Author Topic: People on FIRE: How do you handle health insurance?  (Read 10365 times)

taperted

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People on FIRE: How do you handle health insurance?
« on: January 19, 2014, 10:04:28 AM »
Hi all -- former lurker here, and have been recently contemplating the early retirement. I finally registered here on MMM.

My wife and I have been discussing ER for the past year and the one variable I can't figure out for the budget is how to handle health insurance. We tabled the discussion until this year when there would be more data on the ACA/Obamacare situation, hoping for more clarity.

Our situation is that I am 47, my wife 43. We have two kids, ages 10 and 7. We are all healthy and rarely go see the doctors and dentists aside from the checkups. Our dental work is actually majority of the annual health care costs one of us will invariably have a cavity in a given year. I feel I need vision coverage. I need glasses, but I am not severely nearsighted.

My questions to the forum are:

1) If you retired early, how are you handling health insurance before Medicare kicks in?

2) What would a fair estimate be for my family for Obamacare (I live in California). We have friends who are in a similar situation and they said that it is about $1000/month for the mid tier plan. Is this a reasonable estimate?

3) When Medicare eventually starts, would you supplement that plan with additional health insurance?

I apologize if this has been previously covered, and I would appreciate if you can direct me to a prior discussion.

Spork

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Re: People on FIRE: How do you handle health insurance?
« Reply #1 on: January 19, 2014, 10:14:22 AM »
I can't answer exactly...  I'm not FIRE...  But I did take a 3 year sabbatical (before ACA), so I can speak for what I did then.

What we did was get the highest deductible insurance we could find.  At the time, it was $10k.  We were similar ages as you (40s) non-smokers and in good health.  Our premiums (2 of us, no kids) were about $200/month.

Now... ACA has drastically reduced the max deductible to $5k.  (This is a serious mistake, IMO... but I'd rather not see this thread break down into "this thing sucks"/"this thing is awesome"/"you're a ninny"/"Yo mamma is fat").   My point here is: for a healthy person that is in good financial health, get the highest deductible you can find.  It's generally cheaper to pay for the actual expense than it is to pay for the insurance.  The gotcha there is when you get hit by a bus or have a major unforeseen medical emergency.

Even if you're paycheck-to-paycheck, they'll let you work out a payment plan for that deductible amount.  Hell, if it's a medical emergency, Mastercard will float it. 

I also found that with my HD insurance: the prices were lower.  Had I come in with no insurance, the price would be X.  With insurance, it was 1/2 * X.  (Presumably the hospitals have lots of no-pays and this covers that.)


Paul der Krake

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Re: People on FIRE: How do you handle health insurance?
« Reply #2 on: January 19, 2014, 10:21:19 AM »
I also found that with my HD insurance: the prices were lower.  Had I come in with no insurance, the price would be X.  With insurance, it was 1/2 * X.  (Presumably the hospitals have lots of no-pays and this covers that.)
That's exactly what happens, which is infuriating. So much for free market transparency, but I digress. I look at my insurance premiums as:
1) bankruptcy insurance
2) a magical 50-80% discount on the "cash price"

OP, go to coveredcalifornia.com and put in your ages, projected income, and zipcode. You don't have to buy anything.

Spork

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Re: People on FIRE: How do you handle health insurance?
« Reply #3 on: January 19, 2014, 10:59:48 AM »
I also found that with my HD insurance: the prices were lower.  Had I come in with no insurance, the price would be X.  With insurance, it was 1/2 * X.  (Presumably the hospitals have lots of no-pays and this covers that.)
That's exactly what happens, which is infuriating. So much for free market transparency, but I digress. I look at my insurance premiums as:
1) bankruptcy insurance
2) a magical 50-80% discount on the "cash price"

OP, go to coveredcalifornia.com and put in your ages, projected income, and zipcode. You don't have to buy anything.

One of my Canadian friends was surprised to learn that the ER doesn't post price lists, like they do in her area. I guess there are enough foreigners in her area that the hospital keeps a public price schedule, so you know, say, what a straight-up vagina, childbirth will cost. They are surprisingly reasonable, actually. We figured out it would probabybe cheaper for me to cross the border at 6 months or so, live in her basement, deliver the baby, pay cash for the entire thing and come home than the have a baby on my HDHP.

If you do that the child will grow up hooked on Molson and back bacon and will end up saying "eh?" all the time. 

starbuck

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Re: People on FIRE: How do you handle health insurance?
« Reply #4 on: January 19, 2014, 11:12:28 AM »
i really enjoy how the thread title is worded.

sorry, nothing constructive to add. FIRE is far enough away for us that the landscape could be very different (8-10 years), so i'm focusing my efforts on other areas until the time frame is shorter.

geekette

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Re: People on FIRE: How do you handle health insurance?
« Reply #5 on: January 19, 2014, 12:06:52 PM »
We're currently paying Cobra rates (ouch), but I've been keeping an eye on the ACA site just in case we need it next year (our Cobra will run out next January).  The rates are lower via ACA, but the benefits outweigh the cost of Cobra (for us) at this time.

I keep seeing people mention that the cash price is lower, but I personally haven't found that to be the case.  Looking at a recent EOB for labs, the charge was $258, the "adjustment" (due to carrier agreement) was $235.30, and the total left to go toward my deductible was $22.70.  An ultrasound was $288.25, the adjustment was 177.50, so I paid the other $110.25, which went to my deductible.  The one time I had a lab test that was not covered (deemed experimental), I had to pay the full price.  Just my experiences.

Vision "insurance", though, if you have to pay for it yourself, isn't worth it, IMHO, after adding up the monthly charges and comparing it against the discount they give you off cost of an exam and glasses.  Any expensive stuff your eyes need is generally covered under medical.

I shudder when I see 20-30 year olds include incredibly low expenses for medical in their post FIRE budgets.  Not gonna happen, people, at least not over time.
« Last Edit: January 19, 2014, 12:08:26 PM by geekette »

Spork

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Re: People on FIRE: How do you handle health insurance?
« Reply #6 on: January 19, 2014, 12:11:32 PM »
I keep seeing people mention that the cash price is lower, but I personally haven't found that to be the case.  Looking at a recent EOB for labs, the charge was $258, the "adjustment" (due to carrier agreement) was $235.30, and the total left to go toward my deductible was $22.70.  An ultrasound was $288.25, the adjustment was 177.50, so I paid the other $110.25, which went to my deductible.  The one time I had a lab test that was not covered (deemed experimental), I had to pay the full price.  Just my experiences.

I'm sure it varies by location and what you actually get done.  I had a kidney stone while on HD insurance.  The prices for the docs and the various resulting tests averaged to about half (some more, some less).  YMMV

geekette

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Re: People on FIRE: How do you handle health insurance?
« Reply #7 on: January 19, 2014, 01:10:44 PM »
So did you negotiate a cash price or pay the insurance company's negotiated price?

Paul der Krake

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Re: People on FIRE: How do you handle health insurance?
« Reply #8 on: January 19, 2014, 01:45:11 PM »
geekette, since you're in Cary, which hospital did you go to? My SO recently had to go to Duke for some labs tests and the exact opposite happened. Roughly $1,000 "cash" price, then prenegociated rate bringing it down to roughly $250 (which sounds a lot more reasonable), then her out of pocket around $30.

I was told by someone who works there that this is usually how it goes, for whatever that's worth (proably not much).

geekette

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Re: People on FIRE: How do you handle health insurance?
« Reply #9 on: January 19, 2014, 01:57:02 PM »
Doctor, not hospital, but if I'm reading your post correctly, my experience mirrors yours.  Stated price was high, insurance negotiated price was much lower.  We have a high deductible plan, so we paid it all, but that was what we expected.

pac_NW

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Re: People on FIRE: How do you handle health insurance?
« Reply #10 on: January 19, 2014, 02:21:14 PM »
Check out Retired Syd's website. She is writing frequently about this topic.

http://retiredsyd.typepad.com/retirement_a_fulltime_job/2013/10/navigating-the-new-health-law.html

bogart

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Re: People on FIRE: How do you handle health insurance?
« Reply #11 on: January 19, 2014, 06:10:22 PM »
My SO recently had to go to Duke for some labs tests and the exact opposite happened. Roughly $1,000 "cash" price, then prenegociated rate bringing it down to roughly $250 (which sounds a lot more reasonable), then her out of pocket around $30.

This has been my experience, though it's been some years.  I did infertility treatment there; my insurance did not cover treatment but would cover the ultrasounds done for monitoring.  Duke resisted submitting these, perhaps not least because the uninsured price was $3XX for a u/s whereas the insured price was $1XX.

My recollection is that 5 or 10 years ago, NC decided that state hospitals would not charge uninsured patients more than the highest (?) amount it charged insured patients.  No idea if my recollection is correct or whether this still stands, but if so, the uninsured are likely better off going to UNC than Duke (if they have the choice, of course).

Daleth

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Re: People on FIRE: How do you handle health insurance?
« Reply #12 on: January 19, 2014, 08:06:42 PM »
2) What would a fair estimate be for my family for Obamacare (I live in California). We have friends who are in a similar situation and they said that it is about $1000/month for the mid tier plan. Is this a reasonable estimate?

Your answer, down to the penny, is here: www.healthcare.gov -- or more specifically here, since California has its own exchange and this is where Healthcare.gov will redirect you once you tell it you're in CA: https://www.coveredca.com/
And here's their "shop and compare" tool:
https://www.coveredca.com/shopandcompare/

I can't search for you because it requires your zip code--different plans are available in different areas. Using a random zip code I saw bronze plans (the cheapest) that will cover all 4 of you for around $850/month for HMO's (that's the pre-subsidy price; if you qualify for the subsidy it could be hundreds of bucks lower, depending on your income) and $890 for PPO's (ditto). The silver plans are on the order of $1100-$1200 (again, pre-subsidy). If you enter your income, it should also tell you how much subsidy if any you qualify for.

Those are health only, not dental; dental is separate, but a pretty nominal cost. Pay attention to what you're getting with the dental, though... I've had dental problems up the wazoo, and employer-provided dental insurance, and I've never found dental insurance to be that great a deal. It's still mustachian, but at least for adults it's pathetic compared to health insurance--like, you pay $600/year for what amounts to $1000/year in coverage. Ack! So anyway, when shopping for dental, pay close attention to what procedures are covered, who's covered, and whether there are good dentists near you who are in-network.

barbaroja

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Re: People on FIRE: How do you handle health insurance?
« Reply #13 on: January 20, 2014, 04:21:22 AM »
My wife and I quit our corporate jobs at the end of 2010.  We were 52/53 at the time and purchased high deductible private health insurance for about $500 per month.  Over time the premiums rose to $765 per month, with the biggest jump occurring when my wife turned 55.  We live in Oregon (when not traveling) and at the end of 2013 we applied for coverage through CoverOregon, hoping to qualify for a subsidy.  This winter we're on a 5 month adventure to Australia and NZ.  As part of the application process, I had to predict income for Jan 2014 and I predicted close to $0 because we're not home earning any money.  This resulted in us being pushed in to the Oregon Health Plan (Medicaid) with a $0 monthly premium.  OHP eligibility is determined on a monthly basis so when we come home and start earning enough money, then our application for a subsidy will be considered.  OHP does not cover you outside the USA.  So while in Australia, I've signed up for a basic traveler's policy that costs about $200 per month.  So the net result is that we just dropped our single biggest monthly expense from $765 per month to $200 per month.

taperted

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Re: People on FIRE: How do you handle health insurance?
« Reply #14 on: January 20, 2014, 07:42:31 AM »
Thank you everyone for the replies and links. It has been incredibly informative and useful. Also, thanks for not flaming the cringe-worthy pun of the thread title!

I guess I'm surprised that the medical insurance is relatively low. For some reason, my wife has the figure of $3000/month stuck in her head, but we can't find out the source of this figure. Maybe for a $0 deductable pre-ACA plan she saw once ... I don't know.

Also, I'm surprised that dental is so high. In our employer sponsored plan, our dental is about 25% of the medical (and vision is 1/8 of the medical). But I'll keep researching!

MMMdude

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Re: People on FIRE: How do you handle health insurance?
« Reply #15 on: January 22, 2014, 07:27:41 PM »
As a Canadian - when I see these posts - I am very grateful for our 'free' healthcare.  We do  pay for it out of taxes and in some cases health care premiums, but it is reassuring not having to worry about a catostrophic health event ruining one's finances.  Plus of course the 5k or so per year we don't pay in health insurance effectively lowers one's FIRE requirements by about $150,000

Cassie

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Re: People on FIRE: How do you handle health insurance?
« Reply #16 on: January 22, 2014, 11:26:14 PM »
My hubby & I pay $740.00/month for insurance thru our former employers. We can't consider cheaper insurance because we both have serious health conditions. Our standard of living would be much higher if not for this. Also it tends to go up 50/100/month every 1-2 years.  We are both retired but also work doing consulting. If we gave this up we could qualify for subsidies to get insurance cheaper thru the ACA.  However, we like consulting & do not feel this would be right to give it up just to qualify for subsidies.

catccc

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Re: People on FIRE: How do you handle health insurance?
« Reply #17 on: February 03, 2014, 01:23:56 PM »
Not FIRE yet, but I'm hoping there will be a reasonable option when the time comes. 

I've been thinking about this lately, and I just did a search at ehealthinsurance.com for a family of 3 in the Boulder, CO area (a la MMM, not me).  There is no more $237 HDHP like he has reported purchasing.  Not that I don't believe that he did, I carried this type of very low cost insurance a time or three- while finishing up college, between jobs, during my year as a SAHM...  But in recent searches, it seems like plans with this low of a cost are no longer available!  The cheapest plan in boulder is $467.  For me (near Philly), the cheapest plan for my family of 4 is $691!  That is a lot more than a couple hundred a month.

foobar

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Re: People on FIRE: How do you handle health insurance?
« Reply #18 on: February 03, 2014, 02:27:55 PM »
3k is high but when I left a corporate job 5 years ago, Cobra was 1900/month for a family plan.  If you look at the platinum plans, they are in that range.

Health care costs are a major crap shoot. It is easy to talk about self insuring and going with the 10k deductible when your young and healthy. It is a heck of a lot different when you like 62 with some chronic conditions that results in 5k of meds + monthly visits to the doctor just for it.  Now you have some control over this (healthy living and all) but their is also the luck factor. And trying to guess what the health care law will be in 5 years is beyond impossible.

Thank you everyone for the replies and links. It has been incredibly informative and useful. Also, thanks for not flaming the cringe-worthy pun of the thread title!

I guess I'm surprised that the medical insurance is relatively low. For some reason, my wife has the figure of $3000/month stuck in her head, but we can't find out the source of this figure. Maybe for a $0 deductable pre-ACA plan she saw once ... I don't know.

Also, I'm surprised that dental is so high. In our employer sponsored plan, our dental is about 25% of the medical (and vision is 1/8 of the medical). But I'll keep researching!

HattyT

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Re: People on FIRE: How do you handle health insurance?
« Reply #19 on: February 03, 2014, 02:39:51 PM »
When I quit in April 2013, COBRA was offered at $600/mo. (I'm a 50 year old woman, single, no kids)

I chose instead to purchase individual insurance for $300 a month (from the same company that covered me during my last job).

When the Affordable Health Care plans came out, I saw that I could get a Bronze plan for $250 a month even without a subsidy (with the same company).  I'll check again next year, with my lower FI income, I may qualify for a subsidy to bring that down even further.

It can't hurt to research at your options with Healthcare.gov

oldtoyota

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Re: People on FIRE: How do you handle health insurance?
« Reply #20 on: February 03, 2014, 02:57:31 PM »
As a Canadian - when I see these posts - I am very grateful for our 'free' healthcare.  We do  pay for it out of taxes and in some cases health care premiums, but it is reassuring not having to worry about a catostrophic health event ruining one's finances.  Plus of course the 5k or so per year we don't pay in health insurance effectively lowers one's FIRE requirements by about $150,000

Think of what Americans could do if our brain power wasn't being sucked up trying to figure this shit out.

On a related topic, it's always sweet with a Canadian mother comes into a forum and freaks out because she'll *only* get %50 or maybe 92% of her salary for one year after having her baby. LOL

America, as a rule, doesn't have the "family values" so many politicians preach about.


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Re: People on FIRE: How do you handle health insurance?
« Reply #21 on: February 03, 2014, 03:12:27 PM »
We figured out it would probabybe cheaper for me to cross the border at 6 months or so, live in her basement, deliver the baby, pay cash for the entire thing and come home than the have a baby on my HDHP.

And deprive your baby of the chance to be President? 

Paul der Krake

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Re: People on FIRE: How do you handle health insurance?
« Reply #22 on: February 03, 2014, 08:19:52 PM »
We figured out it would probabybe cheaper for me to cross the border at 6 months or so, live in her basement, deliver the baby, pay cash for the entire thing and come home than the have a baby on my HDHP.

And deprive your baby of the chance to be President? 
Nope, natural-born citizen clause and all that. Her baby would still be in the running, unless the Supreme Court decides to finally address the question (but they didn't even bother when John McCain had a real shot at the presidency in 2008).

foobar

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Re: People on FIRE: How do you handle health insurance?
« Reply #23 on: February 03, 2014, 08:47:04 PM »
This is really off topic but for example if Mr. Obama had been born in Kenya wouldn't he have still been eligible to be president because of that clause? Or was part of the conspiracy that his mom wasn't really his mom?

FWIW I am fine with Obama, McCain or Ted Cruz running for president. I could probably even be talked into letting Arnold run.

We figured out it would probabybe cheaper for me to cross the border at 6 months or so, live in her basement, deliver the baby, pay cash for the entire thing and come home than the have a baby on my HDHP.

And deprive your baby of the chance to be President? 
Nope, natural-born citizen clause and all that. Her baby would still be in the running, unless the Supreme Court decides to finally address the question (but they didn't even bother when John McCain had a real shot at the presidency in 2008).

Psychstache

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Re: People on FIRE: How do you handle health insurance?
« Reply #24 on: February 03, 2014, 08:54:10 PM »
This is really off topic but for example if Mr. Obama had been born in Kenya wouldn't he have still been eligible to be president because of that clause? Or was part of the conspiracy that his mom wasn't really his mom?

FWIW I am fine with Obama, McCain or Ted Cruz running for president. I could probably even be talked into letting Arnold run.

We figured out it would probabybe cheaper for me to cross the border at 6 months or so, live in her basement, deliver the baby, pay cash for the entire thing and come home than the have a baby on my HDHP.

And deprive your baby of the chance to be President? 
Nope, natural-born citizen clause and all that. Her baby would still be in the running, unless the Supreme Court decides to finally address the question (but they didn't even bother when John McCain had a real shot at the presidency in 2008).

As a Texan, I am not fine with Ted Cruz running for president.

Cassie

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Re: People on FIRE: How do you handle health insurance?
« Reply #25 on: February 03, 2014, 09:22:07 PM »
Even though Mr MM said his experience with Ehealth insurance was fine ours was not. We were quoted one price & then charged almost double for a policy. I cancelled it immediately but they still charged us 2 months later so had to go to bank and dispute it. We finally resolved it but it was a big pain.

Daleth

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Re: People on FIRE: How do you handle health insurance?
« Reply #26 on: February 07, 2014, 08:33:49 AM »
This is really off topic but for example if Mr. Obama had been born in Kenya wouldn't he have still been eligible to be president because of that clause? Or was part of the conspiracy that his mom wasn't really his mom?

Yep, he would've. He could've been born on the Moon and it wouldn't have mattered, because his mom was American. And I certainly haven't heard anything along the lines of "his mom wasn't his mom"--that would be hilarious, if the birthers latched on to that.

totesmahgoats

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Re: People on FIRE: How do you handle health insurance?
« Reply #27 on: February 08, 2014, 02:58:07 PM »
Even though Mr MM said his experience with Ehealth insurance was fine ours was not. We were quoted one price & then charged almost double for a policy. I cancelled it immediately but they still charged us 2 months later so had to go to bank and dispute it. We finally resolved it but it was a big pain.

Our experience with Ehealthinsurance was also not great. It was a series of "renegotiations on the premium" only then to be denied all together (my husband has some pre-existing ish, that makes us not so desirable, despite good overall health for the rest of us)

I was able to increase our deductible (10k) through 2014 to for only a nominal increase in premium through our current plan, but will have to muck through the exchange at the end of the year. In CO, when I checked in January, the exchange prices offered only a nominal ($30-40) savings while sacrificing all of our current providers. 

Daleth

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Re: People on FIRE: How do you handle health insurance?
« Reply #28 on: February 09, 2014, 11:06:40 AM »
Just as a reminder, to get an Obamacare exchange plan that starts covering you on March 1, you need to be signed up by February 15. Also, your LAST OPPORTUNITY to sign up this year is in March--after March 31 you are SOL.

FuckRx

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Re: People on FIRE: How do you handle health insurance?
« Reply #29 on: February 09, 2014, 05:29:01 PM »
I think 3,000/mo would be one heck of a cadillac health insurance plan. Just like car insurance in America I do think that too many people get excess coverage and are too afraid of high deductible plans etc. So generally speaking if you are healthy and there is the 4 of you somewhere under the 1k/mo would be a reasonable estimate.
However, what is really going to cost you a lot isn't the premiums, it's unnecessary visits to the doctor, taking meds that you probably don't need, getting imaging studies that aren't needed, even getting surgeries that you don't need and going to the ER for anything that happens after hours etc. I'm a physician who does primary care and urgent care so I'm saying this with some experience being on both ends. I have personally had amazingly expensive PPO plans and super cheapo HMO plans before being a doc and have only now realized that I truly got ripped off in my PPO plan.
How do you know what tests/meds/surgeries you really need? you find a doc/surgeon in a group/insurance that doesn't get paid per procedure/test and instead gets a fixed salary with no bonuses. That doctor/surgeon will probably do what's best for you and not what's best for his/her pocket book. And I think as a patient doing some more of your own research is ideal and bring up your concerns. Don't be afraid to second guess your doc. If he/she is good they will either be able to convince you of their decision or see it from your point of view.
And not to mention if you actively maintain your healthy (exercise/diet/weight) the majority of us won't even need a doctor.