ACA journey

[Pom]

We were most terrified of the insurance cost when we decided to FIRE after H had a lay off in February 2024. We are both diabetic, although controlled, but I do take long acting insulin, to give you a picture of our health care needs. No kids.

Health Insurance Marketplace Calculator | KFF

www.kff.org/interactive/subsidy-calculator/

Here is a helpful calculator that will offer some insight estimating your family cost for ACA. I ran the calculator this morning and our actual cost when signing up was different for a silver plan by $66 less than according to the KFF estimate. It also says our premium would be about $100 more without the subsidy but the information I got from our insurer, said more like $800+ more which seems more accurate. So this isn’t a fool proof tool, but somewhat of help.

Our actual Silver plan numbers:

$547 mo/2 adults. 53M/54F
$3600 Individual deductible.
PCP visit $30
Specialist $85
Urgent Care $75
ER $250 edit. br]RX:
Tier 1b up to $20
Tier 2 up to $75 (my insulin).
Tier 3 up to $100 after deductible

It took us of an epic amount of cooperation with our doctor’s office but we did get Mounjaro approved on our new ACA after 6-8 weeks. We are currently paying $25/mo due to the coupon but RX is $75 per mo/person. Lantus is also $75 per mo.

The insurer we have is Priority Health (this was also our prior employer plan) which I believe is primarily in Michigan? Correct me if not. It is very similar to the BCBS we’ve had in the past but employer plans always depend on the elections of the employer for their sponsored plan. We lived in Texas prior to 2021 and our HDHPs there were costing us through H’s employers what we were paying for premiums in Michigan for traditional, non HDHP health plans. In our experience, health insurance is very subjective to your company and state. I know some of this info is basic but it may help someone. There was much we didn’t know until we went through it or researched it.

I signed up for ACA by contacting a local insurance agency that works with health plans on the marketplace. We live in a small city in a fairly rural area, so chances are you have that option too. She was wonderful to work with and my understanding is they are paid by the ACA marketplace, so this cost us $0 to have someone assist with sign up. I was truly shocked when she came back with our plan options. I was expecting much more expensive plans.

Our COBRA costs through H’s previous employer would have been $1320/mo for both of us. I don’t have all the differences at hand, but my insulin was a bit less $30?/per mo, same Mounjaro costs, similar generic costs, doctor visits $20 but it was less cost for deductibles.

My original estimate for our income this year was $77,000 when signing up on the ACA exchange. We met with our accountant in May to get our quarterly tax payments in place, discuss ACA and our newly retired tax plan and issues and concerns. She encouraged me based on her calculations, to up our income estimate to $86,5k based on dividend income, etc. For those curious, our estimated tax payments are $1100x3/per yr. $3300. Hopefully this is spot on. Our income the past 5 years has been all over the place. I called immediately to notify the ACA marketplace to up our est income from $77k to $86,5k and our policy actually went down $7? Not sure how that happened. It was an easy process.

I do want to say, most healthy FIRE enthusiasts, will intentionally keep their incomes quite low. Having a paid off house to decrease draw on investments is the easiest way to accomplish this and also perhaps laddered CDs or cash in a money market also helps with not drawing from investments which will impact your MAGI and thus your ACA subsidy. You have to have some income as part of you MAGI to get insurance from the marketplace but if you keep income low enough, your subsidy will get you an almost free Bronze plan. Our Bronze plan estimate was $92 per KFF but $320 per exchange. So keep that in mind, the calculator above can be off.

This is not an option for us for 2 reasons.
First, health issues. Also, I have a base income from farm land I own and lease out. It is pass through income on our tax return and then we will withdraw about $26,500 from investments starting next year.

Challenges and concerns: These are minor because we are very, very fortunate. We have made some good choices (and bad but minor in the grand scheme) but we were/are extremely lucky to have had things work out. We had inheritance, did well with several moves and never lost our ass on the many homes we bought and sold. We moved a ton due to H’s career. H never had any extended unemployment periods. I was able to leave my job in 2011 as our parents suffered with different health issues: dementia, 10 years of long term hospitalizations, a stroke. Parents didn’t need our help financially, just our time. I got to be there to handle all that while H kept advancing in his career and earnings. We didn’t buy extravagant anything. Modest homes, cars every 10-12 years, no toys until two years ago. We bought a boat since our home is on a river. We bought this home and did all renovations in cash. New roof, electric upgrade, storage building/garage, 2 old age friendly bathroom gut renovations. New paint and stain. We did all that while H was still working. On to challenges, we’ve had income flux from $200k+ to $130k to $87k now. We didn’t have a ton of time to adjust our lifestyle or mindset, although the last couple of years, we’ve been primarily spending on cash flowing (when possible) renovations. I have us budgeted to $0. I have no idea how it will end up but this scares me. Only because we are trying to maintain some ACA subsidy. If we can’t get the ACA subsidy, because the GOP returns to power and guts everything, we will be fine. Just more of a concern. It is certainly not as damaging to us as other families. If you want to know more about our financial position, I can share. I mean, I may as well confess the rest but this is already so long. Hoping this helps someone with questions about the early retirement healthcare journey. We did just have a Fidelity consult and we will be fine to make it to 62/65 and beyond. They offered a review and it solidified our own calculations and probabilities.

If you want to read more about FIRE, RE (retiring early) etc, MMM (Mr Money Mustache) forums are a good resource or Reddit FIRE, financial independence, etc. Some good info there.

[RockNVoll]

If you're willing to share I'd love details on your savings amounts and rough budget, similar to the other post. We are just a little bit younger than you, also with no kids. We have an amount saved that I think any rational person would say is enough but I have an irrational fear of running out of money. That said, we're seriously considering retiring by early next year but really need to take a harder look at our modeling. Frankly I'm shocked (and I know you and the other poster were as well) at the incredibly low cost of your healthcare plans. When DH priced ours out on the exchange he said it was $25k/year for both of us.

[yetanothermmae]

Thank you for posting! We just directly picked a plan off our exchange so it's interesting to hear about the broker person.

One tricky thing we ran into is that we had to file an income waiver because our income is going to be so different this year from last year. We applied in January, submitted the waiver form and documentation in Feb, and it still hasn't been reviewed/processed. We called and they said they were really backed up. So we are still paying the lower subsidized premium, but we have no idea when they will process the waiver request or what will happen if they don't accept it.

But otherwise, the process has been really easy. To be fair, we don't typically have significant medical needs. But we have had some PCP visits, filled some inexpensive prescriptions, and we had a visit to the ER - everything seems to work the same way our employer-provided insurance did.

[Pom]

Budget for 2024 (We plan to use the same budget for 2025) edits for clarity. 

Income, Farm lease & Investments draw $86,500.00
Yearly/Monthly
Travel ($6,600.00) $550.00
Life insurance April due ($1,440.00) $120.00
Fuel Boat & Auto, Services ($6,000.00) $500.00
Groceries/Cat/Misc goal $550 ($8,400.00) $700.00
Eating Out $500 goal ($8,880.00) $740.00
Medicines, ACA ($12,420.00) $1,035.00    (includes all med premiums + $57/mo Delta Dental, VSP yearly $295 for both of us, vitamins, misc)
MISC./Repairs ($4,980.00) $415.00
Boat $411 mo. & Services ($6,000.00) $500.00
Cleaning ($2,520.00) $210.00
Gifts, annual $ gift to nieces ($3,600.00) $300.00
Donations & Volunteer Expenses ($4,800.00) $400.00
Personal, Haircuts, events tkts, etc ($2,400.00) $200.00
Taxes, State & Fed ($3,800.00) $317.00
Cable Internet, Streaming ($2,400.00) $200.00
Phones ($720.00) $60.00
DTE, C. Energy, garbage, ($3,048.00) $254.00
Insurance Car, House, boat, umbrella ($3,212.00) $268.00
Property Tax, no mortgage ($5,280.00) $440.00
Budget to $0           $7,209.00/mo

*notes: There is a ton of budget fat to trim, if needed. When we travel to see our family in Texas, we have free places to stay but end up hosting lots of meals for all of us and groceries. Travel is probably still the one thing we would/may want to increase significantly and shuffle. We both volunteer approx. 25-30 hours per month. So we did decrease our cash donations, just for now. We buy quite a bit of materials, food too for our vol. gig and absorb that ourselves. We also do quite a bit of entertaining during the summer/fall, since we are in a resort area.

Paid for home: $720,000+ Spent a metric ton on renovations, all in cash.
Paid for vehicles 2. My car is a 2019 model with 36k miles. H's 2018 truck we just paid off. It is much higher mileage.
We do have a 4% loan on our boat. It has 2 years to go on the loan. We bought it new. Should last a long time.

Cash/Checking $12,000
Money Market 5.5% $80,000
CD 5.7% mature'27 $89,000
Fidelity* $500,000
*Rollovers & Roth IRA
Vanguard rollover $540,000
Vanguard Brokerage $280,000
HSA $70,000

Farm Land (my half $1.9 mil) After expenses and land taxes, my draw is $60k/year. We will need $24,500 from investments until we get to SS and then we will not need to draw anything. We plan to take SS at age 62. Medical costs still loom large. We checked out a long term care policy, but we will simply self fund.

Also, capital gains draws do count towards your MAGI, but your MFJ long term capital gains are taxed at 0% until you hit $94,051 in 2024. Our investments portfolio is still quite aggressive. VUG, VTI, etc. After considering the stability of the farm as an asset, we think we are okay with that. Check on me during the next market crash.

RockNVoll , HTH.

So, @yourrichbff financial guru, says we must talk about money. Check her out on YT. I'm sure she has other socials too.