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September 30, 2013

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Barb

Obviously nothing will be sure until tomorrow when we go online (assuming nothing crashes). But the initial figures released show that my twenty four year old son would get coverage at the same amount that he is costing me on my family policy-maybe less. I haven't looked at the costs for us boomers yet, because I am blessed in fact to have honestly good health care-a two hundred dollar family policy or 100 for me alone) with twenty dollar and ten percent copays.

but you know what? If that insurance were more, I would pay it. I wouldnt like it. But I would pay it.

Cindi

I'm going to reserve my comments also until I get all the facts. From my preliminary research, however, our costs will be going up. Our current insurance carrier will be dropping us Jan 1, 2014, so we have no choice. Whatever happens, DH and I will be paying more for health coverage and out-of-pocket costs regardless.
As a side note, if you think medical problems can't emerge, my husband contracted Lyme Disease just from our daily hikes (or simply cutting the lawn). The first round of antibiotics didn't work. Fast forward to today and all the tests and meds he has had to undergo, plus the damage Lyme did to his heart, and for the first time ever he not only met his high deductible, we're now facing 2014 paying off his 2013 medical bills. Obamacare wouldn't have helped. Neither would catastrophic. People get ill. There's no escape. Regardless of age, health, yada, yada, yada. We'd still have to pay. DH now has to master living with long term Lyme Disease. Just from an itty, bitty tick bite that went unseen for a few days.

In a way, I'm glad we're all mandated to get health insurance. I know we will have to pay more, but Obamacare does have it's good points.

I wish everyone good health. And I hope tomorrow goes well for all of us.

PS: Syd, I am so sorry about the loss of your mother at such a young age.

Threequeensmom

We both retired this january. An unexpected health problem for hubby 3 months prior to our retirement left us unable to get private insurance, so we were forced to go with COBRA for the first 8 months. Finally we were accepted for a high deductible HSA-eligible plan for about 40% less than what we've been paying for COBRA. When I hear the pricing for ACA thru the exchanges, it's MORE than what we were paying for COBRA. Hardly 'affordable care' imho.

Angela

Sydney, kudos for keeping a level head and not jumping into the fray along with everyone else. Like you said, we will have actual facts tomorrow, and all the conjecture, good and bad, about ACA can go away. Thank you for keeping us apprised of your findings.
Lastly... My father died when he was 43. I retired at age 43. I'm thinking our parents' mortality was a major factor in our retiring early. I wonder how big a factor it is in everyone else's who follow you.

deegee

One of the last pieces of my ER plan back in 2007-08 was to find an affordable individual health insurance policy I could purchase starting in 2009. I used ehealthinsurance.com and found a decent plan for about $470 per month. (Here in New York, the individual market is terribly expensive.) But in 2010 and in 2011 the premium rose a combined nearly 50% to just under $700 per month so I had to do something about it as it was beginning to strain my budget.

I switched to bare-bones plan in early 2011 but it was only an interim plan until I could get a more affordable and broader policy through the exchanges starting in 2014. Thanks to the subsidy I will be eligible for, I will be able to buy into a plan for about $350 per month, about twice as much as what I had been paying before but less than the $470 I had been paying way before that. So the ACA is a most welcome addition to my ER plan, something I had anticipated back in 2011 when I first switched to the bare-bones plan.

Retired Syd

Barb: Wow, you've got an incredible deal. Right now (before ACA) we pay $700/month and have a $10k deductible we have to meet before anything is covered. Stay tuned to what we get after tomorrow.

Cindi: Yes perfect example (and far less extreme than my mother's case.) Anyone, even a perfectly healthy person, can get struck by something like Lyme Disease. Going without insurance is way too risky in my opinion. (And thank you--I know you lost a mother at an early age too.)

Threequeensmom: Well check into the exchanges anyway tomorrow, just to make sure what you heard is indeed the case. You might also find you qualify for a subsidy, making it much more affordable like in deegee's case above.

Angela: I'm sorry to read about your dad. It's part of who we are, isn't it? I think it's logical that it had an impact on our decisions to retire young. "Life is short" hits closer to home.

deegee: Wow, I can't believe your premium was as high as $700 for just you!

Barb

Syd, I know I am lucky. My husband was a federal employee and while my pension is tiny because he had not retired, I got to keep his insurance (not free, paying into it). Our catastrophic limit is five thousand. I have sworn never to complain..

retireby40

I'm on my wife's employer sponsored health insurance right now. When she retires, then we'll need to shop for a policy. $700/month is a big hit...
Keep us updated. I want to learn more about the exchange. I'll need to get my mom a policy too.

dgpcolorado

Syd, I've been buying my own insurance for fourteen years. Back when I first retired I thought I'd have to "go bare" long before now but my high-deductible ($5900) policy remains affordable at $359/month, despite having gone up by 7x over the years. I'm lucky because I've been healthy: one chronic condition and I'd never be able to afford insurance again under the old system.

I always get a Health Savings Account qualified policy and max out the HSA contribution every year. I've noticed that the coverage in my policy has improved the last two years thanks to the ACA (for example, immunizations are now covered without any deductible or co-payment, including the expensive shingles vaccine).

Like you, I want insurance for disasters like cancer or something else dire and expensive that would bankrupt me — that's what insurance is for. I can pay for the little stuff. In all those fourteen years I've only exceeded the deductible once, for cataract surgery in both eyes. And I now have enough in my HSA to cover the high deductible for a number of years, if it came to that.

My first look at the new heath insurance policies on my state exchange a few days ago shows them to be a bit less than my current policy. And that's before the subsidies, which I qualify for because my income is so low (I have mixed feelings about that, I'm thrifty but not really poor). I still haven't been able to figure out whether the new policies will be HSA qualified (it's never listed in the FAQs). Since I still have five years before Medicare age I'd like to keep contributing to my HSA if I can — it's better than an IRA!

Retired Syd

dgp: I see on our exchange that the policies are labeled "HSA" if they are HSA compatible. In California, the HSA option is only available for "Bronze" PPO plans. Not sure if that's how it is in every state--maybe that's by design of ACA.

I think it's interesting that people feel conflicted about getting subsidies. The vast majority of health insurance, even after ACA, is through the employer/employee relationship. There is a special carve out that gives the employee the "money" in the form of a benefit, but does not tax it. It's therefore money the employee gets without being taxed on it.

Up to now, there was no such benefit for individuals on the individual market--you do not get a tax deduction for your premium. You have to take after tax dollars to buy insurance and get no tax benefit.

The new "subsidies" are tax credits. At the end of the year, if your premium exceeded a set percentage of your income, you get a tax credit on your tax return. Which, depending on your income level, could just put you on equal footing with an employee with regard to their health coverage.

At the low end of the income spectrum it puts you in an even better position than the employe (since it could be nearly a 100% credit--not deduction, but credit). So while I understand your mixed feelings, I think it's a shame that many people, simply being put on par with employees are made to feel guilty for it.

In fact, if you don't qualify for a subsidy, you still get NO tax benefit from premiums, so are much worse off than those that simply get insurance at work.

If they had just called it a tax break instead of a subsidy, I think there wouldn't be such a stigma attached.

dgpcolorado

Syd, Thanks for that explanation — your accounting background is showing!

No, I hadn't thought much about how employee benefits are tax deductible to employers. I've been on my own for so long I no longer "live" in that world.

And yes, the tens of thousands of dollars I've paid in health insurance premiums over the years haven't been tax deductible; they aren't even eligible for payment out of the HSA.

Nice to know that HSA plans are available. The "Bronze" plans are fine with me if I can continue to contribute to my HSA. I've noticed that when the plans are explained by news shows they mention that only x% of costs are covered but they always, ALWAYS, forget to mention the out-of-pocket cap in the plans. Bugs me. The whole concept of high deductibles in insurance is not well understood by most people.

Barb

Syd, color me confused. I do declare my medical premiums on my taxes as a deduction, and my tax programs asks me to. What am I missing. I receive social security and a pension. I am paid and then they take the premium money out-no taxes are taken out when I receive the money.

Retired Syd

Barb: Sorry Barb, I oversimplified. You can deduct them if you itemize your deductions, but medical expenses are only deductible to the extent they exceed 7.5% of your Adjusted Gross Income (AGI). These two hurdles usually wipe away most of the tax benefit for the majority of people--myself included. But you are right, some people have enough in medical expenses to get a tax deduction for the portion that exceeds that threshold, although you always lose the amount equal to 7.5% of your AGI. You can see that amount on Line 3 of your Schedule A. (Of course you can also deduct them if you are self-employed--as you are treated as an employer in that case.)

Sorry for causing confusion!

deegee

Syd, the 7.5% of AGI limit is changing to 10% for 2013.

http://www.irs.gov/Individuals/2013-changes-to-itemized-deduction-for-medical-expenses

There is a temporary exception to this for those age 65 and over.

To me, this only worsens an inequity in the tax code regarding the deductibility of health insurance premiums, something I discovered when I was preparing my ER budget back in 2008. For those covered by employer-based plans, they receive the employer subsidy tax-free and can pay their portion using pretax dollars no matter what their AGI is, whether they itemize their deductions or not. And their premiums are generally lower than for those of us in the individual market. But those of us in the individual market can, at best, have some of their premiums tax-deductible with the rest using only after-tax dollars.

In letters to my members of congress over the years, I have suggested equalizing the tax treatment of HI premiums by (a) making the employer subsidy taxable, and (b) allowing everyone to use pretax dollars for their entire HI premiums by making them an above-the-line income deduction the way IRA contributions are, for example. I got no reply, big shock.

Retired Syd

deegee: I did not know that--and I'm supposed to be the tax accountant! But remember, I'm retired. Even at 7.5% I've never been able to deduct any medical expenses--there's no chance I'll clear the 10% hurdle.

To your point, I did hear that idea batted around a little while back, that everyone just deducts their own premiums on their own tax returns. I guess it died somewhere. But I think it's a good idea too. Might have even solved part of the problem that the ACA fixes--encouraging more people into the pool.

On another note, I was going to post about shopping for insurance on the exchange, but California's was so overwhelmed, I couldn't get past the first few windows before it kept knocking me out. I'll try again when things calm down. Actually, I think it's a good thing that so many people are getting themselves insured, so I'm not really complaining.

New at this

To all those receiving subsidies, "You are welcome!".

I know liberals never say "thank you" for the money that they have their liberal politicians steal for them in exchange for their vote, but just thought I'd remind everyone that someone had to pay for all those "free" subsidies you're getting. And that someone is me. That's part of why I retired young....So go pay for your own stuff next time...or at least say "Thank you".

New at this

Syd - Are you screening comments?

If someone is feeling guilty about recieving subsidies, that simply means they have a conscience. One American should not take from another without at least saying thank you.

I know you understand this. Why the coverup?

New at this

Super post, Syd!

john

Hi Syd!

new at this

Hi Syd!


Retired Syd

New at this: Sorry for the delay. Over the last several weeks I've received about 300 spam comments, some not even in my language. So I've taken to moderating comments. On nights when I'm out having fun, it takes a little more time for me to get to publishing the real ones. You would thank me for this if you subscribe to comments, they are unbelievable gibberish with links mostly to sites selling tennis shoes or viagra.

Retired Syd

P.S. New: To the content of your comment though, it looks like most of the population that will benefit from subsidies under the ACA live in red states. Which is kind of the opposite of what I would think based on how the votes shook out. Doesn't that seem counter intuitive? That the states where the supporters live don't stand to gain very much, and the states where most of the opposition lives stand to gain under the bill?

http://kff.org/interactive/coverage-expansion-map/

The truth is, I don't mind helping the uninsured in other states--and I don't even want a "thank you."

deegee

There is a cost savings associated with more people having health insurance, even subsidized insurance. Those newly insured people will be healthier because preventative care they were not receiving before will be free, saving the cost of treating them later. Furthermore, thoe newly insured people will not be using the emergency room as their primary care provider, the costliest form of medical treatment. These two features of the ACA will offset at least some the cost of the subsidies.

So to those newly insured people who were not buying insurance before but who are now buying it, even with subsidies, I thank you for becoming part of the health insurance system and saving the rest of us the cost of not buying insurance.

Retired Syd

deegee: I'll second that thank you! And while we're on the subject of thank you's. I realized that up until I paid my mortgage off earlier this year, taxpayers were subsidizing my housing expenses by giving me money to pay my mortgage (through a federal and state tax deduction). And taxpayers still give me help that in the form of a property tax deduction. No one ever thinks of this as a subsidy, but I'll tell you, I couldn't have afforded my first house without all you generous taxpayers helping me out there. They even help me pay for my property taxes on a second home, which seems a little whacky to me. So thank you all!

New at this

It's a question of character. People in red states want to pay their own way and believe government confiscation is just wrong. People in blue states just seem to be missing this gene.

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