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Author: RoadScholar5 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Retirement & the HealthCare Question Date: 6/4/2012 9:26 AM
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Pondering the eternal question.

I could likely retire now and live out a modest lifestyle, seeking my own healthcare insurance - but concerns for healthcare costs hold me back.

I am 50 and in 6 years, I can retire from public service with the ability to remain in the healthcare insurance pool and as I understand it, continue paying the same premiums, co-payments, etc. as a regular employee.

This is what keeps me at the job.

However, I am fortunate to always have been healthy and have always had the benefit of employer provided insurance, so I don't really know what life is like on the other side - i.e. - to have health issues and use your own independent insurance.

So, I am basing my retirement decisions on not having any other life experience - and more specifically, *on the assumption* that this benefit I am eligible for in the future is *very valuable* and hard to put a financial price on.

Agree? different view point? My assumption faulty?

Thanks, RS
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Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70742 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 10:20 AM
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My wife and I are 61, almost 62. We both left our respective businesses over 10 years ago in favor of working part-time via the consulting route. We both went from group coverage to purchasing private health insurance through Blue Cross of NC. When you first purchase BC coverage, they set your premium based on your existing health issues, but after that, you move in tandem with everyone else regardless of whether you have more or less problems than everyone else. The premium changes are based on passing age milestones like 55 and 60. So, after you buy the insurance, it really doesn't matter whether you have major health issues or not in terms of your premiums. Today, my wife and I each pay $10K per year in basic premiums, with each of us having a $2.5K deductible, and with each of us having a $2K co-insurance. Our premiums will continue to rise as we move towards 65, but the big jump took place when we passed 60. Bottom line: Private health insurance cost of fortune, so your state subsidized coverage is probably a great deal. Now, whether that will hold true in the future is anyone's guess, since the taxpayers are tiring of paying so much for retired public workers. Good luck.

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70743 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 10:37 AM
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I am late 50s, self-employed and have access to health insurance as a widow through my husband's former employer. It's access because it seems to be about the same price as insurance on the open market. It was the easy choice for this year.

It turns out there is also a high deductible option & I will likely switch to that with a health savings account during open enrollment. It is also what I will be comparing against on the open market for next year.

My best friend retired from state employment and from her experience, it sort of ties you to the state and the costs can rise and the choices of insurance and drs can change.

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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70744 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 12:20 PM
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When I retired early I had to buy an individual policy. In the ten years before I qualifed for Medicare the premium tripled and I had to more than triple my deductible/co-pay out of pocket to keep it from being even worse.

I was in great health and had only a couple small claims in those ten years. The insurance company paid out less than $600 in total. Your health doesn't matter much. They'll raise premiums based on overall experience with all insured. Of course, you never know when your health may take a turn for the worse or you may have an accident. Going without insurance, unless you are very wealthy, is not smart.

If you can work a few more years and stay in a group program in retirement, you may be better off to do it.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70745 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 12:34 PM
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If your state is one of the states that has a 'high risk' insurance pool, you should check the qualifications, prices and coverage for that. If your state doesn't have that type of coverage, you should investigate if there are any other type of requirement that an insurance company offer you coverage as an individual. If not, you need to be concerned that you won't be able to get coverage at all.

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Author: RoadScholar5 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70746 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 2:25 PM
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If it makes a difference, my employer is the federal government.

My understanding is that even if the rules change in the future, tradition holds that existing employees are grandfathered under current rules.

Of course, ObamaCare may factor in here, but realize that is a political issue too.

If I understand the comments here so far, employer provided healthcare retirement is good, but the other options available seem to work as well (as long as you are prepared to handle price increases)?

RS

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70747 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 2:46 PM
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If I understand the comments here so far, employer provided healthcare retirement is good, but the other options available seem to work as well (as long as you are prepared to handle price increases)?

Right now, it depends on the state. If your state does not have a high risk pool for people who have been denied coverage by private insurers, and also does not mandate that insurers be required to sell an individual policy to you, you may not be able to get coverage at all, which doesn't 'seem to work as well', IMO.

Given the court cases going on, I don't know that anyone can project what will occur in the future.

AJ

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70748 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/4/2012 5:43 PM
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I'm 47 and DW is 49. We'd both like to retire soon although I see me going part time just as a safety net.

Here is our situation. Both have individual HSA accounts that we started before we got married. Have a deductible of $5k. Premiums are about $200/month for each. Totally negative histories.

The biggest difference probably, we're high DINKs (Dual Income No Kids). Well, except for spoiling the niece and nephews. And dogs.

We have are emergency fund to cover such things as the deductible if we need to. And we plan on the premiums like any other necessary cost in retirement. Which in this case can basically be a SWAG (Scientific Wild Ass Guess). That's probably while I'll stay part time.

JLC

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Author: RoadScholar5 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70749 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/5/2012 8:40 AM
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Ok, I see now...which leads me to assume that the state one plans to retire in would matter greatly.

Colleges have residency requirements related to in-state tuition.

Assume states would have something like this as well in order to previde border jumping?

RS

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70750 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/5/2012 9:16 AM
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If you google "retirement by state", you'll get a bunch of links that can help you.

Here's an example, in Colorado, the first 20K of pension income is not subject to state income tax.

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70751 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/5/2012 9:41 AM
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Ok, I see now...which leads me to assume that the state one plans to retire in would matter greatly.

Yes. Since medical insurance laws are set by each state, the state that you live in or plan to live in is a big determinant in your ability to get medical insurance.

Colleges have residency requirements related to in-state tuition.

Assume states would have something like this as well in order to previde border jumping?


Yes, there usually some residency requirements for high risk pool insurance, but they are generally not as stringent as college residency requirements.

For instance, Texas generally requires at least a 12 month residency for to be eligible for resident college tuition: http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=R...
but you can establish residency in as little as 30 days for the Texas high risk pool insurance: http://www.txhealthpool.org/eligibil.html

AJ

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70752 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 12:05 AM
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Once you leave your employer, you could opt for COBRA continuation for 18 months..some states require the employer to provide coverage for longer periods....the bad news is that you are on the hook for the full group health premium + 2% (usually).

If you are in good health, an HSA and associated High Deductible Health Plan is the course many in your situation will take. You cannot have other health insurance with an HSA+HDHP. The maximum contribution you may make to your HSA account that is fully deductible (2012) is $6,250 for a family plan, while the out of pocket required by the HDHP before it provides insurance coverage is $2,400 to $12,100 for family coverage...clearly, the higher the deuctible the lower the premium. The HSA is designed to be catestrophic insurance, which is the way most healthy individuals want it anyway...while it allows a tax favored savings plan, where you pay no income tax on withdrawals from the HSA you use for qualifying medical expenses. And the Fed rules (which override any state rules), require that these HDHPs must be 'Guaranteed Renewable', which means that once you are insured and keep your premiums current, the insurer may not raise your premiums if your health deteriorates, but can only raise your premium if they do so for all policy holders in your group (you are usually grouped by 5 year age groups).

For more info on HSA's, see IRS Pub 969 at

http://www.irs.gov/pub/irs-pdf/p969.pdf

BruceM

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Author: RetiredVermonter Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70753 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 11:28 AM
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You've been getting varied but good advice from several people. We're both past 70, so what I say may be of little help, but here's our experience:

We both left the working force around age 59. She was a teacher who had to care for an ailing mother (with me) and I was a middle manager who was laid off unexpectedly. I did consulting for 2 years, and kept COBRA for 18 months, as suggested, but it was VERY costly. We had NO carryover health insurance.

Around 60, I shifted to Blue Cross for both of us. It was $325/month , with a $3,000 deductible, as I recall. (Remember, this was 10 years ago!) Within 3 years, the rate doubled to over $650/month for two of us, and the deductible went up, too! We hung in there until I reached 65 and Medicare; she hit that 6 months later.

Thankfully, Medicare now costs us just $96/month EACH, and we use AARP Medigap to cover most deductibles; the AARP plan is $330/month for both of us combined. So our monthly costs are just over $500. There is no free lunch, but we're awfully grateful for Medicare and the Medigap plan.

By the way, life insurance virtually ceases to exist at our age, even term insurance! (Forget "whole life".) I used to carry $100,000 term reasonably, but when you reach certain age plateaus, the premiums jump, until, at 70, the costs go through the roof. (Understandably, obviously.) Those "cost per unit" things you see are absurd, too. (Who wants to --- or can -- pay $200+/month for a $50,000 policy on Social Security?) Those "offers" end up being outrageously expensive, so we have none now. Just have to look to our other resources (IRA's) to some day cover funeral costs.

Good luck. You're wise to ask questions and look around before jumping.

Vermonter

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Author: RoadScholar5 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70754 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 12:22 PM
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Again, thanks to all here.

I am finding almost daily that the state of residence issue is becoming increasingly relevant. My job is quickly becoming a virtual one and I may not even need to physically go to an office after awhile, which of course, leaves me all sorts of options for moving to other states. I sold my home last year and only rent now, so am portable.

Guess the next step is to get a general idea of how establishing residency usually works.

Thanks

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70755 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 1:21 PM
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Regarding residency - pick your new state, move there, get you Drivers and Auto licenses there. Register to vote there. At that point you may need to wait a short period of time - weeks or maybe months from arriving. I have not compared rates, but I would expect avoiding states with high obesity rates would move you in the areas of lower premiums. Another thing to look for would be longevity and/or higher average age. It was a long time ago, but Iowa had lower medical costs when I was there - but the winters can be brutal.

Gordon
Atlanta

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70756 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 3:31 PM
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TwoCybers writes,

I have not compared rates, but I would expect avoiding states with high obesity rates would move you in the areas of lower premiums. Another thing to look for would be longevity and/or higher average age. It was a long time ago, but Iowa had lower medical costs when I was there - but the winters can be brutal.

</snip>


I have compared rates across state lines. At least in the individual health insurance market, the quality of the state insurance commissioner seems to play a big part in what you'll pay. If he or she is a former lobbyist for the insurance industry you'll pay more. If you have a consumer protection bulldog in that spot, you'll pay less.

intercst

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Author: alchook Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70757 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 3:52 PM
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avoiding states with high obesity rates

Like all of them.

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70758 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 5:34 PM
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Actually there the range of from 21% to 33%. Not trivial in my view.

Gordon
Atlanta

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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70759 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/7/2012 5:46 PM
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Before you move for cheap insurance or living expenses, be sure there even IS health care where you are thinking of living. Some of the cheapest locations are far from care.

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70760 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/8/2012 9:23 AM
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...avoiding states with high obesity rates...

Good luck with that.

JLC

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Author: RoadScholar5 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70761 of 76418
Subject: Re: Retirement & the HealthCare Question Date: 6/8/2012 9:41 AM
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Thanks, I appreciate all the info, likely to sit tight until after the election. Lots up in the air.

RS

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