ACA Health Insurance Pricing in Early Retirement: Examples From Washington State

This is a follow-up post on health insurance pricing in early retirement. I’ve been researching ACA plans in my area (Seattle) and have been surprised by some quirks in the system. I previously posted about how a 64-year-old could end up paying less than a 45-year-old for a Bronze plan.

I dug a bit deeper based on feedback to the last post and learned a few things:

• Some states (like Washington) have enhanced subsidies or special plans for people under 250% of the FPL. In Washington, this is called “Cascade Care,” part of the public option plan. Colorado and Nevada have similar programs, and it looks like Minnesota is working on one too.
• If you actually plan to use the insurance, these plans offer nice benefits like reduced deductibles and cost sharing. I’m not planning to live this lean, but if you can carefully manage your income, they might be worth a look.

A few other things I noticed:

• We know this, but the 400% FPL cliff is a big deal—income management matters a lot more at 64 than at 45.
• With the subsidies, the Gold plans were not as expensive as I thought they would be. They are borderline outrageous without them.
• Calculators like KFF’s subsidy calculator are a good starting point, but there’s a lot of variation in plans. You really need to check your state exchange (or the federal exchange if your state doesn’t have one). For example, in my area, there’s no Silver plan available within my income range.

Overall, I’ve been pleasantly surprised! Insurance is expensive, yes, but it’s not impossible if you can manage your income. And if you’ve saved in an HSA, the max out-of-pocket costs aren’t as scary as I imagined. Of course, this would be very different if I had a chronic condition that pushes me to the limit each year.

Here’s a bit more pricing info for Seattle/King County. I shared some of this in my last post, but people asked for Gold plan details, so I ran them. Remember, you need to check the plan details to make sure your doctors and preferred hospitals are in network.

Edited to add: Pricing is for a couple/household of two

Bronze HSA Plan (top rated bronze on exchange)

Gold HSA Plan

My final takeaway is to not be scared about insurance costs until you actually run the numbers! Before someone chimes in, yes of course, this assumes the ACA will still be in place by the time you hit 64. But in early retirement we make all kinds of assumptions about the tax code (0% LTCG, Roth conversions, etc.) that haven't been around forever either.