This topic is for early retirees, or anyone with first hand knowledge, who has used the ACA for medical coverage.
I will be retiring early (59) at the end of 2021 and considering the option of either buying a PPO plan through an insurance broker, continuing with COBRA, or go with the ACA plan and take advantage of the subsidies.
I am wondering what the experience has been, good or bad, for those that have used the ACA for medical coverage.
Any insight is appreciated.
https://youtu.be/vYlgq2v68Fs
I believe box 12 of your W-2 will list the total cost of employer sponsored health plan. This figure is your contribution plus company. Check the code against the key on the reverse side, it might be DD if memory serves.
I retired two years ago, living in CA. Initially was in a Cobra Plan, but switched to ACA. Since much of my income is from pensions and 401K withdrawls, unable to get any subsidy. Still the cost were about the same, and my plan thru ACA seems better.
@cha: I just looked on the ACA healthcare.gov website for insurance companies available in Phoenix, AZ for 2022.
The following health insurance companies are all available and both of my doctors accept every one of them. Cigna, Blue Cross Blue Shield, Ambetter Health, Oscar Health, United Healthcare, etc.
@cha Most of the doctors that I see periodically are listed in the Ambetter provider documents. The other plans do not cover the same list of doctors. Have you found that the documents that list the doctors on a plan may not be accurate or just slim on choice?
Good Luck with ACA bc you can’t find doctors that accept those plans in AZ.
Best plan - try for the voluntary RIF. If not, work a couple of extra months and save every single penny you can as a contingency fund, cause some unexpected expenses will show up no matter how well you plan. There's no re-do once you leave so be careful...
@sot: Look on the HR website for your medical insurance. It'll show you what your cost and the Honeywell cost is. Your COBRA coverage would be both costs added together with a small administrative fee added in.
Would someone who had family coverage at Honeywell but switched to COBRA be able to identify what the cost difference was from the payroll withholding? On COBRA, you are supposedly paying the full amount of the insurance, not the Honeywell subsidized cost.
https://obamacarefacts.com/2022-obamacare-eligibility-chart-and-subsidy-calculator/
A useful calculator and information to begin your investigation.
Congratulations on your early retirement! ACA exchange has the same insurance companies you know and love and some new ones like bright health, Ambetter, and Oscar. You can add your medical providers when searching plans to see what plans they accept. You can change your plan every year or roll it over. As others have said only the silver plans are affordable with low enough income. There's a way to search plans without signing up first.
I went Obama Care. The key is to seriously limit your taxable income. Remember it is calculated on an annual basis. I finally went on Medicare, my spouse is still on Obama Care. With around $28k jo--t income her coverage is around $1500 per month. Her share of the monthly premium is $75. ACA pays the rest. But, if you decide to get a job or have some other increase in your taxable income, your share of the premium will go up substantially. It is decent insurance. Better than I had at Honeywell. You can go to healthcare.gov and try various scenarios to see how the numbers works. YMMV
Yes I've been using the ACA coverage for three years after my COBRA coverage expired. In the state I live in the ACA coverage happened to offer the same medical insurance company I was using with Honeywell and it was a seamless transition with no complaints. ACA has higher deductibles and max out of pocket costs, so pay attention to this. Also, I use blood pressure & cholesterol meds and market insurance is unavailable to me with the preexisting condition BS.
ACA coverage cost is based on you MAGI (modified adjusted gross income) for the year you use it. My pension & dividend income that I report on my federal income tax allow me to pay about $380/month with the US government paying a subsidy of about $600/month to my health insurance company. You can go to the healthcare.gov website and check different scenarios on what your out of pocket cost would be based on your MAGI for the year you use it.
The ACA only looks at your adjusted gross income for the year you are insured and NOT what you have in any type of savings or investments. I have a ROTH IRA in the low six figures that I can pull funds from when needed that does not affect my MAGI. You also can make financial decisions to move funds and pay income tax on them while you are on COBRA so you can use them while on the ACA coverage. Once again this will have no effect on your MAGI.
Hope this helps.
I resigned at 56 yo and have been using ACA plans for several years. My situation is unique since I saved a lot of cash before I retired...enough to live on until I hit Medicare age.
In my state you have to have a minimum taxable income of around $16500/year to qualify for the ACA. So in order to have taxable income I withdraw it from my 401k. At honeywell you can take money from your 401k without penalty at 56 yo.
To get affordable insurance from the ACA you have to keep your TAXABLE income low. Currently my premium and deductible is zero and max out of pocket is $1000. I never needed insurance until this last year... cost have gone through the roof. Don't ever let your insurance lapse!
Once I reach Medicare age may insurance premium will go way up.
COBRA is the way to go for sure for the 18 months. Best price and same dental (very few dentists (nearly nil) accept any ACA dental insurance). Keep COBRA for 18 months, if you have dental needs, get them done under COBRA before the switch to ACA (and then . . . hopefully just pay for cleanings until Medicare at 65).
I was the hope to learn more post.
I’m a little younger and still working. I think I have a couple more years to work. I’m not yet old enough for Medicare.
I’m guessing as health care costs continue to rise more private employers will be forced to cut costs or discontinue the benefit. I want to try and gain an understanding of options.
You can go to the ACA website and enter your specific information and it will provide you a healthcare quote. It is worth doing for comparison and you can share your results with those here on this site to help others understand cost.
Correcting my earlier post. Family members other then me can get COBRA for36 months. I as the ex-employee can only get it for 18 mos.
I went the COBRA route too. Been 4 months now. Price was essentially the same as shopping, which I will have to do in 18 mos. Family members other than ME can get COBRA for 18 mos. (Why not me?) I did not have any issues with 1 stop but you do need to keep on top of setting up auto pay or being sure the payment is made. The system is not very intuitive. Got my 2nd auto pay due today that I will verify. I would also suggest bank account notices to you phone for inputs and output notices from your acct. (Pension, SS, COBRA) I planned and crunched numbers for 2 years before retirement. Everything is going much better than planned. Was a 40+ year employee. You'll be glad you left. GOOD LUCK!!!
Our experience was it is incredibly expensive. My wife and I were mid (50) no health issues or problems, non smokers, height weight proportion and not taking any medications $80k annual income. The policy had a $5k annual deductible with monthly premiums $3,500 for the two of us. Honeywell under Dave Cote dropping the retiree healthcare costs retirees a fortune. Dave stated at the time it was a better deal and better care of Honeywell retirees. In our experience it was a total lie and had nothing to do with the retirees healthcare and just a cost cutting measure by Honeywell. ACA is a money grab to give free and very low cost to the $20k-$40k household income voters and the expense of higher earners.
OP. Thank you for this post. I hope to learn more.
I went on COBRA. Price was as good as ACA. Honeywell makes it hard to get process started. If you go COBRA route, call 1=stop and and don't stop until you get a confirmation. Then you must set up auto payment. If you dont coverage will stop. Another Honeywell trap. Make sure to dot all I's and cross all T's.