As Baby Boomers retire, we receive a lot of questions concerning health insurance options prior to Medicare (age 65). Insurance through the exchange, i.e. Obamacare, is by far the most confusing and where we receive the most questions.
There are a lot of moving parts that have to come together to get the most “bang for your buck” out of these policies. If taxes, retirement income and the insurance application are coordinated together, you can potentially save hundreds of dollars per month on your premiums, which obviously makes these plans appealing.
Obamacare is priced based upon your income. The higher your income, the higher the cost. Premiums are reduced by a subsidy based on your level of income. One of the most confusing parts of Obamacare is making sure you are receiving the correct amount of subsidy. If you claim a large subsidy when you should not have, you are required to repay the overpayment when you file your income taxes.
We have done a lot of planning around structuring income in early retirement years to get the greatest subsidy. We have also worked with many clients that are told they qualify for a large subsidy (low monthly premium), when in fact they do not. Furthermore we have noted that the subsidy listed on the exchange may not be accurate.
As we look for planning opportunities to get your premiums lower, we review your income along with your taxes to make sure that you receive the correct subsidy.
Outside of Obamacare, there are still other options like COBRA, Faith based insurance or traditional insurance. Each of them have their own unique positives and negatives. Make sure you meet with us prior to making this decision so we can go over how each of these would apply to you specifically. This is a major decision and we are here to help you make sure you understand your options to make the best decision.