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Surprising to find a factual article on the subject from Fox.

http://www.foxbusiness.com/personal-finance/2014/07/29/can-o...

While the Affordable Care Act, or Obamacare, remains a controversial topic in the political arena, many Americans are assessing how it might impact their retirement plans. After all, health insurance coverage is one reason why many people stick with their jobs until they reach age 65, when they're finally eligible for Medicare.

It turns out that an unexpected side effect of the law is that it's enabling some people to consider early retirement. In fact, a recent Bankrate poll found that 23% of Americans would retire early if they could get affordable health insurance outside of their jobs, while just 8% would not. Two-thirds of Americans said health care availability would make no difference in their retirement date.

</snip>


intercst
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We are retiring pretty much on our anticipated target, having waited for DH to qualify for retiree health care. Because that could have disappeared at any time, and an illness in childhood left DH with a pre-existing condition that rendered him pretty much uninsurable outside of group insurance, we budgeted an additional $20,000/year pre ACA just in case we had to scramble for coverage with termination of retiree care. In addition, we were pretty much tied to companies that offered retiree HC, planning things out so that we were at our last company long enough to qualify. I am pleased that our kids will not have to worry about that, providing more freedom in career choices, including working for themselves.

However, the question seems to now be for how long will Drs take ACA compensation. Choice has actually constricted rather than grown in some areas, particularly rural. Were we to go the ACA route, we currently have one and only one insurer choice where we are locating to. I've seen several articles, including this one from NPR, http://www.npr.org/blogs/health/2014/08/03/337071268/two-doc... that worries will we all be well insured but have little access to doctors taking that insurance. Gerard's decision to reject two plans is something officials in Connecticut are concerned about. If reimbursement rates to doctors stays low in Obamacare plans, more doctors could reject those plans. And that could mean that people will get access to insurance, but they may not get access to a lot of doctors.

ACA was a pretty radical change for a system that needed changing. I realize it will take some time to work out the kinks. It is by no means a slam dunk in your favor at this time, but I would have to say a step in the right direction.

IP
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I also want to add that I am concerned that retiree health care will totally disappear now that ACA is here, having already been greatly reduced with medicare. Our company plan is much more portable than that under ACA, allowing us to travel in our retirement.

IP
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Ha. One wonders what the quality of that health care will be though.

Intercst, you'll be pleased to hear that Obama has turned my otherwise historically conservative leaning aunt into a liberal. She retired early at age 52 and had to pay, in her opinion, too high of a monthly premium from age 52 to 65. I'm not exactly sure who she blamed all those years but most certainly came to the conclusion that the federal government should come in and save her. lol

She was just able to start medicare in July. Her private insurance premium was a little over $400 per month for a high deductible policy before she cancelled it.

Although ACA was enacted too late for her to take advantage of it, she was pleased to see it passed. I love her dearly and spend several weeks a year with her. I get to hear her spirited pro arguments for ACA.

It all sounds nice....if it works out that way.

As for me, my company insurance has degraded and has significantly gone up over the past 2 years. Hmmmm. Did not work out so well for me nor most other Americans who are seeing benefit reductions and significant rate hikes.

I guess we will have to see how things play out. After all, it is the democrats will.

Metal
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I also want to add that I am concerned that retiree health care will totally disappear now that ACA is here

I haven't worked for a company who offered retiree health care for the past 15 years or so, and so have generally always assumed we would have to pay for our own healthcare, so I have always had that in the budget. That's pretty much where our mortgage payment has been reallocated, but as it turns out, we may have another avenue to get our retiree health insurance anyhow.

I only had a pension at the first 2 companies for which I worked, so I haven't had that to consider for my planning since 1995, and so between no pension and no access to retiree medical insurance, I've always just planned to have to provide everything on our own.
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inparadise analyzes,

ACA was a pretty radical change for a system that needed changing. I realize it will take some time to work out the kinks. It is by no means a slam dunk in your favor at this time, but I would have to say a step in the right direction.

</snip>


It was a "slam dunk" for me. My health insurance premium dropped by almost 75% and my new Obamacare policy has much more generous benefits than the old one. (e.g., colonoscopy "free" under Obamacare, $3,000 out-of-pocket cost under my old plan.)

Of course, I'm probably one of the few people who actually read the law. After the Supreme Court ruled in Obamacare's favor in June 2012, I started shifting my investments around to minimize dividend income. (Did you know that you can have $100 million in Berkshire Hathaway stock and still qualify for free Medicaid under the Obamacare law? That's something you won't hear from Fox News.) By the time Jan 2014 came around, I got my taxable income just below the 400% FPL limit and qualified for a substantial tax credit.

http://retireearlyhomepage.com/obamacare_spike.html

intercst
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I've always just planned to have to provide everything on our own.

Nice, if you are allowed to do that. Pre-existing conditions however can torpedo that strategy pretty darned fast, even if you have always been insured, it happened through no fault of your own, and the result was that you have taken such good care of yourself that you are healthier than most of the general public who carry no pre-existing condition label making them easily insurable time bombs health wise.

One uninsured illness can render you penniless and negate decades of planning. We would have had to move to a state that offered high risk insurance pools and then pay through the nose if we had lost retiree health care pre ACA.

IP
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MetalDecathlete writes,

Intercst, you'll be pleased to hear that Obama has turned my otherwise historically conservative leaning aunt into a liberal. She retired early at age 52 and had to pay, in her opinion, too high of a monthly premium from age 52 to 65. I'm not exactly sure who she blamed all those years but most certainly came to the conclusion that the federal government should come in and save her. lol

</snip>


Your aunt sounds like a smart lady. Most people don't have the arithmetic skills to figure out that it's better to let Medicare manage your health insurance at a 1.5% admin cost instead of a for-profit insurer with a 20% overhead.

The savings would be even greater if you let Medicare use its market power to negotiate prices.

intercst
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Yes, I am very aware that we can qualify for significant subsidies given our income structure. But the question becomes do we want it even if free? And will it be better than the 70% subsidy we get for retiree healthcare given our years of service? We worked hard to have that choice and I will be less than happy if it is eliminated via unintended consequences of the ACA.

Have you had need to use your insurance while traveling? How did it work, or was it completely out of pocket? How many choices did you have? The neighborhood we are moving to is filled with people whose companies have dumped them on Obamacare and they have found their choices significantly limited. I thought this bill was supposed to provide competition, not remove it.

I will confess that I have not delved into each plan carefully since we are a good 10 months from making a possible change. Gotta love those plans that quote you with a $7,000 monthly premium, which is quoted after subsidy, and still have a huge deductible. Guess they are not that interested in our business.

I am thrilled that we did not need this right out of the gate. Really hope there is an easier way to compare plans down the road.

IP
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This was one of the first things I thought of when it was in Congress. There is a prospect of some net reduction in unemployment through the early retirement of people who were working chiefly to keep health insurance.

I am sort of in that category. I don't actually plan to retire before age 66, but there are days when I'm annoyed enough to consider it.

Unlike people who have always planned to pay for their own health insurance, or who continued working because they couldn't afford to pay for insurance, the issue for me was obtaining health insurance at any price. I'm in good health now and my medical bills are below the average for my age, but I have some medical history that precluded obtaining insurance in the individual market until this year.
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2gifts writes,

<<inparadise: I also want to add that I am concerned that retiree health care will totally disappear now that ACA is here>>

I haven't worked for a company who offered retiree health care for the past 15 years or so, and so have generally always assumed we would have to pay for our own healthcare.

</snip>


I realize most people don't read the footnotes in an annual report (if they even open the envelope at all.) But every Fortune 500 annual report I've seen in the past 20 years contains a disclaimer that reads something like "While we currently provide health insurance benefits to retirees, we make no promise to continue to do so in the future."

intercst
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inparadise writes,

Have you had need to use your insurance while traveling? How did it work, or was it completely out of pocket? How many choices did you have? The neighborhood we are moving to is filled with people whose companies have dumped them on Obamacare and they have found their choices significantly limited. I thought this bill was supposed to provide competition, not remove it.

</snip>


I've always been careful to live in an urban/metropolitan area where I have the choice of thousands of doctors and dozens of hospitals.

While I travel fairly extensively, I haven't had the occasion to sample the health care offerings in foreign lands. Most people who have report that it's quite a bit cheaper than getting the work done in the US.

If I was worried about it, I'd buy a travel insurance policy.

intercst
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But every Fortune 500 annual report I've seen in the past 20 years contains a disclaimer that reads something like "While we currently provide health insurance benefits to retirees, we make no promise to continue to do so in the future."

LOL. They don't make their employees look that hard for that verbiage at our co. Which is why as I said in my original reply to your first post of this thread that we had an extra $20K/year budgeted to age 65 for early retirement just in case retiree health care went away. ACA took the need for that extra money away, or at least some of it. Even with subsidies it looks as though ACA will cost us more.

It's not just ACA websites and stock annual reports that are good to read thoroughly. ;-)

IP
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I realize most people don't read the footnotes in an annual report (if they even open the envelope at all.) But every Fortune 500 annual report I've seen in the past 20 years contains a disclaimer that reads something like "While we currently provide health insurance benefits to retirees, we make no promise to continue to do so in the future."

intercst


I'm on my 7th company as a software developer. I've never worked at a place that provides retiree health care benefits.

Who still does that besides company's that are forced to via union contracts?

Metal
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While I travel fairly extensively, I haven't had the occasion to sample the health care offerings in foreign lands. Most people who have report that it's quite a bit cheaper than getting the work done in the US.

If I was worried about it, I'd buy a travel insurance policy.

intercst

This successful early retiree couple goes "naked" (no insurance) when traveling abroad. When they come back to their home base in Arizona, they buy a travel policy.

http://retireearlylifestyle.com/

Metal
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Who still does that besides company's that are forced to via union contracts?

Those companies that actually have to compete for their qualified employees.

IP,
sending you more off line
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re: I haven't had the occasion to sample the health care offerings in foreign lands. Most people who have report that it's quite a bit cheaper than getting the work done in the US.



Here in San Diego area we see quite a few people going to TJ for medical. Even more go to TJ for dental. There a quite a few Doc's and Dentists who have setup offices both sides of the border.

Some are just unplugging and opening up in TJ -- most all do business on a cash basis/ or even retainer concierge type practices.
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If I was worried about it, I'd buy a travel insurance policy.

I'm guessing we travel to different places, but I always look at worst case scenarios. I'd rather be air lifted out than treated in some 3rd world country for anything worse than the common cold.

Last years surgical mission trip to Nicaragua had one of our surgeons go into SVT (Supra Ventricular Tacycardia). Fortunately converted with an extra dose of his own medication. Otherwise he was looking at flying home. The main hospital in Managua might have been a stop gap until the flight but I'd have serious doubts.

JLC
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"Who still does that besides company's that are forced to via union contracts?"

Those companies that actually have to compete for their qualified employees.


Retirees. Not current workers. Retirees.

Nobody choses a job for the retirement medical insurance benefits.
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JLC writes,

I'm guessing we travel to different places, but I always look at worst case scenarios. I'd rather be air lifted out than treated in some 3rd world country for anything worse than the common cold.

</snip>


Absolutely! I'm strictly a first-world traveler. I wouldn't have any problem getting medical treatment in the places I visit (e.g., EU, Singapore, Hong Kong, Australia/NZ, etc.

intercst
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JLC writes,

I'm guessing we travel to different places, but I always look at worst case scenarios. I'd rather be air lifted out than treated in some 3rd world country for anything worse than the common cold.

</snip>
-----------------------------------------------
Absolutely! I'm strictly a first-world traveler. I wouldn't have any problem getting medical treatment in the places I visit (e.g., EU, Singapore, Hong Kong, Australia/NZ, etc.

intercst


This is all too common. Not only in the realm of medical care but many other areas. In order to make the USA look good certain people always need to compare it to a 3rd World country. Otherwise I guess it doesn't look so good.
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Nobody choses a job for the retirement medical insurance benefits.

Call us nobody then. Pre-ACA, without retiree healthcare we would have had to work until DH was 65 and could get medicare. 55 is a much nicer age to retire.

Many of our co-workers have retired early. The industry pays well, and it is primarily staffed by engineers who tend to save and plan well. Early retirement amongst our colleagues is not that rare. You can bet retiree health care was a hot topic at work, and any efforts to eliminate it would have been met with an exodus to another company.

IP
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This successful early retiree couple goes "naked" (no insurance) when traveling abroad. When they come back to their home base in Arizona, they buy a travel policy.

http://retireearlylifestyle.com/

Metal


Akaisha Kaderli of this website had a very nasty finger injury while in Guatemala.
Here is the story & cost.
http://retireearlylifestyle.com/finger_expenses.htm

Paul TerHorst of "Cashing in on the American Dream" fame say to talk to the locals about medical problems to get referrals.

Or if I was in a third world country with a medical emergency; I would ask about private hospitals where the "wealthy" go. I can't image that the "wealthy jet off to the US or Europe every time they have a problem.
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Call us nobody then. Pre-ACA, without retiree healthcare we would have had to work until DH was 65 and could get medicare. 55 is a much nicer age to retire.

Either I missed something or we are talking about two different things.

I was talking about people CHOOSING a job, but you just now were talking about a job you already have.
I think that when people are looking for a job, their first priority is salary and the retirement benefits which come decades in the future are no more than an trivial concern.

You can bet retiree health care was a hot topic at work,
Talk is cheap. People talk and bitch about their employers all the time.
I worked at an engineering company (Motorola) and we all complained about the money they were spending on new landscaping in the new courtyard instead of giving up raises/bonuses. Hot topic for weeks, especially for my group because our windows overlooked the courtyard and we saw the work going on every day. But nobody even considered leaving because of it. Talk is cheap.

any efforts to eliminate it would have been met with an exodus to another company.
Really? People would have quit and got a job elsewhere because your company eliminated retiree health insurance? Are new jobs that easy to get, where you can quit ond go elsewhere because of a snit? They'd throw away all their seniority and built-up benefits (vacation weeks, pension credits, etc.) over a potential future benefit that they might not get anyway?

Heck, at all the places I've worked, the only people who cared about retiree health insurance were those getting ready to retire -- either early or normal.

There was an even bigger topic than retiree health insurance. Pension accumulation and 401(k) match. I remember when IBM announced that they were freezing their pension program. Crediting for year of service stopped, whatever you had was all you would ever get. If you had 20 years and worked another 10, too bad, you only got 20 years credit not 30.

We were hiring at that time, and I odn't recall seeing ANY disgruntled IBM engineers who were going to jump ship from IBM to us because of that.

Good thing, too, because Motorola froze their pension plan a couple of years later. A few years earlier Moto went from a defined-benefits plan to a cash-balance ("portable") pension plan, and all post-2000 hires were only on the cash-balance plan. Only us pre-2000 people could stay on the DB plan.

Nobody quit over these changes. For all the talk, nobody cared enough about them to quit. People mainly only care about their paycheck, and post-retirement benefits are minor things.

And, hell, retiree health insurance is all about nothing. It only exists up to age 65 --- at 65 you go on Medicare whether you want to or not, and regular health insurance stops. The only people who give a tinker's dam are those people who aim to retire before 65, and that is darned few people and why would an employer pay much attention to the bitching of people who have announced that they are leaving as soon as they can?

"mass exodus to another company" Riiiiight. Because there are just scads of companies with beaucoup empty job-slots waiting to be filled.
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We ? Our ?

Do you go to work with him ?
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I was talking about people CHOOSING a job, but you just now were talking about a job you already have.

No, I am talking about each and every change in job, at least since DH and I met a few decades ago and I started talking to him about retiring early. He comes from a family where they worked into their 70's for giggles, so it is not as though he was going to chose his first job out of college based on retiree health care.

People would have quit and got a job elsewhere because your company eliminated retiree health insurance?

Can only speculate about that since I am not aware of anyone in our industry who has cancelled it. It is currently damned hard to get someone with significant experience to come work for you, due to layoffs that wiped out a decade of workers who would be in their 40's to 50's right now. (vacation weeks, pension credits, etc.) You get vacation weeks based on your years in industry, not in a specific company, pension winds up being lumped summed to an IRA that you can then direct, or you keep it for future access if rollovers not permitted. In fact, we have leveraged a change in employment to gain extra vacation time. It's an easy perk for them to provide, particularly with someone like DH who tends to put extra time in at work before taking vacation and more after vacation to catch up. No one does your work for you at this level. 401(k) match? Never have heard of less than 6% right out of the gate.

And, hell, retiree health insurance is all about nothing. It only exists up to age 65 ...

Tell that to people with pre-existing conditions....and who doesn't have them these days? Your experience is clearly different than ours. Not surprising given so few industries still do retiree health care, and this is industry specific.

So again, call us nobody. The original question was why do corporations even still offer retiree health care. Answer, to hold on to their employees because the rest of the industry does it.

IP,
clearly not tied to the cell phone industry you reference
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Nobody quit over these changes.

Nobody that you knew. IBM happens to have a large employee force nearby in RTP, NC. I had a few neighbors that did quit over change in benefits.

PSU
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And, hell, retiree health insurance is all about nothing. It only exists up to age 65 --- at 65 you go on Medicare whether you want to or not, and regular health insurance stops. The only people who give a tinker's dam are those people who aim to retire before 65, and that is darned few people and why would an employer pay much attention to the bitching of people who have announced that they are leaving as soon as they can?

Not all retiree health insurance benefits work that way. Some continue to pay what Medicare does not cover. Medicare is primary and retiree insurance is secondary.

PSU
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I remember when IBM announced that they were freezing their pension program. Crediting for year of service stopped, whatever you had was all you would ever get. If you had 20 years and worked another 10, too bad, you only got 20 years credit not 30.

Just noticed this. We've moved companies several times between the two of us, always cashing in our pension where possible and rolling it over into an IRA. Investing those funds myself rather than letting them chug along at corporate speed is one reason why we are set to retire early. If a company told me that I could not continue accruing funds in my pension even though I was putting the time in, it would have been an even stronger motive to exit than retiree health care. Loud and clear I would have heard how very little I was valued, and I would have gone somewhere I was valued more.

We work(ed) in a large industry that is in reality really small when it comes to people knowing who you are even when you don't work there. I can't tell you how many jobs we got because someone asked us to apply for them, rather than our seeking them out, often because of someone we used to work with now working for the other company and wanting our work ethic, or someone hearing us present at a conference and liking what they heard. DH uses the same poaching technique with people he is trying to hire.

IP,
more than willing to acknowledge that your experience has been different and done with this topic
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We ? Our ?

Do you go to work with him ?


Not that it is any of your business, but at one point, yes. We met at work, and quickly realized that unless we wanted someone else raising our children, we could not both be in this demanding industry. One benefit of this has been his being able to kibitz with me about work, even the technical aspects of it, and have me understand both the politics involved and the technical nature of the business. Though he would disagree with my conclusion from infant to teen, I have to say it's much more fun on my side than his, since I don't have to deal directly with the political cr@P, and have much more flexibility to my schedule, even if I way under utilized my degree.


IP
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inparadise writes,

Not that it is any of your business, but at one point, yes. We met at work, and quickly realized that unless we wanted someone else raising our children, we could not both be in this demanding industry

</snip>


Good Lord. Were you working in a salt mine with a teaspoon?

intercst
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Were you working in a salt mine with a teaspoon?

Heh, there were times that would have been preferable. Rather tough to raise your own kids when one is on the road 25-50% of the time and the other puts in 11 hour days plus time on weekends. We considered an au pair, but decided that was not what our kids deserved.

Personal choice.

IP
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"retiree health insurance is all about nothing. It only exists up to age 65 ..."

Tell that to people with pre-existing conditions.


Tell what? That retiree insurance stops at 65, when Medicare kicks in? It does.
And the government makes sure you apply for Medicare when you turn 65, because if you don't apply then, then you have to pay more when you do apply.

That pre-existing conditions affect your Medicare insurance? They don't.

Pre-existing conditions isn't a factor for Medicare. You turn 65, you sign up, you pay the exact same premium as everybody else. No medical test, no medical questions, no difference with or without pre-existing conditions.

Retiree medical insurance only covers the period between when you retire and when you turn 65. I don't believe that pre-exisitng conditions matter, because it's usually just a continuation of your pre-retirement employer-provided insurance. Although with perhaps higher premiums and restarting the deductible.

That's how mine worked, when I retired at 58. As each spouse turns 65, their insurance ceased and they went on Medicare. Although -- interesting note -- at first Moto gave us their own Part D-like (drug) coverage. Well, not gave gave -- we had to pay a premium for it.
A few years later they stopped that and let us sign up for a Medicare Advantage plan, along with an annual subsidy that just about covered the M.A. premium.

BTW, I didn't work at the cell-phone business. That was another division. We were still high-tech, though.
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Not all retiree health insurance benefits work that way. Some continue to pay what Medicare does not cover. Medicare is primary and retiree insurance is secondary.

Could be. I only have direct knowledge of a couple of companies.

I wonder if that isn't an implementation of a Medicare Advantage plan. I would think there is still a premium that you have to pay.
I know that our post-retirement premium was $450/mo each, then when Medicare kicked in the RX drug premium was a few bucks, then when we switch to Medicare Advantage the premium was $71/mo (+ Medicare's $110), but they give us $71/mo.

So, I guess in a way we still have retiree coverage, since they give us $71 that we can use to pay the M.A. premium.

Ain't nobody there at Moto who makes a stay/quit decision based on the retiree insurance, though. They are just glad they have a job and get a regular paycheck now.
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Rayvt writes,


Tell what? That retiree insurance stops at 65, when Medicare kicks in? It does.

</snip>


It depends on the company. Exxon covers retirees for what Medicare doesn't pay. Essentially they're providing a Medigap policy. What's that worth, maybe $200 to $300 per month? Not enough for me to stick around if I have enough money to retire.

intercst
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"retiree health insurance is all about nothing. It only exists up to age 65 ..."
...
Tell that to people with pre-existing conditions.
...
Tell what? That retiree insurance stops at 65, when Medicare kicks in? It does.


Oh for god's sake Ray. Surely you are not that obtuse. I even mention in my post how it has given us an extra decade of retirement, or would have been our only option for that if the ACA had not come into being. In addition, you seem to be very limited by your own experiences. While our RHC does indeed stop at 65, that is not the case for everyone. As it has already been pointed out to you by PSU, some people have a RHC plan that steps into secondary coverage when you reach medicare age. In our experience, which is limited in nature, that has tended to be state employees who got that coverage, but I am sure there are other examples out there.

I am not interested in endless nitpicking arguments with you, but trust me I could rip apart your post in terms of how it is constructed, that "It only exists up to age 65 ..." is only an example of your primary premise that "retiree health insurance is all about nothing."

Go back to the buying/selling a home board and argue with Dave if that is all you have to your motivation.

IP,
hip deep in critiquing college essays at the moment
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Ain't nobody there at Moto who makes a stay/quit decision based on the retiree insurance, though. They are just glad they have a job and get a regular paycheck now.

Then I guess that industry is not exactly short on a supply of qualified employees. Having another company poach your people is a big problem here.

IP
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Were you working in a salt mine with a teaspoon?

Heh, there were times that would have been preferable. Rather tough to raise your own kids when one is on the road 25-50% of the time and the other puts in 11 hour days plus time on weekends



Gah!

Sounds like the early days of the Cellular division at Motorola, when they were doing the development work to switch over from analog to digital. Those guys were working 12+ hour days and sleeping under their desks. If someone said that they needed to go home to see the wife & kids, he got yelled at like an Army drill sergeant. Very unpleasant working conditions. Quite a few marriages didn't survive it.

OTOH, for a couple of years they got absolutely HUGE bonuses. Quite a few of my co-workers transferred up there from our group. I interviewed for a group up there and after talking to my buddies decided to stay where I was.

One of my friends, everybody in his group got a 25% of annual salary bonus. That was the year when our group (his old group) got ZIP. A few years later, Nokia came in and ate our lunch. Then cellular laid off a potload of people. We continued to get no or small bonuses, but got to keep our jobs whereas they got to collect unemployment.

Now Nokia got bought by Microsoft and got a bullet in the head. Moto split Cellular off and sold it to Google, who stripped off the patents and kicked the remains to the side of the road.
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It depends on the company. Exxon covers retirees for what Medicare doesn't pay. Essentially they're providing a Medigap policy. What's that worth, maybe $200 to $300 per month?

As if!!
We're on a Humana Medicare Advantage policy. Last year it was $71/mo, this year (thanks Obamacare!) it went up to $86/mo. (Each.)

I always hated hated hated that the employer picked your health insurance and you had no choice. That's like your employer picking out your groceries and paying for them.
Always reminded me of an old joke from the USSR:
"Come the Revolution, we'll all eat strawberries!"
"But, comrade, I don't like strawberries."
"Come the Revolution, we'll all eat strawberries AND LIKE THEM!"

Ditto for Moto's initial post-retirement pre-65 & post-65 plans. They picked it, and that's what you got, like it or not.

Now they give us an HRA-type annual sum, and we can use that to buy whatever Medigap or MedAdv plan we want, we get to pick it.
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I even mention in my post how it has given us an extra decade of retirement, or would have been our only option for that if the ACA had not come into being.

Point taken.

*************************
(Note that I'm not taking any political position about ACA in the following.)

I've been reading a lot of these kinds of threads, people planning to make significant changes in either their early retirement or re-aligning their $1,000,000 portfolio, to capture with the savings and/or subsidies that they'll get from ACA.

ACA (Obamacare) has not even stabilized or settled down yet. The built-in scheduled changes and timetables are still in the (near) future and will be coming on-stream for the next few years. And, heck, the IRS is still trying to figure out how the subsidies are going to work, and how to implement the law. Not to mention the lawsuits that are working their way through the courts, and _nobody_ knows how they'll turn out.

Things are currently changing day by day, the initial rollout was a mess, it is starting to look like the purported savings are imaginary, people are getting hit with large increases for worse coverage. Polls indicate that a majority of people don't like ACA and want to see it significantly changed or replaced or repealed. The expenses are already higher than expected and we haven't even gotten to the point where we are discoving the equivalent of the $600 toilet seats and $345 hammer.

Whatever your political opinions on ACA, it is clear that there will be large changes and several years until it finally settles down and your costs will be predictable.

So it seems really risky to take major steps -- like retiring way early -- that you are depending on cost savings & benefits that are still not settled.

If you retire early by depending on a rope to support you, and that rope frays in a couple of years and becomes rotten thread, you are in a world of hurt.

IMHO, the most absurd of these threads are people who are figuring how to shift around their $1,000,000+ portfolios so they'll get the subsidy that pays all or most of their insurance.
There is NO WAY, in this political climate, that people with a million dollars are going to get fully subsidized health insurance.

Taking major steps to get ACA benefits in 2014 will be useless in 2018, because ACA will look a lot different after all the moving parts settle down.
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ACA (Obamacare) has not even stabilized or settled down yet.
...
So it seems really risky to take major steps -- like retiring way early -- that you are depending on cost savings & benefits that are still not settled.


You are preaching to the choir. Even within this thread I stated that:

We are retiring pretty much on our anticipated (retirement) target, having waited for DH to qualify for retiree health care. Because that could have disappeared at any time, and an illness in childhood left DH with a pre-existing condition that rendered him pretty much uninsurable outside of group insurance, we budgeted an additional $20,000/year pre ACA just in case we had to scramble for coverage with termination of retiree care. In addition, we were pretty much tied to companies that offered retiree HC, planning things out so that we were at our last company long enough to qualify.

...

ACA was a pretty radical change for a system that needed changing. I realize it will take some time to work out the kinks. It is by no means a slam dunk in your favor at this time, but I would have to say a step in the right direction.


That was from post number two of this thread. Early retirement for us has been in the planning long before the ACA was conceived. The extra money we budgeted before ACA became a possibility is still there and not reallocated. We are not planning on the ACA in order to retire, and mostly hoping it does not increase the likelihood that we will have to dip into those extra funds and relocate to a place that has a high risk pool, as was our original back up strategy.

Some may view early retirement as risky, but frankly I view staying behind that desk for more years than necessary as risky. We've buried way too many of our co-workers and friends who have died prematurely. Sitting for extended periods of time has recently been deemed more hazardous to your health than smoking, compound that with high stress. Yes, IMO work is a 4 letter word.

Frankly, as I expressed in post 3 my wish is that the ACA does not cause our company to feel retiree health care is redundant. I am not at all convinced that in it's current state it will bring great benefits. Your post is no revelation to me.

IP,
probably more conservative than we should be, as is often the case with the engineering mentality
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Ratvt analyzes,

IMHO, the most absurd of these threads are people who are figuring how to shift around their $1,000,000+ portfolios so they'll get the subsidy that pays all or most of their insurance.

If the tax break is there why not take it? It's nuts to leave thousands of dollars on the table when you can claim it with so little effort.

intercst
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You are preaching to the choir. Even within this thread I stated that .... Your post is no revelation to me.

IP, I wasn't really preaching to you, but making comments in general.

It's not always all about you.
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If the tax break is there why not take it? It's nuts to leave thousands of dollars on the table when you can claim it with so little effort.

I completely agree with you. To take what is there, great.

To re-order your portfolio or revamp the way you take distributions out of your portfolio is what I was talking about. That's nuts, IMHO. And I keep seeing threads on various DIY investment sites that discuss doing exactly that. TMF, seeking alpha, early-retire, etc. Plus the Fox News item that was the Original Post on this thread. Nothing like retiring early by depending on getting $$$ from ACA, and then getting either nothing at all or getting some at first and they having it disappear.

The big boys (Cramer, etc.) always talk about "getting caught leaning the wrong way" -- and these folks sure seem to be leaning the wrong way.

Just getting it off my chest.

-30-
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Rayvt writes,

To re-order your portfolio or revamp the way you take distributions out of your portfolio {to maximize ACA tax subsidies] is what I was talking about. That's nuts, IMHO.

</snip>


To maximize your ACA subsidy, you need to reduce your taxable income (i.e. AGI). Most investors are trying to do that whether there's an ACA or not.

I've always been a "total return" investor preferring to take my income in capital gains rather than dividends and interest, so it was a lot easier for me to make my portfolio "Obamacare-ready" than someone holding a lot of high-dividend stocks. If the opportunity is there, why not take it?

intercst
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Rayvt analyzes,

Things are currently changing day by day, the initial rollout was a mess, it is starting to look like the purported savings are imaginary, people are getting hit with large increases for worse coverage. Polls indicate that a majority of people don't like ACA and want to see it significantly changed or replaced or repealed. The expenses are already higher than expected and we haven't even gotten to the point where we are discoving the equivalent of the $600 toilet seats and $345 hammer.

</snip>


I've found that people who are getting their Obamacare information from Fox News or other right-wing sources are leaving a lot of money on the table. My premium decreased by $6,000/yr and my new Obamacare policy has much more generous benefits (e.g., colonoscopy with no copay under Obamacare, $3,000 out-of-pocket expense under my old plan) -- and I know I'm not alone.

Obamacare opponents will have as much luck changing the ACA for the worse as they will ending Social Security or Medicare.

intercst
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I've always been a "total return" investor preferring to take my income in capital gains rather than dividends and interest, so it was a lot easier for me to make my portfolio [... better...] than someone holding a lot of high-dividend stocks.

Heh.

I find this funny & amusing because I've managed to stumble across some very interesting (in the sense of "watching a train wreck"-interesting) threads on the topic of high-dividend and DGI (dividend growth investing) recently. Some running to 700+ comments, completely dwarfing some of the long 200+ post threads I've seen here on TMF.

Larry Swedroe (author, columnist, investor, advisor) will write a column and say something about total return investing being much superior to focussing either on capgains or dividends ---- and the crowd goes nuts. The really funniest ones are the ones who tout that they've been investing for years -- since 2009 or since 2011 -- and have made a lot of money in high-dividend or growing-dividend stocks, so they are the demonstable proof that Dividends Work and are superior to capital gains or total return. They usually tend to dismiss "total return" with a "FZZT" -- which merely adds to the humor. (my wife says that sometimes I am a sick sick man.)

So these folks are not only making an investment mistake by focussing on dividends, but they are also subjecting themselve to higher expenses elsewhere.

I think I'll save that little tidbit and toss it out into one of those threads sometime, just to liven things up.
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I've found that people who are getting their Obamacare information from Fox News or other right-wing sources are leaving a lot of money on the table.

This is starting to veer toward getting too political ......

Personally, the times I see Fox News are the same times I see CNN. At an airport or gym or other waiting room. The barber always has their TV tuned to ESPN. ;-) And I don't pay attention to any of them --- I am soooo happy when somebody has thoughtfully muted the TV and everything is closed captioned.

No matter whether what you bolded of my comment is right or not, and no matter the anecdotes of individual people, it is certain that Obamacare has not settled down to steady-state yet. It couldn't even have possibly have, since there are a number of major provisions of that law that we haven't yet reached the calendar dates where they come into force.

There has never been a major government undertaking that has gone smoothly or come in under budget. I've just finished reading Boyd (about John Boyd) which followed the development of a number of Air Force fighter jets, and King of the Killing Zone about the development of the M1 Abrahms tank. Just the Boston Big Dig --- how could something as simple as digging a frigging hole take so much time and go so over-budget?
Heck, Medicare cost far more than they ever expected, and shaped out differently than expected--and that was just for people over 65, not the entire population.

The national health-care system is orders of magnitude more complex than a jet, a tank, and tunnel, and the if none of these were simple and cheap, there is no way that ACA will be.

I'm talking overall. There will, of course, be individual bright spots and dark spots.

Thankfully, I don't have a dog in that fight. Not yet, anyway.
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Obamacare opponents will have as much luck changing the ACA for the worse as they will ending Social Security or Medicare.

Though the SC may very well toss the subsidies for those living in states with fed-established exchanges.
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Obamacare opponents will have as much luck changing the ACA for the worse as they will ending Social Security or Medicare.

Oh, that's just silly.

SS and Medicare were both widely agreed upon and had support of both the majority of the public and politicians of both political parties.

ACA, not so much.

Nothwithstanding the actual facts of the programs, both SS and Medicare are seen a programs that you "pay into" while you are working and get the benefits of when you retire[*]. People feel that these work like a time-purchase layaway account, that you have "bought" your SS and Medicare benefits over your 30-40 year working lifetime, so ending the program would be the government "stealing" something you've bought and paid for.

ACA is nothing like that. Nobody ever had a paycheck that has a witholding deduction for "ACA".

------------
[*] Yes, I know that the programs don't actually work that way. But people in their hearts believe that they work that way.
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Social Security was not supported by both parties initially and even when GW Bush took office a large faction in the Republican Party wanted to abolish it. It took several changes to get SS right, which is what would have happened with ACA if Republicans hadn't stonewalled. Never been a piece of major legislation that didn't have some flaws to be fixed in the next few sessions of Congress. Even the Constitution wouldn't have been adopted without the promise of the Bill of Rights to quickly follow. Difference today is the two parties spend more time hating each other than trying to accomplish something useful.
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SS and Medicare were both widely agreed upon and had support of both the majority of the public and politicians of both political parties.


That's a pretty creative editing of history.

Pretty much all of Republican mainstream business opposed Social Security, arguing it would lead to widespread unemployment and would keep the United States in the Depression. (Hmmm.... sound like familiar arguments?). Chambers of Commerce, manufacturing associations, etc. all came out against it.
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"SS and Medicare were both widely agreed upon and had support of both the majority of the public and politicians of both political parties."
That's a pretty creative editing of history.


Yeah, like I said, this is veering too much toward the political.

Google is your friend. http://www.ssa.gov/history/tally.html

"the Social Security Act bill [...] was passed in the House on April 19, 1935 by a vote of 372 yeas, 33 nays, 2 present, and 25 not voting...
Democrats: 284 YES .... 15 NO
Republicans: 81 YES .... 15 NO"

284 vs. 15 = majority was yes
81 vs. 15 = majority was yes


"the Social Security Act was passed in the Senate by a vote of 77 yeas, 6 nays, and 12 not voting...
Democrats: 60 YES .... 1 NO
Republicans: 16 YES .... 5 NO"

60 vs. 1 = majority was yes
16 vs. 5 = majority was yes


Recall that I said "support of politicians of both political parties."

"the Conference Report was passed by voice vote on August 8, 1935 in the House and on August 9th in the Senate."

Anyway, this is getting too political, so I'm out now.

The NON-political point I was trying to make was that ACA hasn't settled down yet and trying to optimise your financial life around it is trying to hit a moving taget.
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SS and Medicare were both widely agreed upon and had support of both the majority of the public and politicians of both political parties

Please tell me the person who said this has professional assistance.

Social Security was broadly percieved by conservatives as the end of civilization as we know it and it still is. You cannot support SS and maintain you are a conservative unless you are stupid or totally dishonest.
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