Welcome to the BogleHedge Chapter Series. This episode is hosted by the Pre and Early Retirement Life Stage Chapter and recorded October 13th, 2021. It features a presentation and discussion on healthcare planning from retirement to Medicare, including recent law changes. BogleHedge are investors who follow John Bogle's philosophy for attaining financial independence.

This recording is for informational purposes only and should not be construed as personalized investment advice. This is an update to a Chicago virtual group meeting that was held in February regarding your healthcare options from retirement until Medicare. And it also applies to people that are self-employed, that don't have health insurance, basically anybody that doesn't have health insurance through an employer or a co-group.

Is how do I get insurance in this period after I leave work or if I'm self-employed? So a lot of people will continue their retiree insurance through their employer or union, but that's less available than it's been in the past. Some people will buy COBRA. That's where you can extend the insurance you have through work.

That's whether you quit, get fired, it doesn't matter. You can still get it, but there's an 18 month limit except for certain situations. Many people then plan on using the Affordable Care Act, or as one of our participants tonight will tell you, you can also use COBRA first and then transition to ACA.

There are some people that use the ministry health plans. Is there anybody on the call that has used the ministry health plans or knows of anybody? If they, if you raise your hand, if you have, okay, we have one hand raised. If you'd like to tell us about it, go ahead and unmute.

It might be a hand raised from left before. Okay. So some people are, you know, military veterans could possibly be available for the VA insurance. We've had posters on the site that have talked about self-insurance, which I don't recommend. If you're lucky enough to retire at 30 years old, you could still get a catastrophic plan where you don't have probably many people on this call.

Some people that are displaced workers due to trade cases, they can get a health care tax credit. That's pretty rare. No insurance. Some people do that. Some people move to another country. On our Chicago call originally, somebody went to Costa Rica or something and they enjoyed it. They loved it.

They loved the medical care that they got. My favorite option, keep the spouse working and use the spouse insurance, part-time jobs with health insurance, self-employed. Then in those cases, like in the state of Indiana, you have to go through the ACA unless you do a group plan. And Carol, if you could speak for a second about this group plan idea.

>> Yeah. Let me, hold on one second. So now this is probably different in every state. I'm in Texas. I worked for a single lawyer that was only one lawyer and me. And you only need, to have a group health plan, you only need a group of two, two families.

And the rates for similar plans that were on the exchange were lower for the same exact plan. And so it was a really good option. And we also had better options as far as PPOs, whereas maybe on the exchange there was just HMOs. There were better options. So just look into that.

You should be able to go to any insurance broker and they can find those plans for you. It's just called a group health insurance plan, group plan. >> Yeah. And my understanding is not allowed for a husband and wife deal. >> Right. It has to be two unrelated family units, but, you know, family can be one person.

>> It could be you and your cousin, right? It could be you and your cousin, but not you and your wife or husband. >> Or your child. I'm not sure if an adult child would count, but for sure, yeah, for sure, yeah. >> Yeah. And the last option I have is enroll as a student.

Many plans, if you become a student, they want you to have health care. So they have a group rate. And that can often be good because students tend to be younger. So as a group, they have less risk. So that's an option if you want to go to school.

So some big changes happened to the ACA with the American Rescue Plan of 2021, which was signed by Joe Biden and the President signed it on March 11th. It's currently only a two-year deal, but it's probably going to be extended from what I've heard, but we're not really supposed to speculate on those things.

It expands the subsidies to above the 400% poverty level, which really that means the cliff goes away, which was a real sticking point for a lot of people. It increases the subsidies for the people that are down in the 100 to 400% poverty levels. Those are the people who get premium tax credits and cost sharing, depending on their income.

The cliff's gone away. Now it's an 8.5% of income max. And if you had unemployment during 2021, you can get a zero premium plan, very nice plan. There's also some unemployment issues with COBRA that we're going to talk about. There was also many, a much larger open enrollment period.

Typically you get the plan sometime in November and you've got till about December 15th to decide and for January 1st coverage. So President Biden opened the enrollment due to large unemployment and other issues, COVID. There's also COBRA premium assistance to due to unemployment. And as a side issue, we're going to talk a little bit about the Surprise Billing Act, which is something we were talking about before we started recording, which is the issue of keeping the patient out of a billing fight between a hospital and an insurance company or a doctor and insurance company.

People need to know like, what are the federal poverty levels? And they use this as a multiplier for the income to determine your subsidies. So it's basically the same across all 48 contiguous states. And typically it was very important in the old days to figure out where this cliff was, because if you made a dollar over the cliff, it could cost you a lot.

This is the, this is what the cliff actually looks like. The blue line is the old cliff. So this is saying that if we took a 60 year old with a benchmark silver plan, and we looked at their income along this bottom axis here, the X axis, and we said, if they made $15,000, this is a single person, this is about what percent of their income they would pay.

So a $15,000 income person would pay only about, you know, 1.7% of their income towards health insurance. That number would go all the way up to about 9.8%. But right here at the magic number, if you made over 400% of the poverty level, made $1 over it, your cost would jump up to about 20% of your income.

So it was a huge jump in and many people, probably people on this call have managed their income to stay below that. The new law is the orange curve, which limits it to 8.5% of your income. So if you make 50, 60, 70, you're still only paying 8.5% of that income.

And at some point, because you've exceeded the cost of insurance, and you're making more and more money, it basically drops as a percentage. But there is subsidies and assistance and no cliff above the 400% poverty level. That was the biggest change for people who are trying to plan Roth conversions, how much to take out of their 401k, what to spend out of their Roth or post tax money.

So this makes it a little bit easier, because you know what the toll will be. But the nightmare I always thought about is a person who played this very close. And they may have gotten called in to work on New Year's Eve, which they didn't plan to work, and they had to work a double shift.

And they made an extra $1,000 or $500 and put them over this limit. And that limit, that could have cost them 8 to 10,000 in premiums for working one day. So if you have to plan this, you have to be very careful. Has anybody in the audience had issues with this cliff that they'd like to speak about?

You just raise your hand. Okay, so this is only a two year deal, though. So hopefully, they continue it because it does help. So the other thing that kind of dovetails into this is the end surprise billing. This is that health plans must cover the surprise bills. And for the definition of a surprise bill, I'll give you an example.

My wife went for a procedure, and the anesthesiologist, unknown to her, was not in the network. So she went to a network hospital with a network surgeon, a network pathologist, and network nurses, network janitors, everything. And she gets a bill at the end for about 10 times what you'd expect.

And the reason is, is the anesthesiologist is not in the network. Typically in those cases, if you had a plan without a network coverage, it would possibly pay for it, maybe with a higher deductible, less reimbursement. But in certain states like our state of Indiana, there is absolutely no non-network coverage at all in any of the ACA plans.

So if you're dying in the hospital, and for emergency care, it's covered, but the minute you're patched up, you want them to drag you to a network hospital. But in this case, with the surprise billing, if this anesthesiologist were to submit a $2,000 bill, they would normally be reimbursed at, let's say, $110.

And that's what those rates are, because I've looked at them, and they're typically 10 to 20 times the amount that the insurance would reimburse. So what happens is, this now gets, they take the patient out of this, and the insurance company and the provider have to fight it out.

And there's different strategies they talked about, but they settled on a arbitration thing. And it should take the patient out of the billing fight. But they're still arguing about some of the regulations that have come out, and we'll see how that goes. So if you have a surgery that could be done on December 31st or January 1st, for this issue alone, I'd make it January 1st.

This is how the premium, this is the difference between the old law and the new law. So this is the subsidies here. And you can see the subsidies have come down in certain areas, especially in the lower incomes. Okay, the other thing that everyone should be aware of is that you eventually want to get and survive through this ACA plans to get to Medicare.

And there's some certain rules, I'm no expert on Medicare, but you'd need to work at least 10 years of paid Medicare taxes. If you don't have that, let's say you started in the workforce very late, I would recommend you make sure you work enough to get to Medicare, have enough years, 40 quarters or 10 years of payment.

You're eligible at 65. And you're also eligible if you've been on social security disability. And the other caveat is there's a thing called Irma charges. And that would be, I think, people are familiar with it. I think it's a look back two years. And if you've made a lot of money, your Medicare premiums go up.

Anybody want to speak about that? Okay. So, on the site, if you look at the blog, you'll see a lot of some cases about health ministry plans. I did personally talk to somebody who thought it was the greatest thing and he just wasn't available for the call. You may not always get in, they are not legally required to pay.

The people who have them seem to love them. But my theory is if you have a lot of assets, you don't want to use something like this because you're the backstop. So the person I talked to said it saves them about $1,000 a month over the ACA plan. Self-insure, you know, even before COVID, it was insane.

But if you think about people who have been in the ICU for three months, it costs, you know, $15 million or something. It would be very difficult to self-insure. The risk is just too high, I think, especially as you approach, you know, retirement ages. And you also have to decide, do you, I would, I would prefer to self-insure my home any day of the week before I did health insurance.

Okay. We're going to talk about COBRA now and I'm going to bring Lady Geek in and she can talk a little bit about COBRA because she used it and maybe you could explain how the process went for you. Oh boy. Well, it did, the process went fine. The process ended fine.

I am now uninsured until I get on my ACA plan, November 1st. COBRA was an interesting thing. Well, for, well, you have your, your slide here saying it's a Consolidated Omnibus Budget Reconciliation Act. Basically, if nothing else, you lose your job. You have medical insurance. Back when I was thinking about to retire, I went on leave of absence without pay.

And because I was thinking it was a COVID thing and I just, I just became a widow. So I was, I had a lot of stress going on. So, and I said, I got to retire. So what I did, I decided to do a test run and take 30 days leave without pay.

That was a mistake because when I did that, they dropped all my benefits. As an employee, when you do leave without paying, I Googled it and it's perfectly fine. You drop all benefits, all medical, all life insurance, all benefits are dropped when you do that. And the only reason I had medical insurance was due to COBRA because it was a loss of employment.

So I said, okay, I'm not coming back. And so that's how I became involved with COBRA. And what I did is I went on, I have, I have a medical insurance broker. And I said, Hey, Hey Gaia, what's should I go on ACA on COBRA? It was without hesitation.

He said, stay on COBRA. Why? Because they do COBRA, the employer, your employer's insurance, they are your premiums based on the average age of the workforce. If the average age of the workforce is like 35, the premium is one hell of a lot lower than it is if you're at 62 or 60.

So for me, even if you, if I pay full freight, that's for me in Philadelphia, actually close enough to Philadelphia. And I would say I'm saving almost half, I guess other people I've heard COBRA is way more expensive. So, but for me, like 60% was I was paying only 60%, even at full, full, full price plus 2% admin fee.

So I, and COBRA is, you continue the benefits, no change, you don't change your plan. You just continue that on for 18 months. So I mean, I was doing, oh, one thing with COBRA, if you miss a payment, your coverage is dropped. Bye bye. See you later. And the other thing, when I was talking with my employer about the timing of your premium payments, here's something interesting that I didn't know about the employer side, when they have this, the website, the company website, where they set it up, and they said, okay, just do automatic billing, pay it the first month, you're fine.

And I spoke with the rep, she says, you don't want to do that. Why? And I've heard this with other companies. If you send your send the company your money the first, they don't pay the insurance company until a week later, you are not covered for that first week of the month.

Really? Yes. So be very careful if you want to go on COBRA, and you want to spend the way and your company website says automatic payments, don't do that. I was paying my monthly bill the day the billing came out, which is like on the 15th, a couple weeks early.

So I made sure to do a quick reminder, even got a mail notification made sure I pay my premium two weeks before the first of the month. And so I say that, I just that just from I didn't mention that in the in my discussion threads or anything, but that is a very important point.

For COBRA premiums, make sure that the insurance company gets paid at the first month, not when you pay your employer, because there's a there was a week delay, there's a holy crap. Let me let me just share my screen here. Or, Jim, I'm going to stop yours. Yeah. Okay.

And where am I? Sir? You plan? Yeah, I stopped mine. Okay. You plan details. Share this guy. Because what I was doing, whoops, I can see it because what I was doing, I want to show the discussion threads that um, let me let me put the links and I have a couple of I'll just dump all the definitions I work in.

Meeting. Come on. Oh, I can't I can't. I'll share links and since I stopped sharing the screen of this thread, this is someone just sent me sent the chat this this explains when COBRA Okay, so okay, go through COBRA. I go through First of all, I called the company HR.

When does my coverage and it's at the end of the year? No, no, no, that's not right. The people who are the plan administrators don't understand it. I went with the administrator who does the insurance claims processing is Blue Cross Blue Shield. I went with the company's administrator handles the claims they have to pay.

They know the rules. They confirmed. Yes, of course, your coverage ends on October 6. I going to check the website yesterday, I'm still active. Who knows? I'm not I'm not saying anything. So I'm just gonna let it go. But what I wanted to say was, my plan ended up my coverage ended October 6.

I go to my my medical insurance broker, sign me up October 6, he goes, I can't do that. Why not? Because no ACA plan starts on an arbitrary day, they all start at the first of the month and there's something called a 15th of the month rule, a what 15th of the month.

If you end end coverage, I have it here 15th of the month. You can you start on the first of the next month, if I stopped my cover coverage on the 16th, I would not be covered for until December. That's right. Yes. Now. So I'm in this I'm in this gap right now.

And so what I was doing was kicking out some discussions that if, guys, if you if people are thinking of retirement, this is an important decision. This is an important reason on how a fact on how you want to set set your date. Oh, there's some cookie here. Okay.

But what the only other thing is, there was a change in on the on the federal website that it's, of course, not for me, starting next year, they're going to get rid of the 15th of the month rule. So I have in this thread, in this post, I'm quoting the the website that I can't see what that is.

So this I think this problem is going to go away. But there's some exceptions. Just be careful. But no, no, it may it may go away. Because Pennsylvania is a state run marketplace that follows the AC, but they don't have to. So this federal marketplace rule may not apply to your state.

So they give it a shot, but be aware of this. Okay, so that that's, I want to say, here's all the details on this is what I was trying to do about pay. Oh, the other thing that I mentioned, a nice surprise was that the I mentioned in this discussion that I was I got I got denied for a pre just so in the ACA plans have to cover pre existing conditions.

I was saying pre existing condition, cancer, heart, you know, all the all the big the IBDs, whatever the big stuff. No, I got denied oil, the my insurance broker trying to get a something to fill the gap. So we applied and got denied to why for a minor very minor condition that I'm on a small generic drug for.

And I'm because it's not an ACA plan there within their rights and have denied me coverage. I'm not I do not qualify for a metal coverage right now. So what my insurance broker did, oh, and then I told my doctor, he was shocked. There are hundreds of conditions that you can be denied for when I was searching this but my let me put this way, the condition is my doctor didn't believe me.

So I showed him the letter where OK. So that's where it goes. So I was getting here. OK, so so that's that's this in a nutshell, what the only thing I could get was some kind of hospital indemnity plan that it's not medical insurance. It's meant for covering if you have problems with the medical expenses, it's just some some insurance that covers people like who have already it's not the right insurance for me.

It's the only thing I could get and I'm going to cancel it in 30 days, November 1st. So it's like 100 some dollars, but it's better than nothing, maybe, but they haven't charged me yet. And by the way, this this this policy also has a 30 day review where I can cancel for any reason within 30 days.

So if I don't use it and he shouldn't have sold it to me anyway, but anyway, so so there's a lot of things going on with insurance here. So that's this one. And then I just I wanted to link to insurance. This is my this is my original discussion where I was this is this is about believe without pay.

And this is this is my start on April 2020. This is where I started this whole process. So I'll put the links up as soon as I stop sharing the screen. What I did here. Oh, this is another link, because when I go into the marketplace, there's something on EPO, HMO and PPO.

I refuse to do an HMO because you need referrals. I have nothing but bad experience and I have a luxury that Blue Cross I don't I do not need to have an HMO plan. So that was my key requirements, either EPO or PPO for me. Oh, I just also wanted to show just show you, I probably can't share it because it was sent by my broker.

This is a real live rate sheet of Keystone Blue Cross for Philadelphia, because I want to show you that because people are wondering, like, you hear all this stuff, but here, here, there's nothing like live data. So if say, because I want to show you the difference in the premium rate.

So if say, if you're like 30 years old, take this top plan, 650 non tobacco, OK, let's go to 60. So $650. And if I go down to 60, that same plant is 1554. So I want to show you, yes, this is why I stayed with Cobra, because my company's average premium was down in the eight, no, the average age was down in 30s, and I'm 60.

So if I went to buy this in the marketplace, it will cost me $1,500. So this is why you need to pay attention and compare and ask your company, what is my Cobra cost? Then you go and shop the plan and see if it if it makes a difference.

So this is why I stayed on Cobra. What I'm doing now is I'm going on in the Pennsylvania marketplace. And I just want to know and what I already entered in and all this is a Philadelphia zip code and I enter arbitrary birthday. But this is where the tax subsidy comes in tax.

So I just put in an arbitrary number, just to show you that here are the plan details. This is the market. So here HMO, EPO, or PPO, gold, platinum, whatever, blue cross, blue cross. So here's here's the EPO for 350. What income did you put in, lady? I put in 10,000.

Just to get something up there, I could put 50,000 just watch these premiums. But when I work, but the thing that the thing is that this is where my here's the here's here's is for $600 a month. So this is a subsidized Yeah, deductible out of pocket math. So this is $600 a month.

So 12 times six is $7,200 a year versus this, but say with my tax credit, I'm paying $11 a month versus $500 a month for this EPO plan. So they say that's that. So that that's so I say I'm taking a GAM right now for for 2022 and starting November 1, I am taking gamble with my tax subsidy that I'm going to I'm going to spend when way less than like six or $7,000.

So I'm just taking gamble the max this is going to cost me $7,000 because this is an $8,000 deductible. Like I got one for 7,000 here it is. And then independence is at the Blue Cross Blue Shield franchise in Pennsylvania. Yeah, yeah. Okay. Yeah. So yeah, so this deductible seats out of pocket and yeah, it's EPO, they see the deductible an hour pot deductible 7000.

That's because there is no coinsurance, there's no copay, you just pay all things you I'm seeing you pay the in network rates. So that everybody should note the HSA plans that are available. If you go to the next plan to the right, there's no HSA on that plan, because it's got benefits before the deductible.

Yeah, see. So so yeah, so that this is the so yeah, so that the these are HSA plans. So I, but actually, okay, so that's this, that that's, let's want to show up, I'll dump the links in the chat for what for my discussion stuff. So that's all I wanted to show.

I don't think I can share this because it was sent by the broker to me not intended. Unless you can find Keystone ACA rate sheet on Google, I really probably can't share that. But I just want to show you how much the premiums, they are significant based on your age significant change.

So let me stop sharing. And remind me to cut that out of the video, because we don't know. I don't know, I probably keep I just didn't want to pass a copy around, pass a copy around. But that is also because it by the way, insurance rates vary by county.

So plans, everything goes by county. That's why they want your zip code. But then again, I had a question on that. On the ACA plans, I've never had one before. When you sign up, you need a you need to show proof of income in Pennsylvania's household income, not adjusted gross income.

But how do they know for 2022 what I'm doing? I assume there's a tax form, there's a marketplace tax because I know they have to adjust my premium for next year. You give them the estimate of the thing. And then there's a tax. Well, I forget the form, I have it in the presentation that you would true it up on your tax return.

It turns out this year, this year for people who underestimated their income, but then went on unemployment, they don't even have to pay that back. So somebody asked about whether you should work or take a leave of absence. It seems like this year, if you can get on unemployment, it's the best thing to do.

Okay. Okay. Yeah. So yeah, it's something during your presentation, if you say like, well, how is my first year in ACA? How do I adjust? How's how's my premium adjusted for next year? So I'll know how to Well, you just estimate your own income, your Maggie, really. And we'll talk about that.

But the issue is, that will then give you an immediate premium tax credit, that will be a lower bill. Some people do it the opposite way, where they say, just let me have the bill, and I'll pay it. And then I'll true it up on my my tax return at the end.

Oh, okay. So this true up is done in the ACA website or on your now on your tax return. That's where I want to know what form and stuff. Okay. Yeah, we have a screenshot. I don't remember the number. Okay. I just don't the links of my discussion threads and the definition.

Okay, I'm going to share my screen now again. Yeah, I'm done. But I want to turn it over to Carol for a second, because she has an answer on the Medicare question that came up in the chat. Somebody asked about a non working spouse. Carol, if you'd like to speak.

Yeah, yeah, I was searching while you know, during the presentation, I found a pretty good article. Let me post the link again about the kind of explains about the 40 quarters. And there are some options if you don't have the 40 quarters. If your spouse similar to the way Social Security works, you can qualify on a spouse's record.

But you still you still can't get Medicare until 65. And your spouse that has worked the 40 quarters have to be at least 62. And luckily, I didn't even know this till just now either. It's not an all or nothing thing that the 40 credits quarters is just to get the free part premium free Part A.

And it sounds like it's a little bit here, I'm going to post something right in the chat here. If you work between 30 and 39 quarters, you just you're going to be paying 259 a month. So it is a huge, you know, it's a pretty big price jump, but it's not totally off the table.

And then less than 30 quarters, it's 471 a month. So it does go up a lot. But you're not totally cut out of it if you haven't worked the 40 quarters, but it's definitely worth it. You know, if you're close, you definitely want to try to get your 40 quarters in.

But that's a really good article that explains everything that I posted in the chat. Okay, back to Jim. Oh, go ahead, go ahead, Miriam. You're muted, unmute yourself. I have two things. First of all, I believe on the Boglehead forum, I read one of the Bogleheads mentioned he lived in California, and he worked for the university system, that when his Cobra ended at 18 months, he had the state of California would extend the Cobra for another, I think it was six months.

I'm not. I'm pretty sure that's what I read. This was several years ago. I don't know if that's true, but maybe some states or some, well, I guess it would be states, maybe some employers will extend the Cobra. I don't know if anybody knows about that. Miriam, I can actually speak to that.

Like I was saying earlier, I used to work for, I was a paralegal for just a single attorney. And so obviously, the Cobra rules didn't apply, because I think it's you have to have 15 employees. But there was something called Texas State continuation coverage, which worked a lot like Cobra, except it was only nine months, but still, hey, that's a lot better than, so I was able to get the better, cheaper plan for an additional nine months.

And it was kind of funny how it worked, whereas I had 60 days to decide. And then, let's see, I worked till the end of January, then I have 60 days to make my decision. And then the nine months started from the end of the 60 days. So really, it was 11 months.

You got to kind of look into those little rules and extend it as much as you can. So that's going to be state by state rules on that one, though. And then I also wondered whether anybody had made claims under Cobra, and they found it difficult to be paid for Cobra insurance to pay their claims.

I never had a problem. I mean, because it's just, I say, with Blue Cross, you go direct. It's just how the claims get paid, how the premiums get paid. Everything else is handled direct with the insurance. Your company has nothing to do with it after they pay. It's the claims administrators and the usual stuff.

Okay. Thank you. Cheryl, you want to go ahead? Go ahead. Yeah, I was going back to talking about extending beyond 18 months. My husband's an air transport pilot, so he's forced to retire at age 65, and I am younger than he is, and I need more than 18 months' worth of coverage.

So I have to finalize the answer on this, but my understanding is that with other pilots, since it is a situation of forced retirement, it's a condition of employment for all air transport pilots that carry passengers. Since that's a forced condition of retirement, as opposed to simply choosing to retire, that we also have the opportunity to have Cobra for longer because of that.

But I need to confirm it, and we'll post it on the form. Okay. Thank you. Yeah. There was some extensions on Cobra. It could go as much as 36 months that I had read about, but there are special circumstances. But I would like to just repeat that you have up to 60 days to activate this Cobra, so you could be terminated from your employment or quit.

You could have a heart attack the minute you cross over the parking lot, and you could decide a week later that you want to get this Cobra coverage. So you do have to pay your bills, as Lady Geek said, but you have 60 days retroactively to choose Cobra. And the other thing that's important is you need to know what the employer's paying because you're going to pay a slight 2% administration charge over it.

Most people don't understand that their employers are paying maybe up to 80% of the cost. So when it comes to you, it could be five times the amount or four times the amount that they're taking out of your check as your contribution. All right. So let's keep going here.

So Cobra had some effects, or the American Rescue Plan affected it. They have a big premium assistance. And did this affect you, Lady Geek, as far as the premium assistance on Cobra? No, because I start April 2020. I don't know if I will qualify. I was already retired. When did you complete Cobra?

Just recently, right? October 6th. Yeah. Yeah, you should look into that. That might help you. Well, it's already done. I don't know if you can do it retroactively. Yeah, I don't know. I don't know. So again, this could be even reduction of hours. It doesn't have to be termination.

Okay. Let me put it this way. I'd rather not deal with my employer at this point. Okay. All right. So again, unemployment provisions, if you were unemployed at any time in 2021, it treats it as if you had 133% of the federal poverty level, which is the maximum subsidies.

So the only issue there is this thing called the family glitch, which is when your spouse has maybe doesn't have insurance because they turned it down because it was coming through you. But if they are eligible for employer-sponsored insurance, then you don't get a subsidy. So again, if you had any, even a week of unemployment in 2021, and you're on ACA, you're going to have a very nice low premium and it will affect and help your COBRA.

As we talked about, I don't know if people are familiar with health savings accounts. If the health savings or the insurance policy is eligible for a health savings account, you can put money into that. The 2021 limits were 3,600 individuals, 72 family, and then a catch-up provision for 55 and older.

And this money is tax-free, and it's tax-free when you spend it. And you can spend it on deductibles. I think you can spend it on Medicare Advantage programs. You can some over-the-counter items. Has anybody used their HSA a lot and would like to speak about it? This is Lady Eek.

I just started last year, and I said I qualified medical expenses. I zeroed mine out with one month's nursing home, skilled nursing facility for my late husband. So the idea is, if you have to keep a record of your qualified medical expenses rather than keeping an entire pack of stuff, I just said, "Here's one month from a nursing home." And that zeroed out.

Actually, I have five cents left in the account because I forgot to close it out properly, but I might restart it. What does a month, if you don't mind me asking, what does a month of nursing home cost these days? $408 a day. Wow. Okay. The $10,000 to $12,000 per month.

And at the time, I was prepared to burn down his IRA for that, and it's called self-insuring. But we're diverting from medical. But yeah, so skilled nursing and anything that's a qualified medical expense. So a lot of people use HSAs for, they have like a debit card and you just go to the pharmacy and it'll tell you yes or no, if you can use the card for it.

So a lot of people do it for that. Okay. Thank you. So the key thing is not all plans are eligible. So as Lady Geek showed on the Philadelphia or the Pennsylvania site, certain plans, depending on their deductible range and whether they start providing benefits before the deductibles reach.

$8,000 pays, you're not going to be an HSA plan. So these tend to be high deductible plans, but in the state of Indiana, we have cases where the deductibles are so high, they exceed the limit, which is a typical government bureaucracy issue that doesn't make any sense. You could have a plan with an $8,000 deductible with a $7,000 limit, and you're not, you can't save with an HSA, but that's a different issue.

So again, it has to be at least 1,400 for an individual, but it can't be more than $7,050 or 14 for a family. And it can't have anything other than preventative care. So your annual checkups, things like that are covered mammograms, things like that. But if they say they're going to give you a $20 copay, it's over.

And in Indiana, we had 39 plans available and only three were HSA compatible. And most of them were because of the 7,000 deductible was way exceeded. It was in the eights or something. So these are not like flexible spending plans. This is your money, and you can decide when you want to pay for it.

As Lady Geek said, you could pay it for nursing home at the end. You could pay it for aspirin today if you wanted to. And as Lady Geek mentioned, there's debit cards and all sorts of ways to pay. I heard you can even buy stuff off on Amazon and use your HSA.

These are a couple plans that I looked at, and this is just to get an idea of, you know, what had an HSA and what were the premiums. This is this year, and it reflects the America Rescue Act. And it shows you $25,000 income, 50, 100, and what the ranges are.

So this is for a male and a female, non-smoker, 60 and 60 years old. I just picked that arbitrarily, but you can see the range here that at a $25,000 income, you could be paying $52 a month in Illinois. Or if you want the Blue Cross Blue Shield preferred silver PPO plan, you could be paying $1,500 a month with a $6,000 deductible and a $17,000 family out of pocket.

So it pays to shop around and decide what your risks are for your health and how much your income is. Now we're going to go back to the basic ACA Act that was passed under Obama. And that is that they did things like eliminated cancelization by the insurance companies.

They had a lot of subsidy levels between 138% of the federal poverty level. Now here's a case where let's say I had a million dollars in a 401k, a million dollars in a Roth, and I had a million dollars underneath the mattress that was post-tax money, legal. At that point, I could spend money just out of the mattress money and technically have no income.

In those cases, I would be below the 138% and I would have to go on Medicare, which would mean I might be subject to asset tests, which I wouldn't pass. So you basically would like to, if you had no income from wages, interest, dividends, things like that, you would basically like to take money out of your 401k to get up to the 138% of poverty level to qualify for the ACA plans.

And at that point, you'd also get a major subsidy. But you do need to be at least at 138% of the federal poverty level. This is the rule that allowed people to stay on their parents' policies until they're 26. It required employers to cover workers if they had enough employees.

So it was the basic ACA act of, I forget what year it was actually. So there's no coverage limits in the ACA. It used to be they could set a limit of like $2 million. But some people could reach those limits. They could cancel you. Now they can still cancel you for fraud.

So that's the only reason, nonpayment and fraud. And as Lady Geek pointed out on the Cobra, you want to make sure you pay it. I think people know what deductibles and co-pays are. Deductible is what you're going to be paying first. The co-pays, you go to the doctor and they say it's a $30 co-pay.

You'll be paying that. And then some of them have coinsurance up to limits. And each of the plans that you have under the ACA will have a benefit coverage limit. I think I have a page here. And you'll see a page that looks like this. And this will tell you what's covered, what isn't.

Some of these plans might have vision and dental, and they can be very expensive. But you'll find out what it covers. This is the typical open enrollment. It typically happens November 1st through December 15th. You want to purchase insurance by December 15th for coverage on the first of the year.

They've been extended greatly this year because of COVID. And the other thing that happens is if you have a qualifying event, which would mean you got married, you had a baby, adopted somebody, placed the child in foster care, got divorced, a spouse passed away, you moved to a new zip code, or you lost your insurance for whatever reason.

Could be that you came off a Medicaid because you had too much income now. So these open enrollments periods weren't part of the ACA or the Recovery Act. They were actually executive order by President Biden to get people to sign up. And there's a new 80/20 rule. Some of you may have received credits back from your insurance company because they didn't spend enough money.

They need to spend 80% of their money on medical care. And if they don't, they have to rebate that money to their customers. This is a typical benefit plan page. You get this on -- if you go to the healthcare.gov and look up your state and look at a plan, you'll see this.

This is what we were talking about earlier, about whether you need referrals. If you go to an HMO, with an HMO, you're typically assigned a doctor, and that doctor makes all the medical decisions for you. I'm just afraid -- I don't know if this is for effect -- that they might have some financial incentive of not referring you.

So that's why a lot of people don't like HMOs. Is anybody on here that has an HMO and likes it? Just raise your hand if you do. I don't see anybody yet. Okay. Now one of the things that happens with the silver plans is there's extra cross-saving sharing reductions that really can lower those plan costs.

So typically, if you're in the lower income or you're planning your income to be low -- for example, in my case, if you were to say a million in a Roth, a million in a 401(k) and a million under the mattress, I could plan my income, theoretically, to be in the perfect spot to get the maximum subsidy.

And if we went back to that cliff curve, we would see that we really want to just barely make it into -- we'd really want to be here in this 138%. Some states, it could be 100. I think it's got to do with Medicare expansion. But for two people, it would be 23.8, and I don't know if this is 2021.

Some states have their own exchanges, and there's a list here. So if you live, for example, in Maryland, you would go, just like Lady Geek did, to a private exchange for the state that the state runs, but all the other states use healthcare.gov. And this is how you view a plan.

So let's do that now. Okay. So let's pretend we live in -- we'll say we live in Illinois, and I'm going to put a zip code in. I'm going to say Chicago. And I'll pick the county. It's Cook County. And first thing I'm going to do is say -- let's say it's just for me.

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 and things like that. And I don't have a spouse, let's say. And let's say I have that income of -- I'm just going to put $25,000 in here. And here's an important question.

Did I get unemployment in 2021? I'll say no for now, and I'll look at the plans here. And they're basically telling me that I'm going to get $694 of assistance on my premium. So I'll go view the plans, and you guys can all do this. And I'm going to add some filters, because just to narrow it down, I'm just going to look at the silver plans.

This is where you get the most subsidies at these levels. If you're higher income and very healthy, I would definitely look at the bronze plans here. And if you notice here, there's some filters. So if I wanted to be in Blue Cross Blue Shield, if that was important to me, I could filter by this too.

I could make sure that it has an HSA. It may turn out there are none. So I'm just going to apply these filters. And you can see that the cheapest plan I could get is $21 from this Bright Healthcare, which I've never heard of. And the deductible is $1,528.50 on the out-of-pocket.

And it tells you co-insurance, generic drugs, specialists, things like that. It includes child dental, but no adult dental. And if I scroll down here, you can see the numbers that go up. And there's three pages here. And the most expensive plan is $495. And that was really because of the income was so low.

Okay. And this is Blue Cross and Blue Shield. And also you'd be looking at the other thing you'd be looking at is this is a PPO plan. So that's why the cost is so high, where that first plan I'm sure was an HMO plan. So if I go back to the top now, and if you were planning your income and deciding how much to take out of your 401(k) or do Roth conversions, you would want to do something like this.

So I'm going to edit this now. And let's say instead of making $25,000, I'm going to do Roth conversions. And I decide to convert up to $150,000 or something like that. So I'm going to change this number to $150,000. Now this income is high enough that that 8.5% rule is not going to really play into it.

So I'm going to see the real cost here, I'm sure. And basically, it says I don't have any subsidies here because I'm because of my income, I decided to convert Roth, do Roth conversions. And now this is the cheapest plan. And I want to actually what the easiest way to do this, I want to stick with Blue Cross Blue Shield for a second.

And I'm going to say just show me these. And you can see that this is for a single person. So this is pretty good, pretty high. We're talking $1,300 a person here, 60 years old with 150,000 in income in Illinois, but you're getting a gold PPO plan. Again, if you want to the cheapest plan, I'm sorry, let me go back down here.

I think it was what $500 I thought oh, that's it right there that page sorry. So we're talking 569 Okay, so go to healthcare.gov. It's got lots of good information. And the other site is brought up by firefighter in the chat. The Kaiser Foundation has excellent papers, calculators, everything.

So you can do that. So if you want to plan your income. Now remember, in the second example, I went to 150,000. The maximum I'm going to pay for my health care is eight and a half percent. But that's, that's for the cheapest silver plans. And I'm going to the my Roth conversions really brought my income up.

So in you have to decide whether you think future taxes are going to be worth those Roth and Roth percentages against these premiums. I don't think it's worth it. But you have to figure that out for yourself. Okay, so let's Alright, let's So as we talked about, you have to estimate your income.

There are differences between the Aggie and the Maggie and what those are things that like if you had income from tax free municipal bonds, those numbers get bad added back in, and it's kind of like, it's a bigger number than your than your AGI. The next thing is, how would you optimize your so your Maggie income?

One of the things to think about is if you're looking at these subsidies, if they mean something to you, you most likely would like to postpone Social Security or a pension if you could. So let's say you had a pension that you could take it at 5560 or 65.

And you knew you were going to have to survive through ACA plans that you would be, you should really seriously look at delaying that pension and or Social Security as long as you can. You also don't want to take withdrawals from your IRA or 401k type accounts, because those will count as ordinary income.

Again, if you're less than 59 and a half, there's a penalty for taking out of your 401k. So you want to think about that too. So the ideal way to do this is to have some post tax money that you can use. And you still want to be able to set your income above the 138% federal poverty level.

Some people on the site have talked about timing things like for example, if you had large capital gains, that you may want to sell them before you sign up for the ACA for the year before. And in many cases, you're working a lot at that point. And you have high income at that point.

So your marginal rates could be much higher. So you really need to work out a lot of different strategies. Some people have even talked on the site about getting a home equity loan to tide you over to keep if you absolutely need money to survive, but you look at that premium tax credit say that's worth a lot, it might be cheaper to take a home equity line of credit to tide you through some of this time to keep the maximum premium.

I don't know if that's worth it. But sometimes it's worth depending on what your coverage needs are. If you had one patient with one spouse that had a lot of medical needs, it could be that it's better to put one patient on a much better plan, which what I mean by that is lower deductible load or lower out of pocket.

And then have the other person on a bronze plan with a very high deductible. And you also have to think about the children, it could be that they better off from a cost point of view on the bronze plan. So again, delay Social Security, spend post tax money, invest earnings in 401k that which will bring down any 401k individual 401k IRAs, those things will bring your income down.

Things like Roth conversions or Roth raises your income, reverse mortgages. So this is the thing about different states are covered differently depending on whether they expanded Medicaid. It's a little map of that. Again, the Roth conversion, this is what a lot of people ask about, should I do Roth conversions or what's the subsidy worth?

So you got to look at this Roth conversions also raise your income, which can raise your Medicare IRMA surcharges, so you got to kind of look at that too. And everyone always asks, is there a model out there that takes care of this and we really haven't seen one.

Here's the IRMA rate. So I don't know much about this. But apparently, if you have, let's say you had made over 500,000, you could be surcharged by $347 a month on your Medicare, Medicare premiums. So if you're self employed, and you're forced to do this, a couple strategies would be to keep one spouse on an employer plan if that was possible.

Again, if you're if you're self employed, sometimes people have very wild variability in their income. And there, I would just recommend you estimate on the low side, because you always true it up on your on your final tax return anyway. If you were to have employees non spouse, you could do what Carol said, which is come up with a group plan could be very expensive, but it may give you the doctors you need.

So here's another issue that some people have in retirement, they would like to buy an RV and travel around all the states. One of the things that would be very important if you're going to do that, is you would want to pick a state of residency if that was possible.

Let's say you sold your home and bought an RV, you would want to pick a state that would give you good insurance the way you'd like to get it and you'd like to have a national provider with a PPO plan. So think about that. This is again the limits under the eight and a half percent rule.

That's the idea that there's no more cliff. And this was a couple little issues that happened in because of this, if you had estimated your income very low, and you really do to pay back a lot of the premium subsidies, you don't have to pay them back because of this American Rescue Act, which is interesting because the people who decided to pay later, pay up front are kind of getting screwed on that.

Again, this is a one time that that rules a one time case for this year. The other thing that can be very helpful is you can run your tax software if you need to calculate some of this stuff. There's a lot of stipulations if you were unemployed during the year, and that would help your COBRA, as well as basically bring your income down.

Hold on one second. Jim, someone asked if you could show the previous slide again. Which one would you like me to stop at? Show the previous slide to go back. All right. The RV one. No, I think the one you just had was the one that wanted this one.

Yeah, so they're going to come. So I would like, you know, for most of us, you know, we're probably from the poll, it looked like people were between 50 and 70 on this call. So we would look maybe in this column here. So current monthly subsidy that you might have been getting before at $40,000 was $649.

With the new law that President Biden signed, it would go up to $766. And the plan price would go down from $328 to $211. And the lowest price plan would have jumped down from $212 to $95. So some significant savings with this law. I think we were I'm going to post these links into the chat right now, for anybody that needs them.

Okay, this is the let's go back to here. So this is the subsidy reconciliation form 1095 a is anybody here fill this out? I know my wife has so this is the case, this is where you true up the income. So if you just thought you were let's say you become self employed, you act very conservatively think you're going to have income of 40,000 or 20,000.

And you turn out to have this very successful business and you make $10 million. This is where the premium tax credit gets fixed. This is some information about what they have to pay out this is kind of a combination between the premiums and the deductible and the total risk to the pool and what the insurance pays.

And it's how they determine the bronze silver. It really doesn't affect the quality, you could still be in the same network have the same access to same doctors, but the person in the bronze plan is probably going to be paying less premium, but have a very large deductible versus the platinum plan, which has a very large premium, but a very low deductible.

So you really have to look at your health care and it changes over the years and new chronic conditions can occur. So you may change your plan in the beginning of retirement, you might be a bronze person, sometimes you want to take the risk yourself. And if you start having medical problems, I've kind of looked at them all and it's kind of a wash anyway, depending on if you're going to spend the money, you either spend it in premium or deductible either way, it seems like.

So again, platinum will have the highest premiums, gold, silver. Now the good thing about silver you need to look at is it has the highest cost sharing reduction. So the subsidies in the in the reductions in premium and out of pocket can be very good. So you really want to compare everything to the silver plan really.

And the bronze plan typically have these high deductibles, typically where you want to look at HSAs if possible. And typically, if you're more healthy, and you're not going to use it. This is a little summary of the modified adjusted gross income because so you can see that the your gross income is wages, dividends, capital, this is kind of like the money that comes in.

But if you look at the adjusted Oh, I'm sorry, I thought that was the Maggie there. You can see that the other calculation has things like subtracting alimony moving expenses. Half of self employment tax was a little bit more complicated. Again, taking your Aggie plus these things to get to your Maggie.

So again, self student loan interest, half the self unemployment, tuition expenses, contributions to IRAs, these things will tend to reduce it. And I can tell you. So, yeah, I'm going to stop there. Thanks for watching.