ACA Could Encourage More Early Retirements From Baby Boomers
|By Diane Stafford, The Kansas City Star|
|McClatchy-Tribune Information Services|
Insurance providers and financial planners expect the Affordable Care Act to encourage a flood of workplace departures from the 50-to-65 age group, which accounts for about 43 million members of the U.S. labor force.
That's because those not yet eligible for
Obamacare will allow anyone, regardless of pre-existing conditions, to buy health insurance. It's also expected to lower premium costs for the boomer age group, perhaps by hundreds of dollars a month compared with comparable coverage they would buy on their own, assuming they could get it.
"Boomers win in two ways: Their insurance will be more affordable, and they can get it," said
"Don't ask me to tell you who they are, because they don't want their bosses to know they're considering retiring, but they're just waiting for the numbers," McMahon said. "They're waiting to see the prices before deciding to retire."
An employee's cost of coverage in an employer-sponsored health plan may still be the best deal. And premium costs alone won't be the thing that keeps someone on the job or gives a shove out the door. But brokers expect more cost shopping among older workers.
In states that are operating their own exchanges and already have revealed plans and pricing, premiums have been a pleasant surprise to many older comparison shoppers.
There will continue to be private, individual insurance options with insurers that aren't participating on new marketplaces. For many, 2014 premium costs remain to be determined.
But financial planners such as McMahon say potential retirees, who have been paying COBRA costs of, say,
And another potential benefit remains to be discovered: Retirees whose income drops to a certain level may be eligible for government subsidies to help cover the cost of buying insurance through the marketplaces.
The devil, of course, will be in the details. Whether older people continue to see an insurance price break in subsequent years will depend on having enough younger people buy insurance.
Last week's news headlined two more large companies --
According to a 2012 report by the
"It's very, very, very rare to have retiree health care in companies with under 500 lives, and that's where most of
Underwriting is industry speak for pricing or denying health insurance based on age and health. The health reform law mandates changes in the way that insurers band, or group, premium prices.
Traditionally, insurers grouped people in seven or more bands, with the most expensive group being considerably more expensive than the least expensive. That generally meant that older people -- with more health issues -- cost far more than young, healthy ones.
The Affordable Care Act requires insurance companies to price policies in only three bands.
"At least at the outset, prices are locked in, and people in their 50s and 60s may actually see their rates go down," said
Analysts note, though, that many older Americans -- particularly those who are old enough for
Though the act doesn't directly affect
Some critics of the act also say the marketplace, or exchange, plans may be affordable but probably won't be very good in terms of benefits offered. Supporters counter that there will be a range of plans offered, from
Financial planner McMahon said she's urging her retiree and would-be retiree clients to take time -- plenty of time -- to go to such sites and analyze their options after the marketplaces go live.
"If you're thinking about retiring, or you've been retired without planning to, you haven't had time yet to work through all the facts," she said. "You need to make good decisions based on fact, and it will take time to sort it out."
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