We had our meeting in May where we discussed our financial plan.
One of the last things we discussed was health insurance (not something that I had planned on asking about but you brought it up). My wife, Jane, was on COBRA after retiring from her job and her premium was $850 per month. As a retiree with my former employer, I have a benefit of retiree health insurance coverage that is much more reasonably priced. You suggested applying for Obamacare because our taxable income is going to be low for the next 6-7 years due to us drawing down our non-qualified (non-retirement account savings) first.
So I applied for Jane and based upon our estimated income this year and after applying the subsidy, Jane’s health insurance premium will now be $273 per month. That’s almost a $600 per month savings.
Wow! Thanks so much for the suggestion. And since our taxable income will be even less next year, Jane will receive an even higher subsidy and lower premium. In addition, if Jane has a good experience with her new health insurer (Blue Cross Blue Shield), I am going to change my coverage over, too, and we will realize an even greater reduction in our monthly health insurance costs.
The special open enrollment period runs through August 15th so be sure to share with your clients.
To give you a bit more detail, I estimated our taxable income for 2021 to be $41,615 as Jane received her final bonus in 2021 (although she retired at the end of 2020) and accounted for some capital gains/dividend income.
So in 2022, our taxable household income will be much lower as we will only have a small amount of capital gains since we will be drawing almost exclusively from my non-qualified brokerage money market account in 2022. Heck, I may be forced to convert some of my traditional IRA into a Roth IRA just so my income isn’t too low so as to qualify for Medicaid (don’t want that).
Mark (Life is good after ditching the COJ.)