Based on the discussions in this and other forums, I assume many of those, including myself, who are planning to retire before age 65 in US are counting on ACA to manage healthcare costs. I am hoping to retire within the next few years and looking at 3 to 5 years on ACA before being eligible for Medicare. Some (myself included) also take into account SS payments once eligible, in their planning, but I think ACA with its premium subsidies and the many protections (especially pre-existing conditions and cap protections) it offers may be even more important/critical to manage costs in early retirement than the extra income from SS in later years. Given this, isn't there a real risk of significant changes, even outright repeal, of the ACA if there is a change in administration after the November elections? After all, the repeal has been attempted over 50 times or so in the past with no real alternatives in place, so it seems reasonable to expect that it will be attempted again and may even be "successful" next time. I wonder, then what? How do we factor in this possibility in the planning? Thanks in advance for sharing your thoughts on this and if indeed this is something others worry about too. Of course, there is talk of SS and Medicare being impacted as well, though I am hoping there will be a huge backlash if significant cuts in those programs become a real proposal that can pass.
Planning for potential changes or even repeal of ACA and other programs
byu/GenX2024_friendly infinancialindependence
Posted by GenX2024_friendly
11 Comments
Social Security benefits are far more important than a few years of ACA coverage.
I think it’s unlikely that the ACA goes away. But the only way to mitigate that unlikely scenario is to have a lot of money.
I think a complete repeal of the ACA is unlikely. However, I don’t think the intent of the legislation was to subsidize healthcare for the FIRE crowd and I could see some tightening of the eligibility standards that reduces access for FIRE folks, or reduces subsidies for the same group, as part of any effort to get the budget deficit under control.
I think it’s highly unlikely it’ll get repealed or meaningfully scaled back. I’m not worried about it.
TL,DR – Save enough money to cover the loss of subsidies, be prepared to work until Medicare eligibility if the whole thing goes away.
If the subsidies get reduced or eliminated for FIRE folks, then it just means a much bigger healthcare spend each year. That can be budgeted for, which is what we did. Every year the subsidies remain intact is a big financial win, but if they come back we’re covered for that too.
If the whole thing is tossed out and the market reforms go with it too, then most of us are going back to work just like the pre-ACA days. Actual insurance was not widely available at any price in many states pre-ACA and I expect the market dynamics would push insurers back to that default. There’s just too much risk involved with actual insurance for the 50+ crowd unless you engage in a bunch of mitigation efforts like pre-existing condition exclusions, coverage limits, and medical underwriting.
You could ask this about any service/benefit that exists now.
The only sure fire way around this is to not factor it in and instead substitute a different (possibly more expensive) service/benefit into your calculated expenses.
My wife won’t let me factor SS into our retirement income projections. So, we save more than we actually will probably need.
I could be wrong, but I don’t really worry about any of those things just “disappearing.”
Operate under the assumption that there are no guarantees when it comes to the government and you will never get caught with your pants down.
3-5 years before Medicare = I wouldn’t worry about it: worst case scenario you pay the full cost without subsidies for a couple of years. It would be irritating but not life changing.
How to plan for passage of a National healthcare system/ universal coverage/ single payer?
I FIREd last year. Current ACA premium is $225. I can afford an extra $12k/yr if the government screws us. that’s one of the reasons my annual spend is about 2.5% and I could be a lot more careful with money than I am — I stuck it out at work until I felt I’d be fine if both ACA and SSI went poof. I’m 99.7% sure I was being overly paranoid, but it’s awfully nice to not be worried.
It’s very difficult to take away a benefit once people have it. Not to say there isn’t a chance, but it’s lower on my worry list than some other potential economic impacts from a second Trump term.
Look at Project 2025. We will eventually end up in a Christofascist authoritarian state. Healthcare won’t matter as much at that point.