10 Responses to 6 Strategies for the Early Retirement Health Insurance Dilemma

  1. Kevin, thanks for highlighting this very real “Early Retirement” killer. I’ve written about the topic, and we have a plan. We’re budgeting $24k/yr, and will retire next year at Age 55. I fear the $24k is too low, but at least we have a realistic estimate in our retirement cash flow forecast.

    I agree too many folks overlook the seriousness of this issue. We’ll do “private pay” for 10 years, and it’s the thing I worry about most in our early retirement plan.

  2. Hi Fritz – You’re one of the few realists on the early retirement front. Most who cover it do their best to pretend that this issue doesn’t exist, or that somehow everyone will get a magic pass. $24k is a realistic number, but my fear is that it won’t be in five years. It’s not just that health insurance is prohibitively expensive, but equally that there seems to be no ceiling on premiums in sight. We’re either going to fix this crisis on a national level, or it’s going to take the whole ship down, and a lot of personal fortunes with it.

  3. Good article! I work part-time and carry the health insurance for our family. My husband is a small business owner and the premiums would be more expensive through him. More options (affordable) for the years before age 65 would be nice and would free people up to design a work year on their own terms.

  4. Hi Carol – Thanks so much for weighing in on this post. Your story proves the point that I’ve been making (and living) for years that there are part-time jobs with health insurance. Too many people scoff at this option, but it’s worked well in my family for several years. Until/unless meaningful healthcare reform really happens, we’re stuck having to muddle through with this imperfect mess of a system that we have. Keeping a part-time job with health insurance is one of the very best strategies.

  5. We can all thank our elected officials for dragging their feet on effective reform on cost of premiums to what should be affordable because to do so with eliminate their special package healthcare program. (They have an employer style plan which keeps their costs low without cutting into services they receive. All funded by us taxpayers–so we basically paid for that operation for brain cancer McCann got)
    Yes, we should be very involved in what costs we encouter for healthcare. There should be no reason costs should vary for same services rendered everywhere but cost for healthcare are not transparant and unless you question everything given you don’t get to deal with costs until after. I’ll use a small example–cost of a flu shot should be exactly the same even if you pay for it directly but uness you ask cost, first thing they ask you for is who are you insured with, so billing can add costs to insurer. I went thru that time period with a limited availablity for healthcare between 60-65 and most if not all of my visits to doctor resulted in out of pocket payment because after a certain age we are really not suppose to get help. It is more profitable for insurers to have young healthy people paying for services they don’t use.
    I am tired of healthcare insurance being rated and charged by geographic area and the number of non-paying “free” insurance coverage. There are enough people in the age group (50-65 prior to Medicare age) to be able to negotiate a better cost of premium based on that age medical needs than to just dump cost based on a blanket statement.
    It doesn’t get better with Medicare coverage but at that point you get at least a basic Medicare coverage which you need to read all the fine points ( limited coverage) It you are living on a fixed income, which most are, remember that Medicare is not free unless you are living on just $11,000 yearly anything higher you pay. Costs of healthcare need to be transparant.

  6. Hi Maria – I also think they’re dragging their feet because they’re afraid that anything that slows healthcare costs might hurt the economy. Healthcare is 18% of the economy, and outside of it not much is growing. They want to leave it alone to grow to “grow” the economy. But healthcare costs are a drag on the economy. Not only are they slowly bankrupting middle class people, but it’s also cutting jobs. So we’re squeezed on both sides from the same cause.

  7. Hi Kevin. We use Option #3. We are self-employed, small business owners, and our insurance is through a private plan, i.e., meaning we do not use the ACA. While our cost for two people is over $1100.00 per month, it is a tax deduction for us, so that helps. I just feel grateful to have insurance, as we’re in our sixties, and the costs just keep going up every year. We plan to continue to work as long as we can, even if we can “afford” to retire, mostly because we enjoy our work. I don’t hold out much hope either for an ACA overhaul. I think it’s just too complex and a touchy subject to tackle. Who knows what’s going to happen.

  8. Hi Bev – Obamacare reminds me of that saying “A giraffe is a horse designed by congress” – which basically describes everything designed by congress. My guess is that the Obamacare replacement looks even more like a giraffe than the original. I don’t see any meaningful changes in the current system before 2020, if the current system can hold together that long.

    $1100 per month for two people over 60 is really good. My wife and I (both in late 50s) looked into ACA we came up with $1722 with a $1500 deductible (the higher deductible plans weren’t cost effective). We’re supposed to go on a new plan in December from my wife’s job that went from part-time to full time. It will be in the same cost range as yours, but the employer is paying 70%. I’ll be happy for as long as that lasts, after which we’ll go back on COBRA, until we figure out what to do next.

    I hate to think that way, but catch-as-catch-can seems to be the only workable strategy. If we lose current coverage I may be dropping you an email to see who your carrier is to see if we can’t set up a self-employed plan on our end. We’re just in the next state so we should be able to get something similar…one would think…

  9. In our neighborhood we have a doctor practice that started up a couple of years ago, members only. They don’t take insurance.

    The monthly membership fee is $50 per person and a small payment per visit. They have arrangements with labs for low cost lab work and meds as well. I don’t know what the deal would be with any kind of hospitalization or out of area health needs. It says they are ACA compliant.

    Practices like this are popping up more commonly in our area. This could be a good choice for many people.

  10. Hi Marissa – I’m hearing about those too, but I think they’re cash-pay doctors, and not ACA compliant. But things are changing all the time, so maybe this is a significant development. Do some research before participating (assuming you’re interested), there could be scam artists cashing in on the ACA confusion – who knows? If it looks like it’s for real, please report back, either here or via email. If this isn’t a scam, it could be a real alternative.

    I had an economics professor in college who said that the system you’re describing is how healthcare works in China or did 30 or so years ago. He said people pay the doctor when they are healthy to care for them when they’re sick. It also creates a built-in incentive for the doctor to cure people so they can go back to work and continue paying him or her. We can learn a lot from ancient cultures, but we’d have to get over ourselves first.

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