Suppose you’ve thought about early retirement. But you think you can’t leave your current employer for fear of losing health insurance coverage, or you’re staying in a job. You don’t like it because you have pre-existing conditions. In that case, you don’t have to worry about these things. You will be guaranteed health coverage under the Affordable Care Act. You will not be charged extra for pre-existing conditions.
Here are five things you want to understand about how Affordable Care Act and how you’re new over age 65 health insurance choices will affect the new health insurance exchanges.
Health Insurance Must Be Delivered to Everyone
Beginning January 1, 2014, health insurance must be offered to everyone, regardless of pre-existing medical conditions. As Michael Kitces said in How Health Insurance Incidents Will Impact Career and Retirement Permits,
“Now, those who need to keep working can do so and be ensured of health insurance coverage that is very necessary. The equivalent as what they had while working (although premiums can increase with age), which have the same benefits and don’t worry about limitations due to pre-existing conditions or future health changes.”
You will be eligible because the referral is mandatory, and premiums can only be affected by these four things:
- How old are you
- Number of people in your family
- Tobacco use
- Adjustments for your geographic area
Diabetes, heart condition, cancer? However, they cannot rule you out, they cannot exclude coverage for these conditions. They cannot increase your premium because of existing conditions. This is excellent news for various people who are still working because they have to maintain health insurance coverage. Learn more about cool drawings.
Affordable Health Exchange Premiums
Preliminary figures show health insurance premiums are becoming more affordable than what the doomsayers of the past few years may lead you to believe.
In this Forbes article, I give credit to contributor Rick Ungar for saying, “I’m growing up, I’m wrong.” He points to the surprisingly affordable new health sales premium amounts published by the state of California.
Costs vary depending on the region and type of plan you choose. You can keep ideas with lower or higher deductibles. To calculate your highest potential cost for the year, add your monthly premium for the year along with the maximum out-of-pocket listed. In a year with bad health, that’s the most you want to pay. In a year without health care, you only have to pay monthly premiums.
Open Enrollment occurs every year
Open the registry every fall. However, if you lose your health provider’s coverage in the middle of the year. You may be eligible for a special enrollment period.
Here’s what you need to do.
- Visit healthcare.gov.
- If you are looking for mid-year coverage. You will see the option to click to see if you are eligible for the special enrollment period.
- If you want to view pricing, click the round blue circle that says “View plans and prices.” This will allow you to get a pricing estimate before entering the entire application process.
You never know what options you might see until you look.
Tax Penalty Applies If You Go Uninsured
There will be a taxing discipline for not obtaining health insurance. It starts at $ 95 per individual or 1 percent of household income, whichever is greater.
Critics complained that the penalty was not high enough. They say it is cheaper to pay the penalty on buying insurance. That may be true, but I don’t believe most people want to go without insurance. Instead of paying the penalty, it is better to apply that money towards valued insurance coverage to save you money and make you safer.
Tax Credits Delivered for Low Replacement Households
There is a tax credit or support possible for those who cannot afford health insurance premiums. This contribution credit is possible for singles and groups with Modified Adjusted Gross Income (MAGI) below 400% of the poverty line. In 2015, you will be below the 400% poverty line if your MAGI is less than $ 46,680 for singles and $ 95,400 for a family of four.
With proper tax planning, some early retirees can keep their MAGI enough to qualify for credits for several years before reaching Medicare.
In addition to tax credits, many states are expanding their Medicare programs that will affect individuals below 65 with earnings at or below 138% of the poverty level (about $ 21,983 in 2015 for a family of two).
Bottom line: Because of new health insurance exchanges, early retirement options are better for many Americans. If you are close to 65, Medicare will be your primary health plan. The new health changes will have little impact on your options at post 65.