calculating healthcare insurance costs now

[KTP]

Aside from "doing the right thing", what now would be the best option for healthcare coverage in this situation (starting in 2015 though).

Married, husband/wife age 46 in 2015.

Wages from employment: $10,000/yr combined
Dividend income: $5,000
Long term capital gain equity sales: $15,000
Drawdown of cash: $15,000

We plan to work part time in various locations around the USA (maybe short term engineering contracts or cleaning toilets, idk) to get enough earned income to keep contribution to a Roth IRA. Our living expenses will come from dividends, sale of stock, and cash on hand. We plan on living pretty cheap.

Is it really an option now to go without any insurance (we would be well below the income level that requires paying a penalty)? Has anyone researched how this will work? Do you just apply for insurance the same day you get sick, then cancel it again when you are better? That sounds wrong...perhaps I am missing something.

Edit: There really is no good place right now to find this info. It looks like there will be a significant subsidy to get insurance for people in our situation but I have yet to find an online calculator or specific rules. I think we would prefer to have insurance if it is getting heavily subsidized vs trying to do the "go without" and having to constantly initiate a policy. I hope there is some clarity by 2014.

[Joan.of.the.Arch]

A very rough and limited caluculator has been put together at
Health Reform Subsidy Calculator - Kaiser Health Reform

[disneysteve]

I hope there is some clarity by 2014.

It is absolutely, 100% impossible to have even the slightest clue of how to answer your question. Nobody knows what health insurance will look like 2 or 3 years from today. The Supreme Court ruling means the provisions in the Affordable Care Act are not unconstitutional but it has no bearing on what will ultimately get enacted.

So for right now, I'd say don't bother even trying to guess because it would be just that - a guess - based on no real information at all.

[KTP]

It is absolutely, 100% impossible to have even the slightest clue of how to answer your question. Nobody knows what health insurance will look like 2 or 3 years from today. The Supreme Court ruling means the provisions in the Affordable Care Act are not unconstitutional but it has no bearing on what will ultimately get enacted.

So for right now, I'd say don't bother even trying to guess because it would just that - a guess - based on no real information at all.

Frustrating. I know you are right, but as our "chuck it all and leave" date gets closer and closer I want to have a decent sketch of our budget. Ah well, just add it to the long list of other unknowns...I guess that is what makes life interesting.

[KTP]

A very rough and limited caluculator has been put together at
Health Reform Subsidy Calculator - Kaiser Health Reform

Thanks for that link...I can only hope that info turns out to be true!

I entered a family of 4 (we are only 2 though) with an income of $35,000.


Projected income in 2014: $35,000
(149% of poverty)

Unsubsidized health insurance premium in 2014 adjusted for age: $14,805
(Based on an age factor relative to a 40 year-old of: 1.22)

Maximum % of income the person/family has to pay for the premium if eligible for a subsidy 3.97%

Actual person/family required premium payment: $1388
(which equals 3.97% of income and covers 9% of the overall premium)

Government tax credit: $13417.00
(which covers 91% of the overall premium)

The maximum out-of-pocket costs the person/family will be responsible for in 2014 (not including the premium) is $4,167.

So wow, not really too bad. Uncle Sam kicks in $13417.00 and we will only have to come up with $1388 (plus $4K out of pocket max). I wonder if that tax credit is refundable though...for years where we have less than $13,400 in income...

[KTP]

A little more reading from those links by Joan and it looks like we might be just able to be eligible for Medicaid, which would reduce the costs to pretty much nothing. Asset testing will not be allowed in most cases (I think now states can do an asset test for eligibility).
Medicaid would kick in at a modified adjusted gross income of below $25,000 more or less for us...which with the paltry market and fixed income returns may be a reality. A drawdown of our cash to help with expenses will not raise our reported income.


"Beginning in 2014, all states must use the new modified adjusted gross income method to determine eligibility for Medicaid based on income level. Prior to that, states can use any reasonable income methodology to determine eligibility, provided that it is consistent with the objectives of the Medicaid program, simple to administer, and in the best interests of the beneficiary. Also states cannot use an asset test to determine eligibility for an early expansion group of Medicaid beneficiaries. Beginning in 2014 asset tests can only be used to determine Medicaid eligibility for people who are eligible because of other aid or assistance they receive, persons over 65, medically needy individuals, and those who are eligible for Medicare cost-sharing."

[Like2Plan]

Didn't the Medicaid expansion in the healthcare act get tossed out by the supreme court? Not sure how this would impact your plan...

[KTP]

Didn't the Medicaid expansion in the healthcare act get tossed out by the supreme court? Not sure how this would impact your plan...

I am not sure if the part requiring ending of asset testing was tossed out. It is all a very confusing and changing beast.

Right now I hear medicaid kind of sucks...Disney Steve might know more, but I hear that a lot of doctors will not take medicaid patients because of problems getting paid. I could fill a book with what I don't know about this though.

I don't have an issue with getting the subsidized healthcare instead of medicaid...but at the end of the day, if it means I keep $5,000 a year in my pocket I may be tempted if we qualify. I can always donate some to charity to make me feel better.

[Joan.of.the.Arch]

KTP, I've seen my doctors decline to accept a major commercial insurer, too, though. I wish I could you tell which one, because I'm sure you would have heard of it...but I forgot which it was.

If you are going to be traveling, you might have to get new insurance every time you take on a new temporary but lengthy residence, or end up paying more out of pocket if you need help when you are out of the state you bought insurance in, I don't know what happens if you were on Medicaid in, say, Colorado, but you just happened to have made a trip to New Mexico when you came down with pneumonia and had to be hospitalized. Would Medicaid New Mexico bill Medicaid Colorado? Or would they bill you and you try to get Colorado to pay? Even now, I'm sure that happens.

[disneysteve]

Right now I hear medicaid kind of sucks...Disney Steve might know more, but I hear that a lot of doctors will not take medicaid patients because of problems getting paid.

KTP, I've seen my doctors decline to accept a major commercial insurer, too, though. I wish I could you tell which one, because I'm sure you would have heard of it...but I forgot which it was.

You are both right, and it really varies state to state. In our area, for example, many providers and hospitals dropped out of Blue Cross/Blue Shield because of payment problems. Eventually, at least most of the hospitals worked out agreements but plenty of individual doctors did not. As for Medicaid, since that is a state plan, the terms and policies vary by locale. Some are decent, others are not.

And it isn't just doctors and hospitals. It is also pharmacy benefits. I've had a sales rep come in and tell me that his company's product is covered on the big local managed Medicaid plan (Horizon NJ Health). So I prescribed it and my local pharmacist calls and tells me not to use it. Why? It is covered. The company will pay him $2.50 to fill each prescription. The problem? It costs him $12. So much for being covered.

[KTP]

This is looking to be one of those times where you might as well put your head in the sand. We can live very cheap (we live now on about $35K with a $190K income) but healthcare is just this big black question mark in our future budget plans. I guess I will quit worrying about that part and start worrying about how I am going to keep up with inflation when fixed income products are almost negative real return after taxes.

The simple solution would be to only plan on living until 60

[LivingAlmostLarge]

you live on $35k but do you pay for your own healthcare now in that $35k? Also as you age more medical problems typically arise which is why premiums get to be more expensive. I don't think it's just the insurance you have to worry about it's the issues that you'll find and treat. Cataracts, bone spurs, etc.

[KTP]

you live on $35k but do you pay for your own healthcare now in that $35k? Also as you age more medical problems typically arise which is why premiums get to be more expensive. I don't think it's just the insurance you have to worry about it's the issues that you'll find and treat. Cataracts, bone spurs, etc.

No, of course not. We have one of those cadillac health plans that even covers the latte you buy when you visit the doctor (not really joking here). It is fully paid for by the employer. I will miss it for sure.

You hit the nail on the head with the issues of future medical problems and costs. This is why qualifying for some sort of government aided healthcare would be crucial for us if we leave the high paying job. Three years ago when we formed this plan I had no idea the economy would be staying in such a rut and that interest rates would be near 0%. I had hopes of being able to generate $50K/yr with a 3% withdrawal rate...now it is more like $35K/yr with that same rate. That is $15K that could have gone toward health costs each year.

[cptacek]

Another thing to think about...the regulations established by the HHS secretary may be reversed with a new HHS secretary...either because the current secretary resigns, or a new President is elected. So even if you get it figured out for 4 years, it may completely flip again in 4 more.

[muexm]

This is looking to be one of those times where you might as well put your head in the sand. We can live very cheap (we live now on about $35K with a $190K income) but healthcare is just this big black question mark in our future budget plans. I guess I will quit worrying about that part and start worrying about how I am going to keep up with inflation when fixed income products are almost negative real return after taxes.

The simple solution would be to only plan on living until 60

Healthcare.gov is the best site get a quote on health insurance costs right now (If you don't have any preexisting conditions). Keep in mind that health insurance and the medical industry in general is extremely regional. Medicaid qualifications, health insurance premiums, and healthcare costs vary drmatically depedning on where you live. If you are traveling a lot I would look at a national health insurance company like United Healthcare, Aetna, Cigna, ect. becasue they will have network providers in most states and large metropolitan areas.