Not a political comment and I realize it’s different for each state, but our facts are the Marketplace plan / aka Obamacare isn’t working. It’s just a fact. Pre marketplace, we had many choices in coverage, carrier, cost, etc. I have pre-existing conditions but they have been fully covered since 1993 in FL via small group reform (including small groups of 1). So if you own a business or are a sole proprietor or work for a company that provides benefits, FL removed the pre-existing coverage issues a long time ago. I know many states did the same. I guess the ones who were caught in the middle were employees of large employers who left work, did not get another job with benefits, had pre-existing issues and had to pick up an individual plan. Those people are better off because they have coverage now, albeit very expensive. However, millions of us already had good/ affordable coverage and it all went away overnight several yrs ago. When I say “went away”, I mean it literally. The carriers pulled out of the state. The only marketplace plan you can get in our area is BC/BS and it’s choices range from very expensive to ridiculous. Those should be the names of the plans instead of Bronze, Silver, Gold. Essentially everything they said about being able to keep your plan, keep your doctor, keep costs down proved to be wrong. Not saying they lied. It just hasn’t happened. The companies pretty much just said, “forget it, we’re out of here”. Not sure why the feds didn’t see that happening. Or maybe they did and didn’t care. Seems to me it would have made more sense to fix the problem that existed for the non group, pre existing condition folks with some form of “medicare like access” for coverage on issues not covered due to pre X. Yes that would have been messy and vary by state but this present system, for tens of millions of people, doesn’t work. Unfortunately we’ve had a few experiences where we know we have to maintain coverage because one event could wipe you out. I spent one night in a cardiac center requiring three stents and the total bill was 110k. That’s also crazy!
Our healthcare in this country is great (the actual care provided). The cost and manner in which it is paid is really screwed up! They are connected but they are also somewhat separate issues. Cost of care should be the same, regardless of who pays. In some cases it would be better to be uninsured and receive huge care discounts to actual services and view things over a 10 yr period. Probably save a bundle vs. paying the premium, but not twilling to take that risk.
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My plan isn’t a marketplan place, we have a group plan with others in our group. It’s a business group plan.
Second, I would disagree that the ACA isn’t working. Years before I was remarried I was on ACA (aka Obamacare) and my healthcare and plan was phenomenal and much cheaper than what I’m paying now, and I had no waiting period for any pre-existing illnesses which I did have to wait a year for any coverage for prior to ACA so 100% disagree with what you’re saying.
Also have no clue how your insurance if it’s not part of the ACA plan could ever cost that much? I would never pay that much even when I had ACA. My max then was 12k out of pocket. Now it’s much lower.
H has health care coverage until each of us turns 65, as part of his retirement agreement. The company could take it away at any time, of course (the same company reneged on many aspects of my dad’s retirement & severely impacted his finances at the end of his life). It’s not cheap, at more than $5,000/year … and a $6,000 deductible on top of that. But it’s better than what others I know have to pay. We are looking forward to Medicare, believe me!
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$5k/year is a pretty good buy. I would gladly take that as most people would, considering it’s not even $500/mo and it’s hard to find coverage for just one person at that amount these days. The high deductible is the downside, but regardless it is still unbelievable cheap.
My husband’s insurance as part of our group costs more than mine since he’s older so I too can’t wait until I can dump him off the group plan when he turns 65 (3 more years to go) and he can get Medicare, but have to remember that’s not just free either and we’ll still want some supplmental so it’s all stuff that needs to be reviewed but happy I don’t have to do it “yesterday”.
You’re not really disagreeing as I said ACA and pre ACA work differently in each state. I also stated there were issues (in my state) for those who were stuck in the pre X world due to new coverage not picking them up. Your ACA experience was way better than mine. I had a great plan, with full coverage and tons of pre X, that was taken from me and replaced by an inferior (in every meaningful way) by ACA. Coverage was terrible, costs was immediately 2x and has continued to grow much higher. Don’t know what the old plan would have cost because it doesn’t exist anymore. Went away the yr ACA was implemented in our state. Millions lost their coverage and were forced in to ACA with far worse coverage - high deductibles, larger co pays for every day stuff, at a much higher price. Not arguing. It’s just what happened here. I realize it worked / works differently in other states. It did help those that couldn’t get individual coverage due to preX. Have never seen figures comparing that pool to the numbers of small business owners, sole props, large groups that had excellent coverage. FL is a huge small business state. Millions of us owning or working for a small business. The poor / indigent (lots of them too) were already covered by medicaid. In our state, it just hasn’t worked well and likely will be the single reason many need to work until medicare kicks in. Pretty sad to have to work just to pay for the benefits.
I think part of the issue is that as you get older the insurance just costs more if you’re in small business. My 24 year old son provides insurance for his employeees. He stays on his fathers plan since it’s free. But the plans they give them are so cheap because they’re all so young. He has 2 more years on the plan and then has to get his own and these plans are nominal for better and less expensive coverage. Of course because old folks like us have more medical issues than a 24 year old…or so most of them think. Once that group starts having issues down the line thanks to having had covid then it’s a whole different ballgame. But most of us will probably be gone by then not having to say “I told you so”.
We are very fortunate to still have a pre-ACA grandfathered plan. Prices have gone up over the years but it is still half the price of an ACA plan for better coverage and a wider network of providers ($1500/mo for family w/$3500 deductible, $6000 out of pocket max per individual, twice that for family as a whole).
I agree that finding the right balance between mandated coverage and low costs is difficult. Bringing in people in what was previously the high risk pool and adding free annual check-ups, etc. means the cost of providing the insurance was bound to go up. But then the attempt to offset that by raising deductibles led to the cost of actually using the policy being too high for many people. Undoubtedly many are better off if they get subsidies or were previously uninsured, but the burden of the US’s extremely high medical costs just shifted elsewhere.
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Yes, the burden just shifted. Would have been better if they just provided some subsidies to the uninsured or underinsured (pre x) as ACA without subsidies (me and many millions) are getting crushed. We’re giving the subsidies to the former uninsured / poor anyway. Not an easy problem to fix. Would be different if starting from scratch but we weren’t and kind of treated it like we were.
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There are multiple threads on Bogleheads about people trying to manage pre-65 retirement and keep income below the ACA cliff so their care is subsidized (cliff is gone for 2021/2022 so not sure how that works into the plan.) I have seen people talk about using a HELOC or cash out refi to avoid taking funds out of pre-tax retirement plans until they hit Medicare age. All sorts of contortions to get that subsidy.
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A FA advised us to get a HELOC before dh retires. Anything I need to know about that? Seems like a good idea just in case.
Could cost a lot in interest as rates are rising so you need to weigh all of that into consideration and if it’s worth it or not.
Oh, I should have been more precise. I meant to qualify in case we need it but not actually start out taking advantage of it.
Look at the draw period and associated terms. Sometimes it is 5 years that can be extended to 10. But the terms of extension are not always clear, so you want to make sure you have access to it if needed for the whole 10 years.
One has to get in the mind set that what was past is past – company benefits, company pay, company health care costs as employee and retiree; got to get in the stream of what is now and in the future. Then one can make decisions on what things currently cost, what they may cost in the future, and how can I/my family navigate with current and future decisions.
One thing that is keeping many in the work force is the health insurance coverage before age 65 for self or for spouse.
DH’s aunt and uncle (aunt was in HS when DH was in elementary school) - he was union electrician and saved up money out of his pay into health care so he could retire a few years before Medicare and have their health care paid for.
DH and my plan was for us to both work until I turn 65 (Oct 2021, months behind DH turning 65). He was fed up with work and bailed - but it was timely, as he could go out of state and be with his elderly parents - his dad died Dec 2020 at age 92 and his mom died Mar 2021 a day before she turned 92. I was able to pick up health insurance at my workplace which was similar to his and costs $175 every two weeks for the two of us; that is a savings over $1K/month off from the COBRA cost. I am hanging into work with every fiber of my being – I work PRN in health care and put in enough hours to qualify for health care. I work M - F second shift hours M - F on the days I am available and the days they need me.
DH could have even scaled back to 30 hrs/week and continued his benefits. His last boss was an idiot for making DH miserable – DH was so much more knowledgeable about technical things throughout the company – his last boss was not an engineer and did not appreciate what he didn’t know - I had worked for this guy in the late 1980’s, and the stress of the job on this latest boss situation had the boss flying off the handle and berating DH in front of others when DH wasn’t in the meeting the boss made certain directives - this guy was so nasty to DH and then wrote him an email apology – well too little too late, and it didn’t change his ways to making DH want to go into work. DH saw what was in our 401k and said ‘enough’ - enough money and he had enough of his boss. What a terrible way to end his time with a company (actually a series of company owned this facility) with decades of experience and expertise and not making the salary level either. However once DH was aging, it was difficult to work in our city at his level w/o a security clearance, and we were not interested in moving at that point in time.
A good thing is that DH is very happy to do all the lawn ‘chores’ and other chores are things he wants to do/is capable of doing and now has time to do - he always liked mowing the lawn, but now he has time to do all the lawn treatment and babying to make it look great. He use to ‘hate’ trimming the hedge, but not a problem now. He is getting into more wood working and making things. Once he runs out of stuff, I will get him going on making closet organizer spaces (more shelving, etc). What he doesn’t want to make, maybe purchase and he does the installation. He is very keen on getting our house up to picture perfect selling shape. More work on me with retirement on organizing and going through the garage and storage areas and getting rid of stuff. Looking at a townhouse in another city for our housing in-between another home purchase (friend is selling, so once she is ready to sell we may be buying direct/cash purchase).
DH had designed the sprinkler system for this home (which we had built in 1992) and before he retired I added some plants and a small dogwood tree on the edging to the left of our home to add curb appeal. DH wouldn’t do the landscape work so I hired the landscaping guys who mowed our yard when DH was in CA for extended work trips. It turns out one of the sprinkler heads now needed to be moved - which DH did this week. I told him “the sprinkler system supports the landscaping; we don’t plan the landscaping for the sprinkler system”. DH states he is starting to hate the term ‘curb appeal’ but he is very proud of how his lawn is getting to look like with proper care. The prior company that pre-treated and fertilized our lawn had sprayed an area that killed the grass; DH is now having even that spot look great.
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As a financial planner / advisor I do a lot of pre-retirement / post retirement planning, helping clients build predictable income streams based on their risk tolerance. Use all kinds of instruments with various risk profiles. Everyone is different. However the single largest common concern amongst my clients is the cost of healthcare (pre and post Medicare). The largest potential costs come from nursing home / assisted living but many folks between 55 and 65 struggle with how they’re going to retire and pay for regular health insurance prior to Medicare. If they have enough socked away, fine. If not, it changes their whole world regarding what risk they need to take in order to generate the extra cash to pay for health insurance. Some take the plunge. Most decide to put off retirement for at least a few yrs, so they don’t have to force the issue and seek higher returns.
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I have said it before on this thread, and I will say it again. Not everyone has the choice in whether or not they continue working. Ageism is real. Some people are forced into retirement whether they are ready or not. It’s not easy getting hired in one’s mid-50’s.
We knew that our health insurance cost would be our single largest retirement expense, and it is. Dh and I together pay about $28,000 per year. Just the two of us, as ds is launched. We have several years to go, and I will not be surprised if the Medicare age gets pushed back before we hit 65.
Dh’s COBRA was a good deal, and we kept it as long as we could, but he, “retired” at 55. It is was it is.
EDIT: Dh unexpectedly got another job and came out of retirement. He loves it, but it is a three-person business, and he has no benefits. He gets an extra $5,000 per year on top of his salary with the idea that that helps with medical insurance.
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My last one is off to college in the fall. The pot of $ for him to go to college is different than what I spend on him now. So I don’t have to worry about where that money is coming from. That said, when people have become empty nesters, do they notice any immediate savings from having no kids out? I know some people go and travel right away, etc. but I’m not talking about that stuff. I’m just wondering if with him gone, if we will see some immediate cost savings. I’m assuming we will just because of food, but I wonder if it will be all that significant or not.
I think AARP is too big a group to have Medicare age go up.
Yes ageism is a very real thing. As I said, I am hanging onto my job and the insurance - and if not, COBRA costs, which we can afford I just don’t want to pay if I don’t have to.
In Sept we will have our 3rd grandchild. I received inheritance money and also had some money for DDs that went into investments that paid about 1/3 of DDs’ in-state college expenses.
There are people that set a goal to retire at a 50ish age, and they aggressively build up funds and live very spartan lives in order to achieve this.
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Who wants to retire at 50 and live like that for the rest of their lives and not truly get to enjoy retirement when it’s possible they may have 50 more years to live? I am 52 and work and invest now so that I don’t have to scrimp when I retire and can travel and spend how i want and be generous with my kids and hopefully grandkids etc.
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I’m hoping to retire at around 50ish. While I have saved aggressively, I have not lived a very Spartan life, but I guess that’s all in what you consider Spartan. And I won’t have to scrimp when I retire, though I will have to budget as I’ve done my entire adult life. If folks are happy retiring early and make sacrifices to do that, more power to them. Life is short.
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