Golden Years Dimmed by Obamacare

Eyeglasses with newspaper and coffee cup

Chaos and uncertainty – it’s not necessarily the words you associate with health insurance, which is supposed to provide peace of mind. Yet the Affordable Care Act and its flurry of glitches, cancellations, moving deadlines and costly increases have left many concerned and confused. Take Colorado-resident Bill, who received the unwelcome news about his supplemental plan through IBM.

“I am an IBM retiree eligible for Medicare, but whose wife is not yet eligible for Medicare.  Because of the rising costs for health insurance, IBM is dropping their Medicare supplement insurance for retirees, and I have no idea what I am going to do and how much it will cost me,” shared Bill.

In early September, IBM announced its move, stating that roughly 110,000 Medicare-eligible retirees will be shifted from the company-sponsored health plan to an annual stipend, which would allow them to purchase coverage on an exchange. The only caveat is that retirees must enroll in Extend Health, a private exchange, to receive a subsidy.

“IBM said the growing cost of care makes its current plan unsustainable without big premium increases…

“Cost increases under our current retirement group health care plan are no longer sustainable for you,” IBM said in the notices. “Health care costs under IBM’s current plan options for Medicare eligible retirees will nearly triple by 2020, significantly impacting your premium and out-of-pocket costs,” the notice said.”

Worried about costs and what will be available, Bill explained his wife’s special needs and how roughly 27% of their income is already going to healthcare.

“It is particularly important for me to find insurance for my wife since she has fibromyalgia. Her prescription costs without insurance would be in the neighborhood of $20,000 to $25,000 a year – an amount we could not afford without insurance. Our income is only about $48,000 a year, and just this year alone, health insurance cost us over $13,000. We don’t travel very much and live a relatively frugal lifestyle.  Fortunately, our home is paid for, or we would not be able to continue to pay for it,” Bill said.

Bill’s former employer, IBM, is not the only one making the major change. A survey by Towers Watson & Co. found that this may be the new norm as “44% of companies plan to stop administering health plans for their former workers over the next two years,” Bloomberg reported.

Fortunately, Bill was able to find coverage for himself and his wife; however, it came with a cost.

“I was able to go to AMAC [Association of Mature American Citizens] and get Medicare supplemental insurance that is actually better than what I had last year. It was a better deal. AMAC is the conservative answer to AARP,” Bill stated. “Since my wife is not eligible for Medicare, IBM still offered insurance for spouses that are not Medicare eligible. I ended up taking that, but our insurance is now costing us around $1,300 [a month].”

The increase comes to $15,600 a year – that is approximately $2,600 more than what they paid in 2013. Bill commented how this will strain their already tight, fixed income. “Yes, we have to come up with the extra money each month. Social Security is going up by 1.8% or something, which is $18 a month for me. We are going to have to cut back some place else.”

Bill knows that this is only a foreshadowing of what is to come.

“This year it may not seem so bad, but once they have their grip on us, it is going to get worse and worse and more expensive and more expensive,” he pointed out.