Over 60 with no more WF benefits - continuation, health ins, etc ended mid July. 3+ years before Medicare kicks in. Eligible for COBRA and WFB retirement insurance (which was 25-30% higher than cobra). There's also the 'marketplace' based on income which was higher due to 15% not going into 401k, with higher deductibles. Never thought of insurance before with no employment income, it's cash straight out of savings/ira and not inexpensive. Thinking Cobra for the max 18 months then ACA. If you've faced similar open to advice.
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Health insurance is a ripoff for most people. Otherwise, insurance companies wouldn't be seeing the huge profits they are. I have no idea why people would pay $10k per year so they only have to pay 80% of any medical care after they meet their $4500 deductible.
I retired in early March, so I did not have a continuation of benefits. I am 63 so I opted to sign up for COBRA because I will only be three months shy of Medicare at the end of 18 months. It also allowed me to cover my 24-year-old son until he turns 26. I explored retirement insurance but I was told that’s a pool of old people who tend to be sicker so the premiums are higher. It’s also not administered by your current insurance, which was much better than United healthcare used for retiree insurance. One thing I found is that I was discouraged from signing up for COBRA with the representative telling me that it would take two months and that I would be uninsured during that time. It turned out not to be the case. It’s very easy to sign up for and it took two weeks. My retirement date was set for the first day of the month which meant I would be covered by Wells Fargo‘s insurance until the end of the month so it gave me time to arrange for COBRA. I also explored ACA and it is good insurance, but I was in the process of moving so I needed national coverage versus the local insurance offered by ACA at a lower cost.
Most importantly, though I created a full-blown budget of all sources of income and a detailed list of expenses, so that I could be sure I could cover the 1500 a month I pay for Cobra. The first year is tricky, because with a partial year of Wells Fargo income, it will probably not be your future income.
Best of luck with your transition.
If you're in Arizona, go to https://www.azahcccs.gov/
Arizona Health Care Cost Containment System (AHCCCS) is Arizona's Medicaid agency that offers health care programs to serve Arizona residents. Individuals must meet certain income and other requirements to obtain services.
I just signed up and was approved, no charge.
Previous poster is correct. Exactly what I did. I used COBRA paid out of my HSA for 18 months. I then did ACA for 11 months before going on Medicare last month. By the way you can pay Medicare Supplemental and Part D premiums with HSA dollars also. My ACA cost was $157 a month. (Cobra was $520). I am only drawing money for expenses from already taxed savings so I have literally no income. My wife works but doesn't earn that much so a big subsidy from Uncle Sam.
I'll throw one thing out there: If you have a ton of money in your HSA, you can pay for COBRA using your HSA money. That is the only instance I know of where you can use HSA money to pay for primary health insurance costs.
If that's not an option, I'll throw out that you might want to just do COBRA to finish this year, then switch to ACA next year. Your ACA cost is based on your projected income, not your past income. So if you're retiring early and expect to only have $25-40k in taxable income in 2024, most likely ACA wins by miles.
If you're struggling with ideas on how to generate income without working, talk to your CPA but in general you can roll your 401k into a traditional IRA this year, then suppose you have $10k of taxable investment income next year but need to hit $30k to qualify for the ACA coverage you want. You can do a $20k conversion of Traditional to Roth IRA. Alternately, you can just directly withdraw the Traditional IRA money if you're low on savings or don't see the need to keep it tax sheltered.
You'll end up with $30k of total income, so yes, you need to pay the appropriate amount of income tax but depending on your household size there will be a magic sweet spot where you owe very little income tax and will qualify for the maximum ACA subsidy. Again, check with an expert and the ACA online services like ehealthinsurance.com but for me, about $26k equates to $50/month insurance with a $1000 annual deductible and $1500 out of pocket maximum.
Literally the best insurance of my entire life, but you need to be extremely specific with the way you manage your income generation to hit your numbers. Here's a few more: below 150% of FPL* does not qualify for ACA. 150-199% of FPL qualifies for best ACA rates plus CSR**. 200-249% of FPL qualifies for pretty good rates, no CSR.
*FPL = Federal Poverty Level. A variable figure depending on your household size
** CSR = Cost Sharing Reduction. An additional subsidy to lower the monthly cost plus deductible and out of pocket maximum.
Hopefully this formats right. Bottom line is that it's complicated, but there's options out there, especially if you have a good amount of savings. Do not give up. Do not let WF win by screwing you for years with bad health insurance. Take advantage of every (legal) trick in the book to minimize your healthcare costs and maximize the benefit to you and your family.
There might be a penalty forgoing insurance altogether... you might not have many choices