Signed up for health insurance yesterday

[disneysteve]

We are currently on COBRA. I think our eligibility ends in March plus it's open enrollment so it was time to get a new plan on the exchange. I looked over the options and was a tad overwhelmed so I reached out to a friend's husband who runs an insurance agency. He walked me through how to choose and quickly narrowed down which plan would be our best option. I signed up last night.

The monthly premium for the ACA plan is $960/month less than we've been paying for COBRA. That's nice but of course the out of pocket costs will be much higher. We won't know until some time in 2025 if we actually saved any money. We also need to do our 2024 taxes before we'll know our actual MAGI and ACA subsidy. Our accountant and I came up with as good an estimate as we could but there are always unknowns and the real number can't ever be known in advance. Hopefully if we manage to avoid any major medical stuff for the year, we could come out a good bit ahead. If anything crops up, though, we could come up thousands behind. I hate that our health care system is such a gamble.

[kork13]

I'll admit that I have no concept of what health insurance costs... I've been "spoiled" (in some ways) in that the military covers almost all of the medical costs for my family & I. Of course, there are downsides to that, but that's OT... Anyway, everything I see in passing appears to indicate that health insurance costs wildly higher than I'd ever considered... $500-$1000/mo premiums! ... Not even counting cost share/copay stuff according to use.

Is that fairly consistent for everyone? How much do you pay in premiums, and how much do you plan for in other costs?

I'm starting to pay more attention to it all because I'm looking ahead to when I expect to retire in ~4.5 yrs (current plan). Although I've known that healthcare/health insurance would become a new expense for us, I've never grasped how big that expense would be

[Jluke]

I looked over the options and was a tad overwhelmed so I reached out to a friend's husband who runs an insurance agency. He walked me through how to choose and quickly narrowed down which plan would be our best option. I signed up last night.

.

Can you share the advice you were given on how to choose?

if I remember from another thread you had a lot to choose from.

[Fishindude77]

I've always been self employed so have always paid for insurance as well as took care of the program for a bunch of employees. We knew buying private insurance and retiring pre medicare would be expensive, so planned accordingly.
We've now been on ACA insurance for 5-6 years and I don't have any real complaints. First couple years it costs us approx. $1800 per month for spouse and myself. A couple years ago they raised the income thresholds you were allowed in order to get discounts and we now purchase a similar plan for around $785 per month. We don't have dental or vision like we did while working and the deductibles are high but the insurance covers all the big expenses and keeps you safe from going into the poor house over a major medical event.

ACA Insurance is income based, so if your income is relatively low, your insurance costs will be minimal.
I'll take paying some insurance out of pocket and being retired pre-65 over working for insurance or being 65+ on Medicare. Unfortunately, that 65 thing is coming right up and our ACA insurance costs won't go down much when it's only my spouse on the plan.
No complaints, we're fortunate.

[disneysteve]

I'll admit that I have no concept of what health insurance costs... I've been "spoiled" (in some ways) in that the military covers almost all of the medical costs for my family & I. Of course, there are downsides to that, but that's OT... Anyway, everything I see in passing appears to indicate that health insurance costs wildly higher than I'd ever considered... $500-$1000/mo premiums! ... Not even counting cost share/copay stuff according to use.

Is that fairly consistent for everyone? How much do you pay in premiums, and how much do you plan for in other costs?

I'm starting to pay more attention to it all because I'm looking ahead to when I expect to retire in ~4.5 yrs (current plan). Although I've known that healthcare/health insurance would become a new expense for us, I've never grasped how big that expense would be

Won't you have military insurance for life when you retire? Or do you have to pay for that?

When I was working full time (until mid 2021) I was paying about $695/mo.
When I dropped to part time (mid 2021) it went up a bit to something closer to $800/mo (I can't find the numbers right now).
When I went per diem (August 2022) I went on COBRA and we now pay $1,959.16/mo.

Our new ACA plan that starts January 1 will cost us $998.25/mo.

All of these are for medical and dental. The work insurance also included vision but the ACA plan does not.

The ACA plan has a deductible of $4,700 ($2,350 each) and max out of pocket of $17,700 ($8,850 each) along with co-pays and co-insurance for various things.

All in, that means we'll pay $11,979 in premiums and potentially up to $17,700 out of pocket or about $30,000/year worst case scenario. Then we also have to pay co-pays for visits and meds along the way as I don't believe those go toward the max OOP amount.

Yes, it is not cheap and it's definitely a major barrier to early retirement for most. I'm thankful that we can afford to do it. The alternative would be for me to have stayed at least part time until I was 65. Instead I was able to drop to per diem when I was 58.

[disneysteve]

As Fishindude77pointed out, ACA is income-based so the less you earn, the less you pay. When signing up, I had to enter an estimate of my 2024 MAGI. If it turns out that we earn less than that, we'll get money back at tax time in 2025. Of course, if we end up earning more, we'll have to repay some of the subsidy we received. That's why I did some serious number crunching with our accountant to come up with as accurate an estimate as I could, and then I padded it some. I'd rather overpay than get a surprise tax bill in 2025 for underestimating.

[Fishindude77]

You don't get a surprise bill, it gets adjusted on the next years taxes by your CPA.
We never earn exactly what I predict and any adjustment at tax time has not been significant. Don't sweat it.

[disneysteve]

You don't get a surprise bill, it gets adjusted on the next years taxes by your CPA.

Yes, that's what I meant by "surprise bill". If our income turns out higher than estimated, we could owe a couple thousand dollars in subsidy repayment come tax time.

[disneysteve]

Can you share the advice you were given on how to choose?

if I remember from another thread you had a lot to choose from.

When I searched on the exchange, there were 80 plans available. It isn't 80 different insurance companies. It's just a handful but they each offer many different plans. Gold, Silver, and Bronze. HSA or not. Higher or lower deductibles. Higher or lower office visit copays and prescription costs. Higher or lower coinsurances for labs and imaging and hospital stays. Just slicing and dicing everything a bunch of ways.

He said to cut through all of that, focus on the max OOP and the network. You want to make sure that the providers and hospitals you use and prefer are in the network you select and that the max OOP is something you can handle. Everything else just ends up being "noise" in the grand scheme of things. Whether an office visit costs you $30 or $50 is way less important than whether or not your preferred PCP or specialist accepts your insurance. A deductible of $2,500 vs $5,000 isn't all that meaningful when you compare it to what the maximum out of pocket expense could be which is a significantly larger number.

In the end, I chose a plan very similar to what we already have. The two big local hospital systems (including the one I work for) are in the network and that's where all of our current providers are. The deductible is reasonable and the max OOP is something we could handle if necessary.

[scfr]

Thanks for posting. I think it's always useful to have "real world" numbers which is why several years ago I posted our numbers, now outdated but perhaps still useful for some. https://www.savingadvice.com/forums/...r-56-yo-couple

I currently work half-time, and I have $876 deducted pre-tax from my monthly pay to cover my share of medical/dental/vision insurance for DH and me. Our medical is not an HDHP. My employer covers nearly 50% of mine (it's actually 50% - $15 per month), and 40% of DH's. If I were to quit my job I could choose to be pay all and be covered by COBRA for 18 months, and my employer could charge up to a 2% administrative fee (whether they do or not I don't know but plan for the worst). So to give myself up a rough ballpark to work with I just basically double it and say it would cost me $1,750 per month.

I would like to retire at 63-1/2 and use either COBRA or ACA to fill the gap until Medicare kicks in (1 year for DH and 18 months for me). I'm not saying COBRA would be the better option for us compared to ACA at that time, but I would like to keep as many options open as possible. I have a strong suspicion DH will prefer me to keep working until I'm 65; we are a couple more years away from having that conversation, but assuming I can still do the work and depending on how much help my mom is needing if she is still alive and any other number of variables that could crop up, there would need to be some serious negotiations between the 2 of us if I'm going to consider doing that.

[LivingAlmostLarge]

$300 for our family plan of PPO. Next year we are trying the hdhp..kork why do you have to worry? Won't you get military medical for life?

[disneysteve]

I would like to retire at 63-1/2 and use either COBRA or ACA to fill the gap until Medicare kicks in (1 year for DH and 18 months for me). I'm not saying COBRA would be the better option for us compared to ACA at that time, but I would like to keep as many options open as possible.

Chances are COBRA will be better coverage but ACA will be cheaper.

The reason I went with COBRA was because I made that transition while my wife was still in the midst of some complicated medical treatment for the infection in her spine. She was still recovering from her first back operation (and lung operation). I didn't want to switch insurance plans in the midst of that. Now that COBRA is running out soon and we're in the open enrollment period, it was time to switch. We've still got 5 to 5-1/2 years before we'll both be eligible for Medicare.

[MonkeyMama]

Is that fairly consistent for everyone? How much do you pay in premiums, and how much do you plan for in other costs?

We pay $1,650/month for a family of 4. We hit our deductible ($3,000) most years. But the premiums + deductible is the most we can be charged. This is just for medical insurance (no dental or vision). We've never had employer health insurance. There's several reasons we prefer private insurance, but it's also moot because most years I have just worked for small employers. The employer healthcare options have just been more expensive and lower quality than what we could get on the private market.

Edited to clarify that the $3K deductible is the most we have ever paid. Our out-of-pocket I think is technically $6K for the family, but we've never triggered anything above $3K. & I mean, we've both had surgeries, several medical procedures, and a handful of ER visits with kids. Most years we've maxed out because my husband needs annual MRIs re: brain tumor. I think he's finally graduated from that! (After 13 years...) No MRI this year, but then my kid had a $2K ER visit.

[kork13]

kork why do you have to worry? Won't you get military medical for life?

I guess part of it is ignorance. I don't know how it works, but I gather that it runs somewhat more similar to standard health insurance, vs. the "no cost for anything if you do it at a military clinic or with a PCP referral" that it currently is while on active duty. I just need to actually do that research I suppose. Though I do think it's far less expensive than private/ACA coverage.... Like on the order of $1k/yr, not $1k/mo.

But as I said, the other side is just shock at the cost of the insurance. Ignorance is bliss I suppose, but you could buy a car every year or two off of what families spend annually on health insurance! It does at least help explain why so many folks would see going without health insurance as a necessary/practical choice (albeit shortsighted).

[disneysteve]

Ignorance is bliss I suppose, but you could buy a car every year or two off of what families spend annually on health insurance! It does at least help explain why so many folks would see going without health insurance as a necessary/practical choice (albeit shortsighted).

The good thing is the ACA made it far more affordable, especially for lower income folks. My daughter signed up when she aged off of our plan at 26 and actually qualified for Medicaid because of her income so there was zero cost to her. She had that until she became eligible for coverage at her current job. Buying on the exchange around 90% of people qualify for some subsidy and the less you earn, the higher the subsidy. We're getting $926/mo subsidy and that's with a 6-figure income. With much more modest income, you could get coverage for as little as $10 or $20/month with the ACA.