Early Retirement Health Insurance – Open Enrollment (Bonus Chapter)

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I thought our health insurance drama was over this year when we settled on a new plan during open enrollment in November. I wrote about our new plan then, which included a premium jump of more than 30% despite doubling our premium to $13K and dramatically dialing back the doctors and clinics we could go to in-network.

As I wrote then, the insurance market in our state was turned into a mess after the Affordable Care Act collapsed the individual health insurance market, leading our very progressive Democratic Governor to comment that “The Affordable Care Act is no longer affordable”. While, as a state, we had enjoyed relatively lower premiums than the national average, we have seen dramatic jumps the last few years (with many insurers dropping out of the market) until our rates were now higher than the national average.

How this happened is that under Obamacare, state-paid subsidies for poor households were eliminated. Instead, these costs were pushed onto other people in the individual market – only about 100K households in a state with millions of households. So while the State saved money, a small number of people (including us) picked up hundreds of millions in cost.

Thankfully, after watching this system grow progressives worse over the last two years, conservatives won the State Legislature and quickly worked with the Governor on a relief plan. The details are laid out in this article from our metro newspaper, but the headline is that we will now be getting a 25% discount on our premiums beginning immediately. The insurer will be paid back by the state from a $325M fund that they have set aside to provide relief.

Here is an updated look at our 2017 health insurance spending:

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With the big jump in deductible, we are still facing a big potential increase in 2017, but our premium cost is now comparable with 2016.  If we can stay healthy we may end up spending about the same as we spent last year, which would be a savings of about $4,500 compared to what we planned on playing during Open Enrollment.

Are your states also making accommodations for ACA cost increases in 2017?

Image Credit: Pixabay

8 thoughts on “Early Retirement Health Insurance – Open Enrollment (Bonus Chapter)

  1. Distrubing, to say the least. Health insurance inflation is the primary reason we’ve decided to work one year beyond FI (Financial Independence) before we RE (Retire Early). Regardless of how it’s restructured, there’s a fundamental problem with health care in this country, and those with $$ will see increases far outpace the rate of inflation over the coming 10 years. Be prepared, and build it into your retirement cash flow assumptions!!

    Liked by 1 person

    • Agree – we retired with a cushion and you are right that the health insurance market will continue to be costly.

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  2. The ACA is working pretty well in California. I’m afraid that the original healthcare law wasn’t what its supporters originally envisioned and the opposition subsequently added so many poison pills to the legislation that it soon became a doomed proposition. In smaller states where there isn’t much or any competition, rates have risen to a point that isn’t sustainable for many. I guess the good news is that 22 million people have insurance for the first time and some of the draconian rules (no pre-existing conditions, unrealistic cost caps, etc) at no longer legal. I doubt that most people would want to return to the old system. Although no fan of the current administration, I support any plan that can provide insurance for everyone (not just “acces,” which is meaningless) and comprehensive coverage (not cheap plans full of coverage holes) at a reasonable cost. He claims he can do it, so I’m looking forward to seeing it happen.

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    • It will be interesting to see what the GOP puts forward. Right now the system is unaffordable for a government that is $20T in debt.

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  3. You should investigate health sharing plans. Much, much cheaper, especially for people who are in good health. And they have an exception to the ACA…

    Liked by 1 person

    • I did look into those at the time, but there was a few reasons they didn’t work for us. Are you using one?

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  4. I’m glad MN found a temporary fix to the health insurance problem. Now I just hope our government can find a good permanent replacement to the ACA, since that’s where we’re headed.

    Luckily I’m a long ways away from early retirement, so I’m hoping everything is figured out by then.

    Liked by 1 person

    • We’re just a few years from retiree health insurance coverage from the MegaCorp I retired from, so we’re just trying to bide our time until then.

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