When I retired at age 62, my employer’s retiree plan was too expensive. I’ve been going without, hoping to make it until 65 when I’ll get Medicare. With all of the talk about Obamacare, I started wondering if any changes take place with employer insurance on retirees. If so how and what?
Counting the months to 65 in Georgia
Dear Counting the months to 65 in Georgia,
The health reform law itself won’t change retiree health plans directly. Employers are not required to offer a retiree plan, or to make certain retirees eligible for a plan. The law has a lot of detail about active employees who work more than 30 hours per week, but there are not comparable rules for retirees.
Nevertheless, the law will have an indirect impact on employer-sponsored retiree plans and on non-group “individual” plans offered to people who have retired.
In your state, Georgia, the health insurers did not have any rules about how much they could charge non-group customers. So, for example, they could have charged a 60-year-old person ten times as much as they would a 25-year-old person. (I’m not saying they actually did charge ten times as much, just that there were no limits set by state rules.) Health reform limits the rate span from youngest-to-oldest to three-fold, meaning that the oldest customers will pay only three times as much as the youngest adult customers.
The age-rating rules are expected to lower costs for older people, and raise them for younger people. You may get a pleasant surprise when you look in to buying your own plan on the health insurance exchange.
Health reform also does not allow the insurers to charge people more who are ill or have ongoing medical conditions. This already was true for group plans, but now it applies to non-group or “individual” plans too. These are called “pre-existing conditions”. Georgia health insurers could refuse to accept a person, based upon his health; or, they could charge the person a lot more of his insurance. Both of these options disappear with health reform. Insurers will have to accept all comers and cannot charge more for pre-existing conditions. In addition, the plan has to pay for pre-existing conditions.
The pre-existing condition change will lower your rate in 2014, if you had an illness and your insurer was surcharging you for it. Your rate may go up, if you were healthy and your insurer was charging you based upon your good health.
Last, health reform helps people buy insurance and/or pay for co-pays and deductibles. These subsidies are based upon your income, which may be lower now that you have retired. This will help make plans more affordable for people of all ages. When you go to the health insurance exchange, you will find information about these subsidies and the “navigators” or your insurance agent can help you apply. Georgia Health Options, published by Coverage For All has information about plan options, along with names and telephone numbers. You might find it helpful.