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May 11, 2011

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My wife will get a pension and along with it there is health care coverage that is quite resonable right now. We will have to see how it looks when she is elegible to retire.

To continue my thought, my wife will be able to retire after 30 years in the school district in 6 years.Full pension with healthcare that has a co pay agreement taht looks resonable. This may change as states are looking to cut pension liabilities. That will put her at 55. I would like to retire at 59 1/2. But that is flexibile We will see how the numbers fall when that time comes.

My SO and I are planning to have the option of retiring early and we're definitely budgeting for health insurance. I'd have to agree that you should never have a gap in coverage as it makes getting future coverage more complicated and expensive.

Medical insurance is the linchpin of early retirement. I work for the govt., but won't get paid healthcare when I retire. Therefore, I'm working until 65 when Medicare kicks in.

The new law will allow anyone to buy a comprehensive plan on an exchange for a reasonable rate, regardless of health status. What constitutes a "reasonable" rate, I'm not sure, but it will likely be a lot cheaper than a current private insurance plan, and you can't be denied because of health conditions.

On a side note - I have always thought there are many people who could afford to retire, and want to retire, before 65 except for health insurance. Having a one-time Medicare holiday where anyone over 55 can join if they retire would free up millions of jobs and instantly drop unemployment.

COBRA is a risky choice. You are only eligible to stay on COBRA for 18 months. After that you have to get your own. But what if you get a condition that makes you un-insurable in those 18 months. No private policy is going to take you. In my opinion the suggestion to use COBRA is poor advice. Have a private policy lined up before you quit, otherwise you are taking a risk that may leave you with no options.

And as far as depending on conditions in the new health law, that has not been fully worked out as much of it doesn't even go into effect for a few more years, it is being challenged in court and will go to the supreme court, and there have already been over 1000 exemptions given at the federal level and the entire state of Maine has been given a 3 year exemption to premium portion of the law. Its still far too fluid to determine how any of that is going to solidify to make any current decisions based on what may or may not happen as a result of that law.

Get a good private policy, don't bridge with COBRA. HSA is a good option but more comprehensive policies may work well for some too. Just get your own policy while you are healthy. You can't get one if you wait until you are not.

COBRA is ridiculously expensive. Unfortunately, there are not a lot of great options out there. When we were going to be without insurance for a few months (my husband voluntarily changed jobs, and the new employer did not provide coverage for the first 2 months of employment for some reason), I took out a short term high deductible policy that was 1/10th of the cost. The problem with that one is that is was real limited in coverage if you had any preexisting conditions. We were lucky in that we didn't have any claims during that time period.

I am hoping that a miracle happens and there is a viable health care option that is available when we do retire.

Great question, living overseas I can get access to solid health care at a fraction of the US price.

I thought you could use the clinics when living in the US but maybe another option is live close to Canada or Mexico and do a border run when you need to ?

-Mike

Mike:
There is a Vietnamese manicurist in the place where my wife and I both go to have our hair done that needed a very expensive surgical procedure that she could have never afforded in the USA. She flew back to Vietnam and had the surgery performed successfully, spent a week in the hospital, all for under $500. Her airfare was the major expense. They also have other hospitals that attract US citizens, often for elective surgeries to improve their appearance. These hospitals are more like luxury hotels, often with US or European trained surgeons and the costs there are far below the costs in the USA. My daughter's boyfriend's ex father-in-law is a very well known surgeon in our area of California and his malpractice insurance costs around $1M per year. That's the big problem with healthcare in the USA and it needs to be reformed if Medicare is ever going to survive.

When I took early retirement at age 58 I had been with my employer (the largest Defense contractor in the USA) for 32 years and was able to stay under their group insurance plan. That was over 18 years ago and even though my wife and I have been on Medicare since turning 65 we are both still insured under that plan. It's a great plan that allows us to be patients at the best clinic in the Bay Area where we get fantastic service in a new, state of the art facility staffed by wonderful doctors. We never have to go outside of the clinic for anything and all of our medical records and test results etc. are now computerized and available to doctors throughout their system. They use e-mails a lot these days for interacting with us to send test results, appointment reminders etc. Our cost has doubled over the last few years but I still only pay $291/month for both of us which is an incredible bargain. We can also use the plan's mail order pharmacy that sends a 3 month supply of any prescription for what a local drugstore charges for 2 months. A 3 month supply costs $20 or often less for a generic drug and $50 for any brand name drug and we aren't anywhere close to falling into the Medicare "doughnut hole" where you pay 100% of the cost, that so many Medicare recipients fall into at some point during the year. My wife uses two new types of inhalers that have made an unbelievable difference in her life, each one costs the plan $650 for a 3 month supply of which we pay $50.

With all of the cuts being proposed for Medicaid, the plan for the poorest people in our society, we could end up like a 3rd. world country with a large segment of the population being denied access to healthcare. We are already seeing a country of Have's and Have Not's and it could get a whole lot worse in the next few years as the government struggles to bring the deficit down. The Republicans started off trying to turn Medicare into a Voucher program that effectively guts its services but even they have now come to realize that will never pass. There's only one answer that I can see and that's a total revision to the income tax structure, possibly including a large consumption tax that would hit the Big Spenders the hardest, and closing the legal loopholes that allowed a company like General Electric to pay $0 in income tax for 2010. We also will need to slash the defense budget, close military bases, stop being the world's policeman, and pull back troops from all over the world, including Afghanistan.

Where do you keep your HSA?
Few banks want to be bothered, and State Farm Bank,
where I keep mine, insists on taking back all the
interest they pay me each year in the form of a yearly
fee....

Harm --

My company set up our accounts with the bank we do business with...

It's tough trying to figure out your options when you're retiring early, especially factoring in pre-existing condition and dependents. I work at eHealthInsurance and we recently helped contribute to a Reuters article addressing this very issue that is worth checking out: http://blogs.reuters.com/prism-money/2011/02/17/5-ways-to-fill-the-healthcare-gap-before-medicare/

Hope this helps!


One thing that the article did not mention is that it might be worth while to contact your health providers financial aid office. You may find that based on your new lower part time income, that you may qualify for financial assistance. Depending on the income qualification levels, this may come in the form of a full or partial reduction in the billed fees, and or a monthly payment plan to help spread out the payments. This can be especially helpful when using a high deductible plan, since it may allow you to use the HSA fund account to pay the bill even if you don't yet have enough in there to cover the total bill. I have found that it is also possible to negotiate for lower fees, regardless of income, so it may be worth asking.

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