Women's Money Wisdom

Episode 298: The Rising Cost of Healthcare - What You Need to Know for 2025 with Cole Craven

• Melissa Joy, CFP® • Season 4 • Episode 298

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If you’ve been hearing more talk about health insurance costs lately — you’re not alone. From higher renewal premiums to open enrollment decisions, healthcare has become one of the biggest line items in many household budgets.

In this episode, Melissa Joy, CFP®, talks with Cole Craven, co-founder of Move Health, about what’s really happening with health insurance in 2025 and how to make confident decisions for your family or your retirement.

Cole works closely with financial planners to help clients understand their options, and he shares practical insights you can use right now — whether you’re choosing coverage through your employer, the marketplace, or looking ahead to early retirement.

You’ll learn:

  • What’s driving healthcare costs higher in 2025
  • How the Affordable Care Act (ACA) marketplace actually works
  • The difference between COBRA, private plans, and marketplace coverage
  • What to know about tax credits (and what might change next year)
  • Why planning for healthcare is essential if you’re retiring before 65
  • How to find the right help during open enrollment

If you’ve ever said “I’d retire early if it weren’t for health insurance,” this conversation is for you.

Resources:

The previous presentation by PEARL PLANNING was intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https:...

SPEAKER_02:

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence, and be strategic in order to grow your wealth. As a woman, you work hard for your money, and I'm here to help you make the most of it. Now let's get into the show. Well, if you are at the water cooler nowadays, talking to friends, in conversations on social media, I've seen more and more conversations about the cost of healthcare, especially renewals of insurance premiums, than ever before. And I know that's a topic that our listeners are dialed into, whether it's for themselves, their kids, important family members, or, you know, thinking about their friends. So I thought we could have an episode before the end of the year during this open enrollment period where we dive deep on the reality of health insurance in 2025. And in order to have that conversation, I brought in an expert who really knows about health insurance for all ages. Cole Craven is the co-founder and head of growth at Move Health. He lives in Evansville, Illinois with his wife and two sons. And he has a passion for creating an empowered and informed healthcare consumer through effective healthcare planning. So he works with financial planners like myself to make sure that clients like you have good information to make informed decisions about healthcare. I think you're really going to enjoy this conversation. And Cole, welcome to the podcast.

SPEAKER_00:

Thanks, Melissa. Appreciate you, uh appreciate you having me. And you know, I'm I am a I'm a Hoosier at heart. And so it's Evan, there isn't Evansville, Illinois, but I'm actually Evansville, Indiana. Funny enough. And so you are excited. It's all good. You know, my my if my Evansville crowd listened to it, they would they would never let me live it down. Yes.

SPEAKER_02:

Thank you for the correction. And um Go Hoosier is number one in football this week. We're recording um right at the end of October. So congrats on that.

SPEAKER_00:

Exactly right. We've got an it's it's an interesting time to to be an IU Hoosier football fan. We um we have historically been a terrible football school, and and now look at us. Uh so the power of the transfer portal and this new world that we live in. And so similar to that, you know, there's been the winds of change that have blown into you know college football and NIL and all those things. I mean, in the in the healthcare space, if I can make a really cheesy segue, right? We've got some big changes, we've got some big changes that are coming up as well. And so excited to talk through those with you and um, you know, interested in hearing what your listeners are really keyed into.

SPEAKER_02:

Well, I think that really tees it up. Um, healthcare is constantly evolving. Insurance is such an important component of your medical outcomes, the way you see your ability to access healthcare. Um, you know, if you work for an employer that offers you a stable healthcare plan every year, um, subsidizes your um economic costs of that healthcare, then um, I still think you should listen in because um the health insurance marketplace may be there for you at times when you have a transition. But this conversation is really about those who are looking for access to health insurance beyond their employer plan. Um, and again, like if you plan to retire early before pre-age 65, this is absolutely relevant to you. So, could you give us a lay of the land of um the ACA marketplace? And um, you know, we're we're talking about pre-65 um health insurance. What does that even mean nowadays if somebody hasn't been covered by it?

SPEAKER_00:

Yeah, really good question. And so, you know, Melissa, you you made a good point. You know, this is this is really going to be very applicable to folks that that don't get coverage uh from a job, right? So anybody that's getting health coverage outside of a job. Some fun facts about how people access coverage in the United States is um, you know, 50% of the United States gets health insurance coverage through their employer or through a parent's employer or a spouse's employer. 50% of the United States. There is 15% and growing really rapidly that get coverage through Medicare, right? Medicare is for those that are uh over the age of 65 or disabled before the age of 65. 20% of the United States gets health coverage through Medicaid. Medicaid is state-based, low income, typically uh income-based health coverage through your state. Um, and then the the kind of last piece of that puzzle, right? If I do the math, I'm going, okay, 50% plus 20% plus 15%, I go, okay, that's 85%. There's still 15% of the United States that's in this bucket that has to buy health coverage outside of a job. And what we have seen is over the past several years, that number has continued to increase and increase and increase. And there's a couple of reasons why, but we're going to key in specifically to what that space looks like right now. And so pre-65, this could be someone who is um, you know, a small business owner or an entrepreneur or a contractor or a gig worker. Um, one that we serve really, really often, and really the entire reason I wanted to start Move Health when we started it was um the early retiree. I watched my in-laws struggle with this decision, and I watched health insurance be the linchpin in their financial plan before they felt comfortable saying, okay, we're ready to retire. We're ready to spend more time with grandkids and on hobbies and all these things. This was the blocker to them feeling comfortable. There's a there's a lot of people that are sitting at jobs right now that are like, I'm financially prepared to retire. I feel good about that piece of the puzzle. Maybe I've worked with Melissa, our financial planner, who's helped us to feel really confident in our financial plan. The last piece that we need to put into place is health insurance. And when I leave my job, I'm no longer going to have health coverage, right? Um, or I need to take Cobra and I hear that that's really expensive, or I hear that the marketplace is challenging and all these things. And so the goal, you know, let's let's cut through some of the noise when it comes to uh when it comes to that. And so in the pre-65 space, some of this is state dependent, but in the pre-65 space, you really have a couple of options. If we're looking at just as an example of someone who is retiring before the age of 65 and they're saying, I need to find coverage, I'm leaving a W-2 salaried job. You're gonna have a couple of options. Option one, in no particular order, option one is Cobra, right? So Cobra is not, uh, it's not a snake, it's not an insurance carrier either. Cobra is not, you don't get coverage through Cobra insurance. Um, Cobra is a law, it's legislation from the 80s that says when you leave your job, you have the ability to continue your employer benefits. Um, but the downside of Cobra is yes, you get to keep your employer benefits, it's the same plan. Um, you carry it forward. So if you retire mid-year or you leave your job mid-year, you elect Cobra. If you've already paid into deductibles, it stays the same plan. So you've got that deductible that's um, you know, you paid into already. So you're not resetting a deductible mid-year. The downside of Cobra is that when you leave your employer, typically they are going to take away all of that employer subsidy, right? And so whatever the employer is paying, they no longer pay when you are on Cobra. And so you're paying 100%, both the employer portion and the employee portion.

SPEAKER_02:

I always add into I was just explaining to someone um who's getting divorced and she has the healthcare. The spouse is like, that's fine, I'll just take it with me. Um, I'll be I'll use Cobra for three years, because in a divorce case, I believe it's a 36-month period. Um, and I was like, okay, you need to check that price because it is not the, you know, it is not highly subsidized and it just does not work that way.

SPEAKER_00:

Yeah. And and so you're paying 100% of the premium. And it and it depends on the plan that you have and who's on it and all those things for what your cost comes out to. But regularly for a couple, we see, we see Cobra costs that are anywhere between$2,500 a month and$4,000 a month, right? For Cobra coverage. And so a lot of people don't understand. Your employer, they pay a lot for your health coverage many times. Um, and so you know, Cobra can be expensive. Adding insult to injury, there's a 2% administrative fee that gets tacked on top of that. So typically you're paying 102% of the actual cost of that plan. And Cobra can be a right fit for some people, right? If you've already paid a maximum out of pocket or a deductible for the year, or you are piling a lot of income into a year, or you have very specific healthcare needs, um, you know, those can be all good reasons to stick with Cobra. Um, because it's uh, yes, it's expensive, but it's going to provide the most stability in terms of, hey, I'm already seeing these doctors, I don't need to change anything. You could also make a change to other coverage and still see the doctors you needed to, but in the event that you're undergoing current treatment or things along those lines, it can make sense. Again, you don't have to reset a deductible. So when somebody comes to us in, you know, I know we're recording this at the end of October, when somebody comes to us and says, hey, I'm retiring at the end of November, uh just before Thanksgiving or whatever, okay, great, that's awesome. We might just elect Cobra for that month of December, right? Because there's no sense in resetting a deductible for one month and learning a new plan for one month, only to have a new plan start on January 1 again. Um, and so all of that to be said, you know, Cobra's a good option for folks that um are either in a high income year or they're undergoing current treatment, uh, or they really, really like their plan, or sometimes an employer, if you have a severance package, sometimes they'll actually cover Cobra premiums to a degree.

SPEAKER_02:

Sometimes that's negotiated into the severance package. It might not be the first offer, but then if you have, you know, a little pushback or there's reasons to um, you know, uh kind of dispute or ask for a modification of your severance package, I think that's one of the first things that employers are willing to kind of work with.

SPEAKER_00:

Yeah, I I think that that's right as well. And, you know, again, don't be afraid to ask. The worst that can be said is no. And um, you know, you might you might really uh win as a result of that. So that's option one. That's Cobra. Another option, uh, and and it's funny, you know, in the space that we are in in health insurance and and uh in Medicare, specifically in the pre-65 space, people will say, Well, I don't want the marketplace and I don't want Cobra, I want private insurance, right? And I'm I'm using air quotes here, I want private insurance. And private insurance is a bit of a misnomer in the sense that it's a it's a different definition to every person of what private health insurance is. So I'm going to exclude the marketplace from private insurance in this instance. Um, and I'm just gonna reference off-marketplace coverage. And typically what off-marketplace coverage would be is I could go to um, you know, insert the name of a carrier, and I could say, I want an individual and family plan, um, and I want to be able to enroll into it. And there's a couple of different flavors of off-marketplace. Um, there's an option where you might have to undergo some medical underwriting. They might actually ask you some medical questions and it might work um similar to how health insurance worked before 2014 in the individual space where you had medical questions and they'd ask for your height and weight and all those things, and they'd they would either say, Hey, we're gonna, we're gonna accept you. Great. We we're really excited about having you covered on our plan. Or they might say, um, or they might say, Oh, we don't like that prescription medication you take, or your height and weight or out of whack, and uh, you know, we're gonna rate you up. Or they might just say, Hey, you told us you had that surgery in the past three years. Sorry, we're not gonna cover you, right? So there are still health insurance plans you can buy that have a medical underwriting component where they'll ask you some questions and run a medical information bureau check. The benefit of these is if you are someone who is healthy and has you know limited, limited uh, you know, medical expenses annually, it can be a fit for those people. It can also be a fit for people that are, you know, again, healthy, don't have chronic conditions, and and are high income, right? Because it's not going to be your your income is not gonna play a factor. We'll talk about that here in a moment. So that's kind of the off-market place side. You can go direct to an insurance carrier on occasion.

SPEAKER_02:

How often does that happen? Is that infrequent typically?

SPEAKER_00:

I would say it's fairly rare. Um, and and the reason being is a lot of times these are the same plans that are on the marketplace just with no tax credits applied.

SPEAKER_02:

That's what I thought. Like you're you're literally just going without like kind of giving yourself a first look for the tax credits, right?

SPEAKER_00:

Right, exactly. And so you've got you've got that. There are also um, you know, like short-term health insurance plans, and these are gonna have medical underwriting component component to them. They're also not gonna cover the three Ps, pre-existing conditions, prescriptions, or pregnancy. And so uh if any of those apply to you, short term's probably not there. That can be a fit again for folks that are in between uh, you know, jobs or have a short period of time where they're trying to cover. Um, it can be a fit for people who want to keep them longer term. Again, if they are healthy individuals, et cetera, but they will have some exclusions. So when we think of the private insurance space, a lot of times that's just characterized by going direct to an insurance carrier and um you know getting a plan specifically through them. You know, if it could be United Healthcare or Blue Cross Blue Shield or Anthem or what have you, you can go direct to a carrier and do that. It's not always the best option. Sometimes they're gonna have a medical underwriting component. And uh, you know, with that, you might end up it there's there's two caveats to that. One being you might have a situation where you're high income and you're healthy, great. You might go off marketplace and it might, it it potentially could save you money, right? Because through that underwriting component, they're reducing the risk pool and all these things that that benefit you. And um, you know, we'll talk more about the marketplace here in a moment. Uh, and so you've got that component. Um, the other side of it is on the on the private insurance space off marketplace, be very, very mindful of weird, uh, we've seen really weird exclusions, right? Uh, or things that are left out of a plan. Um, make certain you read the fine print. And this time of year, as we near open enrollment period in the fourth quarter of the year, anybody that has ever searched health insurance on their phone or on their computer is going to be inundated with advertising. And my my statement to anybody that's seeing that is if there is a plan that looks too good to be true, it probably is, right? Um, there's trade-offs in everything. And so if you see we've got nationwide PPO networks that are gonna cost you less money and all these things, there's a place where the trade-off happens. Uh, it's either gonna be really expensive uh, you know, on a monthly basis, or there's significant exclusions or underwriting or things along those lines that make that happen.

SPEAKER_02:

So can you give me kind of the pride of like an anecdotal weird exclusion that you've seen? Of course, this is not blanket, don't assume. But like, what's something that came up where you're like, are you kidding me?

SPEAKER_00:

Yeah, and and I'm I don't want to paint all off marketplaces negative, but I will tell you one that one that we experienced that was um that was really challenging was someone who came to us after they had already enrolled into coverage. And they had a um, sometimes you'll see these things called association plans, and they'll say, We'll make you part of the Small Business Owners of America Association. And with that, you get access to our group health plan, right? And um, you know, really it's a group that's associated, you know, built built to create, you know, a group for health coverage. That said, those can sometimes have weird exclusions. And this person came to us in crisis because they were needing a transplant. And when you read the fine print on uh, you know, this organization's group health plan, one of the first exclusions was transplants. And this was a life or death situation. They had to get this figured out, and their health coverage was saying, like, no, it's part of our, it's part of our contract. We don't cover that. And so again, be sure to read the fine print. Make certain you understand what a plan does or doesn't do. Make certain you're working with someone on that that is not, you don't feel like you're being sold to. Um, and again, if it sounds too good to be true on the private insurance uh space, you know, it's kind of a I'll call it off-market place. It probably is. Um, you know, and so, you know, with that, I think one of the one of the you know, better things that happened to uh the health insurance landscape was the Affordable Care Act. Um, and you know, this has been referenced as Obamacare and Trump care and Biden care and all these things, and each legislature or each uh, you know, presidential administration is having had the kind of their own spin on how they've treated it and how they felt about it. But all that to be said, you know, prior to 2014, there were lots of people that would say, Hey, I'm I'm 58, I'm financially ready to retire, I'm I'm ready to go. I had a heart attack two years ago, and it just really put things into perspective for me. I I think I need to slow down and and you know stop working, retire, and enjoy these years. And we would have to tell that person prior to 2014, I'm really sorry. You're you're gonna have to leverage Cobra for as long as you can, but but you will not be, you're not gonna pass underwriting. So prior to prior to the Affordable Care Act, all health insurance on the individual space was was you all pretty well all that was was medically underwritten. So they'd ask you questions. And if you couldn't pass underwriting, you either didn't have health coverage or you had to continue working or or find a job that did provide it. So that was a weird, that was a different spot.

SPEAKER_02:

Yeah, I don't think like new generations won't understand um how critical that was and how difficult it was if you had an at just an adverse chronic condition. Um and, you know, the reality is as I've turned 50 this year, the older you get, the more pre-existing can, you know, the more time you have to have pre-existing conditions where, you know, the picture of health at 60 still has probably a few things on their medical records that could be considered adverse to insurance companies.

SPEAKER_00:

That's exactly right. And so, you know, if if we think about what the Affordable Care Act was or or is, you know, in 2010, the Obama administration, you know, they ran on we're going to create this Affordable Care Act, Patient Protection, Affordable Care Act is the full name of it. Largest piece of health care legislation ever passed by a long shot. And, you know, in a in a you know, really quick 30 seconds, what it did was, you know, the Affordable Care Act said, okay, we are going to create this thing called the Affordable Care Act Marketplace. Um, there were a lot of other things that were impacted by the Affordable Care Act, including, you know, hospital billing, et cetera. Um, but for our purposes, during this conversation, um, you know, it created the Affordable Care Act marketplace. And it said within four years, we're going to build the Affordable Care Act marketplace. And the marketplace is going to have participating insurance carriers that are going to say, you can get coverage with a pre-existing condition. We're not going to ask health questions. The only questions we're going to ask are your age, your income, your location, and your tobacco using status, right? Are you a tobacco user? And so, really, the the tobacco use is really the only thing from a health perspective that an insurance carrier that's participating in the marketplace can really rate someone up.

SPEAKER_02:

Can use to discriminate, basically.

SPEAKER_00:

Correct, correct. And and they can't deny you, they can rate you up though, right? Um, on tobacco use specifically. So as we think about that, you know, an insurance carrier employs all of these people that are called actuaries. And actuaries are people that are much smarter than I am, but their job is to adjust risk and to make certain that the insurance carrier um, you know, remains solvent and they have enough money to pay the claims and that they can, you know, that they can make money as an organization. And, you know, in an insurance actuary, when they hear this affordable care act being passed, and they're saying, you know, oh, we're gonna participate in the marketplace and we have to, oh, we have to accept everybody. And these insurance actuaries are going, um, okay, I guess we have to assume everyone's now in the highest risk pool, right? And so when the marketplace was started, uh, you know, Jan 1, 2014, overnight plan premiums went up 300% overnight from December 31st, 2013 to Jan 1, 2014. And this was a result of them saying, hey, we're gonna have a whole bunch of people that have needed health coverage that are sick or have chronic conditions or have pre-existing conditions, and they're all gonna join these plans. So we just need to assume everyone's in the highest risk pool, and that's how we're gonna create our premiums. And so the Affordable Care Act, right from the jump, you know, didn't make things affordable, right? You could argue that. Now, the Obama administration knew that this was going to happen. They were smart, they had enough foresight to say, okay, insurance actuaries are gonna react in this way, carriers are gonna react this way, we want participation from carriers on the marketplace. We need to figure out a way to make this affordable. And so what they did is they created these things called advanced premium tax credits. And so there are some folks that are going, okay, I know what an advanced premium tax credit is, but an advanced premium tax credit says, hey, plan premiums went up 300% overnight. We knew that that was gonna happen. We know that these plans are expensive. We're gonna federally earmark dollars that are going to reduce the cost of your plan based upon your income. And so this is not Medicaid, this is not low income only. Um, this is this is something that that people can take advantage of. Um and the way that they work is, you know, prior to a couple of recent changes that we'll talk through, is if you're at 400% of the federal poverty level or below, you know, as a part of the original Affordable Care Act, you could get these advanced premium tax credits or these subsidies on your health insurance. And so Melissa, I know.

SPEAKER_02:

What are we talking about like 400? What is 400%? I know it's is it geographically based as well for the poverty? So it's not.

SPEAKER_00:

These are it's the it's the federal poverty level. And so that's um it's not geographically based. They actually they release these numbers every single year, the affordable, uh, the Affordable Care Act does, the federal poverty levels are. And with that, you know, as an example, in 2026, they haven't released these numbers yet, which is unbelievable, but they haven't released them yet. 2026, um, we believe that for a couple, the 400% number is probably around$88,000. And it's$88,000 in modified, adjusted, gross income. And so, Melissa, you've been a planner for a little while, right? A minute, yeah. And so you know, we'll talk about some of the changes that happened, you know, from 2022 uh and on. But you know, prior to prior to that, you know, the Affordable Care Act, you were probably working with clients to help them, you know, keep income below those thresholds. Yeah.

SPEAKER_02:

Definitely. Um, especially for early retirees, right? Like if you're self-employed, there's not a lot of advantage to not making money because that is that is what you're talking about. But when you're an early retiree, there can be a lot of access to funds depending on how you've saved and earned um without reporting taxes for them in a legal way.

SPEAKER_00:

Exactly. Yeah, yeah, yeah. We're no, no one's no one's doing, yeah, we're all all above bar here. And you know, these these advanced premium tax credits prior to 2022, if you were within 400% of the federal poverty level, you could take advantage of these tax credits. And the way that it kind of worked with within that window of of income was like a sliding scale. You know, the higher that your income went, closer to that 400% of FPL federal poverty level number, your uh your premium went up because your tax credit that you received reduced. And vice versa, if you could keep your income lower, there were times where you could take advantage of a lot of these advanced premium tax credits. And so, you know, there are multimillionaires that we work with here at Move Health that are able to, with the work alongside of a financial planner, keep their modified adjusted gross income very low. And so they pay very little for um health coverage on the marketplace. And again, the benefits of the marketplace being you can get coverage of the pre-existing condition and layering on this piece of advanced premium tax credits. And the marketplace is not um a place where you go and get like, you know, ACME insurance company or, you know, whatever. These are real insurance carriers, the United Health Cares and Humanas and Blue Cross Blue Shield, and all these that participate. Um and so these advanced premium tax credits are a big piece of a financial plan, uh, oftentimes.

SPEAKER_02:

Absolutely. They're this is you know, sticker price is one thing. The premium tax credits are a huge component of the planning and accessibility. And it's why you shouldn't just, you know, be like, I can't retire because I can't afford it. Um, but you should also be planning to pay for healthcare. I think sometimes people just assume because they they may choose like a low deductible plan, um, have their um you know, their workplace pay more. They're like, hey, you shouldn't, it's it's not responsible to pay for medical costs. And the reality is you need to disavow yourself of that in many cases. Um so anyway, that's what I think.

SPEAKER_00:

I I think that that's spot on. I think that um it's it's one of those pieces that that a retiree specifically can really let sneak up on them, of where they go, okay, the kids are through college, the house is paid off, I'm diversified from a tax perspective. Um, you know, my the glide path on my money looks good. So we've answered the big questions of do I have enough money and I'm gonna am I gonna be able to make it last the rest of my life? Um, you know, that's that's great. The next one that that kind of gets them is, oh, I for totally forgot I'm gonna have to buy health coverage, right? I'm gonna have to figure this out. And, you know, the marketplace can come in and big be a big piece of that because it's not you it's no longer a gating factor if, oh, I'm not healthy, I I can't get health coverage. That's not that's not a factor anymore. So these advanced premium tax credits are a great way that you can actually reduce your health coverage costs. Um, there are some people that just are not going to qualify for an advanced premium tax credit because you you earn too much to do so. Now in 2022, uh go ahead, Melissa.

SPEAKER_02:

I was gonna say, but every year matters, right? So I work with a family that sold a business um in 2024, 2025's income was also quite high, but 2026 is a different story. So every single year matters. It's not like you're set in one, you know, kind of premium class um based on any particular year. It's it becomes a moving target. And the same goes for Medicare. Um, we're not gonna talk about that today, but your income matters every single year.

SPEAKER_00:

That's exactly right. And a really good call out. There's oftentimes where they say, well, I'm I've got I've got too much in assets to get those tax credits. It's actually not related to your assets at all. Right. The Affordable Care Actplace. It's looking at what your current year's modified adjusted gross income will be. And so um it's not looking back, it's not looking forward, it is looking at your current year's income, what you estimate that to be. And so that's what those advanced premium tax credits are built on. Now, as a part of the American Rescue Plan Act, which was a COVID relief era um piece of legislation, they actually took that income cap off at 400%. And they said, hey, anybody can get these tax credits and we'll subsidize the cost of a plan down to 8.5% of your modified adjusted gross income. And so, you know, on an unsubsidized marketplace plan as an example of if you went and just bought the the middle of the road plan for, let's say, a 60-year-old couple, they might be looking to pay, you know, if they're totally unsubsidized, between$2,500 and$3,000, right? And this is gonna be dependent upon location and things like that. And curious.

SPEAKER_02:

You're talking per month or per year.

SPEAKER_00:

Per month. Yes. Yeah, per month. Unsubsidized. And so unsubsidized. Yep. And so the American Rescue Plan Act came in and said, you know, we're just gonna subsidize that down to eight and a half percent of that person's modified adjusted gross income. So it doesn't matter if you're over 400% of the FPL any longer, you know. So if someone stopped me in the grocery store and said, Cole, I make$100,000 a year and my wife and I are planning on to on retiring soon, you know, what's our health coverage gonna cost? And say, well, plan for probably around$8,500 a year in premium, right? And this was a part of the American Rescue Plan Act. And so currently, through the end of 2025, these these advanced premium tax credits, they work like a spectrum, right? Where there's no longer that 400% block where if you're over 400% of FPL, you don't get uh tax credits at all. It's it's right currently, it is a spectrum. And with that being said, you is example in Indiana where I'm at, um, a couple in early retirement can make north of$250,000 a year and still get a tax credit on the on uh the federal marketplace. Um, and that is set to sunset at the end of this year. And so you might hear, if you're listening to this, you might hear um, you know, the government right now, as we talk on the the end of October, the government's shut down right now. And part of the reason that they're shut down is is over these enhanced advanced premium tax credits. Um, because at the end of 2025, that 400% income cliff, as you will, um comes back where they're saying, hey, if you're over 400% of the federal poverty level, you no longer get these tax credits on the marketplace. And what that has been misconstrued as and what that has been heard as on the on you know news and all those things is tax credits are going away. And that is not true. The Affordable Care Act is not going away, tax credits are not going away. They're simply reverting back to how they worked before 2022. And uh to some people that have only been on the marketplace for two or three years, this will be a big surprise. For those that have been on the marketplace before um 2022, this will be, hey, it's reverting back to how it worked in previous years.

SPEAKER_02:

Although I will say I know it is much more painful to feel like you're losing versus feeling like you're winning. So um, you know, even if uh pre COVID era, pre um, you know, kind of subsidies on steroids or tax credits on steroids, I feel like it will be shocking to a lot of people. And the other thing that is going on, and maybe you can comment on this, Cole, is um health insurance premiums just in general are not um, we've had high in Inflation in other areas, but I I believe, and you correct me if I'm wrong, at least based on the renewals for my own small business, health insurance in general is going higher just across the board because of other factors going on in kind of the state of healthcare in the United States.

SPEAKER_00:

Yeah. I think that, you know, I I in I think we talked about it, Melissa, and prep for this. There's no magic wand, right? We unfortunately there's not a magic wand that we're going to be able to wave and and make premiums magically go down. A good financial planner can by doing some income planning, right?

SPEAKER_02:

Absolutely. In certain cases, I should say. Not exactly right.

SPEAKER_00:

Exactly right. Um, you know, that being said, you know, as we as we look towards the end of 2025, the government has shut down over these advanced advanced premium tax credits. Yes.

SPEAKER_02:

As of now, we may have a resolution or outcome. Um if anything, it could be just reverting back to um what it was scheduled to be at the end of the year, likely a compromise, if not, not the full boat, perhaps. Yes. Um Yeah.

SPEAKER_00:

And and again, if I am certain you use the crystal ball methodology on occasions. Like if I had a crystal ball, I could make some guesses. There's going to be some form of a compromise. I think we will still see an increase on the marketplace specifically. Um But it seems like there's general consensus around we we we don't hate the enhanced advanced premium tax credit. We we think it's you know not necessarily a a bad thing. I think that that has bipartisan support. I think it's just where the funding's coming from at this point is what's really kind of up in the air. Um, all that to be said, we have to plan as if the um, you know, that that it's going to act just as the legislation is written, which is at the end of 2025, that 400% income cliff comes back. And and so with that, you know, Melissa, your experience with health insurance and you know, for the small business as well. In general, um, you know, what we are seeing is, you know, we had a huge, we had a huge mix-up in in 2020 with COVID, right? Where there were insurance carriers, whether it was, you know, home and auto, home and auto or health insurance or what have you, where they, you know, didn't know necessarily how to respond to this. And um, you know, this as a financial planner in the health insurance space specifically, that they're, you know, health, health insurance, I think all planning softwares typically inflate this much higher than the, you know, than the normal.

SPEAKER_02:

This is not a surprise.

SPEAKER_00:

Yeah. And so it is something that that continually becomes more expensive. And I wish there was a magic wand we could wave to, you know, figure out how to reduce rates in the United States across the board, whether it be through an employer or through the marketplace or things along those lines. But some of those contributing factors uh as to why we're seeing those increases in the United States, one is is as a country, we are aging, right? We all get older each and every year. And as we think of the bell curve or the curve of where people are at in in age as far as the United States, you know, there's there's 60 million people that are uh you know over the age of 65 in the United States. There are 40 million people that are between 55 and 64. And so as we look at the US population of 330 plus million people, um, you know, a third of them are over the age of 55. And with that, you see some of those expenses continue to rise and insurance carriers having to um handle those larger claims and you know, number of claims as people age and all those things. That's one contributing factor. Um, the other piece to that is is, you know, um the providers, right? I'm going pretty high level here, but providers are charging more, right? And so doctors and hospitals, all those things. And so insurance carriers are being forced to pay more. And so with that, you end up in this situation where um, you know, you can solve some of the uh symptom, but really the root of it is is, you know, how what does healthcare cost in the United States? And Melissa, you and I would be very wealthy people if we could figure out how to solve that problem today. Um, but uh, you know, what we can do is we can plan for it, right? And that's the that's the bigger piece of the puzzle.

SPEAKER_02:

And so yeah, and I would just mention, like, there's not a lot of conversation in any policy rooms that are at least getting public airtime um about any new system, right? Like uh I think we've all gotten pretty darn used to ACA marketplace, like you know, like regardless of what you say, you know, when a microphone is placed in front of you, constituents in every state are utilizing these marketplaces. Um but you know, ignoring that there is an economic responsibility for you as for most consumers when they use um these plans and getting used to paying for your medical costs in a different way and planning for that is a critical component of preparation and preparedness for whether it's retirement or being self-employed, like all of that stuff.

SPEAKER_00:

Yeah, I think that's that's one of the biggest things that that we try to do when we are planning with someone is don't let these costs sneak up on you. And that's a lot of times why we at Move Health are working alongside financial planners, right? We're arming an advisor or a planner with you know data on the front end to say, hey, here's what costs may look like for for this this client. Um, you know, if they're gonna be fully unsubsidized next year, they should be planning for$2300,$2,400 a month if they're over 400% of the federal poverty level. Um, you know, and and and so as we think about those uh those things, it's really, really important. Plan for it, right? As you are nearing retirement, as you are nearing that that jump to entrepreneurship from your W 2 position, make certain you have a clear understanding before you make the jump. Don't let it be something where you go retroactive and you go, oh, I gotta figure this out now, and then it becomes a fire drill. So um, you know, it's it's one of those things where it's it is, you know, I think as the kids would say, it is what it is, right? Um, we have to, we have to uh, you know, learn to to live and deal with it. And um, you know, that's sometimes what you get when you get uh, you know, this this between uh, you know, the the federal government and insurance carriers and this public-private partnership and all these things, it just it can get muddy and it can change, you know, every time that there's legislation passed. And so um it's important to plan for it. It's important to review this and and analyze this every single year. Um, even if you are on an employer plan, um, it's important to review and and and look at these things because um, you know, one thing that we are seeing often in in the employer space, if I can give just a little nugget for those, those folks, um, it's not all bad, right? Your employer is still covering a lot of the cost. Um, but what we are seeing on occasion is is um, hey, it's$50 a month or$50 a paycheck for me as the employee. But then when I add my spouse, it it then becomes$1,800 a month. Yeah. Why is that? Right. And it's because as a as a business, they're saying, hey, we're gonna subsidize our employee. Um, but the employee family or kiddos or things like that, um, we may not subsidize at all. And so everybody, whether it's employers or individuals or you know, insurance carriers, I won't loop them into the same bucket as you know, employers and people, but um, everybody's feeling the squeeze uh is just where things are getting expensive. But it's not all doom and gloom, right? There is uh there's a lot of good that is happening, you know, the the Affordable Care Act, it has allowed millions of people to retire early or to go launch a business or to do those things that they've wanted to do because they can get coverage with a a pre-existing condition.

SPEAKER_02:

And I would also mention we've worked with a lot of divorced women who had been on their spouse's coverage as well. And um, so that's another key component that I know we work with.

SPEAKER_00:

Yeah, absolutely. And as you think about, you know, that that transition, right? Our our name, Move Health, is very intentional. We when you have a life, a big life move, there's a lot of times where healthcare planning comes into that picture. And um, anytime that you're experiencing a transition, it's an important time to review and analyze and make certain that you're making the most uh you know effective decision and that you're not making one that is rushed if you can avoid it. Um can you talk to me?

SPEAKER_02:

Like that's what um I'll I'll leave you space to make a little bit of a plug. I will say that Move Health is one of the places that we refer clients to when it comes to health insurance. We actually pay a subscription to get access to um coal, your you know, insight, your company's insight, um, resources that educate clients and assist with healthcare planning. Um, we have a calculator. If you were considering retiring, what might you pay um when it comes to um if you decided to retire pre prior to age 65? Um but you're sitting here listening to this episode saying, Hey, I have to make a decision by close to the end of the year. Um to, I think maybe we should be on the marketplace and we haven't done that in the past or we're newly retired. Um, how do you because the reality is you don't just it is a marketplace, it is not a one size fits all. You just take what you get. So how do you get an informed consultation to make a decision versus kind of and what could be the pitfalls of um going to someone who's selling like one particular plan? Like what could you miss if you do that?

SPEAKER_00:

Yeah, I think um I'm trying to, I might, I might butcher this, but if you think about um, you know, the the the one size fits all solution person, I think the the phrase is um when you've got when all you've got is a hammer, everything looks like a nail. Um and so you know, there there is some some challenge there, right? But um, you know, there are a couple of ways that you can kind of access health coverage, right? If you're looking at the marketplace or or you know, individual health coverage, you know, one of them is is doing it yourself, right? You could theoretically go to a healthcare.gov or your state's marketplace and and find coverage and do some research and all those things, and you might spend two or three days, four days a week on it and two or three thousand emails coming in because once you like expose yourself, it's just like an all-out one slot. Yeah. And so you could you could theoretically do that. You could do it yourself and and maybe you feel good about the decision that you made. Um, and they they make it pretty easy to do as a consumer. Um, you know, what we do at Move Health is we're working alongside the client to, you know, the the process that it and a client follows is they're engaged by uh their financial planner to to work with us. They start a client engagement, they fill out what we call their household profile, which just gives us all of the nitty-gritty data that we need, what doctors you see, what meds. And then from that point, it allows us to go to work and say, okay, based upon all the information that's been provided to us, we're gonna be able to present probably three or four options as opposed to the 93 that are available in your area and be able to break it down and say, hey, because you said you see these three doctors, we're gonna have to knock out these two carriers because they don't, they're not in network with that provider or what have you. And so, you know, getting to the point where someone can really understand my doctors are in network, these are what my prescription costs are going to be, uh, you know, et cetera, et cetera. And I always the one thing I joke about with our team, but it's it's real, is you know, I want someone to be able to leave a conversation with our team and understand what it's going to cost when they go to the doctor.

SPEAKER_02:

Yes.

SPEAKER_00:

I think that there is a large portion of the United States that could not answer that question right now. And, you know, from our perspective, that's we want people to be informed and we want them to be empowered. And so um working with a an organization, and this is not necessarily a plug for move health, but you know, working with an organization that is working genuinely in your best interest, um, there's a couple of kind of questions that you can ask to someone that's helping guide you through a health insurance conversation. And it's are you looking at all of the available options in my area, right? Um, are you uh, you know, are you a captive broker or agent? Um that's kind of that if everything uh if all I've got's a hammer, everything looks like a nail situation where you might have someone who all they can sell or write or whatever is a specific insurance carrier. Um, and they'll tell you how great that one is and they won't tell you about any of the others. Um and so make certain that you're doing a thorough review. Um the other piece that I will, you know, kind of leave with that is um if you were to to go it alone and and DIY it, um, you know, there's no, there's no uh, you know, when you do turbo tax, you can have a tax professional look at it. Uh that doesn't exist in the in the health insurance space. And so make certain that uh if you are DIYing it, that you feel really, really confident and comfortable that you have made the right decision. And if not, make certain that you are working with someone that you can you can trust.

SPEAKER_02:

Yeah, and you need someone who's gonna say, Hey, do you know what you're gonna make next year? Um now we don't know exactly what you're gonna turn in as your income on a tax return. But um if you're working with a financial planner, first of all, as they say, I can't even give you a ballpark and they're involved in your withdrawal decisions in early retirement, then you may need to reassess who you're working with. But um and I know that's not a part of the conversation for a lot of investment advisors at least that aren't doing financial planning, but um, you know, you need someone who's asking you to, you know, assess, for example, that parts of you know, those parts of information or review your tax return um from last year and say what's changing, things like that.

SPEAKER_00:

It's a it's exactly right. I think it's and it allows you to do that planning that we've talked about, right? Health insurance premiums may go up next year, right? Is if we if we gave a you know a uh if I gave a you know a takeaway from this, health insurance premiums are likely going up next year.

SPEAKER_02:

I got a 10% renewal for our group plan. Um and honestly, like based on what I've been hearing, um, for all the reasons you described, yeah, was actually like, oh, just 10%. Like, and that's on top of uh close to 10%, around 10% last year. So um, you know, your if you think your employers are scrimping to you or they're changing plans, um, I think there's some like economic realities behind that for the businesses in general.

SPEAKER_00:

Oh, for sure. Um, you know, premiums, premiums are likely to go up, but you can plan for it. You can talk with people that are experts in this space. And um, you know, it's important just to be an an informed consumer. Don't go into this flying blind. Don't wait until December the 14th to, you know, look at this for the first time. I know health insurance is not sexy to talk about, um, but it is something that is that is critical. Um, and so make certain that you are uh uh taking a good look at it this year and um especially with with the changes that are coming. And if you need uh really good guides, I think Melissa I'll provide some things that you may be able to uh you know give to the to the uh put in the show notes, yeah. Yeah, exactly right. Things that you can review and look at and things that we uh you know talk about each and every day that um may help to calm some of those uh those nerves and those thoughts.

SPEAKER_02:

Well, I will just mention if I could just spend a minute or two talking as a financial planner. Um, if you're getting ready for retirement but not quite there and you think you'll retire before age 65, have a conversation with a financial planner like me about how you think about healthcare. Because like I said, there's so many people that are in really good economic condition, financial condition, that think it's insulting and wrong to pay for um, you know, your deductibles pay for some out-of pocket expenses. And one of the things I ask people to consider first, I won't tell you can't um that you have to do it this way, but um if you can keep some of your HSA, if you're in a higher deductible plan, um for to be invested for the future, especially in retirement, A, you get used to paying some things out of pocket when you can afford it, but B, you have a bigger nest egg in a very tax uh friendly um bucket that you can use for medical expenses um once you retire and ongoing. Because the reality too is Medicare is um when you start Medicare is a lot less than these like last years of ACA. And we can have a conversation about that in the future. Um but you still are going to have expenses. I had a client who has dental expenses in the$50,000 range this year. And that's not out of the question, you know,$10,000,$20,000 for coverages that um just are not included. And, you know, there are costs when you retire as well. Um and I would also mention that um don't assume that with you know exactly what you should do. You think um you you should keep Cobra for 18 or 36 months based on your ability. It may be better to go into the marketplace. The marketplace is not socialized medicine. You're going to get private insurance in a way that um allows you to get um uh access to without pre-existing conditions and also perhaps some premium relief. Um, and do have conversations with professionals like Cole, ourselves on the financial planning side, um, because just assuming that um everything is one way um based on conversations with your neighbors or on social media isn't always the best advice.

SPEAKER_00:

It's exactly right. That's one thing that uh, you know, I didn't touch on, which is, you know, these decisions are very, very unique to the individual. Absolutely. And so whether this is Medicare or health insurance or what have you, your situation is not the same as your neighbors. It's not the same as the people you play pickleball with. Their experience with one carrier is not the same as experience that you will have, um, you know, et cetera. And so um, again, make certain you're informed and empowered and that you are looking at this from your lens because we do see people all the time that say, I'm just gonna elect Cobra and I'm gonna, I'm gonna keep that. And we go, well, if we look at the marketplace, your Cobra premium's$2,400. Your your marketplace premium would be like$200. Yeah. Like, oh, I guess I can afford to to pay for, you know, you know, my whatever.

SPEAKER_02:

For the same company similar plan in some cases.

SPEAKER_00:

Correct, right? And so there's there's a lot of times where um we're kind of breaking through some of those preconceived notions. And so um, don't assume you know everything. I don't assume I know everything. I know quite a bit about health insurance and Medicare, but um, you know, all that to be said, uh, make certain that you are are talking to somebody about it, bouncing it off of someone and and looking at it from your unique viewpoint.

SPEAKER_02:

Well, we'll have more details on where to find coal in the show notes. Although I I will mention, do you have any resources that are accessible, just you know, kind of to general populations, a place to find it?

SPEAKER_00:

Yeah, good question. So we do podcasts like this all the time. So if you give a quick search on on YouTube for, you know, move health, you're gonna find uh some some resources that'll have either myself or uh other members of our team kind of talking through what those what those look like.

SPEAKER_02:

Perfect. And um thanks so much for enlightening us. I know this probably won't be your last episode if you're willing to come back someday. Um and I really appreciate the insight on the 2025 healthcare marketplace.

SPEAKER_00:

Of course. Thanks, Melissa.

SPEAKER_01:

Thank you for listening to the Women's Money Wisdom podcast. If you found value in this episode, the best way that you can support the podcast is to forward an episode to a friend or leave a review. Go to ProPlan.com and the podcast link to get all the resources and links mentioned. This presentation by Pro Planning is intended for general information purposes only. No portion of this presentation serves as the receipt of or substitute for personal investment advice from Pro Planning or any other investment professional of your choosing. Copies of Pro Planning's current rent and disclosure brochure and from CRS discussing our advisory services and fees are available upon request or on our website platform at PerlPlan.com. The information that we share is meant to educate and inspire, not serve as personalized financial advice. Everyone's situation is unique, so be sure to consult with your own financial professional for guidance that fits your life. And just so you know, the opinions shared in this podcast are Melissa's own and those of her guests. They don't necessarily represent any organizations with which Melissa is affiliated. For more important disclosures, please go to our webpage at proplan.com.

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Melissa Joy, CFP

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