Health Insurance question

[shortduck]

First of all I have a huge expectation to find a good answer here.

I'll try to post just the crux of my current situation.

My Wife work environment ( aka manager) is very hostile and this has take toll on her. We are almost decided to quit. We had health insurance from her place (PPO). I work as a contractor and my employer health insurance is very expensive.

I was Health market place, minimum monthly plan available to us is $700. We also have mortgage payments.

My current net income is 7400$
- Mortgage $ 5300
- Health Insurance (if I take online) $ 700

This is leave us with $1,400 for monthly utility and grocery ( not too bad though).
Health wise we do not have too much.
1. My son will need braces ( out of pocket anyways)
2. My BP meds should not be expensive (out of pocket)
3. Wife: we are try alternative meds, already paid.


question: Health insurance is ONLY thing that is bothering my wife. Is there a good ( and cheaper) solution to this until she finds another job that will pay Health Insurance?

many thanks for looking, any pointers will be great.

[uniwelder]

I have not health insurance advice, sorry.  What state are you in?  I would think that with 3 people on the plan, and your income, you'd qualify for a health insurance subsidy.  Are you including that in the $700? 

However, some of your numbers are extraordinary.  You're bringing in a net of 90k per year combined and have what is likely a mortgage for a million dollar home?  I hope you're both maxing out all the retirement fund options you have and subtracting that from the net amount provided here.

edited to add---- assuming you're in California (million dollar home), it looks like a bronze plan would cost about $250/month based on the numbers given.  90k income + 3 people.  What's different about my assumptions vs your $700 estimate?

[shortduck]

I am in Michigan.

we put < 20% APR 5.125, just got the home.

My wife+mine combined income > 200K/year.

We do have some 5-6 months of emergency funds available.

[tj]

if your income is > $200k/yr you should be able to easily pay for the premiums on the ACA. Some states have terrible networks though.

[dandarc]

I think that income won't be > $200K per year if wife quits her jobs.

OP - to give good advice, on something like this, need a more detailed accounting of your income and expenses. If your income goes down significantly, then taxes will go down which will help lesson the blow - is your withholding correct for your new lower household income?

People do make it work in Michigan with $1400 / month + housing and health insurance. But that is very tight. Have you considered doing a more full case-study? Can help you think through a lot of things and you'll get a lot of helpful advice. Does your wife want to work and will probably be in another job? How long? Do you have savings that could help here? Way more complex question than health insurance cost.

[dandarc]

More direct to your question - ACA could be cheaper than you're expecting with lower income when your wife quits - do you know if your employer coverage qualifies as affordable or not? Impacts the subsidies that you might receive.

There's no magic bullet when it sounds like you're well over the income to qualify for medcaid - you get health insurance from either an employer, the marketplace, or you go without and bet that you're not going to have an issue (going without is not recommended, but it is a thing that some people sometimes do).

[reeshau]

Point 1: if you have employer health insurance available, you likely won't qualify for ACA subsidies.

Point 2:  Your wife probably qualifies for COBRA coverage, even if she quits.

COBRA is obviously more expensive than you have today, because you have to pay the employer side of insurance, too.  But it's "the devil you know."  You can still look into other options, but it may give her the confidence to take the step.

[ixtap]

As you are seeing, if your employer offers insurance, you won't be eligible for subsidies.

Is your wife planning to take time off? Has she been applying for jobs? How much would COBRA be? (Megacorp's has doubled in two years; two years ago it was a good deal).

[uniwelder]

Is there a good ( and cheaper) solution to this until she finds another job that will pay Health Insurance?

I missed this part in the original posting.  How long does your wife want to quit before starting a new job?  Since this is in the Post-FIRE section, I had assumed she was quitting altogether, but now I realize this isn't the case.  You might want to have your posting relocated, like the Ask a Mustachian section or similar.

If it's just a couple of months, then Cobra sounds like a decent option.  Keep in mind that with most companies, health insurance is active for the full month that you quit.  If her last day is on the 1st of the month, then she'll usually be covered until the 30th or 31st, so that could save some money.

If she'll be out of work for more than a year, then perhaps she can quit in January, so it'll just be your 90k income in the MAGI calculation, which qualifies your family for insurance subsidies.

[dandarc]

I missed that too - good eye. Really does depend on "how long is wife not working". Short time, COBRA is fine although expensive. Of course for short time, Marketplace is also fine more or less regardless of cost too.

[reeshau]

I work as a contractor and my employer health insurance is very expensive.

If she'll be out of work for more than a year, then perhaps she can quit in January, so it'll just be your 90k income in the MAGI calculation, which qualifies your family for insurance subsidies.

If he has insurance available at work, he will likely be disqualified from ACA subsidies.

[uniwelder]

I work as a contractor and my employer health insurance is very expensive.

If she'll be out of work for more than a year, then perhaps she can quit in January, so it'll just be your 90k income in the MAGI calculation, which qualifies your family for insurance subsidies.

If he has insurance available at work, he will likely be disqualified from ACA subsidies.

Yes, good point.  I forgot about that.

I've always been confused when people use the term contractor.  Sometimes it means they work in construction, as an employee for a construction company.  Sometimes it means they're really a contractor and are technically self employed. 

[Firepants]

If employer provided insurance isn't "affordable" you would qualify for a subsidy. In 2024 affordable is defined as employee coverage is less than 8.39% of income. For 2025 it's less than 9.02% for entire family coverage.


https://www.healthcare.gov/glossary/affordable-coverage/

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