 Welcome to the Bogle Heads chapter series. This episode was hosted by the pre and early retirement life-stage chapter and recorded October 13, 2021. It features a presentation and discussion on health care planning from retirement to Medicare, including recent law changes. Bogle Heads are investors who follow John Bogle's philosophy for attaining financial independence. This recording is for informational purpose as 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 health care 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 to an employer or Cobra. 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 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. We don't have probably many people on this call. Some people that are displaced workers due to trade that 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 love 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 work 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, my understanding is not allowed for a husband and wife deal. Right. It has to be two unrelated family. You know, family you and your cousin, right? You could be you and your cousin, but not you and your wife or husband or your child. I'm not sure an adult child would count. But for sure. Yeah, for sure. 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 in the president signed it on March 11. 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 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 employee unemployment during 2021, you can get a zero premium plan. A 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 15 to decide. And for January 1 coverage. So President Biden opened the enrollment due to large unemployment and other issues COVID. There's also Cobra premium assistance to do to unemployment. And as a side issue, we're going to talk a little bit about the Surprise Billing Act, which is something we're talking about before we started recording, which is the issue of keeping the patient out of a billing fight between a hospital and insurance company or doctor 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, as 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, we 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 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 no cliff above the 400% poverty level. That's 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 you know what the toll will be. But you 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 it 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 and 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? Would they 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 doves tails 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 of 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 and network pathologist and network nurses and 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 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 you know, for emergency care, it's covered. But the minute you're patched up that 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 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 the there's different strategies they talked about, but they settled on a arbitration thing. And it's, 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 31, or January 1. For this issue alone, I'd make it January 1. 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 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 if I 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, self insurer, you know, even before COVID, it was insane. But if you think about people who have been in the ICU for three months, that 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 what you have your your slide here says it's consolidated on the bus 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 leave of absence without pay. And because I was thinking it was a COVID thing, and I just recently I just became a widow says I had a lot of stress going on. So and I said, I gotta retire. So what did I decide 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 on Google, it is 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 and have I have a medical insurance broker. And I said, Hey, the guy, what 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 over 18 months. So I mean, I was doing 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 to automatic billing, pay at the first month, you're fine. When 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 send away and your company website says automatic payments don't do that. I was paying my monthly bill. The day the billing came out, which was like on the 15th of no 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 remind me to mention that in the in my discussion threads or anything. But that is a very important point. Your Cobra premiums make sure that the insurance company gets paid at the first month, not when you pay your employer, because there's there was a week delay there as a holy crap. Let me let me just share my screen here. Jim, I'm going to stop yours. Yeah, okay. And where am I sir? You plan? Yeah, I stop mine. Okay, you plan details. Share this guy. Because why I was doing I can see it because why I was doing I want to show the discussion threads that let me put the links and I have a couple of I'll just dump all the definitions. I work in the meeting. Come on. Oh, I can't I can't I'll share links as soon as I stop 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 called the company HR. When does my coverage end? 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 as blue cross group shield. I went with the company's administrator we handles the claims. They have to pay they know the rules and they confirmed. Yes, of course, your coverage ends on October 6. I go and check the website yesterday. I'm still active. Who knows? I'm not I'm not saying anything. So I'm just going to 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 because 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. What 15th of the month? If you and and coverage I have in 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 the fact on how you want to set set your date. There's 10 cookie here. Okay. But what the only the 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 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. As I say, this is what I was trying to do about penny. Oh, the other thing that I mentioned, a nice surprise was that the I mentioned in this discussion that I was I I got I got denied for a pre exist. So in the AC plans have to cover pre existing conditions. I was saying pre existing condition cancer, heart, you know, all the all the big diabetes, whatever the big stuff. No, I got denied. Well, the my insurance broker trying to get a something to fill the gap. So we applied and got denied. So why? For a minor, very minor condition that I'm on a small generic drug floor. And I'm because it's not an ACA plan there within their rights and have denied me coverage. I'm I'm not I do not qualify for a medical 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'm 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? Okay. So that's where it goes. Um, so I was getting here. Okay, so so that's that's this in a nutshell. Oh, I 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 medical expenses. It's just some some insurance that covers people like who have already admit it's 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 1st November 1st. So it's like 100 some dollars but it's better than nothing maybe but they haven't charged me yet and and by the way this 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 soon as I go into the 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 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 to 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 I'll take this top plan 650 non-tobacco. Okay let's go to 60. So 650 dollars 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 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 1500 dollars. So this is why you need to pay attention and compare and ask your company what is my Cobra cost and then you go out and shop the plant and see 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 oh wait is I already entered in and this is a Philadelphia zip code and I enter arbitrary birthday but this is where the tax subsidy comes in uh tax. So I just put in an arbitrary number just to show you that here are the plan details that this is the market. So here HMO, EPO or PPO uh cold platinum whatever then I'm going to go across go across. So here's here's the EPO for 350. What income did you put in Lady G? I put in 10,000 uh 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 here's here's this for $600 a month. So this is a subsidized deductible out of pocket math. So this is 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 gap right now for for 2022 and starting November 1st. 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 at 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 it is Blue Cross. So this deductible I see it's out of pocket and yeah it's an EPO they see the deductible in our pot see the deductible is $7,000. That's because there is no coinsurance there's no co-pay. You just pay all but the thing is you pay the in-network rates. So that's 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 yeah so this is the so yeah so these are HSA plans. So I but I actually okay so that's this that that's let's want to show 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 um 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 want to share it. I don't know I thought you probably keep I just didn't want to pass a pass a copy around and that's also because it by the way insurance rates vary by county. So uh 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 uh but how do they know for 2022 what I'm doing? I assume there's a tax form there's a marketplace tax form 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 uh 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 uh 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 how's my premium adjusted for next year so I'll know how to. Well you just estimate your own income you're Maggie really and we'll talk about that but the issue is um 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 threw 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 tax return. No 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 on 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 um 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 um 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 yeah I didn't even know this till just now either. It's not an all or nothing thing. The the 40 credits quarters is just to get the free part premium free part A and it sounds like it's a little bit um here I'm going to post something right in the um 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 um but you're not totally cut out of it if you haven't worked the 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. Miriam has her hand raised. Oh go ahead Miriam you're muted unmute yourself. I have two things first of all I believe on the Boglehead forum I read uh 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 cobra I don't know if anybody knows about that. Miriam I can actually speak to that um like I was saying earlier I used to work for uh was a paralegal for just a single attorney and um 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 um and then let's see I worked till the end of January then I had 60 days to make my decision and then the nine months started from 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 that as much as you can so that's going to be state by state rules on that that one though and then my I also wondered whether anybody had made claims under cobra and they found it difficult to have to be paid for cobra insurance to pay their claims I never had a problem uh I mean because it's just I say with Blue Cross you go direct cobra is just how 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 uh after that after they pay it's the claims administrators and the usual stuff okay thank you Cheryl you want to go go ahead go ahead yeah we's going back to uh talking about uh extending beyond 18 months my husband's uh 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 uh since it is a situation of forced retirement it's a condition of of employment for all air transport pilots that 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 to to confirm it and we'll post it on the forum okay thank you yeah there was some extensions on on the 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 uh 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 covered so you do have to pay your bills as lady geek said but once you you have 60 days retroactively to choose cobra and the other thing that that's important is you need to know what the employers paying because you're going to pay a slight two percent administration charge over it most people don't understand that their employers are paying maybe up to 80 percent of the cost so when it comes to you it could be five times the amount or four times the amount that that they're taking out of your check is your contribution all right so let's keep going here so cobra had some effects or the 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 uh i don't know if i will qualify i was already retired but 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 retro yeah i don't know i don't know so again this is this could be even reduction of hours it doesn't have to be termination okay let me put this way i'd rather not deal with my employer at this point okay all right so again unemployment provisions if you were unemployed anytime in 2021 it treats it as if you had a hundred and thirty three percent of the federal poverty level which is the maximum subsidies so the only issue there is this thing called a family glitch which is when your spouse has maybe doesn't have insurance because they turned it down uh 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 you're going to have a and you're on a c a 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 if the health savings or the insurance policy is um eligible for a health savings account you can put money into that the 2021 limits were 3600 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 uh deductibles you can i think you can spend it on Medicare Advantage programs you can sum over the counter items is anybody use their hsa a lot and would like to speak about it i just this is lady i just started last year and i say i qualified medical expenses i zeroed mind out with one month of nursing home skilled nursing facility for my for my late husband so the idea is you have to keep if you have to keep a record of of your qualified medical expenses rather than keeping an entire pack of stuff i just said here here's one month from a nursing home and that that you know it showed out actually i have five cents left to account for this i forgot to close it out properly but i might restart it so i mean i haven't used it what does a month if you don't mind me asking what does a month of inch of uh nursing home costs these days four hundred eight dollars a day wow okay to attend the 12 000 per month and at the time i was prepared to burn down his IRA for that it's called self-insuring but we're diverting from medical but the yeah so it's a skilled nursing and anything that's a qualified medical expense so a lot of people use hsa's for they have like a debit card and you just go to the pharmacy and it'll tell 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 um pennsylvania site certain plans depending on the deductible range and whether they start providing benefits before the deductibles reach so if you have copays 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 eight thousand dollar deductible with a seven thousand dollar limit and you're not you can't save with an hsa but that's a different issue so again the it has to be at least 1400 for an individual but it can't be more than seven thousand fifty dollars or fourteen for a family and it can't have anything other than preventive 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 twenty dollar copay it's over and in indiana we have thirty nine plans available and only three were hsa compatible and most of them were because of the seven thousand 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 you as lady geek said you could pay it for nursing home at the end you could pay 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 uh these are a couple plans that I looked at and this is uh just to get an idea of you know what had an hsa and what were the premiums this is this is this year and it's it reflects the uh america rescue act and it shows you twenty thousand twenty five thousand dollar income fifty a hundred and what the ranges are so this is for a male and a female non-smoker sixty and sixty years old I just picked that arbitrarily but you can see the range here that at a twenty five thousand dollar income you could be paying fifty two dollars a month in illinois or if you want the blue cross blue shield preferred silver ppo plan you could be paying fifteen hundred dollars a month with a six thousand dollar deductible in a seventeen thousand dollar 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 a c a 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 a hundred thirty eight percent of the federal poverty level now here's a case where it let's say I had a million dollars in a four one K 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 hundred and thirty eight percent 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 hundred thirty eight percent 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 a hundred thirty eight percent of the federal poverty level this is the rule that allowed people to stay on their parents policies until they're twenty six 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 two million dollars 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 non-payment 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 copays are deductibles what you're going to be paying first the copays who go to the doctor and they say it's a thirty dollar copay you'll be paying that and then some of them have co-insurance 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 then you'll see a page it 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 could 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 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 Medicare Cade 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 assistance for you I'm just afraid I don't know if this is for a fact that they might have some financial incentive 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 with if you were to say a million in a Roth a million in 401k 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 percent some states it could be 100 I think it's got to do with Medicare expansion but for two people it would be 238 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 I'm gonna okay so let's pretend we live in uh we'll say we live in Illinois and um and I'm going to put a zip code in this is near Chicago and I'll pick the county let's go county and first thing I'm going to do is um 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 mean I'm just going to put 25,000 in here and I here's an important question did I get an employment 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 I'm 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 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 kind of 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 will 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 401k 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 eight and a half percent 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 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 now 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 wanted 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 has 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 healthcare is eight and a half percent but that's for the cheapest silver plans and I'm going to my Roth conversions really brought my income up so and you have to decide whether you think future taxes are going to be worth those 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 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 added back in and it's kind of like it's a bigger number than your AGI the next thing is how would you optimize your Maggie income one of the things to think about is if you're looking at these subsidies if they mean something to 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 55 60 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 you may want to sell them before you sign up for the ACA for the year before but 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 and 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 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're 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 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 subsidy worth so you got to look at this Roth conversions also raise your income which can raise your Medicare or my 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 premiums so if you're self-employed and you're forced to do this couple strategies would be to keep one spouse on an employer plan if that was possible again if you're self-employed sometimes people have very wild variability in their income and I would just recommend you estimate on the low side because you always true it up 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 because of this if you had estimated your income very low and you were really due 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 rule is a one time 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 I think the one you just had was the one they wanted this one that one yeah so they're gonna 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 you 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 gonna 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 1095a is anybody here fill this out I know my wife has so this is the case this is where you threw up the income so if you just thought you were let's say you go become self-employed you act very conservatively think you're gonna have income of 40,000 or 20,000 and you turn out to have this very successful business and you make 10 million dollars 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 because 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 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 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 of self unemployment tuition expenses contributions to IRAs these things will tend to reduce it that's how you