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I was all wrong on the healthcare insurance prices

July 14th, 2016 at 02:32 pm

OK, what a dummy..I miscalculated something big time.

For some reason when projecting my income for 2016, I didn't count what I've earned YTD at the bank. I just was figuring out my income from my last day of work forward through year's end. This would include severance and the unemployment benefits and whatever freelance/contract work I may find.

But that all was incorrect since for purposes of seeing if you're eligible for a subsidy on the healthcare exchange, you have to figure total income for the year, because that's what will be showing up on my tax return when I file and that's what will be used to determine whether or not I'm eligible for any subsidy.

So I already earned a gross of $43,215 and I have 2 more paychecks to go in July. Add in the 8 weeks severance totally $12,723 plus unemployment benefits for October through December and I'm already up to $60,000, which clearly means I get no subsidy.

So now looking at the healthcare exchange is much scarier. Most of the silver plans are in the $700 to $800 a month range, and the only one that has a $500 deductible like my current plan costs $745 a month. All the other plans have annual deductibles of $2900 or more.

I may as well stick with my employer's plan at $513 a month. Now it seems like a no-brainer.

I do only routine and preventive office visits except for my MS meds and thru the drug maker's financial assistance program the copays are 100% covered up to a max of $12,000 a year, so I don't have to worry about that.

And sticking with my current plan would be SO much easier and a lot less red tape than switching to a state-managed program.

Bottom Line: My severance will carry me through August and September. I'll try to save as much as I possibly can during that time.

I also plan to do the Safeco Insurance gadget on my car that measures how safe a driver I am (fast starts, sudden stops, and time of day) and this could save me up to 25% of my car insurance.

Unemployment benefits will kick in October and continue through March 2017 (if needed). While health insurance costs will eat up 25% of my unemployment income, I will still have about $1400 a month left over (based on a gross of $1800 a month) so sticking to my austerity budget, I should only be a few hundred in the red each month.

Imagine how much harder this would be if I had a mortgage or rent to pay!

Ideally, I will find some kind of work within the 6 months, because after the unemployment runs out, my healthcare and other expenses will be a big pinch.

It occurred to me this is pretty much the scenario I'd be facing if I chose to do an early retirement in 3 years. I'd forgotten how expensive health insurance is without the good fortune of being on an employer's plan.

The only difference would be that I'd be 3 years closer to getting Medicare and have 3 years less living expenses to fund before getting on Social Security later in my 60s.

8 Responses to “I was all wrong on the healthcare insurance prices”

  1. Petunia 100 Says:

    Yes, I think sticking with the bank's insurance plan is the way to go.

  2. Butterscotch Says:

    Sometimes companies wil extend heath insurance as part of severance. Have you signed an agreement yet? It doesn't hurt to ask them to extend your coverage the same 8 weeks they are paying you for. They might say no, but if they do, oh well, you're leavin anyway.

  3. Jenn Says:

    Butterscotch has a good idea - our company does provide COBRA coverage for a few months as part of the severance. Also, years ago (so the rules may be different now), I had something like 60 days to make the COBRA decision and then it was retroactive. In that time, I found another job so I didn't pay for the COBRA coverage.

    The links you requested for the other bloggers' articles on ACA are http://rootofgood.com/2016/02/ and http://www.gocurrycracker.com/obamacare-optimization-early-retirement/

  4. Janelle Says:

    Well, that certainly sounds much more in line with my experience with health insurance and the ACA exchanges. But I live in California, where everything seems to much more expensive.

  5. CB in the City Says:

    I agree that sticking with the bank's insurance is best for now. Hoping you will find employment with benefits -- and close to home, to boot! I think at this point the salary matters much less than the benefits. Will be thinking of you in the months ahead.

  6. livingalmostlarge Says:

    You are so lucky that your employer plan is so reasonable. I believe for us it was $1800 for the family and we bought our own only for $650/month. Of course it's crappy coverage but it was cheaper.

  7. ceejay74 Says:

    That's crazy! AS's Obamacare thru the MN exchange is $228 per month. Higher deductible than $500, maybe $2k?

  8. Dido Says:

    The frustrating thing about the ACA programs is that costs are tied to age....and you (and I) are in exactly the place where the costs escalate most dramatically. The increase will slow down in another year and level off completely once you hit 60, but right now you are where the costs are increasing. But to put it in perspective, at least you can GET insurance even though the MS diagnosis is on your record, and that insurance will cost you the same as anyone else who chooses the same plan and who is a female nonsmokers your age. And THAT is truly wonderful. But yes, the high cost still sucks.

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