How do you get early retirement health insurance? The question should be, how do early retirees find affordable health insurance? We all know that health insurance can be one of the highest expenditures we will have in retirement before we are eligible for Medicare at age 65. It can be a budget crusher.
Based on all my conversations with people before I retired. Medical insurance issues was the number one thing keeping people in a job they despised. It caused them to delay their early retirement dreams. I stayed far longer than I wanted to with my company because of health insurance.
The new company that took over my company whittled away at benefits and passed more of the retirement medical health cost to retirees. At least I knew I could still get it. In 2009 when I retired the insurance companies could and would exclude people. For anything from treatable high cholesterol to arthritis. Even if you could afford to buy medical health insurance on your own.
Early Retirement Health Coverage through Affordable Care Act (ACA), aka Obamacare
Then came the Affordable Care Act (ACA), aka Obama Care.
Love it or hate it, it is here. Or at least for the start of 2020. I do not want to get into the politics surrounding the ACA. The one thing I think everyone should get behind is an available health insurance benefit brought to anyone wishing to retire early while they are still young. That benefit is that Medical Health Insurance companies cannot now exclude you from buying Medical Health Insurance. The last of the Corporate Golden-Handcuffs have been unlocked.
I could have left my company years earlier. Accepting opportunities that were available to me and received a higher salary rather than endure what was occurring post-merger with a corrupt and now convicted felon ex-CEO Clown who ruined a great company to work for.
I digress. I did retire early with a Retirement Health plan. In the year 2010 it cost me around $475 for Medical and Dental insurance for my wife and me. For the year 2016 it cost me $851 for a lesser insurance. My 2017 early retirement health insurance increased to $970 and increased again 2018 to $1,064, 2019 to $1,340, and now 2020 a slight decrease to $1,334 for an even lesser health insurance benefit. I am not complaining but it is my biggest monthly budget expenditure.
How do you get early retirement health insurance or find affordable medical insurance?
If you have a retirement Health Insurance benefit you should look very closely at it. I would hope that you are getting a better plan for less money than anywhere else. However your share of the premiums may be so high you could benefit from using the ACA site and qualify for an early retirement low-income subsidy. Again, I do not want to get into the politics associated to this. I am just offering a solution to Early Retirement Health Insurance.
I know my Leisure Freak fully retired taxable income when I am not practicing the Retire Often part of the Retire Early and Often lifestyle is within the low-income subsidy thresholds. Since I have no mortgage or debt and aside from a couple of hobbies, I live a simple life free from all the trappings of commercialism. That means my expense footprint is small and thus my taxable income is very low.
Some things depend on where you live. Some States established their own ACA sites and health insurance exchanges. Other States did not set up their own Health Exchange. You will then need you to look at the Federal government Health Exchange site.
You may want to investigate this further by going to the healthcare.gov web site (https://www.healthcare.gov/) .
There is drop-down to your specific State. You want to research basic information from either the federal exchange or your state’s exchange. Whichever is applicable for the state you live in. I have another page called Affordable Care Act Subsidy Thresholds. You can get an idea of whether you will qualify for any health insurance subsidies.
What to look for.
The idea is to find details about the various plans offered, cost and what it takes to enroll. Insurance plans grouped as Platinum, Gold, Silver and Bronze will cover identified essential benefits. However, your premiums and out-of-pocket cost will vary.
Just remember your retirement budget. Calculate what you can afford to pay for monthly premiums, any out-of-pocket deductible expenses, and co-pays. It all has to be part of your budget. Also look at and plan around the things that may not be covered by any health plan you are considering.
Finding an Early Retirement Health Insurance Plan outside of ACA.
Finding your early retirement health insurance and being able to compare various insurance companies, plans, coverage, and monthly costs is easy when using the web site eHealth. (*affiliate) The site is straight forward and all you need to enter is your Zip Code so you don’t have to divulge any super personal information to see the plans and get quotes.
You can find the right health insurance plan for you and your family. Different plans cover different expenses. Let eHealth find the right coverage at the best price.
* eHealth is a LeisureFreak site affiliate that may pay a referral fee if you sign up or buy something. Your support will not affect the price you pay for using the eHealth service and if you do use any of my affiliate links or an eHealth site ad then a great big thanks to you from Leisure Freak Tommy.
The skinny on Skinny Health Insurance Plans:
- For people with pre-existing conditions, buyer beware! You will find that some of the offered skinny health insurance plans will provide little or no coverage at all.
- Most skinny health insurance plans will have strict caps on total amount of expenditures they will payout per year.
- The insurance may be limited to cover only specific doctors services-hospitalizations.
The reason a skinny health insurance plan may be attractive is they have a lower cost that’s driven down due to their coverage limitations. Monthly premiums may cost as much as 60% lower than ACA insurance depending on the ACA qualifying income vs subsidy formula thresholds you meet. The other attractive feature is they can provide gap-insurance. Skinny plans can be purchased at any time of the year and for a shorter duration, such as for 3 or 6-month contracts.
Skinny health insurance plans will roll out in certain states sometime in 2018. There are a lot of conversations as to whether they are merely “better than nothing” plans. Depending on your personal health situation they may not be a practical early retirement health insurance option.
Medishare- The Non-Insurance Health Insurance Option
There is another healthcare option – Medishare. Medi-Share is NOT health insurance. It’s a healthcare sharing ministry membership program in which Christians share their financial resources to help pay for other members’ medical expenses. It does require members to live Christian values, not smoke, or use illegal drugs. For more information on Medishare you can research this option at info.medishare.com.
What happens if you retire early without having health insurance?
Not having health insurance could cost you thousands. Most Health Insurance providers offer in-network lower cost medical services. The insurance companies negotiate lower prices that you can be charged. Without health insurance, Hospitals and Doctors can charge you full price. If you experience any major medical event you not only risk bankruptcy but your early retirement might just come to an end.
Before the tax reform of 2018 all Americans without insurance had to pay a penalty or qualify for an exemption. And guess what, that ACA mandate repeal doesn’t take effect until 2019 so 2108 is still a penalty year. The “no coverage penalty” for 2016 was 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child. This is up to a maximum of $2,085. For tax year 2017 and 2018 the percentage option stayed at 2.5%, however the flat fee adjusts for inflation.
The individual mandate was repealed for 2019. That means that Americans without health coverage in 2019 will no longer be subject to a tax penalty.
I am sure that everything ACA will still continue to be heavily debated in 2019 and beyond even though ACA’s “repeal and replace” AHCA bill failed to pass. At this time ACA is always under threat. Although it is viable option for early retirees who can manage their taxable income to stay withing subsidy thresholds, counting on it may need to be backed up with a plan B.
Finding your early retirement health insurance is an important financial and non-financial aspect of your retirement. The plan you choose MUST meet both your budgetary and health needs.
I wish you great luck and hope this gives you some ideas on early retirement health insurance and that Health Insurance doesn’t keep you from Retiring Early while you are still young.