What about Healthcare?

In making the decision to retire early, one of our primary concerns was the area of healthcare.  Both Mr. Breeze and I have Pre-existing conditions.  I am curious to see how health care reform starts to change over the course of  5 years.

In fact I have added a new section titled Health.  This is an area where I will post about healthcare, what we find, and changing to living a healthier lifestyle (recipes, activities, who knows I might even track our weight goals on line.).

So we decided to buy through the exchange but unfortunately with leaving our jobs and income it was confusing to fill out the paperwork.  We tried to make phone calls, and had our forms reentered but found out that we were applying for aid (i.e. welfare).  That is not what we wanted.

I ended up panicking, and decided to purchase directly from the insurance company as I was afraid to go without coverage for myself, and my family.  We chose Humana as they were one of the best for the medications we were on and I liked the options.  By going direct to the insurance company we are not on the exchange (although our plan is considered a Bronze plan through the Affordable Care Act); therefore, we are not eligible for the subsidies.

So what is insurance costing us:

Well for our family of 3, we have a monthly premium of about $885 a month.  We are not eligible for the subsidy, however, if our healthcare expenses exceed 10% of our income and this includes the Premiums that we are paying, we can deduct medical expenses from our tax liability.  This may or may not be better for us in the long run, we will see what our income ends up looking like after 2016.  We may try to get on the exchange plan for 2017, but for now we are happy to have insurance.

Oh and because neither of us are "working" we were also eligible for medicaid cards, so we are using that as a secondary insurance - this will only help us to reduce our deductible. Speaking of the deductible, we have a family deductible of $12,500.  While I hope we will never reach that amount, if for some reason we have a large medical event, such as a hospital stay, then I know our cap will be our premiums plus the $12,500.  Long term this is a expensive option, but it is affordable today, as we are learning.

So to have insurance for 2016, we are paying:
$885 x 11 (we were covered in January)
And an out of pocket deductible of up to: $12,500
Total potential healthcare expenses for 2016: $22,235

So if our 2016 income is below $222k we should meet the 10% medical deduction for 2016.

The only thing I wish I had done differently, was read Root of Goods post on the Pitfall and Subsidies of the Affordable care act!  Unfortunately I had to make my decision before he posted this, and didn't have the luxury of time (I was leaving my job, moving across the country, and stepping up a new home!).  Oh well, lessons learned and maybe we will do better next year!