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Blueprint: Retirement Health Care

Special Note (2014): The diagram below has been dated by the implementation of the Affordable Care Act (Obamacare). Until I’m able to update it, please do not consider it an accurate guide to the current state of retirement health care.

Retirement Health Care Blueprint

 

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Comments

  1. Early Retired Engineer says:

    My annual premium for a family of 4, $5k deductible, $35 co-pays is $8200. 15 years to age 65. I don't think that is too unreasonable. I will likely increase deductible as kids depart the policy to lower the annual premium. I am reasonably healthy and any routine doctor visit is on my dime (co-pay) anyway.

    I have graphed the premium plus deductible vs deductible over various deductible levels allowed by the plan. In the worst case scenario where the total deductible is met, total cash outlay for health care is lowest at the highest deductible, which makes sense since the insured is retaining a lot of risk. Total potential cash outlay is highest at least deductible. Probable cash outlays is lower as deductible increases. Known cash outlay is highest at least deductible.

    It makes very little sense to have a low deductible policy.

  2. Darrow Kirkpatrick says:

    Thanks ERE. That's really interesting data. Many people pay a high price for certainty. Not too surprising that high deductible policies are cheaper overall, if you can assume the risk. And nice that you actually graphed the numbers to confirm. Thanks again for the comment!

  3. Early Retired Texan says:

    I've been retired since 2010 and a company provided Health Savings Account has been paying my health care premiums since. That account is almost depleted and in the near future, I'll begin to pay the premiums out of pocket. I chose the highest deductible plan available to me under the company's retiree medical. It still seems really pricey, $600/month for $3000k deductible plan,coverage is good. No significant preexisting conditions. I think I need to shop private plans. If I change plans, I can't go back to my retiree plan. New health care laws are going to help with the issue of being dropped or rates skyrocketing if I get sick, I think.

    My question is are there other considerations besides price and coverage if I stick with well known providers?

    Thanks! Great site!

  4. Darrow Kirkpatrick says:

    Hi Texan. Thanks for sharing those details. I agree that's pricey, but sounds about right. I'm optimistic the new health law will help retirees too, but we'll see. Re shopping: premiums, out of pocket expenses, and whether your providers are included seem like the main considerations. However I'm not an expert on health insurance. I've had good experiences talking with the agents at eHealthInsurance.com though — perhaps they could help you too.