Author Topic: Healthcare in FIRE  (Read 1808 times)

heybro

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Healthcare in FIRE
« on: January 07, 2018, 11:20:56 PM »
Hello,

How does a person take care of healthcare costs after they have quit a standard job and are FIRE?

I ask this because our system is primarily Employer based.

I know the HSA is your best friend when it comes to saving for medical expenses.  This includes using a High Deductible Plan.

If people continue to use High Deductible Plans when in FIRE, I wanted to ask this also:

While I have been working, I have taken out Employer Based Plans that were high deductible and I have also, a year or two here and there, taken out plans that were very, how do you say, well, they covered A LOT.  They weren't that much more expensive but I sure did need them for that year or two. 

I'm sure I could find a good plan without an employer but it would be high deductible I am assuming.
I sort of am scared to even know what a plan that would cover a lot, with a low deductible, that is not employer based would cost.

The reason I am asking this is because, it may be a better bet to take my hours at work down to 30 (that which is considered full time and still includes benefits) instead of trying to go all out with FIRE.  Thank you.

spartana

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Re: Healthcare in FIRE
« Reply #1 on: January 08, 2018, 12:01:14 AM »
I believe most people who are FIREd (or plan to soon) plan to have a much lower taxable income (MAGI) once retired and count on getting subsidized ACA medical insurance to reduce premiums but maintain good coverage. I believe the Silver level covers most things at a reasonable OOP max. I use the VA hospital myself for coverage as I have a military service disability and can use it for free.
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soccerluvof4

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Re: Healthcare in FIRE
« Reply #2 on: January 08, 2018, 03:56:48 AM »
Hello,

How does a person take care of healthcare costs after they have quit a standard job and are FIRE?

I ask this because our system is primarily Employer based.

I know the HSA is your best friend when it comes to saving for medical expenses.  This includes using a High Deductible Plan.

If people continue to use High Deductible Plans when in FIRE, I wanted to ask this also:

While I have been working, I have taken out Employer Based Plans that were high deductible and I have also, a year or two here and there, taken out plans that were very, how do you say, well, they covered A LOT.  They weren't that much more expensive but I sure did need them for that year or two. 

I'm sure I could find a good plan without an employer but it would be high deductible I am assuming.
I sort of am scared to even know what a plan that would cover a lot, with a low deductible, that is not employer based would cost.

The reason I am asking this is because, it may be a better bet to take my hours at work down to 30 (that which is considered full time and still includes benefits) instead of trying to go all out with FIRE.  Thank you.


Sparta is right. Having said that not knowing much about you based on your opening like your age etc... I would work the minimum to get the coverage and in the meantime look up the plans on ACA and see what it would cost you a year to add that to your fire amount including inflation. Again , kinda hard to tell not know more about you BUT its good your taking this into consideration because its going to be a game changer for many. Don't take risks with the political landscape the way it is now and have everything wiped away you have worked for till you figure this all out.
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frompa

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Re: Healthcare in FIRE
« Reply #3 on: January 08, 2018, 12:16:07 PM »
Heybro - while it is true that for those who worked for a company, their health insurance was often provided as a benefit of their employment, I secured my and my family's health insurance for the decades I worked before stepping away from work last year.  Finding health insurance that fits your situation is not a mystery, but rather is like handling your money in general -- it's unlikely anyone else will do it better than you can do it yourself, assuming you do your homework.  Study up on what you need, on what's available, ask questions when you're uncertain, and then make your best choice.  This is a rational process, and you need not be ruled by fear of the unknown -- even employer provided health insurance was analyzed by mere human beings set out to determine the best overall options.  If you are otherwise ready to RE, don't let fear of health insurance keep you working.  If you expect your income to exceed such as would qualify you for subsidy, or you want to hedge your bets, make sure you have enough cushion in your savings to cover a reasonable amount for health insurance.  (What's reasonable depends on your age, location, health needs, # and age of dependents, etc... all mostly quantifiable.)  Best of luck. 

Fishindude

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Re: Healthcare in FIRE
« Reply #4 on: January 08, 2018, 01:18:22 PM »
I believe most people who are FIREd (or plan to soon) plan to have a much lower taxable income (MAGI) once retired and count on getting subsidized ACA medical insurance to reduce premiums but maintain good coverage. I believe the Silver level covers most things at a reasonable OOP max. I use the VA hospital myself for coverage as I have a military service disability and can use it for free.

Not always.
I retired at year end and intend to remain on COBRA using my former employer plan for the 18 months I am legally allowed.   We have invested well, have income generating side gigs, planned for retirement and won't see much reduction in income, so private insurance is quite expensive.   COBRA runs about $800 per month and private coverage will be around $1100 for my wife and I.

Hopefully the private health insurance market will get better in the next year and a half, but regardless we will suck it up and buy privately after COBRA.

StetsTerhune

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Re: Healthcare in FIRE
« Reply #5 on: January 09, 2018, 02:44:44 AM »
My ACA plan is ludicrously good this year. I have structured my investments to generate as little "income" as possible, so I can harvest capital gains to hit almost any income target I want. This year I'm expecting some medical expenses, so I am aiming for a low income and getting cost sharing subsidies as well as premium subsidies. For something like $60 a month my wife and I get a plan with a $1200 family deductible. It is absolutely not fair and is ludicrous on a societal level... but they write the laws and I feel no guilt about taking advantage of it.

boarder42

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Re: Healthcare in FIRE
« Reply #6 on: January 09, 2018, 04:04:46 AM »
Unless you're retiring I. The next year or so I think it's pretty fruitless to try to calc or assume any cost. The healthcare market will be dynamic and changing until Washington and the healthcare industry get their shit together. Meaning make pricing transparent then most of these issues will fix themselves and healthcare costs will drop substantially. I have a buddy who is a physical therapist. If you walk in of the street no insurance it's 90. With insurance it's 250. But the insurance agreements typically knock that down to 60-70. He doesn't get why he can't just charge everyone 70 and call it a day.
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Roadrunner53

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Healthcare in FIRE
« Reply #7 on: January 10, 2018, 08:50:59 AM »
Hub retired in 2015 and I was on his employee healthcare plan. We both transitioned to ACA in May of 2015 when he retired. First year on ACA doesn't penalize you for prior income that year. They take into consideration your future income after you retire which should be less than when you were employed. At the time Hub started Social Security in March of 2015, he has a small pension from a previous employer and we took out some money from IRA's plus savings. We were eligible for the subsidy for being below the 400% poverty level. Silver plan is the only one that offers the subsidy. Got to be very careful to keep below the radar screen in income to keep getting subsidy. Hub went off to Medicare March 2017 and I remained on ACA. Cost was MORE than the two of us on it together. It is still based on family income, not individual income. Still have to stay below the radar screen to qualify for subsidy. I have 6 more months till I move onto Medicare. Can't wait to get off it due to the turmoil on whether they will kill it or not. Plus, it is a pain to worry about falling off the subsidy cliff. I want to withdraw more from IRA instead of sucking out money from savings. However, subsidy savings was over $12K last year and will be $8,400 this year. I go to Medicare in August so only a partial year on ACA. If you apply for it make sure you submit paperwork when asked. They will pull the subsidy in a flash. I started inquiring about ACA way before we were ready to go onto it and that started the wheels turning on the ACA machine. For some reason the computer decided we were ready to start and kept sending letters for documentation. We were not ready and we didn't send paperwork. Then we got on it and one week later they pulled the subsidy because they didn't get the paperwork! OMG, it was a nightmare. You can't believe the amount of letters we got prior to starting ACA. This is CT and our system is called Access Health so maybe they have a different system than other states. It took several months and we had to pay the full amount without subsidy for a couple of months. They finally fixed and we got the subsidy money returned to us it but it wasn't easy because no one seemed to understand what the problem was. Talk about government red tape!

Gin1984

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Re: Healthcare in FIRE
« Reply #8 on: January 10, 2018, 08:55:33 AM »
I believe most people who are FIREd (or plan to soon) plan to have a much lower taxable income (MAGI) once retired and count on getting subsidized ACA medical insurance to reduce premiums but maintain good coverage. I believe the Silver level covers most things at a reasonable OOP max. I use the VA hospital myself for coverage as I have a military service disability and can use it for free.

Not always.
I retired at year end and intend to remain on COBRA using my former employer plan for the 18 months I am legally allowed.   We have invested well, have income generating side gigs, planned for retirement and won't see much reduction in income, so private insurance is quite expensive.   COBRA runs about $800 per month and private coverage will be around $1100 for my wife and I.

Hopefully the private health insurance market will get better in the next year and a half, but regardless we will suck it up and buy privately after COBRA.
Check your state, California allows you to extend COBRA for an additional 18 months (36 total).  Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Roadrunner53

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Healthcare in FIRE
« Reply #9 on: January 10, 2018, 09:35:50 AM »
Last year (2017) Hub and I on ACA in CT:
Premium $1916.54
Subsidy  $1409.00
Payment $507.54

Last year (2017) Hub off ACA in CT, Me only:
Premium: $950.54
Subsidy:  $440.00
Payment: $510.54

This year (2018) Me only on ACA in CT:
Premium $1264.20
Subsidy  $769.00
Payment $495.20

Just below 400% poverty level, income approx. $60K

RedmondStash

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Re: Healthcare in FIRE
« Reply #10 on: January 10, 2018, 11:11:53 AM »
Yeah, this is something we're dealing with too. I just left my job and am on COBRA for the next 12-18 months; spouse is on Medicare. Our income is likely not to look as low as I'd like since we're doing IRA conversions for spouse over the next few years. Add spouse's Social Security to that, and good-bye, subsidies.

Basically I look at it as a mathematical question: Over the last 10-20 years, at what rate have health insurance costs increased? The answers are grim, but they're clear. I don't believe healthcare costs can continue to rise that astronomically forever, but it will likely be at least a few years before that sea change happens. So I calculate how much I expect premiums to cost for us, and the rate at which I expect them to rise over the next decade or so, and I figure those numbers into our FIRE plan.

It's all just math in the end.

soccerluvof4

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Re: Healthcare in FIRE
« Reply #11 on: January 10, 2018, 12:23:47 PM »
I believe most people who are FIREd (or plan to soon) plan to have a much lower taxable income (MAGI) once retired and count on getting subsidized ACA medical insurance to reduce premiums but maintain good coverage. I believe the Silver level covers most things at a reasonable OOP max. I use the VA hospital myself for coverage as I have a military service disability and can use it for free.

Not always.
I retired at year end and intend to remain on COBRA using my former employer plan for the 18 months I am legally allowed.   We have invested well, have income generating side gigs, planned for retirement and won't see much reduction in income, so private insurance is quite expensive.   COBRA runs about $800 per month and private coverage will be around $1100 for my wife and I.

Hopefully the private health insurance market will get better in the next year and a half, but regardless we will suck it up and buy privately after COBRA.
Check your state, California allows you to extend COBRA for an additional 18 months (36 total).  Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.


about 3 years ago when I fire'd i did cobra for family of 6 it was about 18k so I feel your pain.
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RyanAtTanagra

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Re: Healthcare in FIRE
« Reply #12 on: January 10, 2018, 12:39:25 PM »
Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Jesus, your people's healthcare costs scare me.  That's as much as my FIRE number itself.  I haven't figured out the healthcare numbers yet (employer pays 100% currently, so it's not a cost for me), but thinking I might have to DOUBLE my FIRE number is discouraging to say the least.

spartana

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Re: Healthcare in FIRE
« Reply #13 on: January 10, 2018, 01:06:08 PM »
Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Jesus, your people's healthcare costs scare me.  That's as much as my FIRE number itself.  I haven't figured out the healthcare numbers yet (employer pays 100% currently, so it's not a cost for me), but thinking I might have to DOUBLE my FIRE number is discouraging to say the least.
Yeah I'd be running off to another country if I had to pay that much! Maybe they are too high income to get subsidies so have to pay full cost premiums. Or have had to use it often enough to pay high OOP max each year. At your projected FIRE income (assuming ACA is still around...and I'm doubtful)  you probably will pay less than $100/month and get cost sharing too.
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Gin1984

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Re: Healthcare in FIRE
« Reply #14 on: January 10, 2018, 01:19:48 PM »
Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Jesus, your people's healthcare costs scare me.  That's as much as my FIRE number itself.  I haven't figured out the healthcare numbers yet (employer pays 100% currently, so it's not a cost for me), but thinking I might have to DOUBLE my FIRE number is discouraging to say the least.
Yeah I'd be running off to another country if I had to pay that much! Maybe they are too high income to get subsidies so have to pay full cost premiums. Or have had to use it often enough to pay high OOP max each year. At your projected FIRE income (assuming ACA is still around...and I'm doubtful)  you probably will pay less than $100/month and get cost sharing too.
Oh, that does not include the OOP max, that is another $6000.  I was just listing what my COBRA costs would be if I retired today.  Mostly because I don't expect ACA to be around by the time I retire and I have medical conditions so I need insurance so I plan for full cost.

RyanAtTanagra

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Re: Healthcare in FIRE
« Reply #15 on: January 10, 2018, 02:37:53 PM »
Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Jesus, your people's healthcare costs scare me.  That's as much as my FIRE number itself.  I haven't figured out the healthcare numbers yet (employer pays 100% currently, so it's not a cost for me), but thinking I might have to DOUBLE my FIRE number is discouraging to say the least.
Yeah I'd be running off to another country if I had to pay that much! Maybe they are too high income to get subsidies so have to pay full cost premiums. Or have had to use it often enough to pay high OOP max each year. At your projected FIRE income (assuming ACA is still around...and I'm doubtful)  you probably will pay less than $100/month and get cost sharing too.

That's at least encouraging.  I don't expect ACA as it is to be around either, but hopefully SOMETHING will still be that helps lower income people cover health care.

MrThatsDifferent

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Re: Healthcare in FIRE
« Reply #16 on: January 10, 2018, 09:35:39 PM »
Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Jesus, your people's healthcare costs scare me.  That's as much as my FIRE number itself.  I haven't figured out the healthcare numbers yet (employer pays 100% currently, so it's not a cost for me), but thinking I might have to DOUBLE my FIRE number is discouraging to say the least.
Yeah I'd be running off to another country if I had to pay that much! Maybe they are too high income to get subsidies so have to pay full cost premiums. Or have had to use it often enough to pay high OOP max each year. At your projected FIRE income (assuming ACA is still around...and I'm doubtful)  you probably will pay less than $100/month and get cost sharing too.

That's at least encouraging.  I don't expect ACA as it is to be around either, but hopefully SOMETHING will still be that helps lower income people cover health care.

Yeah, cause this administration really cares about the health care of lower income people.

RyanAtTanagra

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Re: Healthcare in FIRE
« Reply #17 on: January 10, 2018, 11:24:12 PM »
Though I am totally jealous of your cost, our health insurance cost $19,000/year, I'm not looking forward to COBRAing that.

Jesus, your people's healthcare costs scare me.  That's as much as my FIRE number itself.  I haven't figured out the healthcare numbers yet (employer pays 100% currently, so it's not a cost for me), but thinking I might have to DOUBLE my FIRE number is discouraging to say the least.
Yeah I'd be running off to another country if I had to pay that much! Maybe they are too high income to get subsidies so have to pay full cost premiums. Or have had to use it often enough to pay high OOP max each year. At your projected FIRE income (assuming ACA is still around...and I'm doubtful)  you probably will pay less than $100/month and get cost sharing too.

That's at least encouraging.  I don't expect ACA as it is to be around either, but hopefully SOMETHING will still be that helps lower income people cover health care.

Yeah, cause this administration really cares about the health care of lower income people.

Well I probably won't be FIREing during this administration, unless it runs 8 years, and nothing done is permanent (except maybe damage to the environment)

DanLee

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Re: Healthcare in FIRE
« Reply #18 on: January 11, 2018, 03:14:44 AM »
Is medical tourism not a option?

We in the netherlands pay 74,95 euro's a month for all the basic hospital healthcare all basics included like surgery and cancer treatments etc. With the first 850 euro for your own risk per year. And if you earn less then 20500 before taxes. you get 94 euro's back from the goverment. Bud only if you own less then 107.752 in stocks and savings.
You are can get dutch healthcare if you live or work in the netherlands.

Nick_Miller

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Re: Healthcare in FIRE
« Reply #19 on: January 11, 2018, 07:32:34 AM »
Options in some states (like mine) are VERY limited.

In my county of my state, there is ONE ACA exchange option this year. ONE. That is it. We had 5-6 insurers writing individual plans as recently as 2 years ago, but for this coming year, only one insurer is still writing individual policies. It is very scary. I spoke with a broker who said, "Yep, that's it." He tried to help, but the best suggestion he could make was for me to increase the size of my side writing business to hire an employee and then with 2 people, I could buy a "group plan" from him.

The network for the one remaining insurer is VERY small, and people who buy the insurance frequently have to change PCPs, pediatricians, etc. (I checked this out myself, and it would have been true for us too.) We were prepared to suck it up and do it, but at the eleventh hour my wife ended up finagling me and the kiddos onto her company's health plan for a very cheap rate (the boss pulled strings for her), but I view it as a year-to-year situation at best, because if we were paying the full price for her family plan through work, it would be over $1200/month.


jim555

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Re: Healthcare in FIRE
« Reply #20 on: January 11, 2018, 08:28:20 AM »
Is medical tourism not a option?

We in the netherlands pay 74,95 euro's a month for all the basic hospital healthcare all basics included like surgery and cancer treatments etc. With the first 850 euro for your own risk per year. And if you earn less then 20500 before taxes. you get 94 euro's back from the goverment. Bud only if you own less then 107.752 in stocks and savings.
You are can get dutch healthcare if you live or work in the netherlands.
I don't thing this is a realistic option for most in the US.  Big pain to move and get visas, then deal with the tax headache of both countries.

I could see moving to another state since there are huge differences in pricing between states.

whiskeyjack

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Re: Healthcare in FIRE
« Reply #21 on: January 11, 2018, 02:09:43 PM »
Is medical tourism not a option?

We in the netherlands pay 74,95 euro's a month for all the basic hospital healthcare all basics included like surgery and cancer treatments etc. With the first 850 euro for your own risk per year. And if you earn less then 20500 before taxes. you get 94 euro's back from the goverment. Bud only if you own less then 107.752 in stocks and savings.
You are can get dutch healthcare if you live or work in the netherlands.

If you mean 'can you retire and move to Europe and use the European healthcare plan' - it's challenging. Most countries are not willing to take American expats for long-term stays (over 90 days) without a letter of employment or being enrolled in university. This the post-FIRE board where presumably no one will want a job, so what are the other options?

To become a resident of the Netherlands requires you to apply in one of many categories, but the only one that might apply to retirees from the US who do not have family there is an 'investor' visa, which requires 1250000 euros invested.

boarder42

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Re: Healthcare in FIRE
« Reply #22 on: January 11, 2018, 02:12:58 PM »
Is medical tourism not a option?

We in the netherlands pay 74,95 euro's a month for all the basic hospital healthcare all basics included like surgery and cancer treatments etc. With the first 850 euro for your own risk per year. And if you earn less then 20500 before taxes. you get 94 euro's back from the goverment. Bud only if you own less then 107.752 in stocks and savings.
You are can get dutch healthcare if you live or work in the netherlands.
I don't thing this is a realistic option for most in the US.  Big pain to move and get visas, then deal with the tax headache of both countries.

I could see moving to another state since there are huge differences in pricing between states.

in the current system i think its highly likely you'll see certain states become retirement states for those who quit early and attract more entreprenuers if they have good healthcare available.  but the individual mandate is gone now correct? so we can go back to buying catastrophic plans right?
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