‘Kind of Morbid’: Health Premiums Threaten Their Nest Egg. A Terminal Diagnosis May Spare It.

COLUSA, Calif. — Early on, Jean Franklin received career advice that she followed religiously: “Pay yourself first.” She did just that, saving hundreds of thousands of dollars in retirement savings by the time she became a stay-at-home mom at age 41.

She and her husband, Charles, a former high school teacher named Chaz, planned to retire comfortably in the three-bedroom house where they were raising their children about 60 miles northwest of Sacramento.

But early last year, the 63-year-old became unstable. One morning in May, she woke up with slurred speech and landed in the hospital, then quickly lost the ability to move the right side of her body.

In August, as doctors continued to wonder about a possible diagnosis, the couple received notice that on Jan. 1, their combined health premium payments through the state insurance exchange would increase from $540 a month to $3,899 a month. The reason: federal premium increases expiring at the end of last year would no longer compensate for their payment.

They immediately canceled a month-long cruise they had planned with friends and looked at their retirement accounts.

“Now, instead of thinking about where we can go in retirement, we’re asking ourselves, ‘Are we still going to be able to stay where we are because of health care costs?’” said Chaz, who retired in 2021 at age 59.

Then they received more bad news. In October, at the age of 63, Jean was diagnosed with ALS, a debilitating disease that will leave her unable to speak, swallow or breathe on her own. But Jean’s condition allowed him to enroll in Medicare, the federal health insurance program that covers adults 65 and older and people with disabilities. The diagnosis saved them about $1,600 a month in premiums – hardly reassuring since Jean lost the ability to walk, bathe and dress herself.

“It’s a little morbid that because of my diagnosis, I was put on Medicare right away, so at least we don’t have to pay for that out of pocket,” said Jean, sitting in a wheelchair in her living room, a quilt draped over her legs to guard against the intense chills she now often feels. “We’re not going to let ourselves be buried under this.”

Still, premiums from Chaz’s plan and his Medicare remain a significant strain on their finances. The $2,300 a month they now owe, which includes about $342 in premiums for John’s Medicare supplement insurance, is more than their monthly mortgage and eats up more than a quarter of their budget.

The Franklins are among 22 million people across the country facing greater financial pressure after Congress opted not to extend enhanced federal subsidies in 2021. That aid helped more than double enrollment in Obamacare plans, to more than 24 million.

The Congressional Budget Office estimated in 2024 that, without an extension of tax credits, the number of uninsured Americans would increase by 2.2 million this year alone. As of January, enrollment in ACA plans nationwide was down about 1.2 million year over year, although experts say it could be months before the full effects of rising premiums are known as people miss payments and lose coverage.

The groups hardest hit will be pre-retirees, middle-income earners and people living in high-cost states, said Stacey Pogue, a senior researcher at Georgetown University’s Center on Health Insurance Reforms. The Franklins are all three.

“They fell off what we call a subsidy cliff,” Pogue said. “It’s very, very shocking, the amount that one person would have to absorb.”

That’s because the expanded tax credits made the biggest difference for people near retirement age who were just above previous income eligibility thresholds, Pogue said. People like the Franklins, who likely would not have been eligible for financial help before expanded credits were in place, are now losing that support at a time when insurers have responded to the uncertainty by dramatically raising their rates.

About half of the people expected to lose eligibility for premium tax credits were ages 50 to 64, according to an analysis by KFF, a nonprofit health news organization that includes KFF Health News.

Republicans who opposed the expansion said premium aid goes directly to insurance companies rather than consumers, encouraging fraud and wasted coverage. They also say the enhanced subsidies, which had no income cap for eligibility, were far too generous by capping premium payments at 8.5 percent of income, regardless of the enrollee’s salary.

“Most Americans would agree that taxpayers should not subsidize the health insurance of someone making $250,000,” U.S. Rep. Ken Calvert, a California Republican who voted against an extension in January, wrote in an Orange County Register opinion piece. “I cannot accept the simple expansion of a program that would line the pockets of insurers and which is riddled with fraud at the expense of the American taxpayer.”

Patient advocates say premium increases and expiration of subsidies have forced people to make difficult choices. “Young people who are healthy are the first to say, I’m going to roll the dice” and forgo media coverage, said Rebecca Kirch, executive vice president of policy and programs at the National Patient Advocate Foundation. “Those who remain in the system – because they have no choice – forgo receiving care, taking their medication and going without necessary food. »

While the Franklins manage, they rely on their sons to pay for a motorized recliner to help them lift Jean and a handicapped van to transport her. Chaz, who broke a tooth a year ago, delayed getting it fixed because a crown would cost him $1,000.

This year, the couple will withdraw $36,000 more than expected from their retirement savings, most of it to cover Chaz’s insurance premiums.

“I have a nest egg,” Chaz said. “But there are a lot of people here who don’t.”

For a moment he was outraged.

“I wish Congress would step up and solve this problem,” said Chaz, who is a registered Republican but places blame on both sides of the aisle. “You guys are so busy bickering over stupid shit and it’s both sides pointing fingers and accusing. Where was this discussion two years ago?”

Now, Chaz said, he strives to make Jean, his wife of 27 years, as comfortable as possible.

Before she got sick, they did almost everything together: hiking, traveling, tai chi, amateur photography and bug hunting. One of his favorite specimens was the rain beetle, a fluffy, beetle-like insect that cannot feed as an adult and relies solely on the fat reserves of its larval stages.

In the morning, Chaz and their sons, Charlie and Louis, take turns lifting Jean, dressing her and helping her go to the bathroom. It will be fodder for counseling, she jokes to her sons, when they inevitably need therapy later in life.

Most days, Jean’s outdoor adventures rarely extend beyond hauling them out to her back deck, where she loves watching their backyard chickens swing around. Chaz’s stubbornness makes him a great patient advocate. Charlie always seems to know exactly when she needs a big hug, and Louis tells jokes that can still make her laugh with laughter.

“I don’t know what I would do without my boys making me laugh,” she said.

In December, Chaz will turn 65, old enough to qualify for Medicare himself. “After this year – knock on wood – everything should be fine,” Jean said, before stopping and giving her husband a wry smile.

“Well, everything will be fine.”

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