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Health care

Early Retirement: The health insurance hurdle

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In a comment on yesterday’s grouse about the GOP’s stubborn resistance to a viable national healthcare program, Bucksome Boomer remarks that the main thing blocking her way to early retirement is the difficulty of obtaining health insurance.

There are a few ways around this.

One is to go back to college.

Yes. Tuition at most state and community colleges is far lower than private health insurance, and many colleges provide group policies for students. Arizona’s Maricopa County Community College District, for example, offers quite a nice policy for anyone who is enrolled in even one credit! Pre-existing conditions are covered if your prior policy covered you for 12 months without a break before you enroll (rules vary somewhat by state). Californians have access to student health insurance through the Community College League of California. In Texas, Houston Community College is among many that offer health insurance for students—here, you have to be signed up for three credits, but it can be an online course. A list of Texas universities that offer student health plans appears here.

If you’re yearning for early retirement and you live in a state where the colleges do not provide decent student health insurance, it might be worth considering a move to a state where such programs are offered. Google community college student health insurance to bring up a list of leads. Be sure the program does not exempt pre-existing conditions or, if it does, whether having been covered for 12 months by your current employer’s plan will trump that rule.

Another option is to join a trade group that offers group health insurance. These are not so easy to find; you pretty much have to figure out what groups you might, by any stretch of the imagination, be eligible to join and then find out if they have health plans. This list from California might be a good jumping-off point. Here’s a list of writer’s groups with various plans. Different writer’s groups have different requirements for membership—some expect a serious publishing track record; others will admit wannabes. As a blogger, you are a writer, especially if you’re earning any money at all from your site. Look at all groups associated in any way with your trade, business, or outside interests. The American Library Association and the Modern Language Association, for example, offer group health insurance for members—and anyone can join these organizations.

A third possibility is a high-deductible HSA. In these schemes, you take out a high-deductible policy and combine it with a medical savings account. The savings account functions like a hybrid between an IRA and a flexible spending account. The money set aside is used to cover your health-care costs during your deductible period and any other expenses. If you’re within a few years of Medicare age and you don’t have an expensive chronic condition, this strategy could carry you over until you can get less risky coverage. Any amount that’s left in the HSA rolls over to you when you reach Medicare age, at which time you can use the money any way you please. Shop around for these. At one point I had an HSA that covered 100 percent of my costs at any doctor and any medical facility, once the $1500 deductible was exhausted.

And finally, you might take a 50% FTE job with a public college or government agency—if you can find one in the current economy. Half-time jobs are usually considered benefits-eligible. This means you can get the health insurance without having to hang around the salt mine all day long. It’s not as good as being fully free from the day job, of course, but it’s a lot better than a 40- or 60-hour work week. Some government employers offer health insurance that is significantly cheaper than Medicare; when I go on Medicare, for example, I will pay about 10 times as much as I was paying for the State of Arizona’s EPO plan, and more than I’m now paying for COBRA.

None of these strategies is perfect. But then, no health insurance plan is perfect, at least not any I’ve ever heard of.

This post is part of a series on achieving financial freedom.
Our story so far:

• An Overview
• Education
• Work
• Debt
• The health insurance hurdle
The roof over your head

Good-bye to all that…

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Here’s another volley in the endless blitz of retrograde comments from Republican congressional representatives, reported by The Wall Street Journal:

“When it comes to some health-care summit that’s nothing more than a photo op designed to pave the way for Obamacare 2.0, the answer is no,” Rep. Mike Pence (R., Ind.) said Friday at the Conservative Political Action Conference. Still, they plan to attend and highlight public opposition to the bills and to spotlight their own ideas. “If the president is sincere about moving forward in a bipartisan fashion, he must take the reconciliation process—which will be used [to] jam through legislation that a majority of Americans do not want—off the table,” House GOP Whip Eric Cantor (R., Va.) said Friday.

“Obamacare.” How that term rings of partisan nastiness and intransigence! What on earth is the matter with the Republican party—one I once belonged to and was proud to serve? When did the Grand Old Party come to represent downright backwardness? I’m afraid that’s the word that comes to my mind (well—one of the words) as I watch members of my former party dig their heels in the sand and do every cussed thing they can think of to derail any positive action of any kind that might make life better for Americans…for no other apparent reason than stubborn hatred.

Not for one moment do I believe the GOP is even faintly interested in “the reconciliation process.” Actions speak ever so much louder than words. The actions we have seen have revealed extreme right-wing dogma and loyalty not to America but to well-heeled corporate supporters and their accomplished, amoral lobbyists.

The issue has little to do with universal health care coverage. As Megan McArdle writes for The Atlantic, we don’t even know for sure whether access to health insurance really does save lives—whether it has any long-term effect on mortality at all. No one has seriously asked that question during the fruitless “debate” (one might call it “impasse”) that we have watched over the past year or so. No. The issue is that the American political system is grinding to a halt, hung up by a kudzu-like bloom of stubbornness, dogmatic hostility, flowering greed, and grotesque thinking that the Founding Fathers could never have anticipated would take hold in America.

Politicians used to be self-serving now and again, but at least most could manage to get past their short-sightedness to function in their country’s interest. As we have seen, that is no longer true, particularly of the GOP. When Congress ceases to function—which is exactly what is happening—then America ceases to function as a free republic.

What a sorry spectacle!

Tracking down an insurance policy

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Now that Medicare is coming up, I have to find an insurer from whom to buy a Medigap policy. Yesterday I found an unexpected and valuable resource for insurance consumers, which I’ll describe below.

First, by way of background for those who have not yet enjoyed the privilege of trying to navigate the astonishing maze that is Medicare, the system works like this:

You can choose “Traditional” Medicare, a type of indemnity plan cobbled together with Medicare Part A (which covers approximately 80 percent of most hospital bills and which is free) and Medicare Part B (covering a certain amount of but not all of your doctor’s bills, at a cost of about $95 a month); or you can choose an “Advantage” plan, which is basically a private HMO with all the benefits and risks associated therewith. Most people feel the “traditional” plans are worth the extra cost.

If you go the “traditional” route, you must also buy a “Medigap” policy to cover the significant amounts that the government policy does not provide for. Medigap policies are standardized plans that come in a dozen flavors, from Plan A through Plan L.  An hour or two of poring over the rules and features will reveal that Plans C and F are probably the only way to go—these are the plans that cover most or all of the things that Medicare proper does not cover. I’ve decided that Plan F is best, because it not only picks up the 20 percent missed by Plan A, it also will cover so-called “excess” charges for doctors who think they should make a living in the practice of medicine.

Now. Because these plans are farmed out to private insurance companies, the market is just. freaking. insane! The plans are all the same; insurers are required to offer identical plans with identical benefits. But the prices are all over the map. Here in lovely Arizona, for example, you can pay anything from $93/month to $417/month for the same plan!

The state Insurance Department hands you a booklet showing premium comparisons. It’s forty-six  pages long!!!!! You have to sift through fifty-three insurance companies, trying to figure out which offers what plans for how much, and which companies are reliable and which are likely to rip you off or give you a runaround.

It takes hours and hours to parse through all this stuff.

I figure I can afford $150/month at the outside. Thirteen companies in Arizona offer Medigap policies for $150 or less. So, I made a table, preparatory to telephoning every one of these corporate horror shows. In it, I made room for a price comparison, notes on conversations with CSRs, and notes on Google, Better Business Bureau, and Consumerist reports. Then I spent about four hours trying to track down information on the thirteen likely vendors.

While stumbling around in Google, I came across a consumer service offered by the Texas Department of Insurance. Go to this page and you can search for an insurance company. Because Texas is famously huge, most insurance companies of any significance do business there. Enter, for example, something like “Lincoln Heritage,” and up will come a long page showing contact information (including headquarters addresses and phone numbers, plus names of company officers), financial information spanning the past three years, links to four financial rating organizations, a summary of the company’s history, and…ta da! complaint records!

Yes. Texas tells you how many complaints each company has registered in each of several underwriting areas and also calculates a “complaint ratio” and a “complaint index,” showing how the company’s complaint history compares with those of other insurance companies.

This, as you no doubt recognize, is platinum-plated data.

Thanks to the Texas Insurance Department and the Better Business Bureau, I’ve narrowed the preliminary search down to five companies with clean complaint histories and a likelihood of staying in business for a while:

Assured Life: $97/month
Loyal American: $138/month
Sterling: $139/month
United of Omaha: $93/month
USAA Life: $129/month

Amazingly, the cheapest companies appear to deliver high-quality service—Assured, run by a fraternal organization, and United of Omaha, associated with Mutual of Omaha, have the cleanest complaint records all the way around. So I’m hoping one of those will do.

The cost of this is just breathtaking: take $96 for Medicare Part B and add a bare minimum $93 for Medigap and you’re already up to $189, more than I’m paying for COBRA! And then I still have to buy Medicare Part D, the prescription plan, which is around $50 a month with a $250 deductible!!!!!

What I don’t understand is why the pathetic State of Arizona, whose administration by and large is a joke, can manage to provide employees an EPO for $39 a month that covers almost every doctor in the state (including the pricey Mayo Clinic) and provides prescriptions with a $15 copay, but the vast and powerful federal government can’t manage to engineer better rates than this. Now it must be admitted that if you had to pay the full freight for COBRA, that EPO would run almost $500 a month, and that the retirees’ cost for it is $400 a month.

So…maybe $240+++ a month that of course I do not have and will not have for the duration of 2010 is a bargain. But still….

Another Round of the Bureaucrat’s Waltz

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So, after class yesterday afternoon it was off to the downtown offices of the Arizona Department of Administration, there to try to unknot the COBRA mess. This racked up an extra 28 miles on the car’s odometer, draining the gas tank to the point where I needed a refill.

A very nice representative greeted me at the desk. She again informed me I was not registered for COBRA, and after some discussion we ascertained that yes, I am trying to get the hell onto the COBRA rolls. Somehow. Anyhow. Please. With no more runarounds.

She decided that the amount I owed was not $334 but a mere $313. That was nice, since it will cover me through January to the end of February. Earlier reports suggested that I’d be paying $185 a month to continue in my $36/month EPO and continue Delta Dental’s coverage.

The reason for the apparent discount, it develops, is PeopleSoft’s having kept me on the payroll (without pay) until January 10. Since I remained in the records as an ASU employee  into January, ASU’s regular healthcare policy covered me until then. So I got 10 days off the fee for January.

The new $186/month premium will cover health insurance only. After January’s $161 paycheck from the community colleges, obviously I can’t afford the extra $12/month to continue the dental care coverage.

Did I get a receipt for the check I forked over? No.

Did I get a contract or a policy in exchange for the check I forked over? No.

Did I get any evidence whatsoever that I’m enrolled in this program? Not exactly.

She xeroxed the dear-sir-you-cur letter I’d written describing the endless runarounds I’ve been given and asking to be enrolled with no further contradictory stories, appending the check to the bottom the copy of page 2. At the bottom of the page 2-&-check photocopy, she wrote “paid” and the amounts that were owing for January and February.

Whether that will hold any water if push ever comes to shove, I do not know. Whether I will ever see a policy, an insurance card, or any other evidence that I’m actually covered, I do not know.

When I remarked, in summary of the dear-sir-you-cur, that no two of the many people I’d spoken to had given me the same story, she replied, sweetly, that I seemed to be a great deal less confused than most folks who came into the office.

aughhhhhhhhhh!!!!!!!

Running around COBRA’s barn again

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Just realized I didn’t write a post this morning and then, whilst frolicking with bureaucrats, didn’t get to it this afternoon, either.

Another fine exercise in jumping through hoops and tearing around the Maypole today.

Not having heard anything more from the COBRA administrators over the past 15 days, despite having been told that a notice and a statement would be sent out, I called again to inquire.

Today’s bureaucrat harked back to the original claim that I needed to have sent them money a month BEFORE I was laid off my job. I explained that Arizona State University’s Human Resources people said that I was not supposed to send money while I was still employed there. She said well, then I wasn’t covered.

So I’ve now spent the last month without any health coverage at all, if you believe this one’s version.

She wants me to present myself in person on Monday—when I’ll be teaching until 2:00 in the afternoon about 25 miles from their office—with a check for $334 in hand. This, she says, will cover me through February.

Of course, that doesn’t make any sense, because the one who told me I’d been approved for the ARRAS discount said my premiums would be $185. Two times $185 is $370. So… who knows what this is about.

Entertaining, isn’t it?

First ASU’s HR people told me I would be not qualified for the ARRAS discount because my last day of work was December 31. Then the Arizona Department of Administration, which administers COBRA, told me I would be qualified for the ARRAS discount because my last day of work was December 31. I sent an application and was told I was approved.

Next, ADOA said I should send a chunk of money to the state no later than the first week in December. Then ASU’s HR department told me this demand was incomprehensible, that I most certainly did not need to send money for COBRA while I was still employed by ASU, and that COBRA would send me a statement after I was terminated, saying how much and when to pay.

In mid-January, ADOA informed me that I was not terminated and as far as they could tell I was still employed by ASU. Then ASU told me I most certainly was terminated and ADOA did not know what they were talking about. Then ADOA told me I was not terminated and was still a state employee.

After I spoke with my ex-husband’s former law partner, who is now Arizona State University’s general counsel, I was told the mess was cleaned up. At that point, I was informed that I had actually been canned not on December 31 but on January 10, but nevertheless because the Obama Administration had extended the ARRAS discount into February, I still would be able to get  coverage I could sort of pay for.

On January 14, I spoke to one Connie at ADOA, who said I did not have to send a check but that I would receive a letter telling me of my eligibility and letting me know where and when to send a premium payment. And by the way, no, I did not need to make a COBRA payment a month before my job ended. That was 15 days ago. No such communication has appeared.

Now I am told I need to pony up $334.04, which is supposed to cover me “through February.” Three hundred and thirty-four dollars is slightly more than twice the earned income I have received this month.

So, this afternoon I called the Feds.

There I learned that while COBRA is indeed a federal law, the federal government’s regulatory oversight is limited to private employers. If you work for a state university or government office, you’re on your own! I asked the woman who shared this gem with me if she thought I should call a lawyer. She said not yet…it’ll be another week or so before they’re actually in violation of the law. She recommended going back to HR (hah! words from a lady who’s never had to deal with ASU’s HR department!) and nagging some more.

I am nagged out. On Monday I will trudge down to ADOA in person, hand over $334, and demand a receipt that states exactly what the money is for, and not only that, ask that they produce a policy or a contract describing what I get and when. After that, I give up. If I get in a car wreck or have a heart attack before Medicare kicks in, I guess I’ll just have to drain my savings to pay the bills and then declare bankruptcy.

Ain’t workin’ for the State of Arizona grand?

Nope… Money unhappens

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That six-month free ride for COBRA sounded too good to be true, and, as the saying predicts, it wasn’t. True, I mean. Called the Department of Administration again today to confirm what I thought I’d heard and learned that the “six” syllable actually occurred in the word sixty, as in sixty days.

You have sixty days after canning to enroll in COBRA and start paying up.

LOL! My scheme would’ve worked if I’d been born on March 7 instead of May 7. But in the cold cruel light of reality, it fell way short of its goal.

Oh well. At least I still have the $571 GDU dumped in my account today. Now all I have to do is persuade the federal government that it’s 2009 earnings (which it is), so that I don’t get nicked on the Social Security earnings limit. Even five hundred bucks will make a difference.

Medicare is going to cost a lot of money. Relatively. Yes, I do understand that $300 a month is a microscopic droplet in the bucket compared to what some people are paying for health insurance. But nevertheless, it’s more than eight times what I’ve been paying for an excellent plan, at a time when I’ll be earning a third of what I grossed on the job. With the ARRAS discount in force, Medicare will actually cost more than COBRA!

The base cost of Medicare Part B will be $110 a month. Parts A and B cover your basic needs, but leave your pants down around your knees: it’s an 80-20 coverage with rather limited hospitalization and no prescription meds. As we all know, one serious car accident, one heart attack, one stroke and 20 percent of the resulting medical bills will ruin you financially.

To take up the slack, you have to buy a “Medigap” policy from a private insurer. These policies, which come in a dozen flavors, are standardized, so that all policies issued in any one of the 12 available plans are the same. Only three—Plans C, F, and J—seem to cover all the contingencies well. Insurers charge whatever they feel like charging, and so in Arizona premiums for Medigap policies range from around $80 a month to over $300, depending on your gender and age. One outfit charges $417 to $560 for plan J—this is for supplemental insurance!

On the low end, a 65-year-old Arizona woman will pay between $107 and $163 to get into one of those three plans. Well, at least she did last year; I can’t get my hands on the 2010 rates, but I’m sure they’re higher.

Then you have to buy a prescription drug plan—and you have to get it whether or not you take any meds. If you don’t buy in as soon as you’re eligible, you’re penalized with a whopping fine when you go to sign up later. These plans run around $25 or $30 a month, and they don’t cover all drugs nor do they cover all costs of drugs; you still get to pony up a hefty copay for most prescriptions.

So: $110 for Plan B + $110 or so for Medigap + $25 for drugs and you’re at $245…at 2009 rates. Let’s add, say, 10% for inflation, and that brings us to about $270, for the cheapest plans on the market. By way of comparison, my cost for COBRA will be $185 a month; my cost for an employer-based EPO that let me go to the Mayo Clinic was $36 a month.

I guess you can get cheaper coverage by going with an HMO, which is what Medicare Advantage is. But having watched my mother die pretty hideously in the negligent hands of HMO doctors, I’m not going that way (it’s not in an HMO’s financial interest to treat you when you have a catastrophic illness; au contraire, what works for them is to deny you’re sick until it’s too late to do a thing for you, and then to withhold palliative care).

Interestingly, AARP’s much vaunted senior-friendly plan is far from the cheapest. They charge $187 for Plan C, $190 for Plan F, and $217 for Plan J. By comparison, the lowest rate I could find for Plans C and F was $107; four companies charge around $115 to $120, and quite a few are in the $150 range.

Well, I’ll be happy if I can keep the total cobbled-together cost of this pushmi-pullyu lash-up under $300. But I figure three C-notes a month is what I’d better budget for Medicare over the next two or three years…until it goes up.