Bogleheads® Chapter Series – Health care planning for retirement
00:00:00.000 | Welcome to the BogleHedge Chapter Series.
00:00:04.400 | This episode is hosted by the Pre and Early Retirement Life Stage Chapter and recorded
00:00:08.880 | October 13th, 2021.
00:00:11.640 | It features a presentation and discussion on healthcare planning from retirement to
00:00:15.640 | Medicare, including recent law changes.
00:00:19.480 | BogleHedge are investors who follow John Bogle's philosophy for attaining financial independence.
00:00:24.680 | This recording is for informational purposes only and should not be construed as personalized
00:00:29.060 | investment advice.
00:00:30.060 | This is an update to a Chicago virtual group meeting that was held in February regarding
00:00:37.000 | your healthcare options from retirement until Medicare.
00:00:40.920 | And it also applies to people that are self-employed, that don't have health insurance, basically
00:00:45.640 | anybody that doesn't have health insurance through an employer or a co-group.
00:00:50.560 | Is how do I get insurance in this period after I leave work or if I'm self-employed?
00:00:57.320 | So a lot of people will continue their retiree insurance through their employer or union,
00:01:01.440 | but that's less available than it's been in the past.
00:01:05.920 | Some people will buy COBRA.
00:01:07.360 | That's where you can extend the insurance you have through work.
00:01:11.120 | That's whether you quit, get fired, it doesn't matter.
00:01:13.980 | You can still get it, but there's an 18 month limit except for certain situations.
00:01:19.600 | Many people then plan on using the Affordable Care Act, or as one of our participants tonight
00:01:25.460 | will tell you, you can also use COBRA first and then transition to ACA.
00:01:31.980 | There are some people that use the ministry health plans.
00:01:35.380 | Is there anybody on the call that has used the ministry health plans or knows of anybody?
00:01:41.200 | If they, if you raise your hand, if you have, okay, we have one hand raised.
00:01:51.020 | If you'd like to tell us about it, go ahead and unmute.
00:01:55.540 | It might be a hand raised from left before.
00:01:59.820 | Okay.
00:02:01.420 | So some people are, you know, military veterans could possibly be available for the VA insurance.
00:02:08.220 | We've had posters on the site that have talked about self-insurance, which I don't recommend.
00:02:14.260 | If you're lucky enough to retire at 30 years old, you could still get a catastrophic plan
00:02:19.500 | where you don't have probably many people on this call.
00:02:22.400 | Some people that are displaced workers due to trade cases, they can get a health care
00:02:27.820 | tax credit.
00:02:28.820 | That's pretty rare.
00:02:30.780 | No insurance.
00:02:31.780 | Some people do that.
00:02:33.380 | Some people move to another country.
00:02:34.860 | On our Chicago call originally, somebody went to Costa Rica or something and they enjoyed
00:02:41.220 | it.
00:02:42.220 | They loved it.
00:02:43.220 | They loved the medical care that they got.
00:02:44.660 | My favorite option, keep the spouse working and use the spouse insurance, part-time jobs
00:02:50.220 | with health insurance, self-employed.
00:02:53.860 | Then in those cases, like in the state of Indiana, you have to go through the ACA unless
00:02:58.180 | you do a group plan.
00:02:59.460 | And Carol, if you could speak for a second about this group plan idea.
00:03:02.660 | >> Yeah.
00:03:03.660 | Let me, hold on one second.
00:03:09.420 | So now this is probably different in every state.
00:03:12.420 | I'm in Texas.
00:03:13.420 | I worked for a single lawyer that was only one lawyer and me.
00:03:18.300 | And you only need, to have a group health plan, you only need a group of two, two families.
00:03:23.480 | And the rates for similar plans that were on the exchange were lower for the same exact
00:03:29.500 | plan.
00:03:31.140 | And so it was a really good option.
00:03:33.420 | And we also had better options as far as PPOs, whereas maybe on the exchange there was just
00:03:39.780 | HMOs.
00:03:40.780 | There were better options.
00:03:42.200 | So just look into that.
00:03:43.980 | You should be able to go to any insurance broker and they can find those plans for you.
00:03:49.100 | It's just called a group health insurance plan, group plan.
00:03:52.300 | >> Yeah.
00:03:53.300 | And my understanding is not allowed for a husband and wife deal.
00:03:56.020 | >> Right.
00:03:57.020 | It has to be two unrelated family units, but, you know, family can be one person.
00:04:02.100 | >> It could be you and your cousin, right?
00:04:03.420 | It could be you and your cousin, but not you and your wife or husband.
00:04:06.580 | >> Or your child.
00:04:07.580 | I'm not sure if an adult child would count, but for sure, yeah, for sure, yeah.
00:04:11.920 | >> Yeah.
00:04:12.920 | And the last option I have is enroll as a student.
00:04:16.200 | Many plans, if you become a student, they want you to have health care.
00:04:19.080 | So they have a group rate.
00:04:21.480 | And that can often be good because students tend to be younger.
00:04:24.720 | So as a group, they have less risk.
00:04:27.300 | So that's an option if you want to go to school.
00:04:33.720 | So some big changes happened to the ACA with the American Rescue Plan of 2021, which was
00:04:38.840 | signed by Joe Biden and the President signed it on March 11th.
00:04:45.020 | It's currently only a two-year deal, but it's probably going to be extended from what I've
00:04:50.160 | heard, but we're not really supposed to speculate on those things.
00:04:53.520 | It expands the subsidies to above the 400% poverty level, which really that means the
00:04:58.720 | cliff goes away, which was a real sticking point for a lot of people.
00:05:03.260 | It increases the subsidies for the people that are down in the 100 to 400% poverty levels.
00:05:09.480 | Those are the people who get premium tax credits and cost sharing, depending on their income.
00:05:14.960 | The cliff's gone away.
00:05:16.040 | Now it's an 8.5% of income max.
00:05:19.180 | And if you had unemployment during 2021, you can get a zero premium plan, very nice plan.
00:05:27.640 | There's also some unemployment issues with COBRA that we're going to talk about.
00:05:33.120 | There was also many, a much larger open enrollment period.
00:05:38.940 | Typically you get the plan sometime in November and you've got till about December 15th to
00:05:44.420 | decide and for January 1st coverage.
00:05:47.780 | So President Biden opened the enrollment due to large unemployment and other issues, COVID.
00:05:55.080 | There's also COBRA premium assistance to due to unemployment.
00:05:59.240 | And as a side issue, we're going to talk a little bit about the Surprise Billing Act,
00:06:03.680 | which is something we were talking about before we started recording, which is the issue of
00:06:08.480 | keeping the patient out of a billing fight between a hospital and an insurance company
00:06:12.720 | or a doctor and insurance company.
00:06:16.860 | People need to know like, what are the federal poverty levels?
00:06:20.140 | And they use this as a multiplier for the income to determine your subsidies.
00:06:24.260 | So it's basically the same across all 48 contiguous states.
00:06:28.940 | And typically it was very important in the old days to figure out where this cliff was,
00:06:34.180 | because if you made a dollar over the cliff, it could cost you a lot.
00:06:38.860 | This is the, this is what the cliff actually looks like.
00:06:41.420 | The blue line is the old cliff.
00:06:43.300 | So this is saying that if we took a 60 year old with a benchmark silver plan, and we looked
00:06:49.640 | at their income along this bottom axis here, the X axis, and we said, if they made $15,000,
00:06:56.180 | this is a single person, this is about what percent of their income they would pay.
00:07:01.060 | So a $15,000 income person would pay only about, you know, 1.7% of their income towards
00:07:07.860 | health insurance.
00:07:09.200 | That number would go all the way up to about 9.8%.
00:07:12.840 | But right here at the magic number, if you made over 400% of the poverty level, made
00:07:18.900 | $1 over it, your cost would jump up to about 20% of your income.
00:07:24.700 | So it was a huge jump in and many people, probably people on this call have managed
00:07:29.660 | their income to stay below that.
00:07:32.060 | The new law is the orange curve, which limits it to 8.5% of your income.
00:07:37.540 | So if you make 50, 60, 70, you're still only paying 8.5% of that income.
00:07:45.260 | And at some point, because you've exceeded the cost of insurance, and you're making more
00:07:49.820 | and more money, it basically drops as a percentage.
00:07:54.220 | But there is subsidies and assistance and no cliff above the 400% poverty level.
00:08:01.900 | That was the biggest change for people who are trying to plan Roth conversions, how much
00:08:08.280 | to take out of their 401k, what to spend out of their Roth or post tax money.
00:08:13.860 | So this makes it a little bit easier, because you know what the toll will be.
00:08:18.260 | But the nightmare I always thought about is a person who played this very close.
00:08:24.480 | And they may have gotten called in to work on New Year's Eve, which they didn't plan
00:08:28.060 | to work, and they had to work a double shift.
00:08:30.600 | And they made an extra $1,000 or $500 and put them over this limit.
00:08:35.580 | And that limit, that could have cost them 8 to 10,000 in premiums for working one day.
00:08:41.900 | So if you have to plan this, you have to be very careful.
00:08:48.060 | Has anybody in the audience had issues with this cliff that they'd like to speak about?
00:08:53.660 | You just raise your hand.
00:08:57.980 | Okay, so this is only a two year deal, though.
00:09:03.500 | So hopefully, they continue it because it does help.
00:09:10.540 | So the other thing that kind of dovetails into this is the end surprise billing.
00:09:14.820 | This is that health plans must cover the surprise bills.
00:09:18.900 | And for the definition of a surprise bill, I'll give you an example.
00:09:23.500 | My wife went for a procedure, and the anesthesiologist, unknown to her, was not in the network.
00:09:30.340 | So she went to a network hospital with a network surgeon, a network pathologist, and network
00:09:35.860 | nurses, network janitors, everything.
00:09:38.940 | And she gets a bill at the end for about 10 times what you'd expect.
00:09:44.340 | And the reason is, is the anesthesiologist is not in the network.
00:09:48.540 | Typically in those cases, if you had a plan without a network coverage, it would possibly
00:09:53.800 | pay for it, maybe with a higher deductible, less reimbursement.
00:09:57.660 | But in certain states like our state of Indiana, there is absolutely no non-network coverage
00:10:04.940 | at all in any of the ACA plans.
00:10:07.580 | So if you're dying in the hospital, and for emergency care, it's covered, but the minute
00:10:12.540 | you're patched up, you want them to drag you to a network hospital.
00:10:17.100 | But in this case, with the surprise billing, if this anesthesiologist were to submit a
00:10:21.580 | $2,000 bill, they would normally be reimbursed at, let's say, $110.
00:10:27.420 | And that's what those rates are, because I've looked at them, and they're typically 10 to
00:10:31.940 | 20 times the amount that the insurance would reimburse.
00:10:35.940 | So what happens is, this now gets, they take the patient out of this, and the insurance
00:10:43.120 | company and the provider have to fight it out.
00:10:46.460 | And there's different strategies they talked about, but they settled on a arbitration thing.
00:10:52.960 | And it should take the patient out of the billing fight.
00:10:57.140 | But they're still arguing about some of the regulations that have come out, and we'll
00:11:01.180 | see how that goes.
00:11:02.740 | So if you have a surgery that could be done on December 31st or January 1st, for this
00:11:08.060 | issue alone, I'd make it January 1st.
00:11:13.740 | This is how the premium, this is the difference between the old law and the new law.
00:11:19.580 | So this is the subsidies here.
00:11:21.620 | And you can see the subsidies have come down in certain areas, especially in the lower
00:11:26.660 | incomes.
00:11:29.300 | Okay, the other thing that everyone should be aware of is that you eventually want to
00:11:33.260 | get and survive through this ACA plans to get to Medicare.
00:11:39.220 | And there's some certain rules, I'm no expert on Medicare, but you'd need to work at least
00:11:43.180 | 10 years of paid Medicare taxes.
00:11:46.440 | If you don't have that, let's say you started in the workforce very late, I would recommend
00:11:51.060 | you make sure you work enough to get to Medicare, have enough years, 40 quarters or 10 years
00:11:56.700 | of payment.
00:11:57.860 | You're eligible at 65.
00:12:00.720 | And you're also eligible if you've been on social security disability.
00:12:04.640 | And the other caveat is there's a thing called Irma charges.
00:12:08.820 | And that would be, I think, people are familiar with it.
00:12:12.500 | I think it's a look back two years.
00:12:15.540 | And if you've made a lot of money, your Medicare premiums go up.
00:12:19.140 | Anybody want to speak about that?
00:12:23.100 | Okay.
00:12:25.420 | So, on the site, if you look at the blog, you'll see a lot of some cases about health
00:12:39.020 | ministry plans.
00:12:40.020 | I did personally talk to somebody who thought it was the greatest thing and he just wasn't
00:12:43.280 | available for the call.
00:12:46.340 | You may not always get in, they are not legally required to pay.
00:12:50.860 | The people who have them seem to love them.
00:12:52.700 | But my theory is if you have a lot of assets, you don't want to use something like this
00:12:57.700 | because you're the backstop.
00:13:00.640 | So the person I talked to said it saves them about $1,000 a month over the ACA plan.
00:13:08.380 | Self-insure, you know, even before COVID, it was insane.
00:13:11.940 | But if you think about people who have been in the ICU for three months, it costs, you
00:13:16.340 | know, $15 million or something.
00:13:19.620 | It would be very difficult to self-insure.
00:13:22.180 | The risk is just too high, I think, especially as you approach, you know, retirement ages.
00:13:27.500 | And you also have to decide, do you, I would, I would prefer to self-insure my home any
00:13:32.180 | day of the week before I did health insurance.
00:13:34.300 | Okay.
00:13:35.300 | We're going to talk about COBRA now and I'm going to bring Lady Geek in and she can talk
00:13:40.260 | a little bit about COBRA because she used it and maybe you could explain how the process
00:13:44.980 | went for you.
00:13:45.980 | Oh boy.
00:13:46.980 | Well, it did, the process went fine.
00:13:50.620 | The process ended fine.
00:13:52.140 | I am now uninsured until I get on my ACA plan, November 1st.
00:13:57.860 | COBRA was an interesting thing.
00:13:59.740 | Well, for, well, you have your, your slide here saying it's a Consolidated Omnibus Budget
00:14:05.540 | Reconciliation Act.
00:14:07.820 | Basically, if nothing else, you lose your job.
00:14:12.180 | You have medical insurance.
00:14:14.180 | Back when I was thinking about to retire, I went on leave of absence without pay.
00:14:21.900 | And because I was thinking it was a COVID thing and I just, I just became a widow.
00:14:27.620 | So I was, I had a lot of stress going on.
00:14:29.860 | So, and I said, I got to retire.
00:14:31.540 | So what I did, I decided to do a test run and take 30 days leave without pay.
00:14:37.660 | That was a mistake because when I did that, they dropped all my benefits.
00:14:43.720 | As an employee, when you do leave without paying, I Googled it and it's perfectly fine.
00:14:47.260 | You drop all benefits, all medical, all life insurance, all benefits are dropped when you
00:14:53.660 | do that.
00:14:54.900 | And the only reason I had medical insurance was due to COBRA because it was a loss of
00:14:58.820 | employment.
00:14:59.860 | So I said, okay, I'm not coming back.
00:15:02.860 | And so that's how I became involved with COBRA.
00:15:06.740 | And what I did is I went on, I have, I have a medical insurance broker.
00:15:11.420 | And I said, Hey, Hey Gaia, what's should I go on ACA on COBRA?
00:15:16.060 | It was without hesitation.
00:15:17.760 | He said, stay on COBRA.
00:15:19.660 | Why?
00:15:20.660 | Because they do COBRA, the employer, your employer's insurance, they are your premiums
00:15:26.520 | based on the average age of the workforce.
00:15:29.000 | If the average age of the workforce is like 35, the premium is one hell of a lot lower
00:15:34.160 | than it is if you're at 62 or 60.
00:15:37.320 | So for me, even if you, if I pay full freight, that's for me in Philadelphia, actually close
00:15:43.020 | enough to Philadelphia.
00:15:44.500 | And I would say I'm saving almost half, I guess other people I've heard COBRA is way
00:15:49.900 | more expensive.
00:15:50.900 | So, but for me, like 60% was I was paying only 60%, even at full, full, full price plus
00:15:57.940 | 2% admin fee.
00:15:59.540 | So I, and COBRA is, you continue the benefits, no change, you don't change your plan.
00:16:04.780 | You just continue that on for 18 months.
00:16:07.180 | So I mean, I was doing, oh, one thing with COBRA, if you miss a payment, your coverage
00:16:13.360 | is dropped.
00:16:14.360 | Bye bye.
00:16:15.360 | See you later.
00:16:16.360 | And the other thing, when I was talking with my employer about the timing of your premium
00:16:20.840 | payments, here's something interesting that I didn't know about the employer side, when
00:16:25.200 | they have this, the website, the company website, where they set it up, and they said, okay,
00:16:30.400 | just do automatic billing, pay it the first month, you're fine.
00:16:33.160 | And I spoke with the rep, she says, you don't want to do that.
00:16:36.800 | Why?
00:16:37.800 | And I've heard this with other companies.
00:16:39.920 | If you send your send the company your money the first, they don't pay the insurance company
00:16:44.360 | until a week later, you are not covered for that first week of the month.
00:16:49.800 | Really?
00:16:50.800 | Yes.
00:16:51.800 | So be very careful if you want to go on COBRA, and you want to spend the way and your company
00:16:56.960 | website says automatic payments, don't do that.
00:16:59.080 | I was paying my monthly bill the day the billing came out, which is like on the 15th, a couple
00:17:05.540 | weeks early.
00:17:06.540 | So I made sure to do a quick reminder, even got a mail notification made sure I pay my
00:17:11.480 | premium two weeks before the first of the month.
00:17:15.920 | And so I say that, I just that just from I didn't mention that in the in my discussion
00:17:21.420 | threads or anything, but that is a very important point.
00:17:24.980 | For COBRA premiums, make sure that the insurance company gets paid at the first month, not
00:17:29.600 | when you pay your employer, because there's a there was a week delay, there's a holy crap.
00:17:33.800 | Let me let me just share my screen here.
00:17:37.440 | Or, Jim, I'm going to stop yours.
00:17:40.360 | Yeah.
00:17:41.360 | Okay.
00:17:42.360 | And where am I?
00:17:43.360 | Sir?
00:17:44.360 | You plan?
00:17:45.360 | Yeah, I stopped mine.
00:17:46.360 | Okay.
00:17:47.360 | You plan details.
00:17:48.360 | Share this guy.
00:17:49.880 | Because what I was doing, whoops, I can see it because what I was doing, I want to show
00:17:54.840 | the discussion threads that um, let me let me put the links and I have a couple of I'll
00:18:01.160 | just dump all the definitions I work in.
00:18:04.480 | Meeting.
00:18:05.480 | Come on.
00:18:06.480 | Oh, I can't I can't.
00:18:08.480 | I'll share links and since I stopped sharing the screen of this thread, this is someone
00:18:15.840 | just sent me sent the chat this this explains when COBRA Okay, so okay, go through COBRA.
00:18:23.000 | I go through First of all, I called the company HR.
00:18:25.280 | When does my coverage and it's at the end of the year?
00:18:28.640 | No, no, no, that's not right.
00:18:30.000 | The people who are the plan administrators don't understand it.
00:18:33.160 | I went with the administrator who does the insurance claims processing is Blue Cross
00:18:39.440 | Blue Shield.
00:18:40.440 | I went with the company's administrator handles the claims they have to pay.
00:18:44.880 | They know the rules.
00:18:45.880 | They confirmed.
00:18:46.880 | Yes, of course, your coverage ends on October 6.
00:18:50.200 | I going to check the website yesterday, I'm still active.
00:18:53.280 | Who knows?
00:18:54.280 | I'm not I'm not saying anything.
00:18:55.560 | So I'm just gonna let it go.
00:18:57.680 | But what I wanted to say was, my plan ended up my coverage ended October 6.
00:19:03.800 | I go to my my medical insurance broker, sign me up October 6, he goes, I can't do that.
00:19:09.000 | Why not?
00:19:10.720 | Because no ACA plan starts on an arbitrary day, they all start at the first of the month
00:19:15.920 | and there's something called a 15th of the month rule, a what 15th of the month.
00:19:20.880 | If you end end coverage, I have it here 15th of the month.
00:19:27.000 | You can you start on the first of the next month, if I stopped my cover coverage on the
00:19:32.440 | 16th, I would not be covered for until December.
00:19:36.880 | That's right.
00:19:37.880 | Yes.
00:19:38.880 | Now.
00:19:39.880 | So I'm in this I'm in this gap right now.
00:19:42.800 | And so what I was doing was kicking out some discussions that if, guys, if you if people
00:19:47.640 | are thinking of retirement, this is an important decision.
00:19:51.200 | This is an important reason on how a fact on how you want to set set your date.
00:19:56.280 | Oh, there's some cookie here.
00:19:58.320 | Okay.
00:19:59.320 | But what the only other thing is, there was a change in on the on the federal website
00:20:06.900 | that it's, of course, not for me, starting next year, they're going to get rid of the
00:20:11.760 | 15th of the month rule.
00:20:13.120 | So I have in this thread, in this post, I'm quoting the the website that I can't see what
00:20:21.000 | that is.
00:20:22.000 | So this I think this problem is going to go away.
00:20:25.640 | But there's some exceptions.
00:20:26.640 | Just be careful.
00:20:27.640 | But no, no, it may it may go away.
00:20:31.320 | Because Pennsylvania is a state run marketplace that follows the AC, but they don't have to.
00:20:35.400 | So this federal marketplace rule may not apply to your state.
00:20:40.160 | So they give it a shot, but be aware of this.
00:20:44.000 | Okay, so that that's, I want to say, here's all the details on this is what I was trying
00:20:52.400 | to do about pay.
00:20:53.400 | Oh, the other thing that I mentioned, a nice surprise was that the I mentioned in this
00:21:01.520 | discussion that I was I got I got denied for a pre just so in the ACA plans have to cover
00:21:10.880 | pre existing conditions.
00:21:11.880 | I was saying pre existing condition, cancer, heart, you know, all the all the big the IBDs,
00:21:17.320 | whatever the big stuff.
00:21:19.040 | No, I got denied oil, the my insurance broker trying to get a something to fill the gap.
00:21:27.160 | So we applied and got denied to why for a minor very minor condition that I'm on a small
00:21:34.400 | generic drug for.
00:21:36.360 | And I'm because it's not an ACA plan there within their rights and have denied me coverage.
00:21:42.680 | I'm not I do not qualify for a metal coverage right now.
00:21:46.840 | So what my insurance broker did, oh, and then I told my doctor, he was shocked.
00:21:51.880 | There are hundreds of conditions that you can be denied for when I was searching this
00:21:55.800 | but my let me put this way, the condition is my doctor didn't believe me.
00:21:59.200 | So I showed him the letter where OK.
00:22:02.400 | So that's where it goes.
00:22:05.200 | So I was getting here.
00:22:08.080 | OK, so so that's that's this in a nutshell, what the only thing I could get was some kind
00:22:13.760 | of hospital indemnity plan that it's not medical insurance.
00:22:18.360 | It's meant for covering if you have problems with the medical expenses, it's just some
00:22:25.480 | some insurance that covers people like who have already it's not the right insurance
00:22:30.600 | for me.
00:22:31.600 | It's the only thing I could get and I'm going to cancel it in 30 days, November 1st.
00:22:37.160 | So it's like 100 some dollars, but it's better than nothing, maybe, but they haven't charged
00:22:41.920 | me yet.
00:22:42.920 | And by the way, this this this policy also has a 30 day review where I can cancel for
00:22:46.560 | any reason within 30 days.
00:22:48.520 | So if I don't use it and he shouldn't have sold it to me anyway, but anyway, so so there's
00:22:54.680 | a lot of things going on with insurance here.
00:22:56.320 | So that's this one.
00:22:57.320 | And then I just I wanted to link to insurance.
00:23:01.440 | This is my this is my original discussion where I was this is this is about believe
00:23:07.080 | without pay.
00:23:08.480 | And this is this is my start on April 2020.
00:23:11.760 | This is where I started this whole process.
00:23:13.900 | So I'll put the links up as soon as I stop sharing the screen.
00:23:17.720 | What I did here.
00:23:18.720 | Oh, this is another link, because when I go into the marketplace, there's something on
00:23:24.640 | EPO, HMO and PPO.
00:23:28.640 | I refuse to do an HMO because you need referrals.
00:23:32.240 | I have nothing but bad experience and I have a luxury that Blue Cross I don't I do not
00:23:37.000 | need to have an HMO plan.
00:23:38.240 | So that was my key requirements, either EPO or PPO for me.
00:23:42.760 | Oh, I just also wanted to show just show you, I probably can't share it because it was sent
00:23:48.600 | by my broker.
00:23:49.780 | This is a real live rate sheet of Keystone Blue Cross for Philadelphia, because I want
00:23:53.880 | to show you that because people are wondering, like, you hear all this stuff, but here, here,
00:23:58.160 | there's nothing like live data.
00:24:00.120 | So if say, because I want to show you the difference in the premium rate.
00:24:03.040 | So if say, if you're like 30 years old, take this top plan, 650 non tobacco, OK, let's
00:24:09.560 | go to 60.
00:24:10.900 | So $650.
00:24:11.900 | And if I go down to 60, that same plant is 1554.
00:24:18.520 | So I want to show you, yes, this is why I stayed with Cobra, because my company's average
00:24:24.920 | premium was down in the eight, no, the average age was down in 30s, and I'm 60.
00:24:28.920 | So if I went to buy this in the marketplace, it will cost me $1,500.
00:24:32.420 | So this is why you need to pay attention and compare and ask your company, what is my Cobra
00:24:38.920 | cost?
00:24:39.920 | Then you go and shop the plan and see if it if it makes a difference.
00:24:42.680 | So this is why I stayed on Cobra.
00:24:46.200 | What I'm doing now is I'm going on in the Pennsylvania marketplace.
00:24:51.260 | And I just want to know and what I already entered in and all this is a Philadelphia
00:24:56.800 | zip code and I enter arbitrary birthday.
00:24:59.240 | But this is where the tax subsidy comes in tax.
00:25:03.120 | So I just put in an arbitrary number, just to show you that here are the plan details.
00:25:08.080 | This is the market.
00:25:09.760 | So here HMO, EPO, or PPO, gold, platinum, whatever, blue cross, blue cross.
00:25:18.640 | So here's here's the EPO for 350.
00:25:21.800 | What income did you put in, lady?
00:25:24.300 | I put in 10,000.
00:25:27.800 | Just to get something up there, I could put 50,000 just watch these premiums.
00:25:31.960 | But when I work, but the thing that the thing is that this is where my here's the here's
00:25:36.760 | here's is for $600 a month.
00:25:38.880 | So this is a subsidized Yeah, deductible out of pocket math.
00:25:41.720 | So this is $600 a month.
00:25:43.800 | So 12 times six is $7,200 a year versus this, but say with my tax credit, I'm paying $11
00:25:53.440 | a month versus $500 a month for this EPO plan.
00:25:59.480 | So they say that's that.
00:26:03.400 | So that that's so I say I'm taking a GAM right now for for 2022 and starting November 1,
00:26:09.320 | I am taking gamble with my tax subsidy that I'm going to I'm going to spend when way less
00:26:16.760 | than like six or $7,000.
00:26:19.320 | So I'm just taking gamble the max this is going to cost me $7,000 because this is an
00:26:24.040 | $8,000 deductible.
00:26:25.040 | Like I got one for 7,000 here it is.
00:26:27.660 | And then independence is at the Blue Cross Blue Shield franchise in Pennsylvania.
00:26:31.760 | Yeah, yeah.
00:26:32.760 | Okay.
00:26:33.760 | Yeah.
00:26:34.760 | So yeah, so this deductible seats out of pocket and yeah, it's EPO, they see the deductible
00:26:40.800 | an hour pot deductible 7000.
00:26:44.080 | That's because there is no coinsurance, there's no copay, you just pay all things you I'm
00:26:48.720 | seeing you pay the in network rates.
00:26:51.560 | So that everybody should note the HSA plans that are available.
00:26:55.600 | If you go to the next plan to the right, there's no HSA on that plan, because it's got benefits
00:27:00.300 | before the deductible.
00:27:02.600 | Yeah, see.
00:27:04.560 | So so yeah, so that this is the so yeah, so that the these are HSA plans.
00:27:10.440 | So I, but actually, okay, so that's this, that that's, let's want to show up, I'll dump
00:27:15.520 | the links in the chat for what for my discussion stuff.
00:27:19.880 | So that's all I wanted to show.
00:27:21.800 | I don't think I can share this because it was sent by the broker to me not intended.
00:27:27.240 | Unless you can find Keystone ACA rate sheet on Google, I really probably can't share that.
00:27:34.140 | But I just want to show you how much the premiums, they are significant based on your age significant
00:27:39.460 | change.
00:27:40.460 | So let me stop sharing.
00:27:42.020 | And remind me to cut that out of the video, because we don't know.
00:27:47.220 | I don't know, I probably keep I just didn't want to pass a copy around, pass a copy around.
00:27:54.580 | But that is also because it by the way, insurance rates vary by county.
00:27:58.860 | So plans, everything goes by county.
00:28:01.260 | That's why they want your zip code.
00:28:05.780 | But then again, I had a question on that.
00:28:08.620 | On the ACA plans, I've never had one before.
00:28:12.040 | When you sign up, you need a you need to show proof of income in Pennsylvania's household
00:28:16.700 | income, not adjusted gross income.
00:28:20.400 | But how do they know for 2022 what I'm doing?
00:28:23.180 | I assume there's a tax form, there's a marketplace tax because I know they have to adjust my
00:28:27.260 | premium for next year.
00:28:28.900 | You give them the estimate of the thing.
00:28:30.780 | And then there's a tax.
00:28:31.780 | Well, I forget the form, I have it in the presentation that you would true it up on
00:28:36.220 | your tax return.
00:28:37.720 | It turns out this year, this year for people who underestimated their income, but then
00:28:42.700 | went on unemployment, they don't even have to pay that back.
00:28:46.520 | So somebody asked about whether you should work or take a leave of absence.
00:28:50.980 | It seems like this year, if you can get on unemployment, it's the best thing to do.
00:28:55.660 | Okay.
00:28:56.660 | Okay.
00:28:57.660 | Yeah.
00:28:58.660 | So yeah, it's something during your presentation, if you say like, well, how is my first year
00:29:01.500 | in ACA?
00:29:02.500 | How do I adjust?
00:29:03.500 | How's how's my premium adjusted for next year?
00:29:06.700 | So I'll know how to
00:29:07.700 | Well, you just estimate your own income, your Maggie, really.
00:29:11.080 | And we'll talk about that.
00:29:12.080 | But the issue is, that will then give you an immediate premium tax credit, that will
00:29:17.620 | be a lower bill.
00:29:19.140 | Some people do it the opposite way, where they say, just let me have the bill, and I'll
00:29:22.860 | pay it.
00:29:23.860 | And then I'll true it up on my my tax return at the end.
00:29:25.900 | Oh, okay.
00:29:26.900 | So this true up is done in the ACA website or on your now on your tax return.
00:29:31.980 | That's where I want to know what form and stuff.
00:29:33.700 | Okay.
00:29:34.700 | Yeah, we have a screenshot.
00:29:35.700 | I don't remember the number.
00:29:36.700 | Okay.
00:29:37.700 | I just don't the links of my discussion threads and the definition.
00:29:41.900 | Okay, I'm going to share my screen now again.
00:29:44.700 | Yeah, I'm done.
00:29:45.860 | But I want to turn it over to Carol for a second, because she has an answer on the Medicare
00:29:49.860 | question that came up in the chat.
00:29:52.060 | Somebody asked about a non working spouse.
00:29:53.980 | Carol, if you'd like to speak.
00:29:55.620 | Yeah, yeah, I was searching while you know, during the presentation, I found a pretty
00:29:59.740 | good article.
00:30:00.740 | Let me post the link again about the kind of explains about the 40 quarters.
00:30:06.620 | And there are some options if you don't have the 40 quarters.
00:30:11.060 | If your spouse similar to the way Social Security works, you can qualify on a spouse's record.
00:30:17.580 | But you still you still can't get Medicare until 65.
00:30:19.960 | And your spouse that has worked the 40 quarters have to be at least 62.
00:30:25.100 | And luckily, I didn't even know this till just now either.
00:30:28.500 | It's not an all or nothing thing that the 40 credits quarters is just to get the free
00:30:33.380 | part premium free Part A. And it sounds like it's a little bit here, I'm going to post
00:30:38.580 | something right in the chat here.
00:30:44.620 | If you work between 30 and 39 quarters, you just you're going to be paying 259 a month.
00:30:51.560 | So it is a huge, you know, it's a pretty big price jump, but it's not totally off the table.
00:30:57.860 | And then less than 30 quarters, it's 471 a month.
00:31:01.240 | So it does go up a lot.
00:31:03.620 | But you're not totally cut out of it if you haven't worked the 40 quarters, but it's definitely
00:31:08.020 | worth it.
00:31:09.020 | You know, if you're close, you definitely want to try to get your 40 quarters in.
00:31:13.140 | But that's a really good article that explains everything that I posted in the chat.
00:31:20.060 | Okay, back to Jim.
00:31:23.700 | Oh, go ahead, go ahead, Miriam.
00:31:30.340 | You're muted, unmute yourself.
00:31:34.180 | I have two things.
00:31:36.620 | First of all, I believe on the Boglehead forum, I read one of the Bogleheads mentioned he
00:31:42.900 | lived in California, and he worked for the university system, that when his Cobra ended
00:31:49.060 | at 18 months, he had the state of California would extend the Cobra for another, I think
00:31:56.580 | it was six months.
00:31:58.380 | I'm not.
00:31:59.820 | I'm pretty sure that's what I read.
00:32:01.060 | This was several years ago.
00:32:02.220 | I don't know if that's true, but maybe some states or some, well, I guess it would be
00:32:08.060 | states, maybe some employers will extend the Cobra.
00:32:11.420 | I don't know if anybody knows about that.
00:32:13.740 | Miriam, I can actually speak to that.
00:32:17.140 | Like I was saying earlier, I used to work for, I was a paralegal for just a single attorney.
00:32:21.860 | And so obviously, the Cobra rules didn't apply, because I think it's you have to have 15 employees.
00:32:25.940 | But there was something called Texas State continuation coverage, which worked a lot
00:32:31.260 | like Cobra, except it was only nine months, but still, hey, that's a lot better than,
00:32:35.740 | so I was able to get the better, cheaper plan for an additional nine months.
00:32:39.420 | And it was kind of funny how it worked, whereas I had 60 days to decide.
00:32:44.620 | And then, let's see, I worked till the end of January, then I have 60 days to make my
00:32:48.980 | decision.
00:32:49.980 | And then the nine months started from the end of the 60 days.
00:32:52.860 | So really, it was 11 months.
00:32:55.700 | You got to kind of look into those little rules and extend it as much as you can.
00:32:59.340 | So that's going to be state by state rules on that one, though.
00:33:04.700 | And then I also wondered whether anybody had made claims under Cobra, and they found it
00:33:10.940 | difficult to be paid for Cobra insurance to pay their claims.
00:33:19.940 | I never had a problem.
00:33:20.940 | I mean, because it's just, I say, with Blue Cross, you go direct.
00:33:26.020 | It's just how the claims get paid, how the premiums get paid.
00:33:29.380 | Everything else is handled direct with the insurance.
00:33:31.500 | Your company has nothing to do with it after they pay.
00:33:36.860 | It's the claims administrators and the usual stuff.
00:33:39.460 | Okay.
00:33:40.460 | Thank you.
00:33:41.460 | Cheryl, you want to go ahead?
00:33:42.740 | Go ahead.
00:33:43.740 | Yeah, I was going back to talking about extending beyond 18 months.
00:33:48.940 | My husband's an air transport pilot, so he's forced to retire at age 65, and I am younger
00:33:55.140 | than he is, and I need more than 18 months' worth of coverage.
00:33:59.500 | So I have to finalize the answer on this, but my understanding is that with other pilots,
00:34:05.780 | since it is a situation of forced retirement, it's a condition of employment for all air
00:34:11.260 | transport pilots that carry passengers.
00:34:14.540 | Since that's a forced condition of retirement, as opposed to simply choosing to retire, that
00:34:19.340 | we also have the opportunity to have Cobra for longer because of that.
00:34:23.700 | But I need to confirm it, and we'll post it on the form.
00:34:29.380 | Okay.
00:34:30.860 | Thank you.
00:34:31.860 | Yeah.
00:34:32.860 | There was some extensions on Cobra.
00:34:33.860 | It could go as much as 36 months that I had read about, but there are special circumstances.
00:34:38.540 | But I would like to just repeat that you have up to 60 days to activate this Cobra, so you
00:34:44.140 | could be terminated from your employment or quit.
00:34:47.960 | You could have a heart attack the minute you cross over the parking lot, and you could
00:34:53.060 | decide a week later that you want to get this Cobra coverage.
00:34:55.900 | So you do have to pay your bills, as Lady Geek said, but you have 60 days retroactively
00:35:01.460 | to choose Cobra.
00:35:04.100 | And the other thing that's important is you need to know what the employer's paying because
00:35:07.500 | you're going to pay a slight 2% administration charge over it.
00:35:11.000 | Most people don't understand that their employers are paying maybe up to 80% of the cost.
00:35:16.060 | So when it comes to you, it could be five times the amount or four times the amount
00:35:22.060 | that they're taking out of your check as your contribution.
00:35:24.740 | All right.
00:35:26.780 | So let's keep going here.
00:35:28.860 | So Cobra had some effects, or the American Rescue Plan affected it.
00:35:34.540 | They have a big premium assistance.
00:35:37.780 | And did this affect you, Lady Geek, as far as the premium assistance on Cobra?
00:35:43.980 | No, because I start April 2020.
00:35:47.200 | I don't know if I will qualify.
00:35:49.900 | I was already retired.
00:35:51.780 | When did you complete Cobra?
00:35:53.300 | Just recently, right?
00:35:54.300 | October 6th.
00:35:55.300 | Yeah.
00:35:56.300 | Yeah, you should look into that.
00:35:57.300 | That might help you.
00:35:58.300 | Well, it's already done.
00:35:59.300 | I don't know if you can do it retroactively.
00:36:02.380 | Yeah, I don't know.
00:36:03.380 | I don't know.
00:36:04.620 | So again, this could be even reduction of hours.
00:36:07.340 | It doesn't have to be termination.
00:36:08.340 | Okay.
00:36:09.340 | Let me put it this way.
00:36:10.340 | I'd rather not deal with my employer at this point.
00:36:14.380 | Okay.
00:36:15.380 | All right.
00:36:16.380 | So again, unemployment provisions, if you were unemployed at any time in 2021, it treats
00:36:20.980 | it as if you had 133% of the federal poverty level, which is the maximum subsidies.
00:36:27.100 | So the only issue there is this thing called the family glitch, which is when your spouse
00:36:32.780 | has maybe doesn't have insurance because they turned it down because it was coming through
00:36:38.100 | you.
00:36:39.100 | But if they are eligible for employer-sponsored insurance, then you don't get a subsidy.
00:36:43.660 | So again, if you had any, even a week of unemployment in 2021, and you're on ACA, you're going to
00:36:50.740 | have a very nice low premium and it will affect and help your COBRA.
00:36:57.500 | As we talked about, I don't know if people are familiar with health savings accounts.
00:37:01.740 | If the health savings or the insurance policy is eligible for a health savings account,
00:37:09.360 | you can put money into that.
00:37:11.300 | The 2021 limits were 3,600 individuals, 72 family, and then a catch-up provision for
00:37:17.060 | 55 and older.
00:37:18.460 | And this money is tax-free, and it's tax-free when you spend it.
00:37:21.980 | And you can spend it on deductibles.
00:37:24.980 | I think you can spend it on Medicare Advantage programs.
00:37:27.380 | You can some over-the-counter items.
00:37:30.600 | Has anybody used their HSA a lot and would like to speak about it?
00:37:39.420 | This is Lady Eek.
00:37:40.420 | I just started last year, and I said I qualified medical expenses.
00:37:45.740 | I zeroed mine out with one month's nursing home, skilled nursing facility for my late
00:37:51.380 | husband.
00:37:52.820 | So the idea is, if you have to keep a record of your qualified medical expenses rather
00:37:57.820 | than keeping an entire pack of stuff, I just said, "Here's one month from a nursing home."
00:38:04.140 | And that zeroed out.
00:38:05.140 | Actually, I have five cents left in the account because I forgot to close it out properly,
00:38:08.900 | but I might restart it.
00:38:11.460 | What does a month, if you don't mind me asking, what does a month of nursing home cost these
00:38:16.260 | days?
00:38:17.260 | $408 a day.
00:38:18.260 | Wow.
00:38:19.260 | Okay.
00:38:20.260 | The $10,000 to $12,000 per month.
00:38:21.260 | And at the time, I was prepared to burn down his IRA for that, and it's called self-insuring.
00:38:30.020 | But we're diverting from medical.
00:38:31.700 | But yeah, so skilled nursing and anything that's a qualified medical expense.
00:38:39.500 | So a lot of people use HSAs for, they have like a debit card and you just go to the pharmacy
00:38:45.300 | and it'll tell you yes or no, if you can use the card for it.
00:38:48.860 | So a lot of people do it for that.
00:38:51.220 | Okay.
00:38:52.220 | Thank you.
00:38:53.220 | So the key thing is not all plans are eligible.
00:38:55.780 | So as Lady Geek showed on the Philadelphia or the Pennsylvania site, certain plans, depending
00:39:01.580 | on their deductible range and whether they start providing benefits before the deductibles
00:39:07.300 | reach.
00:39:08.300 | $8,000 pays, you're not going to be an HSA plan.
00:39:10.980 | So these tend to be high deductible plans, but in the state of Indiana, we have cases
00:39:15.860 | where the deductibles are so high, they exceed the limit, which is a typical government bureaucracy
00:39:23.620 | issue that doesn't make any sense.
00:39:25.940 | You could have a plan with an $8,000 deductible with a $7,000 limit, and you're not, you can't
00:39:32.920 | save with an HSA, but that's a different issue.
00:39:37.700 | So again, it has to be at least 1,400 for an individual, but it can't be more than $7,050
00:39:44.100 | or 14 for a family.
00:39:45.900 | And it can't have anything other than preventative care.
00:39:48.820 | So your annual checkups, things like that are covered mammograms, things like that.
00:39:53.880 | But if they say they're going to give you a $20 copay, it's over.
00:39:57.640 | And in Indiana, we had 39 plans available and only three were HSA compatible.
00:40:03.080 | And most of them were because of the 7,000 deductible was way exceeded.
00:40:06.980 | It was in the eights or something.
00:40:12.980 | So these are not like flexible spending plans.
00:40:15.180 | This is your money, and you can decide when you want to pay for it.
00:40:19.220 | As Lady Geek said, you could pay it for nursing home at the end.
00:40:22.380 | You could pay it for aspirin today if you wanted to.
00:40:28.420 | And as Lady Geek mentioned, there's debit cards and all sorts of ways to pay.
00:40:31.540 | I heard you can even buy stuff off on Amazon and use your HSA.
00:40:37.340 | These are a couple plans that I looked at, and this is just to get an idea of, you know,
00:40:41.860 | what had an HSA and what were the premiums.
00:40:45.260 | This is this year, and it reflects the America Rescue Act.
00:40:50.540 | And it shows you $25,000 income, 50, 100, and what the ranges are.
00:40:57.340 | So this is for a male and a female, non-smoker, 60 and 60 years old.
00:41:03.080 | I just picked that arbitrarily, but you can see the range here that at a $25,000 income,
00:41:09.100 | you could be paying $52 a month in Illinois.
00:41:12.220 | Or if you want the Blue Cross Blue Shield preferred silver PPO plan, you could be paying
00:41:17.400 | $1,500 a month with a $6,000 deductible and a $17,000 family out of pocket.
00:41:26.600 | So it pays to shop around and decide what your risks are for your health and how much
00:41:32.700 | your income is.
00:41:35.200 | Now we're going to go back to the basic ACA Act that was passed under Obama.
00:41:40.020 | And that is that they did things like eliminated cancelization by the insurance companies.
00:41:47.260 | They had a lot of subsidy levels between 138% of the federal poverty level.
00:41:54.320 | Now here's a case where let's say I had a million dollars in a 401k, a million dollars
00:41:59.960 | in a Roth, and I had a million dollars underneath the mattress that was post-tax money, legal.
00:42:07.360 | At that point, I could spend money just out of the mattress money and technically have
00:42:12.760 | no income.
00:42:14.440 | In those cases, I would be below the 138% and I would have to go on Medicare, which
00:42:21.160 | would mean I might be subject to asset tests, which I wouldn't pass.
00:42:25.480 | So you basically would like to, if you had no income from wages, interest, dividends,
00:42:31.200 | things like that, you would basically like to take money out of your 401k to get up to
00:42:36.960 | the 138% of poverty level to qualify for the ACA plans.
00:42:41.880 | And at that point, you'd also get a major subsidy.
00:42:46.640 | But you do need to be at least at 138% of the federal poverty level.
00:42:51.760 | This is the rule that allowed people to stay on their parents' policies until they're 26.
00:43:00.800 | It required employers to cover workers if they had enough employees.
00:43:04.920 | So it was the basic ACA act of, I forget what year it was actually.
00:43:09.760 | So there's no coverage limits in the ACA.
00:43:12.400 | It used to be they could set a limit of like $2 million.
00:43:16.440 | But some people could reach those limits.
00:43:19.640 | They could cancel you.
00:43:21.080 | Now they can still cancel you for fraud.
00:43:23.080 | So that's the only reason, nonpayment and fraud.
00:43:27.120 | And as Lady Geek pointed out on the Cobra, you want to make sure you pay it.
00:43:33.240 | I think people know what deductibles and co-pays are.
00:43:37.480 | Deductible is what you're going to be paying first.
00:43:39.040 | The co-pays, you go to the doctor and they say it's a $30 co-pay.
00:43:42.160 | You'll be paying that.
00:43:43.520 | And then some of them have coinsurance up to limits.
00:43:46.880 | And each of the plans that you have under the ACA will have a benefit coverage limit.
00:43:53.080 | I think I have a page here.
00:43:54.640 | And you'll see a page that looks like this.
00:43:56.920 | And this will tell you what's covered, what isn't.
00:43:59.960 | Some of these plans might have vision and dental, and they can be very expensive.
00:44:04.440 | But you'll find out what it covers.
00:44:11.200 | This is the typical open enrollment.
00:44:13.200 | It typically happens November 1st through December 15th.
00:44:15.560 | You want to purchase insurance by December 15th for coverage on the first of the year.
00:44:20.880 | They've been extended greatly this year because of COVID.
00:44:24.280 | And the other thing that happens is if you have a qualifying event, which would mean
00:44:28.320 | you got married, you had a baby, adopted somebody, placed the child in foster care, got divorced,
00:44:34.480 | a spouse passed away, you moved to a new zip code, or you lost your insurance for whatever
00:44:40.480 | reason.
00:44:41.480 | Could be that you came off a Medicaid because you had too much income now.
00:44:45.520 | So these open enrollments periods weren't part of the ACA or the Recovery Act.
00:44:50.440 | They were actually executive order by President Biden to get people to sign up.
00:44:56.500 | And there's a new 80/20 rule.
00:45:00.340 | Some of you may have received credits back from your insurance company because they didn't
00:45:04.000 | spend enough money.
00:45:05.420 | They need to spend 80% of their money on medical care.
00:45:09.680 | And if they don't, they have to rebate that money to their customers.
00:45:15.080 | This is a typical benefit plan page.
00:45:17.820 | You get this on -- if you go to the healthcare.gov and look up your state and look at a plan,
00:45:23.320 | you'll see this.
00:45:26.160 | This is what we were talking about earlier, about whether you need referrals.
00:45:30.120 | If you go to an HMO, with an HMO, you're typically assigned a doctor, and that doctor makes all
00:45:35.960 | the medical decisions for you.
00:45:38.000 | I'm just afraid -- I don't know if this is for effect -- that they might have some financial
00:45:42.180 | incentive of not referring you.
00:45:43.920 | So that's why a lot of people don't like HMOs.
00:45:46.640 | Is anybody on here that has an HMO and likes it?
00:45:52.040 | Just raise your hand if you do.
00:45:53.320 | I don't see anybody yet.
00:45:56.720 | Okay.
00:45:58.440 | Now one of the things that happens with the silver plans is there's extra cross-saving
00:46:02.840 | sharing reductions that really can lower those plan costs.
00:46:06.360 | So typically, if you're in the lower income or you're planning your income to be low -- for
00:46:11.080 | example, in my case, if you were to say a million in a Roth, a million in a 401(k) and
00:46:17.320 | a million under the mattress, I could plan my income, theoretically, to be in the perfect
00:46:22.560 | spot to get the maximum subsidy.
00:46:24.920 | And if we went back to that cliff curve, we would see that we really want to just barely
00:46:29.320 | make it into -- we'd really want to be here in this 138%.
00:46:34.400 | Some states, it could be 100.
00:46:35.400 | I think it's got to do with Medicare expansion.
00:46:38.440 | But for two people, it would be 23.8, and I don't know if this is 2021.
00:46:46.440 | Some states have their own exchanges, and there's a list here.
00:46:49.280 | So if you live, for example, in Maryland, you would go, just like Lady Geek did, to
00:46:53.560 | a private exchange for the state that the state runs, but all the other states use healthcare.gov.
00:47:01.680 | And this is how you view a plan.
00:47:03.440 | So let's do that now.
00:47:06.440 | Okay.
00:47:24.800 | So let's pretend we live in -- we'll say we live in Illinois, and I'm going to put a zip
00:47:35.360 | code in.
00:47:36.360 | I'm going to say Chicago.
00:47:40.880 | And I'll pick the county.
00:47:42.320 | It's Cook County.
00:47:44.680 | And first thing I'm going to do is say -- let's say it's just for me.
00:47:50.720 | And I'm going to say I'm 60 years old here, and I'm a male, and I don't smoke or use tobacco
00:47:55.480 | and things like that.
00:47:59.360 | And I don't have a spouse, let's say.
00:48:02.280 | And let's say I have that income of -- I'm just going to put $25,000 in here.
00:48:08.400 | And here's an important question.
00:48:10.120 | Did I get unemployment in 2021?
00:48:12.040 | I'll say no for now, and I'll look at the plans here.
00:48:15.320 | And they're basically telling me that I'm going to get $694 of assistance on my premium.
00:48:21.520 | So I'll go view the plans, and you guys can all do this.
00:48:26.720 | And I'm going to add some filters, because just to narrow it down, I'm just going to
00:48:29.680 | look at the silver plans.
00:48:32.040 | This is where you get the most subsidies at these levels.
00:48:34.760 | If you're higher income and very healthy, I would definitely look at the bronze plans
00:48:39.240 | here.
00:48:40.940 | And if you notice here, there's some filters.
00:48:42.640 | So if I wanted to be in Blue Cross Blue Shield, if that was important to me, I could filter
00:48:48.120 | by this too.
00:48:49.120 | I could make sure that it has an HSA.
00:48:52.680 | It may turn out there are none.
00:48:55.120 | So I'm just going to apply these filters.
00:48:57.400 | And you can see that the cheapest plan I could get is $21 from this Bright Healthcare, which
00:49:02.800 | I've never heard of.
00:49:04.240 | And the deductible is $1,528.50 on the out-of-pocket.
00:49:08.160 | And it tells you co-insurance, generic drugs, specialists, things like that.
00:49:14.320 | It includes child dental, but no adult dental.
00:49:17.740 | And if I scroll down here, you can see the numbers that go up.
00:49:21.640 | And there's three pages here.
00:49:28.820 | And the most expensive plan is $495.
00:49:33.280 | And that was really because of the income was so low.
00:49:35.840 | Okay.
00:49:36.840 | And this is Blue Cross and Blue Shield.
00:49:40.640 | And also you'd be looking at the other thing you'd be looking at is this is a PPO plan.
00:49:44.800 | So that's why the cost is so high, where that first plan I'm sure was an HMO plan.
00:49:49.280 | So if I go back to the top now, and if you were planning your income and deciding how
00:49:54.640 | much to take out of your 401(k) or do Roth conversions, you would want to do something
00:50:00.280 | like this.
00:50:01.280 | So I'm going to edit this now.
00:50:02.540 | And let's say instead of making $25,000, I'm going to do Roth conversions.
00:50:10.680 | And I decide to convert up to $150,000 or something like that.
00:50:15.440 | So I'm going to change this number to $150,000.
00:50:18.720 | Now this income is high enough that that 8.5% rule is not going to really play into it.
00:50:25.640 | So I'm going to see the real cost here, I'm sure.
00:50:29.960 | And basically, it says I don't have any subsidies here because I'm because of my income, I decided
00:50:35.840 | to convert Roth, do Roth conversions.
00:50:39.320 | And now this is the cheapest plan.
00:50:42.000 | And I want to actually what the easiest way to do this, I want to stick with Blue Cross
00:50:47.720 | Blue Shield for a second.
00:50:49.640 | And I'm going to say just show me these.
00:50:55.360 | And you can see that this is for a single person.
00:51:00.520 | So this is pretty good, pretty high.
00:51:04.440 | We're talking $1,300 a person here, 60 years old with 150,000 in income in Illinois, but
00:51:11.640 | you're getting a gold PPO plan.
00:51:13.600 | Again, if you want to the cheapest plan, I'm sorry, let me go back down here.
00:51:22.600 | I think it was what $500 I thought oh, that's it right there that page sorry.
00:51:34.120 | So we're talking 569 Okay, so go to healthcare.gov.
00:51:37.880 | It's got lots of good information.
00:51:39.240 | And the other site is brought up by firefighter in the chat.
00:51:42.680 | The Kaiser Foundation has excellent papers, calculators, everything.
00:51:47.200 | So you can do that.
00:51:48.200 | So if you want to plan your income.
00:51:49.960 | Now remember, in the second example, I went to 150,000.
00:51:54.080 | The maximum I'm going to pay for my health care is eight and a half percent.
00:52:01.200 | But that's, that's for the cheapest silver plans.
00:52:07.080 | And I'm going to the my Roth conversions really brought my income up.
00:52:12.760 | So in you have to decide whether you think future taxes are going to be worth those Roth
00:52:17.880 | and Roth percentages against these premiums.
00:52:22.100 | I don't think it's worth it.
00:52:23.280 | But you have to figure that out for yourself.
00:52:29.120 | Okay, so let's Alright, let's
00:52:47.880 | So as we talked about, you have to estimate your income.
00:52:51.840 | There are differences between the Aggie and the Maggie and what those are things that
00:52:56.560 | like if you had income from tax free municipal bonds, those numbers get bad added back in,
00:53:03.480 | and it's kind of like, it's a bigger number than your than your AGI.
00:53:08.080 | The next thing is, how would you optimize your so your Maggie income?
00:53:13.140 | One of the things to think about is if you're looking at these subsidies, if they mean something
00:53:16.520 | to you, you most likely would like to postpone Social Security or a pension if you could.
00:53:23.040 | So let's say you had a pension that you could take it at 5560 or 65.
00:53:28.320 | And you knew you were going to have to survive through ACA plans that you would be, you should
00:53:34.240 | really seriously look at delaying that pension and or Social Security as long as you can.
00:53:39.040 | You also don't want to take withdrawals from your IRA or 401k type accounts, because those
00:53:44.140 | will count as ordinary income.
00:53:46.440 | Again, if you're less than 59 and a half, there's a penalty for taking out of your 401k.
00:53:52.080 | So you want to think about that too.
00:53:55.120 | So the ideal way to do this is to have some post tax money that you can use.
00:54:00.420 | And you still want to be able to set your income above the 138% federal poverty level.
00:54:07.100 | Some people on the site have talked about timing things like for example, if you had
00:54:12.360 | large capital gains, that you may want to sell them before you sign up for the ACA for
00:54:17.880 | the year before.
00:54:19.240 | And in many cases, you're working a lot at that point.
00:54:22.720 | And you have high income at that point.
00:54:24.200 | So your marginal rates could be much higher.
00:54:25.920 | So you really need to work out a lot of different strategies.
00:54:31.320 | Some people have even talked on the site about getting a home equity loan to tide you over
00:54:36.400 | to keep if you absolutely need money to survive, but you look at that premium tax credit say
00:54:43.280 | that's worth a lot, it might be cheaper to take a home equity line of credit to tide
00:54:48.460 | you through some of this time to keep the maximum premium.
00:54:52.560 | I don't know if that's worth it.
00:54:55.560 | But sometimes it's worth depending on what your coverage needs are.
00:55:02.320 | If you had one patient with one spouse that had a lot of medical needs, it could be that
00:55:08.840 | it's better to put one patient on a much better plan, which what I mean by that is lower deductible
00:55:14.520 | load or lower out of pocket.
00:55:18.520 | And then have the other person on a bronze plan with a very high deductible.
00:55:24.600 | And you also have to think about the children, it could be that they better off from a cost
00:55:28.640 | point of view on the bronze plan.
00:55:32.760 | So again, delay Social Security, spend post tax money, invest earnings in 401k that which
00:55:37.440 | will bring down any 401k individual 401k IRAs, those things will bring your income down.
00:55:45.540 | Things like Roth conversions or Roth raises your income, reverse mortgages.
00:55:54.920 | So this is the thing about different states are covered differently depending on whether
00:55:59.400 | they expanded Medicaid.
00:56:01.840 | It's a little map of that.
00:56:03.680 | Again, the Roth conversion, this is what a lot of people ask about, should I do Roth
00:56:07.600 | conversions or what's the subsidy worth?
00:56:09.760 | So you got to look at this Roth conversions also raise your income, which can raise your
00:56:13.800 | Medicare IRMA surcharges, so you got to kind of look at that too.
00:56:18.320 | And everyone always asks, is there a model out there that takes care of this and we really
00:56:21.600 | haven't seen one.
00:56:26.960 | Here's the IRMA rate.
00:56:27.960 | So I don't know much about this.
00:56:30.320 | But apparently, if you have, let's say you had made over 500,000, you could be surcharged
00:56:35.880 | by $347 a month on your Medicare, Medicare premiums.
00:56:45.160 | So if you're self employed, and you're forced to do this, a couple strategies would be to
00:56:50.440 | keep one spouse on an employer plan if that was possible.
00:56:54.120 | Again, if you're if you're self employed, sometimes people have very wild variability
00:56:59.440 | in their income.
00:57:00.920 | And there, I would just recommend you estimate on the low side, because you always true it
00:57:05.780 | up on your on your final tax return anyway.
00:57:09.520 | If you were to have employees non spouse, you could do what Carol said, which is come
00:57:15.400 | up with a group plan could be very expensive, but it may give you the doctors you need.
00:57:22.320 | So here's another issue that some people have in retirement, they would like to buy an RV
00:57:28.760 | and travel around all the states.
00:57:31.720 | One of the things that would be very important if you're going to do that, is you would want
00:57:35.540 | to pick a state of residency if that was possible.
00:57:38.160 | Let's say you sold your home and bought an RV, you would want to pick a state that would
00:57:42.400 | give you good insurance the way you'd like to get it and you'd like to have a national
00:57:46.880 | provider with a PPO plan.
00:57:49.480 | So think about that.
00:57:55.600 | This is again the limits under the eight and a half percent rule.
00:57:58.720 | That's the idea that there's no more cliff.
00:58:04.640 | And this was a couple little issues that happened in because of this, if you had estimated your
00:58:10.560 | income very low, and you really do to pay back a lot of the premium subsidies, you don't
00:58:16.560 | have to pay them back because of this American Rescue Act, which is interesting because the
00:58:21.080 | people who decided to pay later, pay up front are kind of getting screwed on that.
00:58:26.760 | Again, this is a one time that that rules a one time case for this year.
00:58:39.120 | The other thing that can be very helpful is you can run your tax software if you need
00:58:43.200 | to calculate some of this stuff.
00:58:47.400 | There's a lot of stipulations if you were unemployed during the year, and that would
00:58:52.040 | help your COBRA, as well as basically bring your income down.
00:58:57.040 | Hold on one second.
00:59:02.040 | Jim, someone asked if you could show the previous slide again.
00:59:07.080 | Which one would you like me to stop at?
00:59:13.220 | Show the previous slide to go back.
00:59:17.520 | All right.
00:59:20.480 | The RV one.
00:59:21.480 | No, I think the one you just had was the one that wanted this one.
00:59:27.040 | Yeah, so they're going to come.
00:59:30.320 | So I would like, you know, for most of us, you know, we're probably from the poll, it
00:59:33.880 | looked like people were between 50 and 70 on this call.
00:59:37.200 | So we would look maybe in this column here.
00:59:41.260 | So current monthly subsidy that you might have been getting before at $40,000 was $649.
00:59:48.400 | With the new law that President Biden signed, it would go up to $766.
00:59:54.280 | And the plan price would go down from $328 to $211.
00:59:58.760 | And the lowest price plan would have jumped down from $212 to $95.
01:00:02.440 | So some significant savings with this law.
01:00:08.920 | I think we were I'm going to post these links into the chat right now, for anybody that
01:00:23.560 | needs them.
01:00:37.200 | Okay, this is the let's go back to here.
01:00:49.280 | So this is the subsidy reconciliation form 1095 a is anybody here fill this out?
01:00:55.000 | I know my wife has so this is the case, this is where you true up the income.
01:01:00.660 | So if you just thought you were let's say you become self employed, you act very conservatively
01:01:05.160 | think you're going to have income of 40,000 or 20,000.
01:01:08.800 | And you turn out to have this very successful business and you make $10 million.
01:01:12.980 | This is where the premium tax credit gets fixed.
01:01:19.420 | This is some information about what they have to pay out this is kind of a combination between
01:01:23.260 | the premiums and the deductible and the total risk to the pool and what the insurance pays.
01:01:29.600 | And it's how they determine the bronze silver.
01:01:37.940 | It really doesn't affect the quality, you could still be in the same network have the
01:01:42.100 | same access to same doctors, but the person in the bronze plan is probably going to be
01:01:46.580 | paying less premium, but have a very large deductible versus the platinum plan, which
01:01:52.020 | has a very large premium, but a very low deductible.
01:01:57.060 | So you really have to look at your health care and it changes over the years and new
01:02:00.700 | chronic conditions can occur.
01:02:02.680 | So you may change your plan in the beginning of retirement, you might be a bronze person,
01:02:07.500 | sometimes you want to take the risk yourself.
01:02:09.660 | And if you start having medical problems, I've kind of looked at them all and it's kind
01:02:14.340 | of a wash anyway, depending on if you're going to spend the money, you either spend it in
01:02:18.180 | premium or deductible either way, it seems like.
01:02:22.360 | So again, platinum will have the highest premiums, gold, silver.
01:02:27.920 | Now the good thing about silver you need to look at is it has the highest cost sharing
01:02:31.780 | reduction.
01:02:32.780 | So the subsidies in the in the reductions in premium and out of pocket can be very good.
01:02:39.140 | So you really want to compare everything to the silver plan really.
01:02:43.260 | And the bronze plan typically have these high deductibles, typically where you want to look
01:02:47.140 | at HSAs if possible.
01:02:49.520 | And typically, if you're more healthy, and you're not going to use it.
01:02:54.540 | This is a little summary of the modified adjusted gross income because so you can see that the
01:03:00.460 | your gross income is wages, dividends, capital, this is kind of like the money that comes
01:03:04.320 | in.
01:03:05.320 | But if you look at the adjusted Oh, I'm sorry, I thought that was the Maggie there.
01:03:13.580 | You can see that the other calculation has things like subtracting alimony moving expenses.
01:03:23.900 | Half of self employment tax was a little bit more complicated.
01:03:29.140 | Again, taking your Aggie plus these things to get to your Maggie.
01:03:34.720 | So again, self student loan interest, half the self unemployment, tuition expenses, contributions
01:03:41.500 | to IRAs, these things will tend to reduce it.
01:03:49.420 | And I can tell you.
01:04:17.660 | So, yeah, I'm going to stop there.
01:04:47.260 | Thanks for watching.