Plan now for your Free Obamacare future

I just checked the WA State Obamacare Exchange. A 63-yr-old male can get a $0/month premium on a Bronze plan with an income of $51,000/yr.

Minimize interest and dividend income, focus on capital gains and tax-free returns of capital.

Big tax breaks aren’t just for billionaires. Middle-class retirees can feel equally patriotic gaming the system like the wealthy.

Open enrollment starts Nov 1st.

intercst

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Isn’t a 63 year old male forced into Medicare, or does that start at 65/67?

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If you are collecting Social Security, Medicare is automatic at age 65. Those on disability might qualify sooner.

Is that a bronze PPO, I assume? I have an HDHP through the exchanges. Next year our taxable income will be squat (just some interest and dividends). Expecting to start selling some shares, and realizing some capital gains (tax-free, per note 409, as I recall). So it will be interesting to see what we have on offer in AZ.

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Yes, and it has an $8,500 deductible. I’d call it “no insurance insurance”.

However, when I was on Obamacare I was ordering my own lab tests online and getting my drugs with a GoodRX coupon since it was cheaper than involving the insurance company. The health policy was just for if “I got hit by a bus”.

intercst

I went with HDHP this year (both at work, and after I retired in July). Has an HSA. I’m debating the value of the HSA, or maybe just settle for what I have (a single year of HSA), and PPO after that. I like not having to get referrals from the PPO. And we should have more subsidies next year with no earned income.

An HSA eligible plan can be either an HMO or a PPO. I had an HSA-eligible PPO plan for quite a while. Switched to a non-HSA PPO plan when my income fell a bit and made my Obamacare subsidy larger. Since my wife passed away, I switched to a non-HSA HMO for the savings, but mainly because my current doctor accepted that plan and it was my wife who was the big user of medical services. I’ve needed one referral since then, which went very smoothly. It helps that I’m in a huge metro area, with lots of options for doctors. I’d feel much differently living in a more rural area with far fewer choices.

–Peter

I only saw HMO plans on our exchange (that were HSA compliant). Our PCP didn’t take anything other than employer-based insurance, so that didn’t matter. If we see her, it will be on our dime. But with PPO, insurance will cover any doctor on the network. With the HMO we need a referral from a PCP on their network or they won’t cover it.

So I’m seriously considering moving to PPO next year. Just give up the idea of playing the HSA. Then we can go to anyone in-network that we like, and keep or PCP whom we’ve been seeing since shortly after she set up her practice over 25 years ago.

In my county of Pennsylvania, a 60-yr-old female with a modified adjusted gross income (MAGI) of $51,000 will pay about $300 per month for the cheapest Bronze PPO.

I am a minimal user of health care. I get all of my screenings and vaccinations. I am not on any prescription medications. For me, the least expensive Bronze PPO has been my best option.

Some things to remember if you are considering using the exchanges:

  1. When you are comparing plans, the out-of-pocket-maximum does not include the cost of monthly premiums.
  2. Your free colonoscopy screening is only free if there are no polyps found.
  3. Be careful if you have an HMO and schedule any sort of procedure that requires anesthesia. It’s your responsibility to find out if your anesthesiologist is in network or not. Easier to pay extra for the PPO and not worry about it.
  4. If you travel out of state, you are probably better off with a PPO. A friend of mine had an out of state car accident and was taken to a local hospital emergency room. Although her HMO claimed to cover out of state emergencies, her claim was denied. She eventually gave up fighting it and will always pay for a PPO in the future.
  5. If you are an early retiree who can manipulate their MAGI, remember there is a minimum income required to participate in the exchanges. (I don’t know if this is true in all states.)

HHP

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Just go to the shopping tool for the PA Obamacare Exchange and keep entering a progressively lower annual income until you find the MAGI that yields the $0 premium for the cheapest Bronze plan offered. Then figure out how to draw your annual spending from the retirement portfolio while keeping the MAGI below that threshold.

For example, if I have a $100,000 block of stock that I bought for $80,000, I can sell it to produce $100,000 of annual spending money, but only the $20,000 capital gain shows up in the MAGI. Similarly, you can probably spend down part of your fixed income allocation without generating much of a capital gain. (Note: if you have a 60/40 portfolio and are using the “4% rule”, you’ve got 10 year’s worth of spending in fixed income.)

Under Obamacare, there’s a 300% spread in the premiums charged between a 21 yr-old and a 64-yr-old, so 60-64 yr-olds are paying the highest premiums. Keep your powder dry and do the income manipulation in your late 50’s and 60’s when it yields the most benefit.

intercst

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Yes. Those are the 12 states that refused to participate in the Obamacare Medicaid expansion ( i.e., Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming.) These states are losing billions of dollars in Medicaid money, rural hospitals are closing, and people with private insurance are paying higher premiums to make up the difference in more people showing up in the ER for “uncompensated care”.

Texas proudly leads the nation in the percentage of residents who are uninsured. And they appear to be completely ignorant of the $8 Billion/year of Medicaid funding that’s not coming to the State. When I fled Texas for WA State in 2006, my health insurance premiums dropped by 60%. As a retiree, you really want to make sure that government leaders in the state where you reside are using science and arithmetic to inform public policy.

Obamacare Repeal? My amazing story of drastically lower health insurance premiums.
https://retireearlyhomepage.com/obamacare_2017.html

intercst

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That’s a function of your state’s insurance market. There are no barriers in the tax law to prevent a PPO HSA plan.

–Peter

Not if you exclude the illegal immigrants. Big difference between residents and citizens. Same with the poor school performance scores that are gleefully reported. Technically accurate but not fully informative.

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Ok what is it if you exclude the illegal immigrants? Please give a reliable site so we can see the true number

Andy

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I was wondering the same, Andy. I’m not sure exactly where the numbers are, but based on illegal immigration estimates, why wouldn’t CA have the highest uninsured numbers (or at least be in the top five)?

Pete

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Would they even count illegal immigrants in surveys about health insurance? I wouldn’t think so. I don’t believe they are allowed to use the exchanges, and they generally are going to keep a low profile so as not to get caught. Very unlikely they will talk to any pollsters or survey takers.

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