With re­peal, re­tire­ment dreams fiz­zle for some

The Denver Post - - BUSINESS - By Carla K. John­son

chicago» Work­ers dream­ing of early re­tire­ment are get­ting the jit­ters as Wash­ing­ton de­bates re­plac­ing the Obama-era health care law with a sys­tem that could be a lot more ex­pen­sive for many older Amer­i­cans.

The un­cer­tainty over the cost of cov­er­age in the in­di­vid­ual mar­ket has caused some in their 50s and early 60s to put plans on hold. Oth­ers who al­ready left jobs with health ben­e­fits be­fore reach­ing Medi­care age are sec­ond-guess­ing their move to self-em­ploy­ment.

With her mo­bile home paid off, so­cial worker Mary Ly­tle-Gaines planned to re­tire next year and work part time.

“My job is very stress­ful. And my grand­son is go­ing to be 8. It would be sweet to spend more time with him,” said the 61-year-old from Wood River, Ill., near St. Louis.

Now with in­surance pre­mi­ums pos­si­bly ris­ing for her age group and in­come level, “I doubt I’ll re­tire.”

The Repub­li­can plan to re­place the Af­ford­able Care Act was still be­ing tweaked Wed­nes­day and may pro­vide more help to older peo­ple than the ver­sion scored by the Con­gres­sional Bud­get Of­fice last week. That analysis found a 64year-old earn­ing $26,500 would pay $14,600 out of pocket for in­surance un­der the GOP plan, com­pared with just $1,700 un­der “Oba­macare.”

The Repub­li­can pro­posal would al­low in­sur­ers to charge older cus­tomers five times as much as younger ones, while cut­ting the size of tax cred­its for many.

“While it’s un­clear how the (re­vi­sion) will ac­tu­ally change the sub­si­dies, it is al­most cer­tain that the com­bi­na­tion of those two fac­tors is go­ing to re­sult in a pretty mean­ing­ful in­crease in costs” for pre-re­tire­ment Amer­i­cans, said la­bor economist Craig Garth­waite of North­west­ern Univer­sity’s Kel­logg School of Man­age­ment.

“The young and the rich are go­ing to be the win­ners,” Garth­waite said. The GOP plan “trans­fers re­sources from the poor and the sick to the healthy, young and rich.”

Cathy Beluch re­tired in 2015 from a job at a lead­ing fi­nan­cial ser­vices firm to launch her own lead­er­ship coach­ing busi­ness. The 56year-old from Hobo­ken, N.J., took the plunge know­ing she could shop for cov­er­age on the health ex­change.

Beluch pays $650 a month for a health plan with a $2,500 de­ductible. She earns too much to qual­ify for a sub­sidy. Her health in­surance costs are high, but she be­lieves she will be worse off un­der the Repub­li­can pro­posal.

“It’s fright­en­ing to think about what’s go­ing to hap­pen now,” Beluch said. “I’d be reck­less to not be con­cerned about it.”

Ge­of­frey Zim­mer­man of Wal­nut Creek, Calif., is re­think­ing his plan for deal­ing with ex­pected fam­ily health is­sues. The 54-year-old fi­nan­cial plan­ner has been sav­ing ag­gres­sively, know­ing his 46-year-old wife’s rare ge­netic bone dis­ease will likely lead her to stop work­ing sooner than most peo­ple.

The cou­ple’s health cov­er­age is now through Lynn Zim­mer­man’s job as a speech pathol­o­gist. They had hoped to be “work op­tional” in six years, he said, but that hinged on af­ford­able cov­er­age.

“I may need to work longer to main­tain health cov­er­age un­til Lynn reaches Medi­care age so that we’re not fi­nan­cially go­ing to crip­ple our­selves,” Zim­mer­man said.

Oth­ers said the sit­u­a­tion for early re­tirees isn’t any more pre­car­i­ous than it has been un­der the Af­ford­able Care Act with pre­mi­ums ris­ing and in­sur­ers ex­it­ing the in­di­vid­ual mar­ket be­cause of fi­nan­cial losses.

“The re­al­ity is peo­ple were al­ready jit­tery about health in­surance and early re­tire­ment. It’s not like health in­surance is cheap for early re­tirees un­der Oba­macare,” said Ed Vargo, a fi­nan­cial plan­ner in Cleve­land. “The prom­ise of af­ford­able health care un­der Oba­macare never ma­te­ri­al­ized” for many peo­ple.

Still, Vargo is ad­vis­ing peo­ple eye­ing early re­tire­ment to take a “wait-and­see ap­proach.”

Fi­nan­cial plan­ner Amy Jo Lauber has been com­fort­ing a client, a 56-year-old sin­gle woman near Buf­falo, N.Y., who had planned to re­tire this spring and live on in­vest­ments and sav­ings.

Her big­gest hes­i­ta­tion had been health in­surance be­cause she had a good plan through her em­ployer, Lauber said. Be­fore the Novem­ber pres­i­den­tial elec­tion, she priced out plans on the health care mar­ket­place.

She found she would qual­ify for a sub­sidy that would make cov­er­age af­ford­able at $250 a month. She even set a date for telling her boss, a date which has come and gone. She will wait and see what hap­pens next.

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