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Rising Health Insurance Costs Trouble Early Retirees

Early retirees are facing higher insurance costs and higher deductibles come 2018.  About 20 million Americans buy health insurance in the individual market, the one significantly altered by President Obama’s Affordable Care Act (ACA). These early retirees know that an unexpected illness or medical event will decimate them financially.

For this age group, typical insurance plans cost about $1400 a month with a $4500 deductible. Many insurers are raising premiums by double digits, in part because of the Trump administration’s decision to stop payments to insurers. These payments would cover the discounts they are required to give to some low-income customers to cover out-of-pocket costs.


Insurance: Costs Continue To Rise

Early retirees receive no government subsidy, which comes in the form of an advanced tax credit, when they buy insurance. The subsidy is available to people earning just under $65,000 per couple.

Premiums vary widely by state. Overall, premiums rose an average 22 percent nationwide in 2017. And they are forecast to additionally rise between 20 and 30 percent overall for 2018.

In an analysis released this week based on insurers’ rate submissions for 2018, the Kaiser Family Foundation found that individuals and families that don’t qualify for a subsidy but are choosing plans on the federal marketplace face premiums 17 to 35 percent higher in 2018, depending on the type of plan they choose. These substantial premium increases two years in a row could lead fewer people to buy coverage.


Insurance: Current Statistics

Rising health insurance costs and higher deductibles are already increasing the number of uninsured people. The percentage of uninsured pre 65 year-olds ticked up from 8 percent in 2015 to 10 percent in the first half of 2017. In 2013, the figure was 14 percent.

Only 25% of companies with 200 or more workers offered any kind of coverage to early (pre-65) retirees in 2017 compared with 66 percent of firms in 1988, reported the Kaiser Family Foundation. And the vast majority of small firms never did offer such coverage.



Health insurance legislation is currently a hot topic in the Congress. Early retirees and seniors are keenly watching, waiting, and hoping for lower insurance costs and deductibles.

Stay tuned.

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