I know many people in my age bracket/situation who are working solely for the medical benefits. If you have any assets, however modest, you are no longer eligible for ACA subsidies. I looked at what we would pay on the open insurance market for two of us (61/62, with one person w/ an expensive medical history) and we are looking at 50-60K a year on premiums alone without an employer subsidy. I don’t want to spend our qualified retirement accounts on this.
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I just want to say that I am not saying “woe is me.” We are amazingly blessed compared to many and I’m extremely grateful for what we have.
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I do get that. But I do wish the healthcare situation here was different so that so many people would not be put in situations of not being able to retire.
Not saying anything more-don’t want to get into trouble.
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I was in the same situation for the most part. Previously I would have been able to retire with health benefits at 62. But they changed it to 65 and I missed the Change by one year.
It was not worth it to us to spend that chunk of our money or pension or whatever on health insurance when I was healthy and complete able to keep working.
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The company we worked for took away retiree medical benefits, but those of us who were employed at the time retained them. If you left and were later rehired, the benefit was lost. When we bought another company, their employees were really ticked off because they’d all lost the benefit years earlier. My premiums are absurdly cheap, and my husband’s were lower than what he paid while working (he was in a professional union and it was negotiated in their contract). They total less than $200/month for the two of us. The medical and the pension were what made the decision much, much easier.
My sister will be retiring at the end of her school year. I was shocked to find out how much she will pay in the 18 month gap between then and when she’s eligible for Medicare. She’s concerned about money, although her advisor says she’s okay. She thinks that one more year will put her over the edge, so she wants to go out while she still enjoys it.
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When I taught I was paying 25% of the cost of my medical insurance. When I retired, it went up to 50%, which was significantgly more, but manageable. Once we got onto Medicare and a BCBS supplemental plan, wow! What a difference.
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Perhaps you are thinking of Medi-Cal programs, but the subsidy qualification is different for ACA plans.
Similar to the Advance Premium Tax Credit (APTC), New Jersey residents will qualify for these savings based on income. Tax households with annual incomes up to 600% of the federal poverty level will receive NJHPS. An individual with an income of up to $93,900 and a family of four who makes up to $192,900 can receive state subsidies to lower the costs of health coverage. These savings are in addition to federal financial help.
GetCoveredNJ | Lower Your Monthly Premiums with the NJ Health Plan Savings
Are there asset factors? I though ACA was all based on income. No personal experience, but I thought that one strategy to bridge to age 65 is to live off non-taxable asset withdrawals to keep earned income low enough for ACA subsidy.
We did this, bridged from early retirement (60) until Medicare, by using ACA insurance. We lived off of non-retirement savings, so we did not have any taxable withdrawals. However, it was still a challenge to keep income down enough for ACA subsidies.
Last year especially was a challenge, with my husband already on Medicare but me not. Our non-retirement investments did well and we ended up with a big tax bill that was to basically to repay the subsidy on one person’s insurance. We might have been better off just getting non-subsidized personal insurance for just me. Too late, now we are both on Medicare this year.
Keep in mind age differences if you are a couple using this strategy. While the younger one is still using ACA insurance, the older one should not take their SS, as that income will effect the premiums.
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Now that the expanded ACA subsidies expired, the income level to qualify is pretty low.
The other issue is the insane deductibles for mid ACA coverage.
I pay $1200 a month with a $10,000 deductible. I have one year until I go on Medicare. I am actively delaying making appointments until I do go on Medicare.
For comparison, my husband is on the best Medicare plan he can be on. All in he pays $370 a month with a $283 deductible and a $2100 max on medication.
If you were to pay for a bronze ACA plan and were to max out your deductible every year, it gets very pricey
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Yes, this strategy might not work for people now, but it did for us for 5 years. This is another frustration about retirement planning, things change (particularly tax laws) and it is hard to predict how those changes will affect your plan. Had there not been ACA insurance for us we would have stayed on my husband’s employer plan. Since he was laid off at 60, they offered him a plan that was not the same as COBRA, something special we could use until Medicare kicked in. We never looked into it as the premiums (at least for the first year) were higher than the ACA ones.
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@deb922 : Is that $370 a month for his coverage only for his Medicare Supplement? Or does it include his Medicare Part B cost as well? (That’s currently $203 a month.)
Including the 202 for part B. The supplement is $158. 0 for part D.
I hope I got my math correct. Ish!
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Wow -that’s a great rate.
You are not paying IRMAA tax?
I’m confused.
I’ll be 64 this month I’m on an ACA plan, I’ll go on Medicare next year.
My husband is 65 and is on Medicare. His costs are much less than mine.
No IRMAA, not even close
@deb922 : Do you know if it also includes their Part D drug plan?? I’m sorry to be so nosy but DH and I are in a Medicare Advantage plan that I’m becoming less and less enamoured with. So I’m trying to prepare my expectations for what I might evaluate this Fall for next year.
We have supplements, and they are in line with what @deb922’s H is paying. The price is going up quite a bit in June, but that’s happening with all the plans, unfortunately. Part D is not included, but like her H, we have a Part D with $0 monthly premium. Our drug costs are very low ($0 for me, a little over $50/year for H - but we would not pay more than $2,000/year each if we end up on expensive meds as long as they are on the formulary or an exception is approved.).
Compared to our high deductible plans from pre-Medicare, it’s wonderful … as soon as we hit the Part B deductible each year, everything is covered 100%. And if Medicare covers it, it’s covered … no insurance company approval required.
@kelsmom is correct.
Our part D plan is $0. My husband is on a biologic and we found one that works on the formulary. His biologic will be capped after we’ve paid $2100, I think it went up $100 this year from last.
My husband’s supplement will I’m sure go up every year. That’s the way it is.
A key part of a medicare package is the medigap plan and if you try to switch back to regular Medicare you can be required to pass medical underwriting in most states to get a medigap policy. This isn’t the place to go into all the details, just want to make sure you’re aware of the possibility.
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