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Much of my journey to early retirement was carefully planned. I saved a lot, invested carefully, read extensively. But in one area — health care — I was just plain lucky. Health insurance is one of the most critical issues in retirement: To live without it before Medicare starts at age 65 is to court financial ruin. In my first article on retirement health care in 2012 I described the meager options available then, and my own good fortune in obtaining retirement health coverage as part of my wife’s public school teacher benefits.

But what about those who want to retire early without the good fortune of retirement health benefits? Last year I began an exploration of the Patient Protection and Affordable Care Act (ACA), commonly known as “Obamacare.” I logged onto our state insurance exchange, went shopping for a plan as if I had no insurance, and reported on what I found. Though the system seemed workable, I decided there was no clear financial reason for us to switch, especially given the risk factors of a new, complex law, still subject to change.

Recently I did the same exercise, to see what had changed, and whether it made sense yet for us to drop our retiree health benefits in favor of Obamacare. If you’ve joined the HealthCare.gov site, then your inbox has also been sagging under the weight of emails reminding you that the open enrollment period for this year would end on February 15. The government gets high marks for persistence and creativity in pushing the new healthcare marketplace, at least in email. (Be advised that the next enrollment period is currently set to run from November 1, 2015, through January 31, 2016. You can’t apply for coverage again until then, unless you have a “qualifying life event” such as moving to a new state, certain changes in your income, or changes in your family size.)

Now, with open enrollment ended for the year, my inbox is at peace. And I can take time to collect myself, organize my research on the healthcare law, and report back to you. Ever since I started this blog, I’ve been hoping I could describe a clear path to affordable health insurance for those of us who have retired before Medicare eligibility at age 65. Are we there yet?

I’d like to write that the new law and associated insurance marketplace are simple, foolproof, and something we can rely on going forward. Unfortunately, I observed mostly the opposite this year. For the details of my experience, as well as a quick overview of the Supreme Court case that currently threatens the entire foundation of the ACA, read on….

Application

The aforementioned blizzard of government emails touted the new improved Health Insurance Marketplace: “It’s easier than ever to apply this year – you can even do it on your mobile device.” Unfortunately, I found the process significantly more complicated than last year. There are three non-trivial steps: (1) security verification, (2) creating an application, and (3) choosing a plan. By the time I was finished, a couple of hours had disappeared, and I was far from confident that I had done it all right.

For starters, the system had either lost or reset my password from last year, so I had to regenerate that, then step through a laborious identity verification process that involved phoning a third party and answering a series of random security questions about my personal finance history. I was fully expecting the process to stall over our credit report — frozen for identity protection long ago. But, mercifully, that didn’t come to pass, and I was cleared to access the system.

Now I needed to fill out the online application. My memory from last year was of a one-screen, 5-minute process. If that was true, it no longer is. The process is now more akin to filling out your tax return. The lawyers and special interests have gotten involved and there are now screens upon screens of entry fields, check boxes, and fine print to consider. There are questions about ethnicity, special government programs, life changes, disability, pregnancy, adoption/foster care, immigration status, and whether you’ve been incarcerated or not.

Completing the family and household information was time consuming and confusing. It was not clear, until much later in the process, whether we should be including our adult son, who is still with us on our current policy until age 26. Be careful when entering income for yourself and your spouse. The ACA defines a special Modified Adjusted Gross Income (MAGI). For most people it’s their AGI, but there are some potential additions and subtractions. (Note that AGI includes your capital gains, even though, by virtue of your tax bracket, you may not be taxed on them.)

Then came the bugs. While doing research in another window, I received a timeout error from the government site. When I resumed working, the site crashed. Logging in again, I was able to pick up in the same section, seemingly losing just a few screens of data. Then came the final review: The system had added a fictitious wife for my son. (At least she was industrious — earning an annual salary of $40K!) When I then chose to ‘Edit’ my application, I was returned to the pertinent section, but without any of my previously-entered data. I had to re-enter every data value from there to the end of the application. And there were more bugs: a half-dozen smaller ones, along with a smattering of typos. Given the money and attention focused on this system, that’s embarrassing, and does not inspire confidence.

Eligibility

And I would need confidence, a lot of confidence, before I would cancel our existing retirement healthcare benefits in favor of Obamacare. I’ve long had trouble getting a crystal clear, authoritative opinion on whether we could or should consider that step. However, at least one issue — that of eligibility after dropping retiree coverage — is clearly answered on HealthCare.gov this year: “If you voluntarily drop your retiree coverage, you won’t qualify for a Special Enrollment Period to enroll in a new Marketplace plan. You won’t be able to enroll in health coverage through the Marketplace until the next Open Enrollment period.”

Finally, my application was done and the site generated a 14-page PDF “Eligibility Notice.” It was at this point I learned, conclusively, that you don’t include your sub-age 26 adult child in your family plan with the ACA. If they file their own tax return, then they must get their own health policy. A Marketplace “household” generally includes only the tax filers plus their dependents. So, just my wife and I would be eligible to purchase coverage under this application. But it didn’t say we would be eligible for a tax credit or cost sharing: That’s because I had declined to state that we would be dropping our retiree plan. Given the need to officially “sign” the application, and the dire warnings about committing perjury, I decided against testing that scenario. Surely there was a better/easier way to get a quote?

Window Shopping

After laboring through the complete application process, I discovered an option at HealthCare.gov to browse the available plans without logging in or completing an application. At the time of this writing, this is still available under Get Coverage / See Plans & Prices. You enter your zip code, income, and household members, and then get a preview of your potential choices. If you’re eligible for a tax credit to lower your monthly premium costs, you will see that reflected in premiums for the plans displayed. (Entering a hypothetical income of $40,000 produced a monthly tax credit of about $436.)

The government’s site offers some minimal capabilities for comparison shopping: You can narrow results using filters for premium, categories, types, companies, and programs. You can manually compare plan parameters such as premium, deductible, out-of-pocket maximum, copayments, and coinsurance. But the data is not listed in a tabular format, making this an arduous process. And there is no quantitative analysis, that I saw, of which plans might cost you more or less overall for different health care scenarios.

There were a total of 52 health plans available to us in our state. Bronze plans featured premiums of $105-$478/month. Silver plans were $258-$624/month. Gold plans were $385-$849/month. The single available Platinum plan was $884/month.

For comparison purposes I ran a similar query at eHealthInsurance.com, then called and spoke with with one of their agents. In federal exchange states like ours, plus a few others, you can supposedly buy the identical government-subsidized plans that are available from the federal Marketplace — though they didn’t appear identical to me on quick inspection. They also offer “private” plans, without a subsidy, but I didn’t evaluate those.

The eHealthInsurance site is a bit easier to use than the federal Marketplace: There are a few more filtering options, and a tabular comparison view which makes shopping easier. There is also a “Cost Calculator” that produces a “Total Savings” number for each plan based on various medical scenarios. But I couldn’t make much sense out of how to use those numbers, and the agent I spoke with didn’t use them either. She advised simply comparing deductibles and out-of-pocket maximums.

My Analysis

Given the poor comparison capabilities of the health insurance web sites, I took the plunge and analyzed the coverage offered by available plans using my own spreadsheet. In essence, I collected the premium, deductible, coinsurance percent, and out-of-pocket maximum for a subset of plans that seemed attractive to us. (Generally the larger insurance companies with more extensive provider networks.) I assumed we would receive a premium tax credit based on our projected income. Then I calculated what our actual, all-in health care costs (including premiums) would be for years in which we experienced one of six possible medical scenarios: $0, $1,000, $5,000, $10,000, $20,000, and $50,000 in covered medical expenses.

The end results were fascinating and constitute the most complete picture I’ve ever gotten of how health insurance works generally, and how it applies to us, personally:

The bottom line is that there is less economic difference between plans than you might expect, especially if you experience significant medical expenses. The ACA prescribes out-of-pocket maximum limits for all plans sold through the Marketplace. In 2015 that limit is $13,200 for a family plan. So, by the time you reach very high-expense medical scenarios in the $40-$50,000 range, most of the plans hit their out-of-pocket maximums and cost roughly the same overall. The difference between the cheapest and most expensive PPO plan was only about 18%. That’s a few thousand dollars in a bad year for medical expenses — probably not a deal breaker.

If you don’t experience high-expense medical scenarios, then the differences between plans are relatively larger, more a function of the premium than the out-of-pocket maximum. Which plan is more financially advantageous for you comes down to your exact medical expenses. If those expenses are low, then the Bronze plans — with lower premiums and higher deductibles — may offer the best value. If your expenses are higher, then the Silver or Gold plans, with relatively higher premiums and relatively lower deductibles, could be more optimal. Just remember that most of us, on average, won’t experience extreme medical expenses every year. If you optimize for that scenario, you could be paying more every year for something that occurs only occasionally.

So what about our situation? It turns out the Marketplace plans can’t generally beat our current retiree health plan, especially in the mid- to high-cost medical scenarios: $5,000 and above. (Some HMO plans would be cheaper than ours, but we don’t want the provider restrictions.) Our premium is roughly comparable to the Gold plans on the Marketplace, but our deductible and out-of-pocket maximums are considerably lower. So our plan is cheaper overall, most of the time. And our plan may have another advantage: the Marketplace plans are priced by age and will increase automatically, while our retiree plan is not: the rate is the same for all retirees and will only increase with inflation.

The bottom line for us? Since our current plan delivers better benefits, and since its survival doesn’t hinge on the balance of power in Washington, we won’t be cancelling our retiree health insurance in favor of Obamacare any time soon.

And for you? Well it’s been more than half a decade since the ACA passed, and I still can’t write with confidence that affordable health insurance is easily available to those retiring before Medicare. If you have no other option then, yes, the Marketplace is available (during Open Enrollment) and working, for now. But the appearance of another Supreme Court challenge to the law means the ultimate fate of the ACA is still up in the air….

Verdict Ahead

As I’ve described, I’m not chomping at the bit to sign up for Obamacare right now. But my option to do so, and that of millions of others who need it much more than I do, could potentially disappear come June, depending on the outcome of a new court case.

The Supreme Court will be hearing arguments in King v. Burwell starting in early March. I’m neither a lawyer nor a politician, but I think most would agree the case is an attempt by the ACA’s opponents to overturn it on a technicality. The claim is that the IRS has illegally interpreted the ACA to provide subsidies to people in states that use the federal health insurance exchange. Without those tax subsidies, lower income citizens couldn’t afford the insurance they are required by law to have, causing the entire ACA program to unravel.

The King case was not expected to make it through the lower courts, but the Supreme Court took the unusual step of preemptively accepting it. That may indicate that a number of justices think the case has merit. But, previously, the Supreme Court supported the ACA, voting 5-4 that Congress had the constitutional authority to require people to buy health insurance. And there is recent news that the case could be thrown out early for technical reasons. Otherwise, a decision is expected by June….

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