Many of my clients are concerned about what health care costs might be if you retire before age 65 (Medicare Age)?
They thought that because they had good incomes or lots of money, they wouldn’t get any financial help for health insurance.
After they went through our Prepare For Retirement Process and learned about healthcare options, they were pleasantly surprised with the financial help they get EVEN when they have good incomes.
Make sure to check out potential options through Covered California (or your state marketplace if you’re not in CA).
In this video blog, I’ll show you how to look up potential options and pricing for healthcare plans on the Covered CA website.
Automated Transcription (please excuse the robot’s typos!)
Hi everyone. Zack Swad here and today I want to talk about open enrollment and covered California’s program. Open enrollment started November 1st and goes through January 31st. I work with a lot of clients that retire before age 65, and one of their big, big concerns is how much is health insurance going to cost me before Medicare age, which is not until 65? So today I want to talk a little bit about how do you go on the Covered California website, how do you compare what the costs are, which plans might be right for you? And so let’s jump right in. Okay, before we go to covered ca.com, I want to talk about the different levels of plans that there are on covered California. And as you can see here, there are four different levels. There’s bronze, silver, gold, and platinum. Bronze plans usually have the lowest premiums, but they can subject you to high out of pocket costs.
Silver plans have a little bit higher premiums than bronze, but more of a moderate out-of-pocket cost. Gold plans have even higher premiums and lower out-of-pocket costs. And then your platinum plans, those typically have the highest of premiums but the least out of pocket. Now, depending on your situation and what your health status is, that’s going to determine which plan would be the best for you. Okay, so let’s go ahead and see how do you compare the different plans that might be available to you. So the first thing that you’re going to want to do is go ahead and go to covered ca.com and you’re going to find that this site pops up right here and it’ll say Open enrollment is here. What you’re going to do is you’re going to type in your household income here. So I’m going to use an example of a couple that makes $100,000 a year an income.
And they are located here in Petaluma where I live. There’s two of them. They both need coverage and they want it starting next year. And this example, they’re both 60 years old. So we put in that information and we hit calculate. What you can see here on the right hand side is it gives you a quick quote. This is usually for a silver plan and for them it’s saying it might cost around $700 a month for both of them, which is actually a savings or financial help of over $1,500 a month for this couple. A lot of people are surprised by that because they think, oh well we have an income of a hundred
thousand dollars. Are we really going to get any assistance? And as you can see here, the answer is likely yes now, but let’s continue. And so hit continue and we’re going to hit this explore plans button right here and this will prepopulate some of that information. Make sure it all looks the same as what you put in and then go ahead and hit see my results continue. And then what you’re going to want to do, if you’re not quite ready to apply, you’ll see there’s apply now button down here. But if you want to see some more estimates of the different types of plans that are available, you’ll click preview plans and it’s going ask you to type in a doctor or hospital. You can actually just skip this and hit next.
This here is where you can tell them about your healthcare needs. So in this case, it’s asking how often do you go to the doctor? What types of tests and treatments do you need? How much are you using the plan? This is really important because as we’re going to see later to figure out which plan might be the best for you, there’s going to be a cost approximation based off of how much you actually go to the doctor or need surgery or these other things. In this example, I’m going to use medium use and that’s somebody that goes to the doctor about four to five times a year and they get tests and treatments in their doctor’s office.
And the next section has to do with prescription drugs. So if you’re use any prescription drugs, how regularly do you use them? In this case, there’s low use two to three prescriptions during the year. Medium use one to two prescriptions, or it gets higher. Again, I’m just going to click medium use for this one, which is somebody that needs one to two prescriptions each month and we hit view plans and now it’s going to load up some different plans that you might be able to apply for. And so as you can see here, there are many different options. You know, have these HMOs like Kaiser, Western Health Advantage, these might be some of the most cost effective, but there’s all kinds of plans. For example, there’s this blue plan that’s a PPO, um, but you can see the premiums are astronomically higher than some of the HMOs. Okay, so I like to, let’s look at Kaiser. I think that’s one that most people use in California.
A lot of people use, I should say. And one thing you can look at is this quality rating, which tells you what their member’s experience is and how it compares to national standards, which Kaiser has high ratings in this case. But the other thing that you can look at that I find interesting is this total expense estimate. So based off of the way you answered those questions, it’s trying to give you an approximation of what your healthcare expenses might be throughout the year. Now of course, we never know what’s going to happen with their health. It could be much worse or better than what we approximate. And it is important to talk to a financial planner or a health insurance agent to really make sure you’re getting the right plan. But this can give you some ideas at least. And the other thing is the yearly deductible. So how much are you going to need to pay out of pocket before the insurance is going to kick in? So those are some of the quick facts on how you can shop and compare on here. If you have any questions, feel free to give me an email. My email is Zack@swadwealth.com or just give me a call at (707) 899-1010. I hope you found this helpful and hope you have a great holiday season. Thank you.
Meet the Contributor
Zack Swad is a fee-only financial planner located in Santa Rosa, CA serving clients locally and across the country (virtually).
He specializes in financial planning and retirement planning for people age 50+. As a fee-only, fiduciary, and independent financial advisor, Zack Swad is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice. He has been in the finance industry for over 11 years. He previously worked for a Fortune 500 Financial Services company, managing a practice of $800 million for 300 clients. Zack then went on to build his own firm, Swad Wealth Management, LLC so he could make a deeper impact in his client’s lives. In his free time, Zack enjoys spending time with his wife Elise, playing board games, piano, and singing.
Zack Swad’s Contact Information:
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