If you’re retired, you need insurance. But where do you start in this overwhelming market? And what types of coverage do you need? Here’s what you need to know for those approaching retirement in Iowa.
No one wants more bills to pay, especially when you’re on a fixed or limited income. But insurance is something of a necessary evil. If you’re looking for health insurance coverage through the marketplace, the deadline for 2023 is approaching quickly. Open enrollment for health plans begin November 1st and run through Jan 15th. This is mainly for people who are self-employed or can’t get workplace insurance, but also don’t qualify for Medicaid or Medicare.
If you’re one of these people, you’re part of the 13 million who are enrolled in private health insurance. Below, we’ll look into health insurance coverage considerations and other potential insurance needs for 2023.
Premiums are Rising by 4% to 5% on Average
Premiums are rising nationally between 4 and 5 percent on average. While each state varies, Iowa’s premiums are rising to 5.4% which is slightly higher than the national average. If you have a marketplace plan and are facing a large premium increase, you can always check to see if there is another affordable option available.
Outside of open enrollment, a qualifying event is necessary to enroll or make changes to your coverage. There are three insurers that offer exchange plans in Iowa, with plan availability varying from one location to another:
- Oscar
- Medica
- Wellmark
Take Advantage of Generous Subsidies
If you’re looking for a way to help lower your health insurance costs, there are still some ways to do that. In fact, more generous financial help remains in place. That is, temporarily expanded subsidies that were put in place for 2021 and 2022 were extended through 2025 in the Inflation Reduction Act, which became law in August.
This means there is no income cap to qualify for subsidies, and the amount anyone pays for premiums is limited to 8.5% of their income as calculated by the exchange. Before the changes, the aid was generally only available to households with income from 100% to 400% of the federal poverty level.
The marketplace subsidies that you’re eligible for are based on factors that include income, age and the second-lowest-cost “silver” plan in your geographic area (which may or may not be the plan you enroll in).
Be Sure to Give a Good Estimate of 2023 Income
Are you still in the workforce? You might have heard that the amount of your subsidies is based at least partly on your income. And you might be thinking, “How can I estimate what my income will be in 2023?”
If you end up having annual income that’s higher than what you reported when you enrolled, it could mean you’re not entitled to as much aid as you’re receiving right now. And any overage would need to be accounted for at tax time in 2024 — which would help reduce your refund or increase the amount of tax you owe.
Likewise, if you are entitled to more than you received, the difference would either increase your refund or lower the amount of tax you owe.
Either way, at any point during the year, you can adjust your income estimate or note any pertinent life changes (death of a spouse, inheritance or divorce etc) that could affect the amount of subsidies you’re entitled to.
Family Income is Fixed Starting 2023
In 2020, the Affordable Care Act changed the rules for how people can get insurance if their employer doesn’t provide affordable coverage.
People who are employed and don’t get employer-sponsored health insurance are considered “affordable”. It’s important to note that no more than 9.61% of income this year are permitted to sign up for a plan through the marketplace. The measurement of affordability is based on the cost of employee-only coverage.
That’s the case even if a worker wants their dependents covered too — meaning the actual cost of family coverage could far exceed that threshold. However, in 2023 it will work differently. If the workplace coverage for a family would be unaffordable, the employee would need to stay on the employer plan, while the spouse and kids would be covered by the marketplace — and eligible for subsidies.
Because there is no one-size-fits-all solution for health insurance, families will have to split between multiple premiums and deductibles. Not everyone in the family glitch will be covered.
Other Types of Insurance to Consider
Healthcare coverage isn’t the only insurance you’ll need as a retiree or pre-retiree. And certain insurance plans can help you live out your golden years as worry-free as possible – a worthy investment in your well-deserved break from workaday reality:
- Long-Term Care Insurance: From house call professionals who can help with daily activities to home modifications like ramp and grab bar installations, long-term care can help you live comfortably and independently as long as possible.
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Early Retirement Medical Insurance and Supplemental Medicare Insurance: If you are retiring before age 65, you need to brace against the potentially exorbitant costs of insuring yourself until you qualify for Medicare. The right Medicare supplemental insurance plan can reduce your out of pocket expenditures. However, supplemental medicare is complicated and has the potential to lead to a lot of confusion. Professional advice may help you find the right solution for your situation. It is also important to evaluate your coverage every year since policies can change and your health needs also evolve.
- Dental and Vision Insurance: It’s the unfortunate truth: some parts of our bodies just don’t work the same way as we get older. That’s why both Vision and Dental insurance could be a huge cost-saver for older Iowans. Medicare doesn’t cover most routine dental care or procedures, though its Part A Hospital Insurance may pay for certain services you receive while hospitalized. Medicaid’s dental coverage varies by state, but there are no minimum coverage requirements for adult patients. Vision insurance will also cover the costs of routine preventative eye care, such as screenings for glaucoma, macular degeneration, and cataracts
Final Thoughts
If you’ve been putting off signing up for marketplace health insurance, now is the time to do it! Additional insurance may seem like an unnecessary expense, but should something go wrong, you’ll be happy to have it.
We know that 2023 is a lot to think about, but if you plan ahead and get your fiduciary advisor involved, you can be ready to face any challenges that come your way. So what are you waiting for? Talk with your Fiduciary advisor today about getting covered for all your retired life needs.
At Johnson Wealth and Income Management, we want you to have the best year yet—and that starts with planning for your insurance for 2023. Contact us today to get started.
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