If there is one thing we learned from 2020 it’s that having adequate health insurance is not a luxury but a necessity. A close friend of mine who was in otherwise good health found himself hospitalized for several months this fall with Covid. Without health insurance this type of hospital stay would bankrupt most people. Sadly, the cost of insurance has continued to rise drastically in recent years, especially for those who are self-employed or not receiving it through their employer.
Because of these high costs, many seniors who are not yet eligible for Medicare, are being forced to continue to work, not for the paycheck, but for the insurance benefits their job provides. It is especially sad to see people who have physically strenuous jobs continuing to work despite the harm that is being done to their bodies, simply because they cannot afford what it would cost to pay for it out of pocket.
This was the very predicament that one of our clients faced recently. He himself was already enrolled in Medicare, but his younger wife would not be eligible for another year. He had chosen to continue to work just to keep his health benefits, but the taxing nature of his work was having a serious impact on his own health.
They came to me to see if I had any suggestions because the best health insurance rates they had found on their own were over $800 a month just for her. This kind of large expense was going to certainly require them to dip more into their retirement accounts than they wanted to, and hoped I might be able to provide a better option.
Talking with them, I discovered that their monthly expenses were relatively low, and because of this, as long as we kept their adjusted gross income for 2021 low they could qualify for rather large credits through the Obamacare marketplace. This would result in a drastic reduction in their out of pocket costs for a quality private healthcare plan. After crunching all the numbers the client was able to get the healthcare they needed at an approximate 90% discount. This allowed him stop working almost immediately without risking their financial future.
I would guess that many of you reading this, or someone you know is in a similar situation, ready to retire, but waiting until age 65 to stop working because of the need for health benefits. If that is you, an Obamacare plan might be the perfect stopgap solution until Medicare kicks in.
By requesting a quick quote on healthcare.gov I found a non-smoking individual age 64 in Jackson County MO with a taxable income of $40,000 a year would qualify for nearly $800 per month in premium subsidies. With these credits applied a person could get reasonable coverage for around $50 a month. For couples with a similar income, the out of pocket costs would be even lower.
Obviously, there are many factors that should be considered before making this kind of life changing decision. I would suggest consulting with both an experienced health insurance broker, and a financial advisor before making doing anything. However, for those of you whose monthly expenses are low, and have ample retirement savings, Obamacare could be the answer you have been looking for. It certainly was for the couple I helped.