Don’t Let Health Insurance Concerns Stop You from Retiring

Individuals who are continuing to work because they are concerned about the health insurance conundrum is a very real and common concern. However, this concern is not an accurate reflection of the facts on the ground.
financial planning Parsec Financial Planning - Fee Only Financial Advisor in Asheville NC Charlotte NC

Here is a hypothetical scenario: Let’s say Joe is 62 years old and works for a company that has great health insurance options at very little cost to him and his wife. Joe is ready to retire and spend more time pursuing other interests and passions, but he is afraid he won’t qualify for (or can’t afford to pay for) health insurance for them. Joe has plenty of resources to retire today, yet he continues to work because he’s concerned about the health insurance conundrum.

Does this sound familiar? As a financial planner working with clients who are trying to transition into retirement, this is a very real and common concern. However, this concern is not an accurate reflection of the facts on the ground.

How did we get here?

Historically, our health insurance has been tied to our employers dating back to one event – World War II. (The New York Times gives a fascinating walk down health insurance memory lane). In short, it all goes back to money. And if you tried to get coverage on your own, companies could exclude you for pre-existing conditions and other risk-related factors. So, if you lost your job or wanted to retire or start a business before age 65, there was a real risk that you may not qualify for health insurance. This all changed in 2010 with the passing of the Patient Protection and Affordable Care Act of 2010, aka, Obamacare or Affordable Care Act (ACA).

The main purpose of the ACA was to lower federal spending on health care while decreasing the number of uninsured. One of the strategies to achieve this goal was to create an exchange for individuals to shop for their own individual health insurance. These exchanges provided a marketplace where consumers can compare different coverage options and costs. And here’s the kicker: Under this new law, health insurance companies can’t refuse to cover you or charge you more just because you have a pre-existing condition, and depending on your income (not assets), you may be eligible for government subsides. This new requirement changed the game for all of us. Individuals who once had no options now have some. And for those who deal with existing health issues, you have a new life at least in terms of health insurance eligibility. And what about costs? Well the costs are coming down for the federal government.

So, what does this mean?

Well, for Joe it means he now has options as he doesn’t have to wait until age 65 when he becomes eligible for Medicare. He can go to www.healthcare.gov and enter a few pieces of information and he’s got a list of health insurance plans to consider. And most importantly, Joe is no longer tied to his employer and is free to move about the world uninhibited by the health insurance conundrum.

If you or someone you know is still slaving away at the salt mine just to maintain health insurance, please reach out and let’s further discuss.

Michael Baughman, CFP®
Senior Financial Advisor

Share:

Recent Posts:

How To Evaluate Taking on “Fun” Debt

Personally, there is nothing more relaxing and exhilarating than being on a sailboat with a 15-knot wind on your beam (side), listening to the soft sounds of water splashing against the bow and using wind energy to propel the boat forward.

Tax-Loss Harvesting Amidst Market Turmoil

Market declines like the one we are currently experiencing present great opportunities to take advantage of cheaper asset prices. Almost everyone with a taxable account should be harvesting tax losses during times like these.

“What If” Contingency Planning

We want to ensure you are thriving, as living a healthy and successful life is truly priceless. Of all the steps that can be taken toward financial security and peace of mind, planning our own death and incapacity is the least popular. Life goals dominate our consciousness, and these goals are often about ourselves. Estate planning is not as much about us as it is about the people and things that we love.

Recent Quarterly Newsletters:

Thrive By Ensuring Your Loved Ones Are OK Edition

Our Q3 2022 newsletter focuses on how to thrive by ensuring your loved ones are OK. In it, we have created an eight-page fillable guide you can create for loved ones to follow after you pass. We also provide other guidance on estate planning, caring for aging parents and preparing for a potential disability.

Thrive by Learning and Growing Edition

Read our Q2 2022 newsletter on how to thrive by learning and growing. CEO Rick Manske reflects on graduation season and what this time of achievement and change means for students and loved ones. CIO Bill Hansen writes about education savings; President Harli Palme writes about tax savings related to college expenses; Portfolio Manager Nancy Blackman cautions about hidden costs of college. Advisor Charles Thompson outlines why it’s important that we value and prioritize travel. Advisors Judd Meinhart and Hilary Daniel write about job transitions and what to do with your 401(k) and new benefits. Advisor Neal Nolan ends with 10 ways to celebrate Independence Day and we highlight announcements across our firm. We hope you enjoy this edition!

Recent Whitepapers:

Stay Up To Date With Parsec

Sign up to join our mailing list and receive quarterly newsletters, whitepapers, news, and more right in your inbox.
Scroll to Top

Not a Client But want to receive updates?

Please sign up to join our mailing list and receive our latest news, thought leadership content and invitations to upcoming webinars.