when get a small pension) and moving (while working part-time). It’s just a thought but one of the biggest considerations is health coverage. Wondered if anyone had used the healthcare marketplace for coverage before 65?
If so, curious:
Is coverage good? (e.g., covers most health issues without exorbitant co-pays/deductibles)?
Is the monthly cost very high?
My current health care is amazing. I’d want to get some sense of what an alternate would look like before considering giving that up (have cancer history also). I’ve tried ACA calculators online but they have been confusing!
My husband was laid off a few years ago at 60 years old and decided to just call it early retirement. We stayed on his company COBRA to finish out the year (had met deductibles already). Then for the following years we used the state marketplace to get our health insurance. We kept our income low, since my husband was not working and not collecting any retirement income (including no 401K withdrawals.) Because of the low income, we have gotten good rates for the insurance (some government subsidy). Significantly lower than COBRA.
My husband will be moving on to Medicare this year (I will move on to Medicare next year). I will stay on the marketplace insurance until I move (he will be off it the month he starts Medicare. We will be keeping the Dental insurance from the marketplace (they allow this and the rate is slightly better than just getting dental as an individual.)
Things we have learned. We have done this in NJ and in MA and the plans available and the rates were significantly different (although not the dental). State plans typically only cover health care provided in that state (so no crossing into NY if you have a NJ plan.)
In NJ my premium was lower and the plan was actually better. In MA, my premium is higher, and the plan is more restrictive (things like needing a referral for a specialist). In NJ we used a free (state paid) consultant who helped us get enrolled. He recommended we keep our income low to get the subsidy and said it was a common approach used by “early” retirees.
In both states, our premiums were lower than what our Medicare premiums will be (but that was because of the subsidy).
Thank you so much, kiddie! It’s great to hear from someone who’s done this & done it successfully.
Part of me is thinking: ‘how can I give up the most incredible healthcare ever, to gamble on the unknown?’
The other part says: ‘then you stay in the life/location you are in for the next 5-7 years.’ It’s certainly not a bad life/location (I know I’m fortunate).
But does that mean I just have to keep the status quo? Ugh. Also want to avoid making any catastrophically bad financial decisions in these last few higher-earning years…!
Thanks for this, and your entire post. I was curious and started doing some checks for us. On the bright side, I was surprised that we probably will qualify for subsidies, and the plans weren’t as pricey as I thought. Without subsidies, it looked like $1500-2000/month for both of us. I was planning on $2500/month per person.
However, we live on a state line and half of our important doctors are located in a different state. Some we could travel 60-130 miles north, but H’s oncologist is across the state line. I would like to stay there, if possible. I didn’t realize we couldn’t cross state lines on ACA plans. That is likely why no matter how good of a plan I picked, our colonoscopy doctor wasn’t covered and the oncologist didn’t even show up on the list!
Recently I figured that I’d have to stay at my job longer than I had planned (age 55). I figured I’d try to at least get H closer to Medicare age - he is 4 years older than me. I was looking at it purely from a cost standpoint. I didn’t realize coverages stopped at state lines. Of course, when I retired we are hoping to move somewhere, but where is up in the air.
We felt comfortable with the state rule, as we were already well established with our NJ doctors (since we had lived there for so long). It is a struggle for people in NJ who feel that the “good” specialists are in NYC (I don’t agree, but many feel that way).
Now in MA, we figured we can get any kind of specialist we need in Boston (we are fairly close to Boston). The struggle here in MA is finding primary care physicians who are accepting new patients and are on your plan. When we moved (last year), we picked PCPs who were in the plan and nearby. Honestly, we are not thrilled with our selections, but figure we will switch once we get on Medicare (less restrictive on who accepts Medicare).
We are lucky, in that we are able to live off of non-retirement savings during this time. This keeps our income very low, and gets us the health care subsidy. Our premiums are much lower than the ones you mention, under $1,000 a month for both of us (including dental).
depends on your state, and age. If you are within 18 months of age 65, you might find COBRA to be more to your liking.
A state like CA has a lot of ACA options (PPO’s, HMO’s, high deductible, low deductible…), which can be really cheap if you can zero out income and live off of savings. Your state options will be different. OTOH, if you have to pay full price, COBRA might be a better financial deal.
In our case, COBRA was only a few dollars more per month than a similar ACA plan, so we just keep COBRA until 18 months were up and then went to ACA to bridge to Medicare.
In addition to the COBRA option, my husband’s employer offered something else to bridge until 65 (I can’t remember the details, but I think we could have used it from the end of COBRA until he turned 65 which would have been a few years.)
You need to do the math for your own situation. We kept COBRA for the full year of my husband’s final paid date (which was actually in a different calendar year from his last physical work date.) It made sense for many reasons, we would already have deductibles met and that year was actually a banner high income year because his severance package was paid out that calendar year.
My understanding is that states vary quite a bit on costs. I’m self employed and have insurance through the marketplace. I’m sure others will have a different opinion but mine is that the coverage is pretty terrible. I get some of the cost subsidized, but if I did not it would cost at least $1,000 per month for the premium with a $6000 deductible. For the last several years I have just assumed that I will pay a lot per month for nothing to be covered, just for protection in case of a serious illness or accident.
I think this varies greatly by state and by the available plans. We own a small business which does not provide health insurance so for the past 10-15 years we have just bought our own.
ACA allowed us to buy on the marketplace and no longer deal with searching for insurance for DH who has some health issues that make insurers reject you.
We pay about $1600/month for 2 people for a PPO plan. Every year I do a spreadsheet and it seems like you can either pay a Bronze level plan with lower premiums and a higher deductible, or a Gold plan with high premiums but very low deductibles. If we KNEW we’d have a lot of medical expenses in a year, I’d choose Gold but the years that would have made sense were years where we had unexpected things (emergency appendectomy etc).
H retired and was eligible for Medicare. I decided to join him but I was only 60, so needed coverage. We were not eligible for a subsidy and I wasn’t comfortable with the available options. I pay a bit over $900/mo for a low deductible maximum coverage BC/BS plan here in VA. I don’t believe there are limits on OOS coverage. I get regular physicals, lab work, see a cardiologist- coverage hasn’t been an issue and out of pocket has been minimal. In VA, you go through the “Marketplace” (state) rather than the federal system.
It just boggles my mind that the choice to retire needs to be tied to healthcare. DH recently retired at 58. He has many health issues, has worked his entire life at a high stress 60+ hour a week job, and has saved enough for us to comfortably retire. He decided he didn’t want to work until he drops dead on the job but that he had no need to continue to “collect chips” as he puts it.
Right now, I (54) am continuing to work as the pay out from his company sale made our income for the year so high that we would not do well on the marketplace. Luckily, I still want to work for a few more years, but now that I’m covering our family plan, almost my entire paycheck goes to health insurance through my employer. As a teacher, my COLA that the union fights for each year hasn’t come close to covering my insurance increases.
This really shouldn’t be the issue that it is and I realize that we are in a very privileged situation.
We haven’t had group coverage since the mid 80’s. We buy on the marketplace and my premium for a silver PPO is around 1300.00, my husband has a bronze plan and his is about 1000.00. We don’t need referrals for specialists but I do find the preferred provider list narrower than pre ACA. Even within my state it depends where you live for the amount of choices. I’m in Ca and in my area there is the choice of metal levels for Blue Shield as a PPO or a Blue Shield HMO option. Blue Cross recently started offering coverage but they are quite a bit more expensive for the same coverage.
My dh was, “retired,” (ahem) BY his large company when he was 55. We stayed on COBRA 18 mos as it was far more affordable than buying on the marketplace. After that time, it was our only option as dh was working for a four-person company that did not provide health insurance. I initially chose a more expensive plan with a much larger network. After about four years, I switched to the same plan dh had chosen as the main treatment facility I wanted to make sure I had was added to his plan. I think we were paying about $1,300 per month apiece in our last state. Something like a $10k deductible each. We did have a drug plan as well.
We are in a new state now, and we do pay less, but it is still expensive. Dh started a new job here, but there is a 3-month waiting period to get on his company’s heath insurance. It will be a huge savings to us once we can get that in September. It was a driving factor in his deciding to continue to work.
We did not have the ability to manipulate our income to keep it low because dh had participated in a deferred compensation plan at his large corporate job. Those payments began as soon as he, “retired.” Thus, no subsidies for us. It’s not that we couldn’t have lived off savings - we just had no control over timing that income.
Means testing for subsidies solely through income rather than through wealth is a bit frustrating to me.
Re: keeping your current providers- I jumped through hoops (and paid a premium) in order to keep my PCP who I loved. I had had minimal dealings with the other docs in the practice although I liked the PA and the nurses.
Halfway through the first coverage year paying extra for this particular doctor-- the practice was acquired, my doc took “early retirement” (I guess that’s medicalese for “I can’t stand the new owners and being told how to treat my patients by a 32 year old accountant”) and I discovered through trial and error that none of the other physicians in the practice are worth the premium.
So just a cautionary tale for anyone wondering if it’s worth paying extra to keep your doctor. In my area, all the independent practices are being bought and consolidated, so all the reasons you might love your doctor (always available, never rushes you through an appointment, listens, doesn’t tell you to get an MRI just for the heck of it, will talk to you on the phone on a weekend without a “teledoc” appointment and paperwork) could go away immediately if there’s a change of ownership!
I was on an ACA plan for several years, until I went onto Medicare. Same with DW, who will start Medicare soon.
Some years we qualified for subsidies, some years we didn’t, so we just signed up projecting a relatively low income knowing we might have to repay the subsidy when we filed our taxes.
We did/are doing this for the last 8ish years. Things I’ve learned along the path:
the website for my state has gotten much better. The first year, we were stymied with the question about income, as that was very much in flux for us.
we found a wonderful insurance advisor who helped us - both with signing up for marketplace coverage, and with the initial Medicare enrollment (the second Medicare enrollment will happen in 2.5 years). No cost to us.
our first transition to Medicare happened mid year, the second will be in a January. For our state, one had to call the marketplace after the premium for the last month of coverage was paid, and at least 15(?) days before the end of the month. With the end of year transition, I believe we will cancel the automatic re-enrollment during open enrollment.
we’ve been more than reasonably happy with both the cost, and the coverage. Neither of us have expensive prescriptions, and the monthly cost (bronze plan) hasn’t been too bad. With stepping down from 4 to 3 to 2 to 1 on the plan (and from 4 down to 2 in the household), the cost did go up, and the APTC went down. It is a relief to have one of us on Medicare. We do watch, and plan for the PTC repayment.
If you are using insurance from the Virgina State Marketplace you are participating in what the federal Affordable Healthcare Act (aka Obamacare) makes possible. States have some latitude on how they set it up within parameters but they are all state/federal partnerships. There is also still a small individual insurance marketplace outside of the state ACA marketplaces out there but all plans must meet ACA guidelines.
Thanks SO much for the great info and sharing of experiences.
I’ve been spoiled by my employer healthcare for many years (I fully appreciate how lucky I am). Just wanted to explore the possibility of other options. Like: is the financially responsible thing just to stay in current job/location until Medicare? But somehow seems wrong to chart my next few years only out of fear…?