A Retiree Looks at the Affordable Care Act

I received my retiree health benefits enrollment package from my former employer in the mail day before yesterday.  After hearing all the doom and gloom about rising costs I was pretty nervous opening the envelope.  Turns out the cost of our total coverage – pre-retirement medical for me, Medicare supplement for my husband, and dental insurance for both of us – will go up 2%.  I can live with this.

But is there a better deal out there?   My premium for a high-deductible plan with a Health Savings Account (HSA) will be $713 a month.  This is the full premium for employer-based coverage for retirees – which by definition are a high-risk pool.  I am the (relatively) young, healthy person paying into this pool.  What would I pay for the same plan on the new health care exchange?

My current plan is not available on the exchange in the state of Utah.  So while I would have liked an apples-to-apples comparison, the best I can do is look at similar plans. 

As a reminder, the healthcare exchange offers four plan Tiers. 

                Bronze – plan pays 60%
                Silver – plan pays 70%
                Gold – plan pays 80%
                Platinum – plan pays 90%

With the high-deductible/HSA plans, the plan starts paying after the deductible is met.  These plans are only offered on the bronze and silver tiers.  The lowest premium of the bronze plans is $329 per month; the highest premium for the silver plans is $502 per month.  The higher the premium – the lower the deductible.  The silver plans come closest to what I have now. 

Just for fun, I also researched what my current insurance dollars would buy on the exchange.  The highest priced platinum plan is $622.75 per month.  So the answer is yes, I could get a policy with a lower premium on the healthcare exchange.

But I won’t.  Premiums are not the only thing you should consider when evaluating a health plan.  You also need to do the math.   Look for the plan that will give you lowest total health care costs, including premiums, co-payments and co-insurance, and out of pocket maximums.

This became very clear when I researched Medicare Supplement Plans for my husband. Here in Utah there are eight available plans that cover both health and prescription drugs.  Of the eight, two have no monthly premium; the others have a much lower premium than what we pay for the Medicare Supplement offered by my former employer.  But wait!  How much will the copay on his prescription be?  About $450 a month, as opposed to the $28 per month we’re paying now.  And – what is the annual out of pocket maximum?  They range from $6700 for the no premium policies down to $2500 for the highest premium policy.  Our current plan has an out of pocket maximum of $500

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I can’t cover my husband through my former employer unless I am also enrolled.  So I will choose to pay more for my health care in exchange for my husband paying less for his.