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  1. Awesome information, thanks for posting. I guess those instances where you didn’t have to pay a deductible were a pleasant surprise. But like you said you really have to dig into the plan’s info to find out if something like that exists and if you think you’d be using that service a lot. I’m still on my employers plan and the full book of benefits is massive and rivals the Bible. I’m not sure I wanna read it, I just hope search works well within the document ;)

  2. Budgeting for the full potential cost (premiums + out of pocket max + misc) is smart not only because a disastrous year could be handled in-budget, but also because the medical budget from non-disastrous years can be ‘set aside’ into a ‘health endowment’ that, for people who beat the odds (which would be most people), would grow very quickly and provide a significant buffer against future disastrous years or those ever-present worries about end-of-life care, etc. This could be done either explicitly or implicitly, depending on how each individual likes to keep the accounts. The end result is an ever-increasing security for retirement finances, at least where health costs are concerned.

    Healthy people would be well-served by paying less in premiums for high-deductible plans, so that they can benefit from the high likelihood that they can just set aside all of their health care budget into their health endowment. Those expecting to need care can move up the insurance scale as best fits their needs.

    Of course, this is all just doing variations on the exact same math we all know and love: spend a smaller percentage of the portfolio, and the portfolio has a higher likelihood of being secure.

  3. I’ve been doing similar research into health plans and I think I’m going to pull the COBRA lever for the first eighteen months.

    What do you think is driving the big changes I’m seeing on ER coverage and ever shrinking networks? It seems like most plans I’m pulling and testing have limited networks with no out of pocket coverage.

    On a side note, I hope the IRS and HHS can get together on HSA eligibility. It seems insane to me that a plan with a $15k out of pocket max does not qualify as a HDHP due to some ancillary benefits

  4. I retired in Dec. 2013 at age 49 and have been thankful for the ACA. I’ve had a lot of health issues in the past and most insurance companies want to deny coverage even though I’m fairly healthy now. Unfortunately, the plan I’ve been on since 2013 isn’t being offered next year and so the only doctor I’ll be able to continue with is my PCP. The specialists I’ve been seeing aren’t in-network with the new plan. There is a new insurer in my state that would cover these specialists but after Googling the company, I don’t want anything to do with it. They get horrible reviews. So I’ll just have to find new specialists as needed and have my records transferred to them. Health coverage is probably the biggest stressor I have in my retirement, with worrying that the ACA might just go away. due to politics.

  5. Great news to report from Phoenix– instead of one option like last year, we now have four companies from which to choose (although one of the new ones is run by a Kushner!!!) and the premiums are down about 10% from last year with similar deductibles.

    • The one ACA provider in the Phoenix area in 2018 had practically no provider network. A broker told me not to expect anything better with 4 ACA providers in 2019 – there is no “competition” among ACA plans, rather they all seek the lowest common denominator.

      Do you have different information that causes you to think this is “great news”?

      I am trapped in my job because it provides good insurance, and there are no worthwhile options otherwise.

  6. In SC, somehow the premiums have increased but so have the subsidies. My fam of 5 paid $117/mo (highly subsidized) for a Bronze plan in 2018. It might be 0$/mo in 2019.

    This is my first year on the exchange, so hopefully when tax time comes the $117/mo will turn out to be legit! Hopefully my $11k in planned traditional IRA contributions for my wife and I will decrease our MAGI.

  7. Tanja, thank you for continuing to cover the topic of healthcare in retirement. Most of the RE bloggers that I follow seem to be using a healthcare ministry, leveraging a working partner’s employer plan, getting greatly subsidized plans via the ACA, or are just lucky enough to not have much need to spend on healthcare. None of these options are particularly well matched to my own situation, and I can’t imagine I’m the only one who feels that way.

  8. Thanks for this post, which (as I’ve come to expect) is incredibly insightful, helpful and actionable.

    I’ve opted for COBRA coverage for my first 18 months of FIRE, but I will be on the ACA market a year from now. I’ll bookmark this post as well as your past and future posts on the topic as essential references for when that time comes. I’ve already drained depressing amounts of time and energy figuring out how to model healthcare costs into our plan, and your analysis will greatly expedite the process of making choices next year.

    The health insurance mess is one reason my family FIREd in California. Should the ACA one day collapse, I’m hopeful that California would step up with a replacement, whether a single payer system or something else.

  9. Thanks for the info that ACA costs might be starting to stabilize. Mine in CA went up 11% for 2019 and I still only have one provider to choose from. I had been trying to guess if that’s what I should expect for planning purposes. (I’m still working half time so I’m a little insulated from that price increase this year.)

  10. Wow, so interesting on what services do and do not go towards deductibles. Thank you for the insight. We are employed still, but I found that if we each do our own plan/deductible through our employer (happens to be HDHP) it was a better deal than a joint plan. I had knee surgery last year and instantly met my $1500 deductible and hit my $5000 out of pocket so I was able to utilize that benefit. But if I were teamed up with my spouse the deductible and out of pocket max all were higher as a family and cost us more. Is this similar in the health care market? Do you have to do family or can you do individual while married?

  11. Hi, we’re in SF Bay Area. The unsubsidized health care premium for my family of 3 increased 16% for 2019. I suppose it’s an improvement because in the past few years, the premiums increased over 30% each year, but it’s still way above the inflation rate. I dealt with these increases by downgrading my health plan each year. Definitely should be one of the main concerns for early retirees as the increases are not really predictable.

  12. In NC here. We as a family of 4 were looking to FIRE at 56 next year. After role playing on Healthcare.com site found that we would pay appx $1,500 per month with a $20,000 out of pocket. None of our doctors participate as well. No thanks. Luckily my wife works for the state and will have the ability to buy into the plan once retired in two years. Its very expensive but at least we will have a choice of doctors and stability of known outflows. Of course since “role playing” I now get around 20 junk emails and 10 or so phone solicitations daily.

  13. Thanks for this as it’s a timely topic for our family (me, wife, 3 boys under 10 y/o). My wife and I are both self-employed without a subsidy. Our first year after leaving my job meant a $1,200 plan with high deductibles. That’s increased to a little over $1,300 this year (roughly 2x the cost our of mortgage and property taxes before we paid it off). Last year, after much research we made the switch to Liberty Healthshare. We documented the entire experience throughout the year at http://www.mylibertyexperience.com – hopefully that will help some people in the same position. Needless to say there were pros and cons and our experience hasn’t been perfect. This year we are seriously considering short term plans from United Healthcare since Ohio has increased the number of days you can hold one to 360 (and the plans have our primary care providers in-network). Yes, they aren’t for everyone but I do believe they are worth researching for those without (or with limited) pre-existing conditions or maternity care needs (but engage in the required research!).

  14. Thanks for this post! Your articles on Covered California were particularly helpful this year, as I applied for coverage + subsidies for the first time. We started an extended travel period, so our income dropped remarkably – and rather than spending $380+ for each Bronze plan this year, we will be paying $2/month with subsidies. Thank you, ACA!

  15. Thanks for the updated post on your latest ACA experience Tanja, last year’s post was very helpful as I prepped for my exit this past September (wife finished 3 years ago at 50, I’m 53). I took Cobra for my final 3 months of the year at roughly $1,100 a month and just finalized my 2019 ACA enrollment. A couple things I think are worth repeating to folks depending on their circumstance. The first is the importance of knowing as closely as possible what your Modified Adjusted Gross Income (MAGI) is going to be in the year you are receiving subsidies and knowing that the standard deduction cannot be used against that calculation. I didn’t realize that until I saw it in your write up last year. Second is a hindsight is 20/20 comment, when I started to focus on investing in my late 20’s I followed the standard advice to spread investments across different fund types, the one I leaned heavily on for maximum return and was always highly recommended was a US Growth Fund, made perfect sense at the time and its performed very well, I’m not disappointed, the problem for future FIRE aspirees that want to get subsidies on ACA (assuming its still around) is that it is an actively traded fund that returns capital gains to the fund holders every December regardless if you sell any shares, I’ve had years with as little as $4,000 and as high as $20,000. Those are some big swings to navigate when you are trying to keep your MAGI under $65,840 and not knowing what the amount will be until late December is going to weigh heavy on my mind every year as I sell taxable funds to generate income. The last item was something else you mentioned last year. My last tax return on file is from 2017 working a job with income well above the ACA limits, while going thru the verification process I was preliminarily accepted based on my entered assumption of earning $64,000 in the upcoming 2019 tax year, in my first go around I split the $64k between my wife and I but for some reason the site requested that I provide proof of income for her (but not me) I assumed it was because she hadn’t had a W2 in 3 year so I went back in and adjusted the app to show the entire $64k under me…same result. The required docs needed to be a tax return and 1099’s etc. so I scanned the first page of our 2017 return (showing income significantly over the ACA limits) and the 1099’s but I also drafted a short letter stating my wife and I are early retirees beginning in 2019 and we plan to fund our income through dividends, interest and capital gains all the while recalling the hours of time you said you spent on a similar item last year. I chewed my finger nails for about 4 days and finally received a confirmation that everything was received and approved. We’re in a Florida Blue Select Bronze plan (that surprisingly had both our current doctors) for $222 a month with $15k deductible and total out of pocket, subsidies were $872 a month. We luckily have only needed basic preventative care in years past so I was thrilled with the outcome as we had originally budgeted $1,000 a month in premiums as a placeholder. Knock on wood but phase 1 is completed with few hurdles. Hope that helps anyone in a similar spot.

  16. Very useful information both in the articles and accompanying comments. I’m a single, early 50’s FIRE gal and as the author suggested, have learned to read the fine print in the policies under my consideration. Because I travel quite often, the tidbit, usually at the very end, that describes covered expenses while out of the country is of particular interest.

  17. Healthcare is the most complicated and terrifying part of Fire. How did you get over the fear to take the plunge and fire?

  18. Hi Tanja:

    I love your blog. I’d like to point out, though, that one of your points in this post is inaccurate. You state that “early retirees with no employment-based insurance available should expect to be able to buy health insurance on an exchange through at least 2021. (The next Congress after this one won’t be seated until January 2021, and if they made changes to the law right away, the earliest they could take effect is the start of 2022.)”

    However, there is currently a lawsuit against the ACA that was brought about by several GOP state attorneys. Without getting into the weeds, being the GOP was unable to repeal and replace the ACA, they are now trying to attack its constitutionality. With the ACA being a Federal law, it’s the Trump Administration’s job to defend the ACA against lawsuits, such as this one. That said, they are being derelict in their duties, which furthers their efforts to sabotage the ACA.

    Long story short, the ACA, unfortunate, is not all that secure—even in the near future.

    Here’s an article link that sums up what’s going on in court: https://cnn.it/2Nm5Ooa.

  19. Hey, Tanja. I’m sorry I’ve neglected your blog for so long. Great stuff. Mrs. Groovy and I signed up for Obamacare a couple of weeks ago. We’re very fortunate. Our BCBS North Carolina policy will cost us $24.73 per month. The premium tax credit will be $1,756 per month. Our maximum out-of-pocket limit is $2,450 per individual/$4,900 for the family. Is our insurance good? Damned if I know. The only way I’ll really know that is if I have a serious illness or get into a serious accident. I got my fingers crossed, though. Good luck with the book. Cheers.

    • How on earth could you sign up for an insurance with no idea if it’s any good or not? That seems insane to me. Are your doctors (or equally good or better equivalents) in the network? Are all your prescriptions covered? Did you price out any scenarios?

      Maybe I shouldn’t be too surprised, since “Mrs. Groovy” wrote a comment on another site which I think was directed at me but when I asked if that was so, she didn’t reply: “It pisses me off when I see people who are reduced to making life decisions based solely on health insurance. I know it’s important and if you have an existing condition that’s serious, you’ve got to think carefully about leaving a job with coverage. But most people who’ve spent years assessing and building their financial lives have the capacity to pivot should things not work out as planned.”

      “Fingers crossed” is not responsible planning.

  20. Hi, Tanja. I’ve read your post from January (of this year) about your experience signing up for ACA thru CA’s exchange. Very helpful. I have a few questions if you don’t mind. Forgive me for posting the question here instead of the post from January, as I figured it’s too old a post to comment on….

    We are currently in a “red” state that does not have its own exchange, of thinking of moving to CA in the future. Your post certainly is illuminating about possible problems a FIRE member might have signing up. The ACA is no where as “strict” as far as proof of income as CoveredCalifornia.

    You mentioned in the other post the easiest thing to do is to estimate your total income on the W2 line (instead of breaking it down into unearned income, rentals, etc.). Is this what you did for 2019? Does that cause any problems at all? You also mentioned you could submit a “sworn statement” as proof of income (I googled and I believe the form’s title is “Attestation of Income”). Just wondering if you (or anyone reading this) did this, and whether that’s a better route than declaring your estimated income as W2. (Just as background, our income will be all unearned — dividends and capital gains — so it’s next to impossible to estimate; however I have the ability to do Roth conversions each year if I need to adjust actual AGI upwards…)

    • Also, for those that answer… What’s your experience as far as how much scrutiny CoveredCalifornia places on proof of income on your application? Do they ask for all kinds of documentation, especially if using the Atttestation of Income route? Do they question your estimates? I am in a good position of hitting my estimates +/- 10%, but afraid the process would be such a hassle that it’d be extremely difficult to get the application approved. Thanks in advance for your help!

    • In reference to your income verification question, with 2019 being my first ACA year the only proof of income I had was my 2017 tax return showing our total income exponentially higher that the ACA cap. On my application I estimated 2019 MAGI as 64k and was tentatively approved but received a follow up email requesting proof of income, I used the download feature scanned my 2017 tax return page 1 and wrote up a cover page explaining that we were early retirees in 2019 and would be generating income via cap gains, dividends and interest. 5 days later I received an email from the exchange saying all was approved and it specifically stated “we require nothing else from you”.

  21. Something that doesn’t get mentioned often enough is retiring early and moving overseas. I have a great quality of life in a beach community and purchase health insurance through the government. I pay around $90 per month for a policy for my wife and I that covers health, dental and prescriptions at 100%. I have been impressed with the quality of the service available in our area.

    I am also able to earn 10% on my CD investments, paid in US dollars, which greatly enhances my ability to remain comfortably retired. While I understand that overseas living isn’t for everyone, I think it is something that should be considered given the state of healthcare in the US. My entire budget for living overseas is covered by what it would cost me for just the premiums for a good health insurance plan in the US.

  22. I am surprised that most people repeatedly miss the biggest problem with US healthcare, which, as i would contend, is not necessarily the insurance affordability (which, sure enough, is a close second). The biggest problem is predictability of the charges; in particular, out-of-network charges.

    Let me give you an example. Suppose you get hospitalized (or even just visit an ER, that would be similar), and your hospital is in-network, and your plan says your deductible is $250, so you’d think that’s all you get billed. Sounds good in theory. Well, almost any hospital uses independent contractors, who are likely to be out-of-network, and whose charges are not going to be anywhere close to “customary” charges your out-of-network plan assumes behind the scenes. So chances are (real life case) you’d pay $250 deductible, plus you’d get a $4800 bill from an anesthesiologist, and about $5200 from a company you never heard of but that claims that supplied some equipment for the procedure. Your insurance takes the first bill, says customary charge for that would be $400, so it would hopefully pay 60% of it ($240) and apply 40% ($160( towards your yearly out-of-pocket maximum deductible (which is likely at least $3-$5k), and you would still be on the hook for the 100% of that bill. A similar thing happens to the second bill (if insurance does recognize it as necessary for the procedure at all).

    Bottom line, you are still on the hook for about $10k to settle on your own, with less than $500 of that actually being counted toward out-of-pocket, of it even applied toward your yearly maximum (not paid!). You maximum out-of-pocket promise isn’t in fact what it says it is. Not even close.

    And hospitals and providers will never (and i mean, never) tell you who will be attending to you, so not only you won’t be able to come up with any reasonable estimate of their charges, you won’t even be able to figure who might be in-network and who is not.

    This is all based on first-hand experience, not some hypothetical example. Through experience i know that many hospital providers differ in terms of how much risk they carry that one can run into some outlandish out-of-network bills afterwards. For example, with Kaiser, such risk is almost non-existent, as long as you attend their own facility, while with say Sutter Health and some smaller hospitals conducting mostly outpatient procedures may present the greatest risks where out-of-network charges are quite easily to exceed an order of magnitude what insurance is willing to count toward maximum out-of-pocket (let alone pay for it) even despite the facility being part of their proclaimed “in-network” list.

    The problem with US healthcare is not so much insurance availability. Rather, it is the fact that it is neither socialized, nor market. It is more like a shark-infested pirate bay.

    You can’t shop for a procedure in advance, not even for a ball park figure. Have you tried to call up say even 4 labs and be able to get a quote for your MRI order? Let alone a more complex in-patient procedure.

    Nobody ever is going to hand you procedure estimate disclosure to sign before you decide to go in. There’s no strict “truth-in-healthcare disclosure” law framework, unlike, for example, there is for the mortgage insurance. So prepare to be raided whether you have insurance or not, and see if they’d care.

    Among other things it means, unless you are part of some provider network where your out-of-network participation is entirely predictable, the HDHPs are not that unattractive as it may seem, since you have a significant uncertainty in overall bottom line liability either way. But at least with HDHPs you can pay a lot of it with tax free money IIRC both in contribution and deferred sense, which, aside from yearly limits, is more than what either Roth or IRA can do for you in taxation sense.

    One possible strategy is to try and max out HSA balances as much as possible assuming health is good enough (20…35yo period), and then switch to something like Kaiser with significantly less out-of-network uncertainties so that their copays and even maximums ideally can be covered by the proverbial 4% of the HSA balance even one has a chronic condition.

    But even then, it all can go south very easily (what if Kaiser doesn’t have a critical treatment that might really be your last resort?). And Kaiser is only in a handful of states.

    • Absolutely, DmLi. Healthcare is the one area that most of the FIRE bloggers avoid like the plague (is plague covered by insurance? Beats me.). Because none of them understand it in the detail that you obviously do, don’t want to learn it in depth like you have, and you just can’t write all snarky and “yay, totally!” about the state of health care today. Anyone who’s early-retired who doesn’t disclose what they’ve done for health coverage (this author does, to her credit), I just dismiss and don’t bother to read at all.