Health Insurance In Retirement: Unsolved

I’ll admit it.  We did it.  It’s true.

We retired without a clear plan for health insurance in retirement.


This post was inspired by a note from a longtime reader, who is on the brink of an early retirement and is wondering what to do about health insurance in retirement.  Here’s what his wife wrote:

“…He said you guys were pretty much on the same page but did have questions about how you handled private insurance.  Do you have anything you’ve written you can send me?”

My answer to that e-mail was “Not Yet”, but it spurred me to finally write this post. Today, I’ll share what we’re doing about health insurance in retirement.  Plot Buster, it remains an Unsolved Mystery.

Our plans for health insurance in retirement are Unsolved. We retired anyway. Here's why... Click To Tweet

Delaying Retirement Due To Health Insurance

I’ve had a lot of folks tell me that they’re holding off on retiring because they don’t have retiree medical insurance.  In my humble opinion, the lack of a clear health insurance option is not, in and of itself, a sufficient reason to delay retirement for everyone.  For many folks, it likely makes sense to delay retirement (e.g., those with insufficient financial resources to pay for expensive private insurance).

However, for many others, not having a clear plan for health insurance in retirement is an obstacle which can be overcome.  At least I hope that’s the case, since we’ve been retired for 100 days as I write these words, and we still do NOT have a clear plan for health insurance in retirement.

In spite of this gaping hole in our retirement plan, we retired anyway.

Personally, I don't think the health insurance issue is sufficient, in and of itself, to warrant continuing to work. Click To Tweet

Important:  Health Insurance is one of the biggest issues you’ll need to resolve as you face retirement.  Do NOT make a decision based on what you read in a blog post.  Spend time researching this topic, and become knowledgeable enough on the topic to make your own decision. Do NOT assume that the path we’re taking is right for you.  This is a huge risk area in retirement, and a decision only you can make.  I’m sharing our decision only for the sake of demonstrating how we decided to deal with this critical retirement planning issue. We could certainly be “wrong” (I really, really hope we’re not!).  Whatever you do, I strongly urge you to NOT forgoe medical insurance under any circumstance.

Why We Retired Without A Health Insurance Solution

I’ve been thinking about this post for a long time, but I’ve struggled with what to write.  Today, I’m taking the plunge, and explaining why we retired without a clear plan for health insurance in retirement.

When I began planning for retirement 5 Years Prior To Our Retirement Date (see The Ultimate Pre-Retirement Checklist), my employer was still offering retiree medical coverage, which my employer paid for.  I knew these plans were dying quickly across Corporate America, and decided to assume our Corporate health insurance in retirement plan would be discontinued by the time I retired.  I built a line for health insurance in our Retirement Spending Plan and plugged in a number from thin air.

Unfortunately, it was the right assumption to make.

Shortly after I started my early planning for retirement, my employer announced they were discontinuing the retiree medical insurance benefit.  While many others freaked out about the announcement, I just kind of nodded my head and thought to myself, “Yep, I knew that was coming”.

Lesson Learned:  It’s good to make conservative assumptions in your retirement planning.  Better to assume to worse, and get a surprise to the good, than to plan for the best and have a negative announcement throw your plans off track.

Insurance Is Only A Number (Or Is It?)

Since that first assumption 5 years ago, health insurance has always been in my view “only a number”.  A cost to be assumed, not unlike the myriad other costs we have to ensure our resources are capable of covering before we make the decision to retire.

Health Insurance is a major cost in retirement, make sure you're assuming the worst before you conclude you have enough money to retire. Click To Tweet

While many articles point to the fact that the “average couple can expect to spend $275,000 on health care expenses through their retirement years”, I found that kind of statistic difficult to deal with when trying to determine When Can I Retire.

More important to me was the annual cost of private insurance for an early retiree.  As I started to research the annual cost of private health insurance for early retirees, I was shocked.  My research led to the writing of “Obamacare Is Falling Apart”, where I cited the problem of many insurers pulling out of the marketplace and annual cost increases of 10%.

Based on my research, I assumed we’d be paying $2,500/month for health insurance in retirement, inflating at 5% annually.

Due to my pension, we’ll not be eligible for any Obamacare subsidies and will be required to cover the full cost of private health insurance in retirement.  I fear my assumption may be too conservative, but at least it’s a number.

Or Is It?

The biggest concern I have is not the cost of insurance (it’s only a number, right?), but rather the availability of private health insurance in retirement.  We’ve covered the assumed costs in our retirement spending plan through our Retirement Investment Drawdown Strategy (if we didn’t, I wouldn’t have retired, and would have chosen to endure the One More Year Syndrome for at least another year).

Availability, however, is another story.

The two biggest risks we face are: 1) further exits from the insurance companies in our area, or 2) experiencing a serious illness before we enter the private marketplace which may bring up the infamous pre-existing condition constraint (an area of likely legislative revision before we’re in the market).

We’ve chosen to accept those risks, and are focusing our first few years of retirement on maintaining a healthy lifestyle, getting plenty of exercise, eating right and praying.  I’m taking Spin classes 3X/week and Barre Above 2X/week at our local health club, which I’m also supplementing with frequent swimming and mountain biking now that we’re living full time in the mountains.  Now that we’re retired, we’re also taking time to cook more healthy meals, and are focused on eating right. Control what you can control, right?

What Are We Doing For Health Insurance Now That We’re Retired?

Given the focus which the Affordable Care Act is getting in Congress and the reality that it will likely be a moving target for some time, we decided that it wasn’t worth it for us to continue working until we had an answer to this puzzling mystery of health insurance in retirement.  June 8, 2018 was My Last Day Of Work.  I’m Retired!!

We’ve developed a plan to cover the first 30 months of our retirement, and we’re hoping that the market sorts itself out by the time we finally have to make the plunge into the health insurance market in January 2021.

We had the financial means to retire, and we decided that the Freedom Of Retirement was worth the risk that we’d be able to find health insurance once our 30 month plan expired.

COBRA – 18 Months (July-Dec 2019)

In August of this year, I made my first payment of $1,067 to our insurance company for the continuation of COBRA benefits (maintaining the same benefits I’d enjoyed as an employee, but covering 100% of the costs myself).  I’ll be making this payment monthly through December 2019, and enjoying a fine health insurance in the process.  Ironically, COBRA was once viewed as an option of last resort, but many folks are now deciding (as did we) that it’s the best insurance available for the money.  Too bad it’s only available for 18 months…

Retiree Health Insurance –  12 Months (Jan-Dec 2020)

As I mentioned earlier, my employer previously had a retiree health insurance plan which was discontinued several years ago.  Fortunately, they decided on a long lead time before they discontinued this plan, and I’ll be able to catch the final year of the benefit before it expires.  It’s slightly subsidized by my previous employer, but the subsidy is fixed as the annual cost continues to increase.  Therefore, our annual premium for 2020 will be approximately $1,500+ per month, but at least we have an option which provides full insurance coverage for one more year at a cost below our assumption of $2,500 per month.

2021 – When Unsolved Must Become Solved

For now, we’re enjoying our Freedom (immensely), and keeping an eye on the retirement health insurance dynamics.  We have some time to sort things out and we’re confident that we’ll find a solution.  I’ll be turning 58 in 2021, and will have to cover 6+ years of insurance through the private marketplace before my wife and I are eligible for Medicare.  We’re well informed and far from naive about the issue.  We’ve recognized our potential risks and made a conscious decision that the benefits of an early retirement outweighed the risk of health insurance in retirement.

At this point, the options for 2021 appear to be:

The Affordable Care Act:  While it’s messy, the reality is that The Affordable Care Act has shone a light on the whole issue of health insurance in retirement.  The wheels in Washington are grinding, and we’ll be watching closely to see what evolves over the next 2 1/2 years

Private Insurance:  Regardless of what happens with the ACA, private insurance will likely continue to be an option in some form.  We’ve bookmarked the helpful sites at and to give us access to private insurance options, and I’ve had some discussions with my insurance guy about resources he has available to assist in the evaluation of private insurance options.

Health Sharing Ministries:  Many early retirees have pursued health sharing ministries due to their markedly lower cost than “traditional” insurance.  There are tradeoffs, but these appear to be a viable option.  We’ll continue to monitor developments in this space, and will likely evaluate this option as a potential 2021 solution.

If all else fails, the reality is that I’ll only be 58 years old in 2021. Worst case, I could always go back to work, right? (Ugh, the thought).  Seriously, there are many part-time jobs which provide health insurance, and it’s an option that we should always leave on the table.  I had an interesting chat with a 60-something-year-old recently.  He’s driving a bus for the local school district, primarily for the health insurance benefit.  “It’s GREAT insurance”, he says, “and I get up early anyway.  They’re desperate for drivers, you should give them a call”.

Let’s just say I’m not making that phone call yet, but I did make a note of it…

What Other Early Retirees Are Doing For Health Insurance

As part of my ongoing research into this issue, I’m keeping a close eye on what other early retirees are doing for health insurance in retirement. I’m maintaining a Google spreadsheet with links to articles that other bloggers have published on how they’ve solved the health insurance puzzle, and I’ll continue to track this topic as we approach our 2021 decision point.  I’m paying attention, and I hope to learn from others who have walked this path ahead of me.

** If you’ve solved your health insurance in retirement puzzle, please leave a comment on this post.  I’ll refer back to this post as we approach the 2021 decision, and may reach out to you to see how your “solution” is holding up.

A Note On Medicare

A final note regarding Medicare.  Obviously, this post is focused on health insurance solutions for early retirees.  Once a retiree reaches 65 years of age, Medicare becomes the obvious solution.  It’s a huge topic, and well beyond the scope of this post.  If you’re interested in Medicare, you’ll be happy to know that I’ve lined up an expert on Medicare issues who will be publishing a guest post on The Retirement Manifesto in the coming months.

Stay tuned.


The decision on when to retire is filled with uncertainty. How will your investments perform?  What if that inevitable bear market raises its ugly head? How much will you spend in retirement?  What impact will inflation have on your spending?  What should I do about Long Term Care?

In my view, health insurance in retirement is nothing more than one more uncertainty to deal with.  Sure, it’s a BIG uncertainty. Regardless, the “health insurance in retirement” issue is not necessarily a reason to continue working if all other pieces in your puzzle line up.  You, however, may disagree, and I’m fine with that.  Just realize that nothing in life comes without risk.  Heck, even continuing to work comes with risk (see Will You Be Forced To Retire Early).

Retirement is about recognizing these uncertainties, continually gaining knowledge on issues of particular importance to your situation and evaluating all of your options. Ultimately, each of us must make an educated decision about what we’re going to do.  For those areas where an immediate decision isn’t required, put a system in place to continue to monitor developments so you’ll have all of the facts at hand when you do need to finalize your decision.

Only you can decide when you’ll retire, and what risks you’re willing to accept.  In our case, we retired in spite of a foggy outlook on how we’re going to solve our health insurance in retirement puzzle in 2021.  At this point, I have no regrets.

I hope it stays that way.

What About You?  Are you continuing to work for the sole purpose of maintaining health insurance?  If you’ve decided to retire early, what are you doing for your health insurance in retirement?  Finally, am I nuts for choosing to retire without fully resolving the health insurance puzzle?  Let’s chat in the comments…



  1. This problem is why I stay semi-retired. We obviously have different risk tolerances in this area, and I respect (and am also a bit jealous of) your ability to take the plunge. It’s such a mess.

      1. Hi Fritz:
        Thanks very much for the quick response to my email on this topic and pointing me to the blog. I have a few more milestones to achieve , like getting our son through college, before retiring but do hope and am pursuing an early one. Your blog and all the comments are very helpful. This is one of those areas that politicians can’t seem to solve or let private insurers solve. So I do agree with many respondents that whatever the plan is, base it on what’s available and not on a promise that may not meet fruition. If something better becomes available, great. I will continue to research this topic as well. If I come across something meaningful and promising, I will share it. Thanks again.
        Regards and thanks, Mike Enright

    1. The risk is there in every step. worried about health risks and making early retirement is not a good option. You can take health insurance plans which cover standard medical care with expenses of treatments and medicines. There are different policies and plans available for health insurance as Medicare plan G, Medicare supplement plan G and many more. Many of my colleagues enrolled in these plans.

  2. Younger folks with decades to live before reaching Medicare age really feel the crunch. But they’re also more employable than those of us on the other side of 50. So I hate seeing them stay in the work force when they’re FI, primarily due to health insurance (unless they have extenuating health circumstances).

    The penalty for not having ACA-compliant insurance is gone in 2019. It will be interesting to see if the private market begins to make better, more affordable plans although it won’t happen anytime soon. Some who work in insurance think it will never happen. There’s always Mexico.

    1. I left out a thought (no coffee yet). What I mean about younger folks being more employable is that if they take the plunge and quit the 9 to 5, they can get back in the workforce later if they find the insurance nut too hard to crack.

    2. Funny you mention Mexico, I heard a podcast a while back about a guy who gets all of his dental work done in Mexico, he swears by it. I don’t think I could bring myself to that extreme, but it’s always good to keep your options open!

  3. I did what you did, took Cobra for 18 months. Then we switched to a private high deductible plan for $1300 per month for the two of us. I don’t consider the health sharing plans reliable enough to stake my entire nest egg on. I retired with plenty of assets to cover the costs and since I like to work a day or two a week I earn enough to cover not only insurance, but all our costs. At $16k per year I consider health insurance to be an affordable bargain. We also have long term care policies. As far as returning to the work force full time, not going to happen. But if I wanted to it would be simple, I would just accept one of the job offers I keep getting. You mention part time jobs offering health insurance. Most companies only offer that to workers that work 30 hours or more per week. That’s nearly full time work. Great post, and good luck to both of us!

    1. I’m leaning your way on the health sharing option, Steve. Given that we have the money allocated in our retirement budget, I’d prefer to go with more “traditional” insurance and have confidence in the reliability of the insurance (that’s what it’s for, after all!).

  4. We retired at 49 at the beginning of 2018 and went with COBRA through the wife’s company. Our current cost through COBRA is about $1000 per month. November 2018 is when the company reevaluates their insurance options, who knows what they will decide and what that will mean for us nevertheless our COBRA runs out in June of 2019. We will be looking for a viable option over the next couple of months so we have continued coverage after November or June, whichever one forces us to move to a new solution

  5. I retired at 55 with no pension. My employer didn’t offer health insurance so we had MediShare, a Christian based health sharing program) which we really liked. The “premiums” were like $300 for us (healthy, no kids). Once I retired our income dropped to virtually nothing. The plan is to live off of savings until we’re 59 & 1/2. Because we can keep our income low we qualify for Obamacare. A $2,000 policy is costing us around $425 a month. I constantly monitor our projected taxable income, but I’m a CPA so it’s a no brainer. It’s an option for those of you in the same boat (as long as it exists). Then we’ll play it by ear. A little scary but it sure beats working!

    1. Kelly, I too will be retiring at 55 and living off savings. I’ll take Cobra for the first year but then re-evaluate and consider affordable health care due to low income. I’m paying rent now but when I retire I’m moving to a paid off home and have just been figuring my rent turns into medical cost.

  6. Instead of taking your pension, and spending over a thousand a month on healthcare, you could have lived on your taxable account and kept your income low. That would have allowed you to receive both premium and cost sharing subsides from the ACA. I also paid 18 months Cobra for my wife, received 18 months free from my employer, and then applied to the ACA. What would cost us 2592.00 per month is now zero with 150 ded and 2450 OOP max. Advanced planning for income control is the way to reduce health care costs at this time. This could all change in the future, but you have to work with what you can control.

    1. I looked at that option, Dan, but decided to go with COBRA since I retired mid-2018 and our 2018 taxable income would have disqualified us from 2019 subsidies, so I’d have been paying full COBRA prices until 2020 regardless. I would have to delay my pension until a 2020 start to qualify for a subsidy on a lower 2019 income, and I chose against that long of a deferral on my pension.

      1. Don’t forget that you can come off of Cobra and onto the ACA once you have your income under control. It is not too late to control your costs for health care.

        Best to you

    2. Self-employed M.D. retired a few months ago at age 63, so no Cobra. Will be shopping on Marketplace for individual plans until I am 65 and for my spouse for 5 years after that. Only 2 insurers in WA, Kaiser (nope) or Premera…$2300/month for both of us. We will be living on non-IRA investment income, dividends and interest, of about $180K-200K/year. I would assume that all the talk of manipulating your income to qualify for a subsidy and lower your health insurance cost does not apply to us?

  7. You mean you didn’t make a plan for healthcare for several years from now? Shame on you! 😂😉
    That’s the most frustrating part about healthcare planning in retirement, it feels like a year to year decision based on what the politaicl landscape is like. We can only wait and see.
    The PIE family is currently paying through the nose for COBRA ($1900 a month! Ouch!) but that’s just until the end of this year. There was really no other viable option due to retiring part way through the year. You know all about that!
    For 2019 we’ll be signing up for ACA. My calculations show that we should be able to get a reasonable plan for the family for around $500 to $700 a month. Cross fingers that remains true.
    It’s true that many folks point to healthcare as a reason not to retire, that and kids college costs. In many cases when I’ve talked with ex-colleagues about this it really is just lack of knowledge about how to live life away from the corporate paycheck and corporate health insurance.

    1. Good thoughts Fritz. As you know we are 15 months ahead of you. COBRA expires in 45 days and we will leap into the healthcare void. Being diabetic with a pre-exiting condition, as of now, no private insurance or the new short-term insurers will talk to you. We will start with a Florida ACA plan through BlueShield. We have found the Florida plans much better than Georgia likely due to the number of retirees in the state of Florida. We will test a Bronze Plan with good out of state coverage for our college kids still in school for the balance of this year and likely continue the same for 2019. Premiums in Florida for these plans are only going up modestly (4-5%). Then the waiting game begins to see what healthcare options materialize for the next 9 years before Medicare.

      The bonus of retiring at 53 was I am more healthy and physically active than I have been since high school. Our hope is while we may have to pay a high premium for healthcare insurance it becomes only that – insurance.

        1. 2018 is $1765 for 2 adults and 2 kids. Was paying $1966 for COBRA which included vision and dental. So I think the premium is about the same, coverage is about the same but the deductible will go fro $4500 to $7500

          1. Fritz, the 2 URL’s you have listed both have either ACA or ST plans. What would be the advantage of using this link vs. the Thanks for all your insights

    2. I think Mr. PIE and I talked about this issue when we met last year at FinCon. Not a bad plan for 2019, but you may want to double check on your qualification. I was under the impression that 2018 taxable income determines 2019 subsidies? Given that you both worked 1/2 year in 2018, it’s worth double checking. Happy for you and Mr. PIE, looks like your retirement has started off well in New England!

      1. It’s complicated, I agree. But luckily qualification for 2019 coverage is based on estimated income in 2019. The source below of course walks you through looking at your most recent tax returns to estimate future income, but then goes on to talk about making adjustments due to expected changes.
        The additional complication is that if you estimate significantly higher or lower than what actually plays out, you need to report that information and potentially receive an additional subsidy, or owe for subsidies you shouldn’t have received.

        I’ll be digging further into all of this as enrollment time gets closer!

        1. Great to know! Makes me think about potentially delaying my pension one additional year to qualify for 2019, tho I know it’d only be a one year play (and that one year is already covered by my available employer retiree health care, tho at a much higher cost).

  8. Great article! I appreciate hearing how/why you made the decision you did for health insurance. I’m also grateful for the private insurance links which I plan to review soon.

    I looked at health insurance as just one more piece of the puzzle in retiring early. I didn’t let it scare me into staying longer. It’s been an item on my list of expenses for the future from the first day I started planning. I do not have a company option (other than cobra) but I’ve had private health insurance before and am confident I could survive on again.

    I’m currently paying rent for an apartment while I work. I’ll retire to a paid for home and just plan to move the rent to insurance. The upside of being single is I only have to care for myself. The downside of being single is there is no one else to share in the cost. =)

    Another insurance option I’m considering is something through AMAC.

  9. our company just rid itself of the retiree health benefit and it’s a gray area weather or not i’ll qualify. i agree with dan who wrote that income control could be a key. could you have deferred the pension and deflated annual income on paper? i don’t know what we’ll do when the time comes but am waiting on a pension/healthcare buyout offer which i will likely take.

    the last i read, which was encouraging, was with the ACA you ought not have to pay more than 10% of annual gross income for a plan. i hope that’s the case when we peace out. stay fit and healthy, fritz. thanks for writing these kinds of things for all of us who are getting close.

    1. Freddy, see my response to Dan above on pension deferral. I hadn’t heard about the 10% guideline, I like the sounds of that. I suspect we’ll go through many false starts and rumors before anything becomes stable in the health care arena. Thanks for the kind words, happy to know I’m helping folks on their journey to retirement!

  10. Good post, Fritz. I made the same plunge without having all the answers, and it is a concern. But with all the unknowns about future healthcare legislation, any plans you make will likely have to change anyway. I also took full advantage of COBRA for as long as I could before entering the insurance marketplace (what fun that is!). One thought you might add is how to use your HSA if you have one. You can’t use it to pay premiums, but it can be used to cover any co-pays and out-of-pocket costs. Could it help bridge the gap to Medicare?

    1. Funny you mentioned HSA – I had that thought as I was writing, but felt the article was getting too long already, so left it out. It certainly helps fund the costs, thanks for adding it to the discussion. Hope life is going well for you in Michigan!

  11. Thank you, Fritz for your article and links! Certainly helps us in our pre retirement planning and the unknown of private health insurance. Completely agree to live a healthy lifestyle. We all have control of our own health and eating well and exercising will go along way to keeping health care cost down.

  12. First off, you have to be insane to be without health care in this country for even a nanosecond. One medical issue can lead you very quickly to bankruptcy. There is NO way in hell I would ever take that chance. Period! Your lifestyle would quickly vanish as would your home should you become ill. And for what? So you didn’t have to work???
    Another thing that people don’t realize: they think the solution to their problems is to earn more and more money. Not so. Sometimes, the less you earn, the better off you will be. Hey! I didn’t write the laws in this country. I just live by them. People are fools if they want to be millionaires. You become a target. No thanks.
    Our actual low income qualifies us for great medical care at an affordable price of $20 a month. That’s it. No deductibles. No co-pays. Nothing. Hubby works 2-3 days a month. He’s 61. He’s lucky to get that much work at all. A successful retirement is based on being properly insured for everything: home, car, health etc. If you think eating healthy is going to give you good health, I have a bridge in Brooklyn I’d like to sell you.
    I wrote about this exact problem, the other day. Here’s my link:

  13. We’ve been using the ACA and subsidy since it when live in 2014. My husband retired in 2013 and we bought a castastrophic plan first, which got eliminated. It was $500/mo and covered nothing unless we spent over $5000, then it paid everything. I want that plan back and like Mrs. Groovy, I’m hopeful that as the penalty is removed, that there are more options like this returned to the marketplace.

    While we are grateful for the subsidy, it is like the “golden handcuffs” situation. We are stuck with lots of money in IRAs that we can’t do Roth conversions on without going over the subsidy line. Currently we get a subsidy of $1700 and are paying $2.42 in premium with income estimated at $53,000 (ages 59 and 61). Of course, that’s a Bronze plan and if we actually use it, we pay some hefty copays, which is similar to the desired catastrophic plan for us.

    Thanks for that Google spreadsheet. At some point I will come up with a post to explain our experiences and it would be an honor to be added. For now, we are too busy traveling and enjoying the good life, which is what good health is all about!

    1. Hey Susan! I’ve heard others calling for a “catastrophic” plan, and I agree it would be a nice option in the new regulations. Fingers crossed!! I’ll look forward to your post, and will add it to the spreadsheet (tag me when you post it, please? Thanks).

      1. We need to watch for the rules with regard to catastrophic plans. I don’t think they would be considered ACA-compliant. So if you have a break from an ACA-compliant plan and wish to go back on a compliant plan, it’s possible there could be a waiting period — meaning you pay for benefits but can’t use them for the first X months. Many dental plans have waiting periods now.

        Also, just FYI for anyone considering the COBRA route. You can go from COBRA to an ACA plan either when your COBRA benefits expire, or during open enrollment. If you’re on COBRA and decide the premiums are too expensive, you are sh*t out of luck with regard to ACA until the next open enrollment period.

  14. I came back to work an extra year due to the uncertainties of what health care will look like in the future.
    This is especially true of preconditions as I have one. My older brother’s employer went out of business so he did not have the option of Cobra and the ACA was not around then.. He had a small cancer removed 30 some years ago and was cancer free. He was refused insurance and put in the high risk pool and was paying something like $2,000 a month until he found a new job. I will use COBRA for 18 months and have 8 months of whatever is out there before I reach 65. I enjoy my work so it is not bad. I just need to be patient.

    1. I have genuine empathy for those facing this chaos with a pre-existing condition. It’s a difficult challenge when you’re “healthy”, I can’t imagine having to face the pre-existing obstacle on top of everything else. Patience is a virtue, good luck on your journey!

  15. Everyone has very different risk tolerances, and I applaud your confidence, but don’t share it. 🙂

    DH reached Medicare eligibility this summer, which was my stop date. I’m a few years younger, and luckily still have Retiree Medical, for now. I feel like we reduced our risk by 50% by getting him on Medicare. I’m hoping my megacorp has mercy and gives us a big heads up before they yank the rug out from under us.

    I just hope healthcare gets ‘fixed’, because us early retirees certainly aren’t the only ones suffering as the squabbles continue.

  16. I’m curious as to why you think healthshare ministries are more of a risk than traditional insurance? My girlfriend and I are on Liberty Healthshare at $200/mo each and it frees us to make as much income at part time jobs and with Roth Conversions as we like without the concern of losing a subsidy. Liberty publishes their financial situation and they raise the contributions if needed – I don’t see how this is any different than traditional insurance.

    So what if they go belly up, we just go get another insurance or health care ministry at that point. I suppose it’s possible that they could go belly up right after we just had a big expense but come on, two things at once? That’s so unlikely it’s silly to worry about it – it’s like never leaving your house because a drunk driver may hit you. Live a little!

    1. Lance, good to know you’re happy with Liberty, also one of the programs we’re looking at. I need to do further research, but my primary hesitancy is due to my (perhaps mistaken?) understanding that they can reject a claim if they disagree with the cause or any other reason. There are also caps on the payouts, so a major disease (e.g., cancer) is a concern. I’m not getting any younger, and have had cancer in the family. Thoughts?

      1. A point that isn’t being shared here about Medishare or Liberty health sharing programs is that health care providers don’t have contracts with these non-traditional payers. According they don’t have to accept Liberty’s or Medishare’s payment as payment in full. Often the health provider will not accept assignment, return the payment to Liberty or Medishare and bill the patient 100% of the medical bill. The patient can obtain their health cost share reimbursement from Liberty or Medishare and use it to offset their medical bill. However the reimbursement is typical very low so the patient, rather unknowingly can be stuck with a substantial liability.

        These programs also coach their members to claim they don’t have health insurance and thus ask for the discount health care providers, must by regulation, offer to uninsured patients. However, it becomes semantics since individuals participating in these programs have “health care coverage”, coverage that is sufficient to exempt them from the penalty under the ACA.

        There are also various concerns about coverage. There are limits for pre-existing conditions, preventive care is not covered and mental health benefits are limited.

        There is a reason why their monthly contributions are so small relative to traditional insurance.

        I could go on but texting is not my favorite past time. Everyone needs to do there own research. However most of the members in these programs often equate it to comprehensive health insurance which it is not.

        1. Jeff, when I talked to a local insurance broker, he proposed a package of a sharing plan plus a “limited medical” plan such as + additional riders for a defined list of expensive conditions like heart issues. And yes, essentially being a “cash pay patient”, negotiating with all your providers and crossing your fingers. (Since we lack any decent ACA providers/networks here, as I wrote in another comment.) Sharing plans do not cover Rx’s, and they are funky about pre-existing conditions… because they are not true “insurance”. This 3-part package sorta looks like corporate insurance, but it obviously is NOT.

          As I see things, if you insist on high-quality health insurance, and you don’t have a worthwhile ACA in your area, early retirement is only possible if you can get retiree coverage from your employer (uncommon, and subject to cancellation), or if you’re a military or government employee (it’s bankrupting our cities, can you count on it?), or if you get benefits from a spouse’s plan by whatever means.

  17. Thanks for the post Fritz.

    I am one of the ones that has decided to keep working to maintain health insurance benefits. Mrs. r2e has a pre-existing condition which will be a long term health issue.

    I was part of a reorganization at work which put us on Cobra for about six months. I recently took another job that has health insurance, though at a much higher cost than I used to pay. But our financial plans can absorb this.

    Health insurance has been top of mind in our planning. We know we have the money to cover the cost of coverage, even with the pre-existing condition – something many others may not have the luxury of.

    I have been following blogs and other forums to stay on top of options like medical sharing, ACA plans, private plans, etc. The whole ACA thing is a challenge and with the 2019 change coming up that market place will see changes.

    Your disclosure in your post is spot on – every case is unique and not every situation will work for all.

  18. I retired this year at age 57 and enrolled with Samaritan Ministries which is a Christian sharing organization. We pay $500 to others in need. It has worked VERY well so far. We cover expenses up to $300 and when it exceeds that amount, file for a need-share for reimbursement. Using Good Rx for prescriptions saves us a ton of money too. We use the Healthcare Blue Book to determine the average cost of procedures which is very helpful. So far, so good!

  19. Thanks for writing this post. I would like to retire early but I was diagnosed with a chronic leukemia 7 years ago. Although it is completely controlled through drugs, I currently have to take those drugs for the rest of my life. I have nearby access to a top cancer center with some good specialists that understand my type of leukemia. Unfortunately, the cancer center and the specialists I have seen since the beginning are not part of any of the marketplace plans. So by leaving my workplace insurance I would lose access to the doctors I have seen all these years.

    As you said so well “The biggest concern I have is not the cost of insurance (it’s only a number, right?), but rather the availability of private health insurance in retirement.” With my situation I feel the same way. Insurance costs is a number that can be budgeted for (or reduced as long as I keep our income low enough for ACA subsidies). But there is no amount of insurance I can pay on the marketplace that currently let’s me stay with my specialist.

    I am inching closer to wanting to retire, but still haven’t gotten over the hump of having to change doctors. I wish it were much simpler here!

    1. Dragon Guy, so sorry to hear about your leukemia. The good news is you have great specialists available (for now), but I can certainly understand how stressful that must be for you as you evaluate your options. Definitely seems the path you’re on (continuing to work) is the right one for now, let’s hope a plan opens up that continues to allow access to your specialists! I wish it were simpler, too…

  20. Hello Brother Fritz from Clayton. Awesome scenery here and unbelievable “falls”. We DID NOT go to the Tallulah Gorge floor!
    I think you have a “PLAN”. You’re not “out there” with ZERO coverage. You’re a very intelligent man, and I am confident you and Mrs. are a great team.
    Most importantly – you are praying, and I’m sure without ceasing. It will all work according to His plan!
    I look forward to that day for coffee!

    1. Sorry we’ll miss each other on this trip, Brother Mark!! Funny, I’ve only been to Tallulah once, and we didn’t go down to the floor, either (didn’t have enough time on our visit, something I hope to rectify in coming months!). Prayer is definitely a part of it all, isn’t it! I’m looking forward to that coffee, as well. Enjoy your time in North Georgia!!

  21. The fear of something bad happening! This is one expense category that I refuse to compromise on. For us, it has to be a tier1, named provider. The last gap year I took (2015), it was the perfect storm & we ended up spending >$35k on health. So my worst case scenario means $3k per month budgeted for health. Count the years to 65 (for both of us that is now 7) and that means we set aside ~$250k for this bridge. Now for the good news, ACA plans still cheaper than that & the beautiful plan that works for us is the local community college. One of us takes a class & through that we can get family coverage that not only saves us $$$, but is also equivalent or better than any group PPO plan we’ve ever had. We plan on it being yanked away any year, but every year it’s in effect just means we’ve over saved for this mandatory expense. It is a mess, but there are many good (although expensive) options. I did write a piece on this over two years ago (our Cobra expense was much more than yours!!),

    1. Community College, what a great life hack to solve the insurance problem! Who knew? (Besides you, obviously!). Well played. Interesting that you’re “Tier 1, no compromise”. I’m leaning that way, too, but there’s been a lot of positive comments from folks in this post who are happy with Health Sharing ministries. Different strokes for different folks, I guess that’s why it’s called Personal Finance, right? I’ll have a look at your post, thanks for sharing.

  22. My wife & I are 58 and we retired 5 years ago. We use the HSA high deduct plan and pay $1100/mo. We have been with Kaiser in southern Calif for almost 10 years. I do not think we have a availability risk because Kaiser is an HMO (insurance & medical provider all in one) and they just built a $300M hospital a couple of miles from our home. A bonus – our LTC program is the HSA account (now $100k).

  23. I have been retired for 5 years at 46 and had health insurance with a part time job (20 hours per week) That ended in 2015 and went on Obamacare. Made too much money the first year because of investment changes. Than in 2016, 2017, and now 2018 I have my investments situated to generate as little income as possible and 2018 I should have premiums covered 100% by ACA credits. I have a couple rental properties and they are positive cash flow but with the tax advantages they provide a low taxable income and my taxable account hold very few bond and mostly equity. My retirement accounts hold the bond portion. My objective is to watch income which is growing each year due to reinvestment of dividends and interest. I strongly recommend rental for early retirement for cash flow. I also only work 1 day a week (could work more if wanted or needed) but all earnings go into retirement funds (401K and IRA). Obamacare is fine and just as good as my employer’s plan which had a high out of pocket.
    If you are concerned about government messing up ACA vote Democratic in November.
    I have to agree with Cindi but you can have a substantial assets just position them correctly.
    I agree with Dan if you didn’t need pension use your taxable accounts first but I guess that can’t be reversed now. I thought I had a plan with part time work but like stated previously 30 hours a week is almost full time and I don’t want that much commitment in my life now.
    Good Luck in your navigation of health insurance.

    1. I just retired as self employed physician at 63, so no cobra. ACA gold plan will cost my wife and I about $2400 per month. We are living off our investment income of about $200K/year. Aside from owning rental properties as you mention, how can you manage your investment income low enough to qualify for ACA subsidies while still needing enough investment income to live on at one’s desired standard of living, which is part of what saving for retirement was all about?

      1. Doctor Bob, congratulations on your recent retirement! I have to admit that the strategy of reducing your income to qualify for ACA is outside my realm of expertise, though I’m sure you can find some relevant articles on the topic by doing some Google searches, or contacting others who have left comments on this post. Unless I choose to defer my pension for longer than I would prefer, it’s not a practical option for me. Good luck as you figure it out, and keep it all in perspective as you live your ideal life!

  24. Thanks for posting this. I’m in the same boat. My first Cobra payment is due October 1. Auto deduct is set up for $1601.00 every month. I’m covered under Cobra until December 2019.
    Currently looking at the private insurance sites that were posted above.
    We’ll also look at Obama Care (ACA) when open enrollment opens in November.

    One question, can I change my Cobra plan when the typical open enrollment period starts in November? I like Fritz’s payment a lot better than mine. I’d like to switch to a high deductible plan to lower the monthly premium.

    I was also going to talk with my insurance agent as a sounding board as well.

    Besides the health insurance issue, I’m thrilled to be retired, healthy and fit at age 57. I fell into the OMY syndrome for 3 years and actually regret it now. I can’t get that time back. I don’t see too much difference between FAT Fire and regular FIRE from my spreadsheets.

    1. My payment may be lower, but it is a high deductible plan. I’d check with your COBRA provider to see if you can change during the annual election process, I’d suspect you’ll be able to. Congrats on a “healthy and fit” retirement at age 57. Don’t worry about the lost OMY years, just enjoy the Present and realize you’re still better off than 99% of the folks in this world.

  25. I will be 59.5 in Feb of next year. I plan to retire in the spring of 2021 at 61.5. I realized this summer I could get Obamacare subsidies if I could keep my taxable income under the subsidy cliff. We can get a Bronze plan with no cost to us. Very happy I realized that fact this summer. In 2019 and 2020 we will do ROTH conversions of our IRAs to have a pile of money that is already taxed and will not count against the Obamacare subsidies. Those conversions will be in the %22 tax bracket but that is still much cheaper than paying full price for health care

    I will retire in the spring of 2021 (instead of later in the year) so I don’t exceed the income limit for subsidies in 2021.

    The Bronze plan is fine with us. I don’t want prepaid medical care. We can handle normal office visits. I just want catastrophic care which a Bronze plan will do.

    Of course, who knows what Obamacare will look like in two years. If it changes drastically I will work a few months more in 2021 so I have money to pay for COBRA for 18 months and pay for private insurance after that.

    The key is I discovered I can do ROTH conversions after 59.5 while I am still working to have a pile of taxed money we will pull from (in addition to the IRA) to manage our taxable income so we can get Obamacare subsidies.

    That was when I was able to set a firm date for my early retirement.

    1. Looks like the “keep the income low to snag the subsidy” is a very common approach in the early retirement community. I agree that Bronze is fine for someone only looking for “catastrophic” coverage, just make sure you keep plenty of “dry powder” available to cover those high deductibles, should something unfortunate happen. One word of caution on the Roth conversion, I believe the $ may have to sit in the Roth for 5 years before you can access it, make sure you check the details before you pull the trigger.

      1. See the following for more information on 5-Year Rule associated with IRA distributions:


        Roth IRA Distribution Table

        UNDER AGE 59.5

        Contributions: Tax-No; Penalty-No
        Conversions: Tax-No; Penalty-Yes (Taxable Portion)
        Conversions: Tax-No ;Penalty-No (Nontaxable Portion)
        Earnings: Tax-Yes; Penalty-Yes

        UNDER AGE 59.5

        Contributions: Tax-No; Penalty-No
        Conversions: Tax-No; Penalty-No (Taxable Portion)
        Conversions: Tax-No; Penalty-No (Nontaxable Portion)
        Earnings: Tax-Yes; Penalty-Yes

        OVER AGE 59.5

        Contributions: Tax-No ;Penalty-No
        Conversions: Tax-No; Penalty-No (Taxable Portion)
        Conversions: Tax-No; Penalty-No (Nontaxable Portion)
        Earnings: Tax-Yes; Penalty-No

        OVER AGE 59.5

        All Distributions Are Qualified
        No Taxes
        No Penalties


  26. It’s a moving target. You can’t plan for everything. Sometimes, you just have to jump in and deal with problems as they come up. I like you plan. You’ll be okay for a few years. Hopefully, ACA will be resolve by 2021.
    Mrs. RB40 plans to retire in 2020 so we’ll be looking at healthcare around the same timeline. Although, we might become expats for a year or two. That will complicate the picture too.

  27. We thought about this long and hard before I took the plunge at 56- Hubby is 71. I, and other colleagues were a part of a spin off from my mega-corp company. As soon as I was being constantly reassured that I was safe and all of the benes promised to me would likely continue under the new company. No one would put it in writing, however, so while I had the chance I retired after 4 months of pushing my director and HR for answers. By that time it looked like I might have to interview for the job I already had (you can’t make this stuff up) I’d had enough… So I fired them. 😀

    By retiring then, I was able to participate in the retiree medical plan (50/50 everyone pays half- my part is $600). Wonderfully, I had a small pension, which I turned into an immediate annuity and began payments with survivor benes for DH. Since I wasn’t eligible to get ss nor medicare, the pension pays an added amount of $300/mo. which will end when I am 65. As it turns out, the new company has no pension nor the 50/50 plan for the employees. I know when I smell a rat.

    I retired with much fewer funds than almost all of our friends (500k, solar power on paid for house. About $105k is in cash money market, hubby is on SS 2k/mo). It has taken almost 2 yrs to go thru 10k of the cash(including my husbands bout with cancer)- leaving us w/95k now. Almost 400k is in my IRA- 60% stock mutual funds & 40% bond.

    There is always the chance that a company will go under/ file BK without a reorg., so I could lose the health insurance, but I decided I’d take that risk- and, at 58 I have no regrets. The plan is that if my insurance might be in jeopardy, I’ll go to work at HEB (Tx Grocery chain), as you can get on pretty easily as a friend of mine did for the health ins.

    Plus, I just love that store (people are happy there), so I’d probably like working there. I doubt I’ll have to do that, but if so, I’ll just have to cut back on volunteer gigs. I can deal with that.

    Trust me, I was just plain done with the drama of my last job (I was an analyst), and the 10 hour days + immense stress that came with it. Fun fact: My hair when I left there was prob 60& gray… but over the last 2 years, it has darkened quite a bit end there is all kinds of auburn mixed in. I’m just sayin’… So, If you can do it, I say do it.

    Have a plan B for just in case, though. It’ll help you feel more secure.

    1. You do, indeed. Unlike most countries, there’s no universal federal insurance in the USA, it’s typically provided by your employer. There is a federal program once you reach Age 65, but you’re on your own until then if you’re not employed (over-simplified explanation for brevity).

      1. Medicaid may be available if your income is low. But in states that have not expanded Medicaid, even WITH a job you can earn too LITTLE to qualify for ACA and too MUCH to qualify for Medicaid.

  28. Great article. Health insurance is a big part of FIRE planning since health problems can pose such a high risk to your assets. In our case we followed a similar plan. Using COBRA for the two of us was only $700/month and we used that for the full 18 months. Now having to switch elsewhere and the ACA was the best choice for us. The biggest impact was our plans for gradual conversion of IRA assets. We need to make sure we stay in the subsidy range. If that doesn’t work out we’ll look at writing off insurance costs as business expenses. Between subsidy calculations and tax planning strategies there are a lot of scenarios to consider.

    1. Good point to bring up the before-tax IRA conversion impact on ACA subsidies, Steve. We’re also looking to convert some before-tax assets under the new tax law given it’s historically favorable marginal tax rates, and that move (combined with my pension) will knock us out of the market for ACA subsidies.

  29. I did a lot of research on the 5 year rule a couple of months ago and I would have to check my notes but a combination of my ROTH being open for more than 5 years and me being 59.5 when i start the conversions means that is not a problem. I can convert and take out money at any time. I had started the ROTH in the mid 2000’s as a college fund for my boys.

    We just opened a ROTH for my wife so the 5 years will have elapsed by the time we start doing conversions for her.

    1. Sounds right to me, Bobby. Having Roth money that you contributed 5 years ago will work for your strategy, I was thinking you were considering taking Roth money out before the 5 year time horizon had passed. Thanks for clarifying.

  30. Such a huge issue for me – thanks for providing your insight Fritz! The one issue that I didn’t see too much comment about above is the issue of ACCESS vs. COSTS. The cost issue is a big one for everyone – especially those that don’t qualify for any subsidies. However, I would contend that ACCESS is a bigger issue – I don’t mind paying for good insurance but if good insurance options aren’t available and we are forced; on a state by state, county by county basis; to pay huge $ on insurance that few providers accept, then that is a bigger issue. The more that the providers opt out of accepting ACA plans, the worse it gets – it seems like there are many providers that are just deciding not to accept ACA plans. The access issue is bigger than even the cost – unless you are living it, as I have been for the past 6 months, you won’t appreciate it until you do. My wife and I are dual US & (European country) citizens – we are considering moving abroad until we can qualify for Medicare. It is sad that it comes to this but I would rather not worry about access on a daily basis and know that if I need care, I can get it! Don’t mind paying for good insurance but paying top $ for bad insurance with little access is a non-starter.

    1. Exactly why I made the point about access, Dave. I agree it could prove to be an even bigger hurdle than the cost. You’re fortunate to have dual citizenship, it certainly opens up options for you that many of us don’t have!

  31. COBRA is going to be our stopgap as well, eighteen months of the premium health insurance for the start.

    My bigger concern is many of the geographic areas I want to live have these “micro networks” without access to specialists my better half may need. It’s a dicey issue, but thank goodness for another eighteen months to watch the dust settle.

    Worse case is getting another job with premium insurance

  32. Great discussion, I left work at 61 and we did Cobra until the wife turned 65 and she went on Medicare. I remained on Cobra and I was able to structure my taxable income to a level that’s would qualify me for a great ACA subsidy. This is working out till I hit 65 next year but until then I have to live with a horrible plan with a $5600 delectable which should protect me from a catastrophic hospital visit. These private plans are horrible and very expensive but it’s the price you pay if you want to retire early. Honestly I don’t see how folks that are self employed deal with these expensive plans. My share is $250 a month for a plan that cost $1000 a month so I’m lucky in that’s respect but have to limit my taxable income. Good luck to everyone….

  33. We pay ~$2000 per month for the two of us and have minimal heart burn with the cost. However, I do agree that ACCESS to the right doctors is a bigger issue. ACA charges a lot in AZ and does not provide doctors needed if your situation is unusual……..sad state of affairs which is unfortunate.
    Our options are limited to one in Maricopa county, AZ which further exacerbates the situation.
    If one has insurance through the market place, please note your coverage is severely limited when you travel. It only covers you in case of emergency…….and they have their own definition of “emergency”. So, one can be stuck with a huge bill.

    1. SKD, are you saying that you’re on ACA in Maricopa County, with the one and only provider? Everything I’ve read about it (Ambetter / HealthNet) is horrifying. An absurdly small network, which none of my current doctors participate in), claims almost never processed correctly, and on and on. With the high premiums and high deductibles.

      I have the resources to pay for my own insurance, but there is simply nothing available that I consider usable. The ministry plans seem like a house of cards. ACA is like flushing money down the toilet and getting nothing for it. I know of some limited coverages that are being sold, which don’t come close to being adequate insurance. I have 12 years to Medicare and I keep working because good private insurance simply IS NOT AVAILABLE.

      I wish the author and some of the commenters well, but I think you’re all making a HUGE mistake. Cheerful comments and crossing your fingers won’t get the job done. Until we start to see signs that the private insurance situation is improving (and when has that EVER happened?), I think it’s incredibly foolish to walk away from good corporate health insurance.

      1. So much to say in response, Larry, but I think I’ll write a future post with more. Bottom line: “I’d rather die while I’m living, than live while I’m dead”. I’m retired at 55, and have 10 more years of Freedom than if I stayed working just for the insurance. To me, that’s not a trade I’m willing to make.

        That’s why they call it “Personal” Finance, right?! I respect your opinion, and thank you for stopping by. Stay tuned for a future post with more…

        1. Fritz, I fully understand the trade off I’m making. And I’m not happy about it. In fact I’m really unhappy about it. I’m currently in good health and I’m giving up my daytime hours (going to my job) in exchange for a paycheck that I don’t really need any more, and benefits that I do need, and simply can’t buy on my own. I’ve looked in depth at the available options in my area. I’ve asked financial planners and other experts for help, and there just isn’t any help to give me.

          Why am I so adamant about this? Why can’t I “take a chance” on the ministry plans or other substandard options? I know my family medical history – my father had two heart bypasses and 2 or 3 joint replacements before he reached Medicare age. And I have pre-existing conditions of my own. Going with substandard insurance is a risk I simply will not take.

          So yes, I do disagree – loudly and emphatically – with the statement in the article ‘the “health insurance in retirement’ issue is not necessarily a reason to continue working if all other pieces in your puzzle line up.” Yes, it really is. That I have a low 7-figure net worth and simply can’t buy “good” insurance – at any price, it just isn’t available – keeps me in a job that I used to like, but the frustration over insurance causes me to like it less and less with every passing day.

          I look forward to further articles and discussion on this topic, but please avoid the “sometimes you just have to take a risk” line of thought. It’s irresponsible, IMO.

          1. I appreciate your thoughts, Larry. Given your family history, I can see why you’re making the choices you’re making. It’s also why I put the very clear disclaimer in the post. For me, it was a risk worth taking. Each has to make their own decision, and live with the consequences. Thanks for highlighting the risk, and best of luck in your situation.

      1. TJ, yes the Republic had an article about this 2 weeks ago listing the 4 companies for 2019. I talked to an insurance broker last week who thinks BCBS will also sell ACA in Maricopa County in 2019, but this is not confirmed by the link you posted.

        However, the broker cautioned me that this is not necessarily “good news”, since all plans would be very similar in terms of deductibles, out-of-pocket limits, and very limited networks. Hope this is helpful.

  34. Great comments everyone, and much appreciated. I am currently 61 and my wife is 60 and we are struggling with these issues as well and trying to plan our retirement timing. In reading through all of the comments, the one that I thought was the most accurate was that if you want to see ACA plans continue you need to vote Democrat in the mid term elections. And I am saying this is a lifelong registered Republican. Don’t forget that The Republican-controlled House of representatives voted over 40 times to repeal this act with no replacement during the last presidency. On another matter, the removal of the individual mandate is not going to lower cost, but could in fact increase costs as this allows younger, and healthier individuals to go without any insurance without a penalty leaving older, and generally less healthy individuals taking advantage of the plans and having to cover those costs. The only good news that I’ve heard recently on this is that many of the programs actually made money this past year after raising their rates significantly and that the rate increases for 2019 or not believed to be quite as significant . Good luck everyone.

    1. Certainly don’t want to turn Fritz’s blog into a political forum but when I think of government provided healthcare pre-Medicare with a pre-existing condition I hope there becomes a balanced answer for healthcare but given the political landscape I don’t find many discussions focus on the vast majority of consumers. My person focus would be to get the government out of healthcare decisions and provide a framework for competitive industries in healthcare to create the best solution. Free market economics would drive innovation competition. Things like the state boundaries just work against a solution. I am also more focused on growing my retirement savings so I could afford whatever solution is presented vs hoping politicians who don’t even participate in the same solution we do find and answer.

  35. Access is definitely the bigger issue in NYC, where we live. Now that both my husband and I are out of the corporate life, we have to buy insurance (we are late 40’s so way too early for Medicare). We have COBRA for now at $3k/ month but for my small business to replicate that plan (when COBRA ends) it would be $5k/ month. So many of NYC hospitals are consolidating and they are taking very few plans. So even if we would be willing to pay $5k and beyond, it’s unclear how long these small business insurance plans will be available. We’ll play it by year, but we also bought a place in Costa Rica as the nuclear option, since healthcare is affordable and available there.

  36. Wife and I (both 60ish) recently retired from megacorp with Retiree Medical-several colleagues have done the same recently with downsizing. I doubt we, and many of our colleagues/peers, would be retired without Retiree Medical, which is one of the reasons we tolerated the stresses of corporate jobs. It is distressing to say the least (in fact it’s not doing much for my health..) to see the comments of Retiree Medical being eliminated. It that does happen, I believe we probably would go back to work until 65 (assuming the community college option is not available to us!). I cannot imagine not having health insurance and I don’t think we are prepared at this point to pay 20-30K a year for it either. I guess I better start at least thinking about a Plan B or C. Thanks for the post, looking forward to the next installment.

    1. I’m sorry to raise the risk of losing Retiree medical, Rob, but it is a risk you should be aware of given the number of companies that have discontinued their plans (even for folks who are already in retirement). Plan for the worst, and hope for the best. I’m sorry to bring the worry, but glad to hear my words have cause you to start thinking about a Plan B or C. Let’s hope it never comes to that for you.

  37. Great TOI, thanks for sharing.. We are in the same (lucky) position and I have chosen a similar path. Nice to know I’m not the only believer… I chose to continue my company plan through Cobra as well, which runs out 12/2019. I will continue to monitor the landscape and if required take on a small part time job, just to cover the cost of healthcare. We will have five years to cover until medicare.

  38. What a pickle!!! Mrs. Groovy and I are income poor but asset rich. So we have subsidized healthcare insurance through Obamacare. Right now we’re paying $117/month for family coverage. Without the subsides, we’d easily be paying close to $2,500/month. We as a society have two choices. We can go the free-market route or we can go the full-blown socialism route. I’d love to see both options available and let competition between the two business models sort things out. But that’s not going to happen. Good luck, Fritz. If anyone can figure this dilemma out, it’s you. Cheers.

    1. I applaud you, Mr. G, for raising the “income poor/asset rich” issue in your awesome new book!! I was impressed by your recognition that some folks receiving entitlements have to decide if they’re willing to give those up for the sake of the “Big” Freedoms (yes, I DID read the book!!). Thanks for the kind words on my ability to figure this out, but I’m afraid you’ve more confidence in me than I do. This entire issue worries me more than any other aspect of my early retirement.

  39. Senor Fritz! (notice, I did not write “Senior”. Ole!)
    Thanks for the informative post. Yet another one to bookmark and study as I make our own preparations for late 2019. It’s a healthcare jungle to say the least. The one blessing we have is the ability to write off our policies via my wife’s business. That’s effectively a 33% discount, but against WHAT exactly? To your point, gotta plan for the conservative and hope for something less.
    GD captchas! 😉

    1. GD Captchas?! But, but, but, I turn them off for 2 days after my posts come out, afraid you missed my “no captcha window” for this post! 🙂 Cool to know you can a policy though your wife’s biz to get the tax discount. Nice option for some folks, and a good addition to the discussion. Thanks for stopping by!

  40. Your post and all the responses just prove what a disaster the ACA was and is to our health insurance system. Obamacare made is so most people can’t afford or even get health insurance and those that can afford it, cannot afford to go to the doctor. There have been thousands of articles written proving this point.

    One big failure and I am sure this will get negative responses from the FIRE community is that people with substantial amounts of savings can “work” their numbers so they can have other Americans pay for their healthcare. I do not understand how someone that has a million or more in savings is getting free health care or even subsidized healthcare All that is doing is forcing other people to pay $18,450 per year like me and you! Nothing is free in this world, that is why our national debt is so high, we just keep borrowing to give people free stuff.

    To get that $18,450 plus deductibles and by following the 4% rule, I need an additional 500,000 dollars in savings just to cover health insurance, and for you, one that follows a 3.25% withdrawal rate, you need over $600,000 in additional savings just to cover health insurance, and that is why we are holding off another year or two until our kids are out on their own and maybe the price will drop by then.

  41. It’s definitely a frustrating mess. I haven’t run the numbers for health sharing ministries for a retiree or someone with pre-existing conditions etc. but I can say my experience with it has been highly positive.

  42. Fritz – Can you make a recommendation for a MAGI calculator? With retirement looming, we need to figure this out. My husband (59) will retire with a pension that covers our basic expenses. I (53) am self-employed. Combined, we will be at the tipping point of the ACA subsidy scale. Diverting my income is one way to make an ACA plan affordable, but our pre-tired lifestyle will be limited (no travel) without my income. I will certainly sit with a CPA, but I want to play with tax deductions and solo-preneur deductions.

    1. Cheri, you’re wise to work your MAGI to secure the ACA subsidy, if possible. I’m afraid I don’t know of any MAGI calculators, though suspect you may be able to find some via Google. I think you’re on the right track by working through the details with your CPA, too important to miss the mark on the ACA subsidy, if it’s within reach. Good luck!!

      1. My google search failed me. There are calculators that perform behind-the-scenes calculations, but nothing I can find that provides a transparent one-page glance that allows a user to play with deductions, and calculate that sweet spot where income and subsidies intersect.

        1. That’s amazing, Cheri. I’m surprised no one has thought of that yet, I’m sure others have the same need. In my case, I just have a simple spreadsheet where I project my income, suppose you could build something in a spreadsheet since there’s nothing pre-existing (yet!).

  43. Fritz – I agree that planning for health insurance is one of the major conundrums (and risks) of retiring early from the corporate world, and it is the biggest uncertainty in our FIRE plan. Trying to find a way to quantify costs was a huge challenge when planning for our June 2018 FIRE transition. We ended up with the following plan:

    * I elected COBRA for my HDHP with HSA from my last employer and will likely stay on the plan through 2019.
    * My wife is still working for the time being, so depending on when she leaves her job, I can either go on her plan or we may be able to extend our “COBRA era” for 18 months past her last work day.
    * After that, we will take our chances with the ACA (I have 14 years to go before Medicare eligibility and my wife has 18).
    * Although we did geoarbitrage out of the Bay Area to the Sacramento area to lower our cost of living, we did stay in expensive California, in part as a hedge against the collapse of the ACA. If the ACA is eliminated, I think there is a good chance California (of all states) would stand up a replace plan, possibly a single-payer one.

    As far as estimating our healthcare costs, we used the ACA (Covered California) enrollment flow to estimate our premiums (after tax subsidies) for a family of four. We also used historical numbers to estimate our out of pocket expenses. For a while we also used the AARP Retirement Health Care Cost Calculator ( to estimate our long-term costs for both before and after Medicare. More recently, we have relied on the projections of the software used by our financial advisors. Also, on their advice, we have factored into our plan a 4 year long-term care event, paid out of pocket, in case either my wife or I experiences that scenario.

    Hope these tips provide helpful to some or your readers…

    1. Good comment, Randy. You’re fortunate to have your wife’s COBRA as an option, though with 14-18 years to go before Medicare you’re as vulnerable as we are. We’ll keep a close eye on developments, I’m sure this will be getting a lot of focus over the coming years.

      As for factoring in a 4-year long-term care event, smart move by your planner. I’ve got a “Retirement Cash Flow Model” out to age 95, I like throwing some “black swans” scenarios into the mix to make sure I’m conservative enough in my assumptions to cover a “bad” scenario. Smart planner!

  44. Why would you take Cobra from your last employer if your wife is still working? Why didn’t you go onto her plan immediately? I’m assuming that would have been cheaper but maybe I’m missing something.

    A co-worker retired from my employer last year. She was doing “RE” with no intention of ever returning to work. I didn’t know her “FI” status and I did not ask, but I had to ask what her health-insurance plan was after her Cobra ended. Her plan was to assume that “they” would “do something” allowing her to have access to insurance. I was dumbfounded by that answer. You seem more informed than that, but ACA is such poor insurance in my area (very very few doctors take it) that I just can’t imagine making it part of my plan. Is it usable in your area?

    1. I went COBRA with my plan for three reasons: 1) My UnitedHealthcare plan is a very good plan and much better than my wife’s Blue Shield plan (my employer was an international software giant whereas hers is a small startup). 2) Except for a few select companies, most employers subsidize ONLY the primary member of the insurance plan (i.e. my wife) and they do NOT subsidize the cost of children or spouse’s on the plan (who pay full rack rate). I can’t remember for sure, but I think it would have cost me the same or more to go on her plan for inferior insurance. 3) Her plan is a PPO, not an HDHP with HSA.

      I don’t have direct experience yet with ACA, but from everything I’ve read the Covered California plan is much better than most. The Blue Shield plans on Covered California seem comparable to the plans my wife has available via her small company employer. If you don’t have a chronic condition requiring continual treatment or medication, and you have enough resources to FIRE, then hopefully you’re health plan is mostly there to cover catastrophic events. If you cannot afford to pay the maximum out of pocket costs for a “bad year”, then you probably should not FIRE.

      1. In my area, a typical ACA plan might cost me nearly $1000 a month with a deductible of several K$. (I would exceed the income thresholds for any subsidies.) While I could easily afford “a bad year”, I have a real problem with the concept of spending over $10K for no purpose, and $15K+ before I’d get any actual benefit at all. With a very poor provider network, as I mentioned. And “a bad year” has the real potential to become a series of bad years, depending on the disease or accident or etc. causing the need for medical care.

  45. Even thinking about this issue makes my head spin. Fortunately I’m able to choose the safe and simple route for me: continue to work with for the federal government for another 1-3 years until I’m eligible for an immediate pension (that includes continuation of medical coverage). Except for this part of my financial equation, I would be able to retire today. I’m so sad to hear this is such a complicated issue for most others wanting to retire before age 65. 😢

  46. Great post and resources. Sincere thanks to everyone for sharing. This is a big issue for us also.

    I’m self employed and plan to be for a few more years. Wife has a corporate job but will RE during first quarter of 2020. I’ll look into COBRA and already know approximately what ACA will cost, but with a long 21-22 year gap before Medicare eligibility, we have to be cautious.

    Our income pushes us past the subsidy threshold so that’s not an option.

    I did come across Sidecar Health – which based on reading about the ministry options above sounds quite similar. Has anyone researched it further? I’d love to know how it compares to ACA.

Comments are closed.