OT: Financial Independence & Affordable Care Act

[no_such_reality]

One great uncertain people have had in planning for financial independence and retirement is planning for health care in the future.

Two aspects of the Affordable Care Act’s health exchange implementation in California that I think will be of great benefit to our people are the standardize service offerings for comparison and the coverage for pre-existing conditions.

Granted, at current estimates, a family of 4 will run basically $12,000 a year for a silver plan with a $2000 deductible and $45 co-pay on primary care visits and $12,800 out of pocket max.

But at least you have a reliable price. Now, how to effectively factor this into the retirement planning.

Even as solo-adult, it pretty much trips to $300/month in SD for a 40 year-old for the same silver plan. A couple $600. Age to 60 and the plan is at $600+ per month per person.

Are expectations for rates to stabilize through the first few years. Or expect them to rise further? I personally expect a short term stall and then rate increases similar to what businesses have been seeing.

[The-Shoveler]

Wow that is seriously unaffordable,
Really have not paid much attention to this, but 12K a year sounds excessive.

I know a lot of Biz owners who get by on $35.00 a month catastrophic type insurance.

Basically you only go in if something catastrophic happens otherwise you pay out of pocket.
Hopefully that option will still be available, otherwise I guess the option is to opt out until you know something catastrophic happens.

[SK in CV]

[quote=The-Shoveler]Wow that is seriously unaffordable,
Really have not paid much attention to this, but 12K a year sounds excessive.

I know a lot of Biz owners who get by on $35.00 a month catastrophic type insurance.

Basically you only go in if something catastrophic happens otherwise you pay out of pocket.
Hopefully that option will still be available, otherwise I guess the option is to opt out until you know something catastrophic happens.[/quote]

Seems pretty similar to what I’ve had for the last few years. Four years ago I paid right about $1,000 a month for family coverage with a $2600 deductible and a similar co-pay.

$35 a month for insurance sounds like what I paid through my former employer for crappy dental and vision coverage. If it’s for medical coverage, it might work fine for a >30 single guy that can afford a sudden $10,000 medical bill. It’s not what most families of 4 would want.

[The-Shoveler]

Assuming that 10K event happen maybe once every 20 years or so, I think that would be the better option,

I have coverage, but I have not been to the doctor for probably 15 years, (knock on wood).

[SK in CV]

[quote=The-Shoveler]Assuming that 10K event happen maybe once every 20 years or so, I think that would be the better option,

I have coverage, but I have not been to the doctor for probably 15 years, (knock on wood).[/quote]

Sounds like someone who has never had to pay all the medical bills for a family of 4.

[The-Shoveler]

Yes you are correct, been a W2 wage earner with benefits my whole career.

I but I know of a few who do use the catastrophic insurance for/with 4 kids (6 people).

It is all they can afford, and it seems to be OK for them (well so far).

Seriously when I was a Kid I went to the emergency room 2 times (once with broken arm – don’t think we had insurance back then), I never remember my brothers ever going.
(We got our shots at school in those days).

We did not go to the Doc in those days if we had the flu unless it got really really serious. No antibiotics every time type of thing, in fact I never remember getting them until I had a tooth infection when I was a adult.

I guess times have changed.

[no_such_reality]

A typical ER run is $30,000.

We had an accident a while back and even though no-one was hurt beyond soreness and bruising, with an toddler in the car, the trip was warranted, but the combined bill for mom and son was around $28,000.

SK, I was hoping the exchange plans were worst case scenario since they assume you have pre-existing conditions. Or do regular plans now not exclude them too starting next year? I would think ‘regular’ healthy person plans would actually go down.

But alas, according to Forbes, they’ve gone up, a lot.

Still the primary benefit is knowing you can get insurance, the cost may be ugly though.

[The-Shoveler]

I Guess I am out of touch with the health system the way it is now, 30K Wow,
never paid much attention to it (never had to).
They should have held out for the full Monty
(gov run health system like the UK)
This just seems like a frankenstein that is worse than doing nothing.

[spdrun]

^^^

Agreed. And the “death panel” objections to public insurance were just asinine, since there’s nothing preventing people from buying private insurance in addition to their NHS plan in the UK (Canada is a bit more strict).

Interesting question to anyone who was around in the 60s — did Conservatives scream as loudly when Medicare and Medicaid came into existence?

[UCGal]

Something not mentioned here – because of course Piggs are all highly paid… but there are subsidies for those making less than 4 times the poverty level.

For a family of four – that means your modified AGI (agi with some specific tax deductions added back in), can be as high as $92k.

I’m hoping to retire early, once my mortgage is paid off. Part of that plan is to control spending… and our planned budget is less than that $92k MAGI. (And still living a nice, middle class life). This is doable because we won’t have PI mortgage… just taxes, insurance, and maintenance for housing.

There is a LOT of discussion about this on the early-retirement.org forums.

I have insurance through my employer and currently pay about $300/month for a family of 4, for Kaiser Permanente. My employer is paying about $800/month. COBRA is about $1100/month for the same coverage. Kaiser’s site gives me a price of about $1200/month for similar coverage, but a copay of $50 instead of $20. And the silver plan (with no tax credit subsidies) is about the same as the COBRA. (But with a deductible.)

If you want to see how your family would fare… You can price the silver plan online.

http://coveredca.com/

[no_such_reality]

UCG, I saw those at early-retirement.

Quite a bit of planning people will do now as you point out $94,000 in AGI garners an estimated $236/month credit but $94,001 is nothing. And a $50,000 AGI is a $700/month credit.

Pay off the home, reduce your income or multi-year hit your income (until mandatory withdrawals.)

Now, how to semi-retire and restructure my income so that I have $50,000 of realized AGI while not reducing my standard of living. 🙂

[SK in CV]

[quote=spdrun]
Interesting question to anyone who was around in the 60s — did Conservatives scream as loudly when Medicare and Medicaid came into existence?[/quote]

I was around, but I was a little kid for most of the 60’s. But I also know that conservatives did holler and whine about medicare. Famous quote from a then B movie actor/wannabe politician claimed it would lead to….

From here it’s a short step to all the rest of socialism, to determining his pay and pretty soon your son won’t decide when he’s in school where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do.

The AMA also strenuously opposed medicare. It turned being a medical doctor from a good paying profession into one of the very best. No group benefitted more.

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