[Speedy Petey]

Daniel, thanks for your advice. I checked with my local permitting planning commission this morning. They informed me that if my house was built before 1965, which it was 1962, that my house did not fall under sub panel requirements and my main panel would pass inspection as is. I can use my meter combo outside, just bring 4 wires inside just in case I ever run another circuit.Thanks again for you advice!

I don't know what they are talking about, but regardless of the year your inside panel will now be a sub-panel. Period.
You are creating this scenario, it is NOT an existing one, so you MUST follow the codes for a new installation. You MUST run four conductors to the inside panel and then separate the grounds and neutrals. Even if there are no equipment grounding conductors you MUST isolate the neutral and provide provisions for the equipment grounds.
Curious, why the outside disconnect? Is it required? Why not just do the 200A upgrade and upgrade the panel at the same time??

I'll also disagree with Daniel on something. I have never in all my years heard of a local requirement to upgrade the wiring in the whole house when doing a service upgrade. This is kind of absurd if you ask me.

 

[Speedy Petey]

wild card, in my semi rural area the the electrical inspectors are independent of my local permitting office. When I have electrical specific questions I go directly to the inspector, not the permitting office that is staffed with clerks. Just a thought.

That is pretty much all of NY State (and PA I believe).