Early Retirees Beware: ACA Healthcare Shake-Up

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Your Retirement Guide Podcast with George Jameson, CFP® and founder of Capital Wealth Group in Columbia, SC. 

In this episode, we dive into the critical changes coming to ACA healthcare subsidies, set to expire in 2025, and their impact on early retirees under 65. George shares practical tips to manage costs, adjust income, and keep your retirement plans on track.

 Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.

Thank you for tuning in to this episode of The Retirement Guide. If you enjoyed this episode, please subscribe & leave a review. If you'd like a free 30-minute retirement review, visit our website at www.capitalwealthplan.com to schedule.

This is for education only.It is not tax, legal, or investment advice. Before  acting on any information consult your tax, legal, or investment advisor.

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Episode Transcript

George Jameson (00:00):
Hi, and welcome to my podcast.
I'm George Jameson, certifiedfinancial planner and founder of
Capital Wealth Group.
Today we're diving into acritical topic for anyone
planning to retire before age65.
I'm talking about healthinsurance and healthcare cost.
Right off the bat, there's somebig news you need to know.

(00:20):
The enhanced Affordable Care Acthealthcare subsidies are set to
expire at the end of 2025 andare unlikely to be extended by
Congress according to NPR andInvestors Business Daily.
These subsidies havesignificantly lowered premiums
for many Americans, but withoutan extension premium costs for

(00:44):
subsidized a CA plans areexpected to skyrocket even
potentially doubling or more insome states.
This is a game changer,especially for retirees or
future retirees retiring beforeage 65 and self-employed folks
who depend on these subsidies tokeep healthcare affordable.

(01:07):
Let's break it down and figureout what this means for you.
Right now in 2025, the enhanceda CA subsidies help people
earning above 400% of thepoverty level, think 58,320 for
a single person, 78,880 for afamily of two 99,440 for a

(01:31):
family of 3 and roughly 120,000for a family of four.
These are the 400% of povertylevel figures.
However, if nothing changes,starting in 2026, any amount
above these figures, and thesubsidies vanish.
So anyone over these incomethresholds loses all financial

(01:53):
help.
So you'll be paying full priceand those prices are climbing
fast.
According to KFF.org org'slatest analysis, most a CA
insurers are proposing premiumincreases between 10 and 20% for
2026.
kff.org states that this couldmean out-of-pocket monthly

(02:16):
premiums jumping by more than75% on average.
For example, a family of threeearning 110,000 a year, which is
over the 400% poverty level, andif they're enrolled in a silver,
ACA Plan, they may see theirmonthly cost leap from$780 this

(02:38):
year to$1600 per month nextyear.
That's more than double whatthey're paying now.
And for a 60-year-old couple whoretired early.
The national average full pricewithout a subsidy for a silver
plan.
Under the ACA program is about1300 per person on average, so

(03:01):
that would total 2,600 per monthwithout any subsidies.
Keep in mind these figuresfluctuate depending on what
state you live in, so what canyou do if you're in this
squeeze?
Some might stick with theirplans and pay the higher
premiums.
It's tough, but doable for thosewith room in their budget.

(03:21):
Others could switch to an evenhigher deductible plan, which
may have lower monthly costs,but will make you pay a lot more
out of pocket before insurancekicks in.
It's a trade off you save now,but then you risk more later if
you need serious care.
Either way, it's a financialstretch for a lot of people.

(03:42):
So what are the uniquechallenges for early retirees?
We've already spoke on some, butfor those who retired before age
65 or considering earlyretirement, this subsidy
expiration is particularlyconcerning since Medicare
doesn't start until age 65.
A CA plans are often the onlyviable option for many people.

(04:06):
The potential doubling thepremiums could derail retirement
plans for some or even forceretirees back into the workforce
to afford coverage.
If you're in this boat, it'scrucial to reassess your
healthcare budget now.
You might need to allocate moresavings to cover these increased
costs or even work part-timejust to pay for the premiums.

(04:28):
Additionally, managing yourincome distributions until you
reach age 65 to stay under that400% poverty level could help
you qualify for financial help.
But really that's not feasiblefor everyone, especially if most
of your savings are in pre-taxretirement accounts and you need

(04:49):
to take withdrawals to live on.
So this isn't just aboutindividual bills.
It's really a seismic shift forthe A CA itself.
Letting these additionalsubsidies expire amounts to what
is effectively a partial repealof the a CA program.
Erasing a lot of its gains inhealth coverage.
Millions could drop coverage ifcosts get too high.

(05:12):
Undoing years of progress ingetting people insured.
It can be a ripple effect.
Higher uninsured rates mean moredelayed care, worse health
outcomes, and bigger costs downthe road.
So what's next?
For now?
The clock is ticking.
If you're own an ACA plan with asubsidy, especially above that

(05:32):
400% poverty line, startplanning today.
Could you adjust your income tostay under the cutoff until you
hit age 65.
Maybe save some extra to BRACEfor 2026 and beyond, especially
for those who haven't alreadyretired.
It doesn't sound like Congresswill step in.

(05:54):
I hope I'm wrong, but withoutaction, these increases are
coming.
I'll keep you posted as thisunfolds, but for now it's about
staying informed and gettingready for some change.
That's it for today.
Thank you for tuning in.
If this resonated with you orknow someone who may need this,
please share if you needretirement planning help.

(06:17):
Please let me know.
Until next time, be safe andhave a great day.