Health insurance premiums blocking early(ish) retirement?

[AliInKY]

Hi all,

My husband and I are in a position to pay off our home in 8 years and exit stage left from the rat race.  While we plan to do part-time work as it pleases us, we will have no financial need to do so...except for the concern of health insurance.  We will be 55 and 62 years old at that time, so not eligible for Medicare. 

We have medical conditions that require medication.  Mine is autoimmune and can't be impacted by diet or lifestyle.  His is a result of 25+ years smoking (he quit 6 years ago, so proud of him!)  I'm concerned about premiums we'd have to pay for health insurance, whether under ACA (which is what I priced in Kentucky) or whatever may come out of Washington in the next few years.  There are options where I work to bridge to retirement but the premiums are still quite costly.

Anybody else in a similar position in which you feel health insurance premiums are your blocker to early(ish) retirement?  Suggestions on what to research further?

Thanks much.

[startingsmall]

I definitely see this as the major sticking point in our plan. I know that many people feel like it will all be worked out in the coming years, and either ACA costs will stabilize or we'll come up with some better (single-payer?) plan, but I'm kind of a skeptic.

We're currently 38 & 33 years old... and should be in a position to retire in 10 years. What we've decided to do instead is shift our focus from early retirement to 'downshifting.' We've basically accepted that one of us will probably always need to have a job that offers health, so for now I'm cutting to PT work while he continues to work FT. At some point in the future, we might trade off. And there may be gaps where we're covered by COBRA, where neither of us is working FT.

I can't currently see any other way to take advantage of the progress we've made without risking time without insurance. My husband also has an autoimmune disease, so going without health insurance really isn't an option for us... and all the savings in the world won't really help much if we go back to the days of being able to deny individual insurance based on pre-existing conditions.

[ooeei]

The health insurance landscape is in a state of flux right now, so what may be true this year could be completely wrong 2 years from now (even moreso 8 years from now).  My vote is stay the course and make a decision when you're within 6 months to a year of retiring.  At that point you'll have a more reasonable idea of what to expect. 

[Gin1984]

Lack of retirement health insurance is one of the reasons we may not retire early or we may need more funds to live somewhere like California or Massachusetts to get health insurance.  My first goal is to face 25X my current expenses and once there I'll look at what states and what costs I'll need for insurance and save for that.

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[MayDay]

Same issue here.

We'll be able to retire in 9-10 years when we are 52 and 44. So we'll need insurance for a good long while until Medicare kicks in.

I am ok so far, but family history indicates I'll probably need knee surgery and get cancer before age 65. H has heart disease and needs $$$$ procedures and medications. He would be uninsurable BN if the ACA doesn't exist in a similar form.

At this point we are accumulating as if we'll retire in a decade, but in reality there is a good chance one of us will work in some capacity for quite a while longer.

I can't even imagine the stress if we'd retired last year, thinking HRC would be elected, and to now see it all threatening to crumble.

I don't necessarily even care how expensive it is. I can save enough to pay high premiums (which I realize isn't a good solution for most people!) But if the legal situation isn't stable enough to be pretty sure it'll continue as is for another 20 years until I'm 65, I have no clue how you can decide to pull the trigger. I'm terrified.

[skeptic]

Not much to add but it's a big concern here as well.

[anotherAlias]

Lack of retirement health insurance is one of the reasons we may not retire early or we may need more funds to live somewhere like California or Massachusetts to get health insurance.  My first goal is to face 25X my current expenses and once there I'll look at what states and what costs I'll need for insurance and save for that.

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This is my plan as well.  The only problem is that I should have enough saved to cover my current expenses covered by the end of the year/early next year.  So insurance premiums won't have stabilized much by the time I save what I'm guessing for health care.

[Miss Piggy]

Health insurance is a huge concern for me and my husband as well. I am assuming we'll need an extra $25,000/year to cover health insurance, prescriptions, copays, etc. I'm hoping that's absolute worst-case scenario.

Our current plan is to quit full-time work in 2.5 to 3 years (at age 49 and 47), but keep my consulting business solely to pay for medical insurance & medical expenses. I can make enough working about 10 hours a week, which is pretty much retired compared to the combined 100 hours we're working now.

[startingsmall]

Health insurance is a huge concern for me and my husband as well. I am assuming we'll need an extra $25,000/year to cover health insurance, prescriptions, copays, etc. I'm hoping that's absolute worst-case scenario.

Our current plan is to quit full-time work in 2.5 to 3 years (at age 49 and 47), but keep my consulting business solely to pay for medical insurance & medical expenses. I can make enough working about 10 hours a week, which is pretty much retired compared to the combined 100 hours we're working now.

But this still relies on an ability to qualify for an individual policy, correct?

I used to be able to get an insurance policy through my professional organization, but that went away with the ACA and I don't know if they would ever reintroduce that if the ACA went away. With that insurance, rates were higher in case of a pre-existing condition but everyone was at least eligible for coverage. Am I correct in understanding, though, that pre-existing conditions before the ACA often meant an inability to find insurance coverage even at costs of $25k/yr? If so, I don't understand what someone in your situation would do if they encountered health issues. Would one of you just have to go back to FT work?

(Not asking to be a smartass... just genuinely curious, because I never had an individual plan pre-ACA and now I'm back on employer insurance.)

[Miss Piggy]

Health insurance is a huge concern for me and my husband as well. I am assuming we'll need an extra $25,000/year to cover health insurance, prescriptions, copays, etc. I'm hoping that's absolute worst-case scenario.

Our current plan is to quit full-time work in 2.5 to 3 years (at age 49 and 47), but keep my consulting business solely to pay for medical insurance & medical expenses. I can make enough working about 10 hours a week, which is pretty much retired compared to the combined 100 hours we're working now.

But this still relies on an ability to qualify for an individual policy, correct?

I used to be able to get an insurance policy through my professional organization, but that went away with the ACA and I don't know if they would ever reintroduce that if the ACA went away. With that insurance, rates were higher in case of a pre-existing condition but everyone was at least eligible for coverage. Am I correct in understanding, though, that pre-existing conditions before the ACA often meant an inability to find insurance coverage even at costs of $25k/yr? If so, I don't understand what someone in your situation would do if they encountered health issues. Would one of you just have to go back to FT work?

(Not asking to be a smartass... just genuinely curious, because I never had an individual plan pre-ACA and now I'm back on employer insurance.)

This is exactly why it's such a big deal for us--we both have pre-existing conditions.

I don't recall the specifics, and what I do recall probably isn't 100% accurate, but my recollection is that before ACA, people with pre-existing conditions COULD buy their own coverage IF they had not had a gap in coverage in the past X number of months. Maybe somebody here can confirm or deny that? It was never an issue I "studied" because we always had coverage through employers.

If we ever lose pre-existing eligibility in the U.S., soooooo many people will be screwed.

[MayDay]

You could buy it, but your preexisting conditions were excluded, and they could drop you at any time.

[Poeirenta]

Yes, absolutely. DH is a Type 1 diabetic and my family health history is none too rosy. We recently decided to ask our employers to go to 32 hour work weeks, which will increase our time to ER 5-10 years, but give us more time now while also keeping health insurance. That might seem like an odd choice, but my dad died in his early 50's and I'm 45, so I have some extra anxiety about the shortness of life. As we're in the position to 'buy' an extra day off each week while keeping our insurance (and adding service credit to my pension), we decided it was the best option for right now.

I wish I had some brilliant ideas for how to solve this particular conundrum, that's for sure!

[Gin1984]

Health insurance is a huge concern for me and my husband as well. I am assuming we'll need an extra $25,000/year to cover health insurance, prescriptions, copays, etc. I'm hoping that's absolute worst-case scenario.

Our current plan is to quit full-time work in 2.5 to 3 years (at age 49 and 47), but keep my consulting business solely to pay for medical insurance & medical expenses. I can make enough working about 10 hours a week, which is pretty much retired compared to the combined 100 hours we're working now.

But this still relies on an ability to qualify for an individual policy, correct?

I used to be able to get an insurance policy through my professional organization, but that went away with the ACA and I don't know if they would ever reintroduce that if the ACA went away. With that insurance, rates were higher in case of a pre-existing condition but everyone was at least eligible for coverage. Am I correct in understanding, though, that pre-existing conditions before the ACA often meant an inability to find insurance coverage even at costs of $25k/yr? If so, I don't understand what someone in your situation would do if they encountered health issues. Would one of you just have to go back to FT work?

(Not asking to be a smartass... just genuinely curious, because I never had an individual plan pre-ACA and now I'm back on employer insurance.)

When I aged off of my mom's insurance I was unable to get insurance for ANY amount of money on the public market.  I was lucky though, I could COBRA so spent over $500/month back in 2009. But what I would have done after, I don't know.  Thankfully I moved and was able to get SO coverage.

[Paul der Krake]

I'm not too worried. I have faith that something will show up. Maybe it will be pricier than the current rock bottom net premiums for people with the right tweaked income, but I think the days of $3,000/month policies for pre-existing conditions are behind us.

And if I'm wrong on that, the world is a big place.

[Trudie]

Lack of retirement health insurance is one of the reasons we may not retire early or we may need more funds to live somewhere like California or Massachusetts to get health insurance.  My first goal is to face 25X my current expenses and once there I'll look at what states and what costs I'll need for insurance and save for that.

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This is the position we're in.  We just keep salting it away and are even prepared to spend $20K a year -- but the bigger worry is if they start dumping people with pre-existing conditions (either explicitly or in a de facto way).  I have to hold out hope that there will always be a few progressive states that insure their people, and that may have to become our plan B.

[Gin1984]

Lack of retirement health insurance is one of the reasons we may not retire early or we may need more funds to live somewhere like California or Massachusetts to get health insurance.  My first goal is to face 25X my current expenses and once there I'll look at what states and what costs I'll need for insurance and save for that.

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This is the position we're in.  We just keep salting it away and are even prepared to spend $20K a year -- but the bigger worry is if they start dumping people with pre-existing conditions (either explicitly or in a de facto way).  I have to hold out hope that there will always be a few progressive states that insure their people, and that may have to become our plan B.

My problem is that I don't think $20K will be enough.  Because you are not only looking at medical costs but that the COL is often higher in those areas. 
For example I live in WNY and spend $25,000 excluding daycare.  My mom lives in Palm Springs, Ca which is cheaper than San Diego or the bay area.  Her rent is more, her food is double mine etc.  So I would be looking at an extra $45,000 to account for the same style of living and insurance.  Then the taxes end up costing more because you are spending more.  That an additional two million.

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