Health Insurance Time Bomb that Will Affect your Railroad Retirement

Prepare yourself for the upcoming healthcare challenges. Welcome to another episode of the Highball Advisors Railroad Retirement Whiteboard. I'm John McNamara from Highball Advisors, and today we're discussing healthcare concerns among retirees.

Many railroaders approaching retirement worry about healthcare costs. Some currently benefit from premium tax credits under the Affordable Care Act (ACA), which have helped lower insurance expenses. However, these credits are set to expire at the end of 2025, leading to anticipated increases in insurance rates.

While some retirees may access healthcare through railroad retiree insurance or union plans, others must navigate the ACA exchanges for coverage. This situation highlights the impending changes and challenges ahead. Let's break down the impact:

The ACA initially introduced premium tax credits through the Inflation Reduction Act during COVID-19, significantly reducing premiums for qualifying individuals. Approximately 92% of ACA enrollees benefited from these credits, making healthcare more affordable across income levels.

However, with the expiration of these credits in 2025, premiums are expected to rise. Currently, monthly premiums are 32% lower on average since 2021 due to government subsidies. Without these credits, costs are likely to increase substantially.

For example, a 60-year-old couple earning around $80,000 annually (approximately 405% of the poverty level) currently pays $567 per month. Without tax credits, this could triple by 2026. In some states like West Virginia, costs could skyrocket from $6800 to $43,000 monthly for the same couple.

These changes necessitate careful planning and consideration in your financial strategy, especially if you're nearing retirement. Developing a comprehensive healthcare plan aligned with your financial goals is crucial. Feel free to reach out if you have questions or need assistance navigating these challenges.

If you found this information helpful, please leave your comments below and subscribe to our channel for more updates. Until next time, stay informed, stay prepared, and take care. Goodbye for now!

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.