How many of you go without health insurance?

[OtherJen]

I'm not a gambler at all. Maybe that's why this doesn't make sense to me.

Honest question that I'm afraid might sound like trolling.

How is spending ~$10k on something you don't expect to use not a gamble? To me that just feels like gambling that I will need it.

I've got autoimmune disease on both sides of my family, and my grandmother died of gynecological cancer in her early 50s. Not having insurance would feel like Russian roulette.

[EscapeVelocity2020]

I'm not a gambler at all. Maybe that's why this doesn't make sense to me.

Honest question that I'm afraid might sound like trolling.

How is spending ~$10k on something you don't expect to use not a gamble? To me that just feels like gambling that I will need it.

You don't sound like trolling, but you do sound like you are playing the reverse-lottery.  You don't buy the 10k 'ticket', but if you lose, it'll cost you everything you ever hoped or dreamed of (unless you are lucky and die quickly)....  Sadly, the odds of losing this 'short term gain' wager are high enough not to be ignored (given the consequence of losing) and odds of losing increase the longer you live. 

In Pete's case, given that he doesn't sit behind a desk like most employees and in fact works in home construction, he is especially crazy not to carry health insurance, at least to protect his ex-wife and son in case he is injured on his own project or needs ongoing care for an accident or illness outside his control.  He is a significant source of income that can't be replaced - the very definition of what having insurance is designed to mitigate.

Don't get me wrong, I hate feeling beholden to the US health insurance industry and I'd love to know there were a reasonable alternative.  I also don't want to end up in the ER watching my life's savings disappear or hoping I'd just die quickly.

[Paul der Krake]

I don't pay for health insurance now and have not except for 2 years. One year was to be eligible for an HSA; the tax savings on that was more than the premiums.
I enrolled in the VA just to avoid the ACA penalty. I didn't vote in the poll since I wasn't sure how you'd characterize that.

And yes, I've used health care including surgery, visits to the ER and dealing with a couple chronic conditions. It's amazing what you can pay for.

Based on family history, I expect to die from some form of cancer. Right now, I don't plan on treating it aggressively. We'll see when the time comes; I may choose to blow the whole wad I've saved on fighting it. 30-50 years of saved premiums is a nice chunk.

The VA is health insurance... it's just a weird HMO.

[Paul der Krake]

......
I enrolled in the VA just to avoid the ACA penalty. I didn't vote in the poll since I wasn't sure how you'd characterize that.
.....

The VA is health insurance... it's just a weird HMO.

My point was that I enrolled to avoid the ACA penalty when it was around, not for healthcare.

What would you have done if you had been hit by a bus? Would you have paid hundreds of thousands of dollars out of pocket, or would you have used the VA benefits you didn't intend to use?

[DeniseNJ]

How is spending ~$10k on something you don't expect to use not a gamble? To me that just feels like gambling that I will need it.

If health insurance were real insurance it would make more sense--like if you paid a lesser amount and it only actually covered catastophe, like life insurance or car insurance.  Regular health care is something you should expect and plan for.  Insurance is for stuff you can't plan for that would be ruinous if you had to cover.

The difference is that insurance companies have come to realize that if they pay for preventative care and small issues that ppl might not pay for themselves, then they can avoid having to pay for major issues later on, so it's actually more profitable to pay for these things.  You would think ppl would want to avoid future health issues but that's another story. 

So the expectation is not that you will pay and not use it, like life insrance which I had for 20 yrs and never got to use.  The expectation is that if you have insurance you will use it and get preventative care and see a doctor more frequently and maintain better health--that's why it's so expensive.  If I just had to pay for anything over 50K, my premiums would be tiny, but I wouldn't get to subsidize everyone else who needed full coverage.

[sherr]

Now there are two votes for yes!  I'm really hoping someone sticks their neck out with a good arguement...  Even MMM's 'I'm healthy and take care of myself (and my son)' reasoning for being uninsured does not seem to have had much traction with the community that this was a frugal idea worth investigating.

I have health insurance and will probably continue to have it in retirement, but sure I'll attempt to give a legitimate answer here.

First of all to respond to the "negotiated rates" benefit of insurance: you can probably get those yourself (or better) just by telling the doctor beforehand that you're a cash customer. The "negotiated rates" are not some magical deal that your insurer has managed to create on your behalf, it's part of an arms race between providers and insurers. Insurance companies will claim costs are too high and they can only pay 80% of what the provider is asking for, so the providers raise their "rates" by 20%, so the insurance companies claim they can only pay 70%, so the providers raise their "rates" by another 10%, etc. People can and do sidestep the whole thing just by talking with providers and asking for the "real" rate.

Second of all, most of the "worst case" financial scenarios involve long-term illnesses, cancer and similar. In which case, you can simply start paying for insurance. They are not allowed to deny you or refuse to cover your pre-existing conditions any more. This is a hole that has been  intentionally blown in the ACA by the Republicans, one of their many efforts to sink it. The "must accept pre-existing conditions" rule only makes logical sense when paired with the individual insurance mandate. By setting the individual mandate penalty to $0 they are betting, hoping, that young healthy individuals will choose to not get insurance until they develop cancer or similar, reducing the paying base and driving up average costs for everyone until the ACA does actually enter a death-spiral (helped along with all the other things they're doing to sabotage it).

So if you're on average healthy and don't have many ongoing health expenses, the only real risk you're taking on by forgoing insurance is that of immediate catastrophic problems. Being hit by a bus, or similar. But the chance of that is much lower than the overall chance of needing healthcare.

Note that I'm not advising people to do this. Before the ACA the #1 cause of bankruptcy in this country was unexpected healthcare expenses. If the Republicans succeed in destroying it and moving us back to the bad old days because too many people cynically took advantage of the loopholes they created for them then we'll be right there again, but worse since healthcare costs have only continued to go up in the interim (but slower than they were before the ACA). And even if the risk of immediate catastrophic injury is "low", it's still non-zero, and it doesn't make much sense to me for anyone approaching FIRE to take that chance when they don't have to.

[LiveLean]

So our Petey boy, the man who lovvvves bilking everywhere in this era of distracted driving, is going to self-insure.

Let's hope he has good auto insurance, which will cover him when the inevitable distracted driver takes hits him. And a good personal injury lawyer to sue that person's auto insurance, if not his own, to cover his staggering medical bills.

[Alternatepriorities]

I'm not a gambler at all. Maybe that's why this doesn't make sense to me.

Honest question that I'm afraid might sound like trolling.

How is spending ~$10k on something you don't expect to use not a gamble? To me that just feels like gambling that I will need it.

I've got autoimmune disease on both sides of my family, and my grandmother died of gynecological cancer in her early 50s. Not having insurance would feel like Russian roulette.

Okay that makes total sense.

[Alternatepriorities]

I'm not a gambler at all. Maybe that's why this doesn't make sense to me.

Honest question that I'm afraid might sound like trolling.

How is spending ~$10k on something you don't expect to use not a gamble? To me that just feels like gambling that I will need it.

You don't sound like trolling, but you do sound like you are playing the reverse-lottery.  You don't buy the 10k 'ticket', but if you lose, it'll cost you everything you ever hoped or dreamed of (unless you are lucky and die quickly)....  Sadly, the odds of losing this 'short term gain' wager are high enough not to be ignored (given the consequence of losing) and odds of losing increase the longer you live. 

In Pete's case, given that he doesn't sit behind a desk like most employees and in fact works in home construction, he is especially crazy not to carry health insurance, at least to protect his ex-wife and son in case he is injured on his own project or needs ongoing care for an accident or illness outside his control.  He is a significant source of income that can't be replaced - the very definition of what having insurance is designed to mitigate.

Don't get me wrong, I hate feeling beholden to the US health insurance industry and I'd love to know there were a reasonable alternative.  I also don't want to end up in the ER watching my life's savings disappear or hoping I'd just die quickly.

I'm not a bankruptcy lawyer and have never gone through the process so my understanding might be way off. I'm under the impression that retirement accounts, primary residences and primary vehicles are all protected from bankruptcy within reason. So many a mustachian could in theory put 100k in medical expenses on CCs and then wipe it out in bankruptcy without jeopardizing FIRE. I haven't done that and I'm not advocating anyone plan on it, but that seems to take most of the risk out of the reverse lottery?

To be clear I do currently have health insurance through DW's employment and figuring out how to keep insurance is retirement is one of two things we really need to figure out to FIRE. The other is how much longer DW will enjoy her work and find it fulfilling.

[Cassie]

The thing is you are healthy until you aren’t and then it’s too late if you don’t have insurance.  I was in excellent health, big exerciser, thin until I ended up in the hospital at 50 with a too fast erratic heartbeat, BP in the stroke range and asthma. That was not a cheap hospital stay too stabilize and diagnose me.  I have a friend that works at a huge casino and their insurance doesn’t meet ACA standards. My DIL was healthy at 40 until a baseball size brain tumor was found and the doctor capable of operating was out of state. No appointment until the hospital verified her insurance.

[Rural]

I'd like to hear from the "yes" voters. It seems like incredible hubris to remain uninsured in the USA. I generally agree with Pete but I can't agree on this topic. I've seen a few high school friends deal with significant cancers (we're all in our 40s) and autoimmune diseases, etc. The costs of treatments for those illnesses would have been ruinous without health insurance.

My young nephew is facing multiple medical consults and probably surgery. My dad was just diagnosed with cancer. A young cousin went through leukemia treatment a few years ago. Without insurance, the associated costs would bankrupt each family.

I didn't vote yes as explained above but I have gone without health insurance a couple of times when my finances and responcibilities were different than they are now. So here's an example of when the math might make sense.

Imagine you have significant assets in a 401k that won't be lost in bankruptcy, own a single mustachian vehicle with 200k+ miles and have a small stash of cash (let's call it $24k) that you'd like to spend taking a year off. Now imagine that you look at the price of insurance and see that it's slightly over $800 per month ($9.6k/year) for the most basic plan offered through the exchange and it comes with a $5,000 deductible. One might look at those numbers and decide to gamble there won't a medical bill that exceeds 14.6k but is less than 24k in the next year.

Honestly given the protections offered for retirement accounts and primary residences in bankruptcy I'm a little surprised that more mustachians don't gamble on it.

The real risk is not that you'll lose the bet and have to pay the extra $10,000. The real risk is is having something life-threatening and not being able to get treatment at any cost because you don't have insurance. If you're literally bleeding in the moment, emergency rooms have to treat you, but once you're stabilized you're screwed until the next open enrollment season.

[Alternatepriorities]

So our Petey boy, the man who lovvvves bilking everywhere in this era of distracted driving, is going to self-insure.

Let's hope he has good auto insurance, which will cover him when the inevitable distracted driver takes hits him. And a good personal injury lawyer to sue that person's auto insurance, if not his own, to cover his staggering medical bills.

As you pointed out those injuries would be covered by the auto insurance and not health insurance anyway. Having health insurance would only matter if he wrecks his bike without a car involved. I suspect that's a risk MMM thought through and decided to accept. I'm not certain I would do the same in his position but I can certainly respect his choice and I can think of scenarios where I would make/have made a similar choice. I also chose not to go snowboarding or skydiving while I didn't have insurance...

[habanero]

The problem with Pete's reasoning is that he or someone else can be bankrupted due to something completely outside their own control. I can accept the not insuring home or only having liability insurance on car etc, because the financial downside to the trade is easily quantifiable (as in value of house / car). And as for a house burning down (which in most places is the only way to actually loose a complete house) the risk is extremely low and one can reduce it a lot by taking basic precautions.

For health insurance in the US this reasoning doesn't work - and is fundamentally flawed. You have a known upside (premiums not paid) but you have an unlimited downside, at least at anything remotely probable that can happen and costs more than your net worth, and a lot of this can happen because of stuff outside your own control. Yes, a healthy lifestyle, eating well, not doing very high-risk activities etcetc can all help reduce the risk but never eliminate it. That means you are left with a positive probability times an unlimited downside (as in much more than your net worth) which means "get insurance". 

If you are silly rich you can self-insure, but at that point the premiums doesn't really matter to you anyway so it still doesn't make much sense to go uninsured.

[DeniseNJ]

While hospitals have to treat emergencies, you can negotiate with doctors, and insrance has to take pre-existing conditions, the risk is still huge.  You can only enroll in health insurance, even Medicare, during open season or a special enrollment period.  The reason is exactly because of pre=existing conidtions.  Insurers don't want ppl enrolling just when they are sick.  and for Medicare, the longer you wait, the more it costs.

Hospitals treat emergencies but will still send you a bill.  When I got a huge bill, thousands of dollars, for rabies shots in the ER, they said if I can't pay it I can apply for Medicaid.  Um, no I don't qualify for Medicaid.  And who wants to decalir bankruptcy over an apendicitis.  Also, you can negotiate with doctors but it's hospital bills and lab work that will really add up and that's a lot harder to negotiate. 

Also, some things need to be tended to ASAP.  If I have cancer I don't want to wait until my insurance kicks in.

But if we didn't have so many helath issues, I would totally take a very very high deductable plan.

BTW, hosptial insurance (Medicare Part A) is not for hosptial care at all.  It's for inpatient care.  If you are in the hospital under observation for days, it doesn't count.  Read the fine print.

[Alternatepriorities]

I think how much a person enjoys/finds fulfillment in whatever they do for money has a significant impact on calculating the risk of paying the premiums. If work feels like I am literally trading the healthiest days of my life (doing something meaningless) for money to pay a premium for insurance that "might" buy me more days later, I'm going to look at that cost differently than if money is spontaneously generated by doing something I enjoy doing anyway. That's why I'm not sure I would make the same choices as MMM has in the same position. The premiums would cost him zero days of his life and might save him a lot of money and time in the future.

However, I have spent a number of years literally trading my life away hour by hour for money and then there is calculation to be done. Do I risk spending today at a job I hate to maybe buy an unknowable number of extra days of life at some point in the future.

[EscapeVelocity2020]

I'm not a bankruptcy lawyer and have never gone through the process so my understanding might be way off. I'm under the impression that retirement accounts, primary residences and primary vehicles are all protected from bankruptcy within reason. So many a mustachian could in theory put 100k in medical expenses on CCs and then wipe it out in bankruptcy without jeopardizing FIRE. I haven't done that and I'm not advocating anyone plan on it, but that seems to take most of the risk out of the reverse lottery?

To be clear I do currently have health insurance through DW's employment and figuring out how to keep insurance is retirement is one of two things we really need to figure out to FIRE. The other is how much longer DW will enjoy her work and find it fulfilling.

Thanks for the reply.  Everyone's calculus is different (even how risky their decision is changes depending on circumstance like if you are trying to get pregnant or if you commute by motorcycle...).  I guess most people look at bankruptcy being a lot more expensive than paying premiums - even 10k/yr for 20 years is 'only' 200k vs. losing everything you have except the essentials to live, and possibly losing part of any future earnings if they can work out a payment plan (Cpt 13 vs cpt 7)...  Maybe there is a strategic bankruptcy maneuver once you FIRE (like if you only have money in retirement accounts), but even then bankruptcy is a long and painful legal process, suffering aggressive debt collectors the whole time, and you lose access to credit for 10 years after.  I was pretty amazed that a medical debt found me years later, having sold my house and living overseas for 3 years and moving to another part of town when I returned.  The debt had been sold a few times, so it was only a fraction of the original amount, but debt collectors are impossible to dodge unless you fully flee the country!

I've entertained notions of going a year without health insurance during FIRE so I can hang on to that giant 10k premium that probably only buys me a free checkup...  but I've landed on playing the ACA subsidy game instead.

[Alternatepriorities]

I'm not a bankruptcy lawyer and have never gone through the process so my understanding might be way off. I'm under the impression that retirement accounts, primary residences and primary vehicles are all protected from bankruptcy within reason. So many a mustachian could in theory put 100k in medical expenses on CCs and then wipe it out in bankruptcy without jeopardizing FIRE. I haven't done that and I'm not advocating anyone plan on it, but that seems to take most of the risk out of the reverse lottery?

To be clear I do currently have health insurance through DW's employment and figuring out how to keep insurance is retirement is one of two things we really need to figure out to FIRE. The other is how much longer DW will enjoy her work and find it fulfilling.

Thanks for the reply.  Everyone's calculus is different (even how risky their decision is changes depending on circumstance like if you are trying to get pregnant or if you commute by motorcycle...).  I guess most people look at bankruptcy being a lot more expensive than paying premiums - even 10k/yr for 20 years is 'only' 200k vs. losing everything you have except the essentials to live, and possibly losing part of any future earnings if they can work out a payment plan (Cpt 13 vs cpt 7)...  Maybe there is a strategic bankruptcy maneuver once you FIRE (like if you only have money in retirement accounts), but even then bankruptcy is a long and painful legal process, suffering aggressive debt collectors the whole time, and you lose access to credit for 10 years after.  I was pretty amazed that a medical debt found me years later, having sold my house and living overseas for 3 years and moving to another part of town when I returned.  The debt had been sold a few times, so it was only a fraction of the original amount, but debt collectors are impossible to dodge unless you fully flee the country!

I've entertained notions of going a year without health insurance during FIRE so I can hang on to that giant 10k premium that probably only buys me a free checkup...  but I've landed on playing the ACA subsidy game instead.

I think that's where we will land for FIRE.

The first time I went without insurance I had nothing but $42k in student loans while I finished the last year of college. The ACA hadn't been conceived yet. The second time I had only a small sum of money that wasn't in retirement accounts and a single used vehicle... The last time was probably a bit more of a risk financially but we spent almost the entire three months in Europe.

[MayDay]

Has anyone really negotiated 80% off a medical bill? People talk about it, but the only times we've tried, we might get a 5 or 10% cash discount. Whereas we regularly see EOB's with an 80% discount (I have never averaged a whole year of stuff but the ones with the 80% write down have tended to be things like open heart surgery for 300k, so they significantly effect things).

[firestarter2018]

Even if you are very, very rich, if you end up at the ER with no insurance, you are going to be waiting around like the rest of the uninsured.  Maybe not a problem if you have some relationship with an ER or are willing to go to an ER that isn't busy (probably not a good sign), but there are other complications to being uninsured in addition to the added expenses.

This was a real eye-opener when my son had to go for stitches - walking past a room full of uninsured with much more severe injuries and getting a bed right away.

I'd never heard about this before. I didn't realize patients with insurance got preferential treatment in the ER over those without; I thought it was all based on triaging and urgency.

Anybody know if some types of insurance get even more preferential treatment? Like, employer vs. ACA? Gold vs. Silver or Bronze?

My guess it is kind of triaging.  So in a Mass casualty incident there are 4 levels of triaging, life threatening (red), urgent (orange or yellow), walking wounded (green) and dead (black).  My guess is those with insurance in the Green section, which covers a lot of ground, get moved up to first seen but if a urgent or life threatening came in with no insurance they'd go ahead.

Sorry for the late reply, but this isn't true. ER's don't triage by insurance status, they triage by severity of the presenting condition and staff/MD/bed availability. From what I understand, they aren't even allowed to inquire about insurance status before the initial medical screening/assessment is done.

[HBFIRE]

As my net worth reaches higher and higher levels, I like having insurance to cover catastrophic scenarios.  I no longer mind paying the 3-6 K out of pocket costs, what I want to avoid are the massive costs like 50+ K.  This is also why I carry umbrella insurance and personal property liability insurance as well some other protections in case of lawsuits.  The key is to protect against huge losses and self insure the small ones.  I turn down any kind of insurance options that cover relatively small risks as I prefer self-insuring those.  In addition to this, I am increasing my spending on my personal health as a means of lowering risk of catastrophic health costs (i.e. fitness, healthier foods, brain exercise, etc).  Spending the money on these to make them more convenient and higher quality is well worth it long term.  This is a major luxury that I think is worth spending on.  The three tenants of happiness once basic needs are met are Health, Time, and Relationships.  Use money to increase the quality of each of these.

[Knapptyme]

I am one of the few (now 4 yeses). I am prepared for the vitriol, but I will attempt to allay all the fears presented.

First, I have three kids. What about the kids? They are insured through state sponsored Medicaid. (Note: I also don't really have life insurance.) I looked it up, and when my kids would need my financial support, social security would pay out to them more than I make anyway if I die or am disabled from a debilitating illness or injury. So, they should be fine. Also mentioned, bankruptcy is not a desirable option, but an option to get out from under medical debt without losing everything else.

Next up, I didn't mind paying the tax penalty since the EIC we get for working the system the way we have ended up paying for it. So the fact that I don't have to pay the penalty this year is a nice little bonus, but not a motivating factor at all.

My wife is insured through her employer, and I could be too for roughly $1000 extra per month. Since that is an option to me and yet not realistically affordable, we fell into the ACA's family glitch. (Look it up. It's real. I and my family would not be eligible for a subsidy even though our income would make it so.) So the ACA's plan is also not totally affordable (and only good for catastrophic events anyway), especially considering the rest of my family is covered.

I'm the only one uninsured. I'm relatively young and healthy. I've done this for the past 2.5 years. And before kids and before the ACA, my wife and I went a year without health insurance because we were poor without coverage through jobs.

Lastly, while I'm not eligible for Medicaid like my kids are, I have learned through some conversations with the Medicaid people that if something were to befall me, I can turn to them for assistance (likely because I have kids). For instance, they gave me an example of a broken arm ($8000). They would likely be able to pick up the tab after $5500 on that injury. And I know in an emergency, I would be taken care of even if it might cost something later.

Look, I'm not going to champion the cause of being self-insured. I'd rather be insured. But, I'm taking a calculated risk on myself. My family medical history is pretty clean. I don't want a job just for health insurance. I want to be with my kids. (I get to be a SAHD now on which it is hard to put a dollar value.) I even implored my wife's employer (my previous employer, too) to stop offering spousal coverage. If they did that, we would qualify for ACA subsidies and all be insured.

TL;DR The problem is the ACA family glitch. Look it up. It's been written about for years. Here's one example article that sums it up pretty well.

https://www.healthinsurance.org/obamacare/no-family-left-behind-by-obamacare/

[FiveSigmas]

@Knapptyme, thank you for voting, and, more importantly, posting your rationale. I personally prioritize heath insurance very highly in my list of needs, and I strongly encourage others to do so as well (for reasons already enumerated in this thread). We're all adults, though, and we get to make our own decisions. I appreciate your candid response.

Would any of the other 3 (or others) mind sharing their stories?

[Acastus]

Sorry MMM, but going without health insurance is absolutely crazy. Many illnesses and accidents can result in $ 1 million in medical expenses. Christopher Reeve was the poster boy for this. When he broke his neck, he used up his insurance cap of $2 million in about 18 months. Robin Williams paid for his remaining 5 years of life.  You can get wiped out.The chance of getting one is low, but healthy lifestyle does not protect you from many truly random diseases. MMM will get wiped out if he does not come to his senses.

[sherr]

Sorry MMM, but going without health insurance is absolutely crazy. Many illnesses and accidents can result in $ 1 million in medical expenses. Christopher Reeve was the poster boy for this. When he broke his neck, he used up his insurance cap of $2 million in about 18 months. Robin Williams paid for his remaining 5 years of life.  You can get wiped out.The chance of getting one is low, but healthy lifestyle does not protect you from many truly random diseases. MMM will get wiped out if he does not come to his senses.

It is crazy, because he has more money than he could ever possibly need and at that point there's literally no reason not to pay for health insurance. However it is not true that he "will" get wiped out. Those cases get so much attention precisely because they are 1-in-a-million. It is overwhelmingly likely that he will not get wiped out, and he knows it.

[Dicey]

Sorry MMM, but going without health insurance is absolutely crazy. Many illnesses and accidents can result in $ 1 million in medical expenses. Christopher Reeve was the poster boy for this. When he broke his neck, he used up his insurance cap of $2 million in about 18 months. Robin Williams paid for his remaining 5 years of life.  You can get wiped out.The chance of getting one is low, but healthy lifestyle does not protect you from many truly random diseases. MMM will get wiped out if he does not come to his senses.

It is crazy, because he has more money than he could ever possibly need and at that point there's literally no reason not to pay for health insurance. However it is not true that he "will" get wiped out. Those cases get so much attention precisely because they are 1-in-a-million. It is overwhelmingly likely that he will not get wiped out, and he knows it.

Ah, that's the crux of it! IMO, MMM is being incredibly penny wise and pound foolish. To think that others may follow his path on this topic is mind boggling.

[moof]

Sorry MMM, but going without health insurance is absolutely crazy. Many illnesses and accidents can result in $ 1 million in medical expenses. Christopher Reeve was the poster boy for this. When he broke his neck, he used up his insurance cap of $2 million in about 18 months. Robin Williams paid for his remaining 5 years of life.  You can get wiped out.The chance of getting one is low, but healthy lifestyle does not protect you from many truly random diseases. MMM will get wiped out if he does not come to his senses.

It is crazy, because he has more money than he could ever possibly need and at that point there's literally no reason not to pay for health insurance. However it is not true that he "will" get wiped out. Those cases get so much attention precisely because they are 1-in-a-million. It is overwhelmingly likely that he will not get wiped out, and he knows it.

Ah, that's the crux of it! IMO, MMM is being incredibly penny wise and pound foolish. To think that others may follow his path on this topic is mind boggling.

My mind is split between the rational side that runs the numbers and kind of agrees with his very specific choice, and the other side that sees him as a self-appointed role model and father that makes this extremely unsettling.

We don't know his net worth, but seemingly it is well into the 7-figures terrain.  As such, he can indeed cover all but the most extreme situations as more or less pocket change.  If he gets something chronic, at the next open enrollment he could get coverage, at least so long as the ACA stands the way it is.  I have a deep queasy feeling typing that out.

On the other hand he advocates to retire when you have "enough", rather than the Suzy Orman enough is never enough to retire mantra.  Get you 25x spending and pull the plug, saving to a 3% WR is nuts after all.  So anyone following his lead has to navigate the whole "Do as I say, not as I do" path to carefully factory his situation in and parse choices like these VERY carefully.  It is also very true that the treatment of "uninsured" patients is a major wild card he cannot easily explore for us in advance.  Paying for and receiving medical are two very different critters.

So I guess the question becomes one of whether it is wise to self-insure medical is you have a few spare million lying around, or if one should look at potentially better ways to make use of most of that money sitting their as a dooms-day medical fund?

[sherr]

So I guess the question becomes one of whether it is wise to self-insure medical is you have a few spare million lying around, or if one should look at potentially better ways to make use of most of that money sitting their as a dooms-day medical fund?

Well just because it's your dooms-day medical fund doesn't mean you can't also have it invested, but I think this is the wrong way to look at it.

It's a well-known and often-discussed (on this forum at least) phenomenon that once you actually FIRE your focus can and should change from "earn/save as much as possible" to "protect what I already have". Because by definition if you're already FIREd then you have "enough". This is when people start talking about bond tents to reduce the sequence-of-return risk, and things like that. The point is not to end up with "more", it's to reduce the number of failure cases.

For someone who is already FIREd, not paying for health insurance is a staggeringly large and completely unnecessary risk. It has the potential to wipe out your whole lifetime's work, and it's something that you can easily guard against (assuming you're "actually" FIRE, and not just "optimistically-but-not-really" FIRE). Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

It's just a nonsensical risk. Maybe not a "large" one in terms of how likely it is to cause a problem. But definitely a "enormous" one in terms of how bad things could go (very bad), and what he gains by not insuring against it (next to nothing in relative terms).

The only people for whom it may make rational sense not to purchase health insurance are relatively poor people who have very little to lose. Once you do have things to lose it just doesn't make sense.

[Dicey]

@sherr and @moof, we're singing the same song.

I wonder if part of MMM's plan in the case of something catastrophic health-wise, is to return to his native Canada? If I knew I had that kind of safety net at my disposal, I might make different choices as well. But to espouse going without for anyone but himself, is negligent, IMO. Posting about his choices is tantamount to espousing it for others.

I worked too goddamn hard for my money to piss it away over something as stupid as failing to have basic insurance coverage.

You can make good cases for not buying life, disability, and long term care insurance post-FIRE, but going without homeowner's and health insurance? I can't fathom the risk. Sure I could pay for a new house if mine burned to the ground, but then I'd have to live on what was left, and I wouldn't want to have to do that.

My best guess is that if MMM is really making the $400k per annum figure that gets bandied about here, his nest egg might well be in the $5MM range, given the last ten year's stock performance. Perhaps that changes things. To me, it makes him look like a total cheap-ass. Or maybe he really has insurance and is just saying this shit to be controversial. Maybe he's running out of things to write about, as evidenced by his post [in]frequency on the blog and his lack of presence on this site. Maybe throwing bombs like this is the easiest way to feign interest in something he's moved beyond. <--- To be clear, he doesn't owe anyone any number of posts anywhere. There is plenty of benefit to this forum without his presence, but it does seem like his interest has waned.

[sherr]

I don't think that assuming trickery or click-baitery is fair or necessary. MMM is after all just a person, and people are perfectly capable of making the occasional bad decision all on their own without any negative intent.

I think it's much more likely that this is simply a bad decision, driven by MMM's focus on relentless optimism. Optimism can be a bad thing too if it prevents you from realistically evaluating situations.

[afox]

another reason for going without health insurance i dont think we've talked about is one's views/decisions towards end of life care.

This was covered really well in a recent hidden brain podcast episode:
https://www.npr.org/2019/11/13/778933239/the-ventilator-life-death-and-the-choices-we-make-at-the-end

perhaps MMM (or any other person that declines to purchase health care coverage) has different views about how they want to die?

If you are of the mindset that you are not going to go to extraordinary (ie. expensive) measures to extend your life, the amount of savings need to "self-insure" are much lower.

Wish MMM would opine more on his reasoning for not needing health care coverage.

[EscapeVelocity2020]

Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

This is probably the bit that MMM wants to avoid talking about.  In reality, his website (and MMM HQ, etc.) is a very successful small business so he would not qualify for ACA subsidies (as people are saying, his income is probably still around 400k/yr) and getting health insurance is more expensive and possibly more difficult than it is for a typical FIRE individual.  I do wish he would disclaimer that in his blog post though, instead of going on about how 'unemotional' he is about finances and confident that his good health will last, then vaguely saying there will be a future post with more details...  It does make it sound like he is advocating for no house and health insurance, which clearly is counter to what the forum thinks.

[EscapeVelocity2020]

I voted "no". Pretty much always had health insurance and currently use the VA for basicly free or low cost co-pays (service-connected disablily vet). Post FIRE (pre-ACA) I had COBRA then a low cost/high deductible Blue Cross plan then after the ACA was enacted I went solely to using the VA (and love it). Had a big expensive sports injury about a year after FIRE and was glad I kept COBRA which covered nearly everything. Won't go without and would move to another country if I had too for affordable health care.

This is a 'no' (but almost yes) I can totally understand, maybe some other 'yes' votes have VA?  Thanks for explaining.

[Dicey]

I don't think that assuming trickery or click-baitery is fair or necessary.

Excuse me? Trickery or click baitery? Did I write something that somehow made you think that's what I said?

MMM is after all just a person

Correction. MMM is a "persona". Pete Ademy is a person. I referred to the persona, not the person Hence, I call him MMM, not Pete Ademy.

...and people are perfectly capable of making the occasional bad decision all on their own without any negative intent.
It's negative results that are the problem, not negative intent.

I think it's much more likely that this is simply a bad decision, driven by MMM's focus on relentless optimism. Optimism can be a bad thing too if it prevents you from realistically evaluating situations.
Agreed.

[Paul der Krake]

I voted "no". Pretty much always had health insurance and currently use the VA for basicly free or low cost co-pays (service-connected disablily vet). Post FIRE (pre-ACA) I had COBRA then a low cost/high deductible Blue Cross plan then after the ACA was enacted I went solely to using the VA (and love it). Had a big expensive sports injury about a year after FIRE and was glad I kept COBRA which covered nearly everything. Won't go without and would move to another country if I had too for affordable health care.

This is a 'no' (but almost yes) I can totally understand, maybe some other 'yes' votes have VA?  Thanks for explaining.

I think someone else said "yes" but that they are able to use the VA even though they didn't intend to use it. I'm not really sure what they meant by that - would they use a non-VA hospital or doctor if needed? Would they plan to pay the full cost of any medical care they incurred even if thousands of dollars? But bottom line is that if you qualify to use the VA, and sign up for it, it covers most things at relatively low cost co-pays so is considered medical insurance.

Yes, it definitely counts. VA is insurance, no ifs and buts. People are allowed to think whatever they want of its inherent quality but it qualifies under federal law as Minimum Essential Coverage.

I'll give another example on the civilian side: a few years back I was on catastrophic ACA plan that with the highest deductible allowable by law, somewhere around 6.5k. I never used the plan or even signed up for a primary care doctor, instead doing all my medical stuff overseas on vacation, paying cash. Was I "without health insurance"? Of course not. Just because someone is getting a raw deal, whether perceived or real, doesn't make them not covered.

[jim555]

...Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

What you spend has no bearing on your subsidies.  It is your MAGI income that they look at, MMM has way too much income to get any subsidy.

[sherr]

...Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

What you spend has no bearing on your subsidies.  It is your MAGI income that they look at, MMM has way too much income to get any subsidy.

What you spend has a direct bearing on your subsidies when you're FIRE, because that's the only amount of money that you need to generate in "income". Blog income or whatever could always be sheltered in a corporation, from which MMM only draws a salary large enough to cover his expenses. Now I certainly have no clue what I'm talking about when it comes to corporate taxes so maybe there's some catch I'm not aware of, but for your average retiree yes the two are directly related.

[jim555]

...Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

What you spend has no bearing on your subsidies.  It is your MAGI income that they look at, MMM has way too much income to get any subsidy.

What you spend has a direct bearing on your subsidies when you're FIRE, because that's the only amount of money that you need to generate in "income". Blog income or whatever could always be sheltered in a corporation, from which MMM only draws a salary large enough to cover his expenses. Now I certainly have no clue what I'm talking about when it comes to corporate taxes so maybe there's some catch I'm not aware of, but for your average retiree yes the two are directly related.

The average retiree is not using a corporation to funnel income and expenses, so this is not a usual situation.

[Dicey]

I don't think that assuming trickery or click-baitery is fair or necessary.

Excuse me? Trickery or click baitery? Did I write something that somehow made you think that's what I said?

@Dicey How else did you mean this to be taken?

.....
Or maybe he really has insurance and is just saying this shit to be controversial. Maybe he's running out of things to write about, as evidenced by his post [in]frequency on the blog and his lack of presence on this site. Maybe throwing bombs like this is the easiest way to feign interest in something he's moved beyond.

Hmm, good question. Let me see if I can do better.

IMO, rarely does trickery or clickbait lead one to anything useful. There is a rock-solid underlying utility to the MMM blog and Forum. It just seems like Pete Adeny has lost interest in the persona he created, insofar as feeding/maintaining the monster (see: Frankenstein). It's undeniable that his posting frequency has dwindled. It's possible that he'd like to step away from being "Mr. Money Mustache", but the fire house of cash is too strong and the fame it's created is too alluring Or maybe when he tries, too many people (fans, supporters, advertisers) pressure him not to.

In the early years, it really felt like he was involved and engaged. Now it feels like he occasionally drops bombs to make it look like he's paying attention, then disappears into the haze, so his minions won't notice that his heart is elsewhere. I think that's vastly different than the terms trickery and clickbait imply.

His interests have evolved, which is 100% normal and health. What he created is an incredible gift to the rest of us. Even if he never published another word, his legacy will endure. But FFS, telling people (particularly US-based people who make up the bulk of his readership and his revenue), they don't need to insure their home or their health is so incongruous that one can't help but wonder at the motivation.

@MoseyingAlong, I hope that helps.

[sherr]

...Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

What you spend has no bearing on your subsidies.  It is your MAGI income that they look at, MMM has way too much income to get any subsidy.

What you spend has a direct bearing on your subsidies when you're FIRE, because that's the only amount of money that you need to generate in "income". Blog income or whatever could always be sheltered in a corporation, from which MMM only draws a salary large enough to cover his expenses. Now I certainly have no clue what I'm talking about when it comes to corporate taxes so maybe there's some catch I'm not aware of, but for your average retiree yes the two are directly related.

The average retiree is not using a corporation to funnel income and expenses, so this is not a usual situation.

Completely irrelevant. People deal with the situation they find themselves in. If the average retiree found themselves with a blog that generated a half-mil in income a year, then yes they absolutely would funnel income and expenses through a corporation. In the same way that I, a more-normal FIRE pursuant, find myself using a DAF to lump charitable giving into single tax years for tax purposes, and intimately familiar with the workings of ROTH pipeline.

Just admit you were wrong. FIRE expenses == income == ACA subsidy.

[jim555]

Your personal expenses are not business expenses.  IRS will have a field day with that in an audit.

[sherr]

Your personal expenses are not business expenses.  IRS will have a field day with that in an audit.

? I must be failing to communicate. MMM's personal expenses are what he has to generate in income. Income is what the ACA subsidies are based on.

It's entirely legitimate to form a corporation, "MMM Incorporated", that receives all MMM-related income and pays all MMM-related expenses, and then Pete himself draws a salary from that corporation that's only large enough to cover his personal expenses. Which are quite small, and therefore his income is quite small, and therefore he gets a large ACA subsidy.

Now the downside of that is that you wind up with a lot of money in MMM Inc that you can't touch in your personal life (without drawing it in salary and taking the tax hit), but that's neither here nor there for this discussion. FIRE expenses == "income" == ACA subsidy.

[jim555]

Is it worth having a discrete corporation which gets taxed as an entity, plus your own personal taxes when all taxes and benefits are considered in the big picture?

[OtherJen]

Is it worth having a discrete corporation which gets taxed as an entity, plus your own personal taxes when all taxes and benefits are considered in the big picture?

It would depend on the situation. In my own case, it is not worth it and I have remained a sole proprietor.

[Mr. Green]

Your personal expenses are not business expenses.  IRS will have a field day with that in an audit.

? I must be failing to communicate. MMM's personal expenses are what he has to generate in income. Income is what the ACA subsidies are based on.

It's entirely legitimate to form a corporation, "MMM Incorporated", that receives all MMM-related income and pays all MMM-related expenses, and then Pete himself draws a salary from that corporation that's only large enough to cover his personal expenses. Which are quite small, and therefore his income is quite small, and therefore he gets a large ACA subsidy.

Now the downside of that is that you wind up with a lot of money in MMM Inc that you can't touch in your personal life (without drawing it in salary and taking the tax hit), but that's neither here nor there for this discussion. FIRE expenses == "income" == ACA subsidy.

You could do this, but I suspect once you ran the actual numbers you wouldn't. For one, choosing to set the business up as a corporation, which is the form you'd need to take in order to pay yourself a salary, would mean all of the business profits beyond your salary being taxed at the corporate rate. For someone making as much money as MMM, this would mean giving away more money in taxes than if you had chosen a pass through style business setup and simply forgone healthcare subsidies.

That's a lose-lose because, in addition to that, you can't spend your own money because it's the business's money, not yours. You'd have to take that money as income some year in order to access it, at which time you'd still give up healthcare subsidies due to the income increase.

If your business was small, it might be worth being a corporation, but don't forget all the extra reporting and administration rules that apply to corporations.

[beltim]

Just admit you were wrong. FIRE expenses == income == ACA subsidy.

No.  Just no.  You don't even need to get into business deductions to prove this wrong, as there are many more common situations that show the above wrong.  The two off the top of my head that could happen every year are selling taxable investments (you only pay capital gains tax on the gain, not the net proceeds), and making withdrawals from Roth IRAs or 401ks, which are not taken into account for income or subsidies, but certainly go towards paying expenses. 

[Mr. Green]

...Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

What you spend has no bearing on your subsidies.  It is your MAGI income that they look at, MMM has way too much income to get any subsidy.

What you spend has a direct bearing on your subsidies when you're FIRE, because that's the only amount of money that you need to generate in "income". Blog income or whatever could always be sheltered in a corporation, from which MMM only draws a salary large enough to cover his expenses. Now I certainly have no clue what I'm talking about when it comes to corporate taxes so maybe there's some catch I'm not aware of, but for your average retiree yes the two are directly related.

A good tax attorney would say that your direct spending should be only one part of your income strategy. Obviously you have to make enough income to live off of, but if you spend a small enough amount you may still want to "generate" a higher income simply because it is the most tax efficient thing to do. There is also long term tax efficiency to consider as well. Choosing to pay no tax now isn't necessarily how you end up paying the least amount of tax over your lifetime if that means you end up with so much money by the time you hit RMDs that you're in significantly higher tax brackets. That's a fairly complicated equation, especially for the very early retiree because the last thing you'd want is to pay a little more tax in the name of long term efficiency now, and have that extra expense help contribute to a portfolio failure 20 or 30 years from now.

[big_owl]

@sherr and @moof, we're singing the same song.

I wonder if part of MMM's plan in the case of something catastrophic health-wise, is to return to his native Canada? If I knew I had that kind of safety net at my disposal, I might make different choices as well. But to espouse going without for anyone but himself, is negligent, IMO. Posting about his choices is tantamount to espousing it for others.

I worked too goddamn hard for my money to piss it away over something as stupid as failing to have basic insurance coverage.

You can make good cases for not buying life, disability, and long term care insurance post-FIRE, but going without homeowner's and health insurance? I can't fathom the risk. Sure I could pay for a new house if mine burned to the ground, but then I'd have to live on what was left, and I wouldn't want to have to do that.

My best guess is that if MMM is really making the $400k per annum figure that gets bandied about here, his nest egg might well be in the $5MM range, given the last ten year's stock performance. Perhaps that changes things. To me, it makes him look like a total cheap-ass. Or maybe he really has insurance and is just saying this shit to be controversial. Maybe he's running out of things to write about, as evidenced by his post [in]frequency on the blog and his lack of presence on this site. Maybe throwing bombs like this is the easiest way to feign interest in something he's moved beyond. <--- To be clear, he doesn't owe anyone any number of posts anywhere. There is plenty of benefit to this forum without his presence, but it does seem like his interest has waned.

Yes, we make several multiples higher annual income that MMM and frankly I think going without health insurance is moronic of him.  As has been said multiple times when you have a significant amount of money at your disposal it's a no-brainer to just have insurance, it's a small line item in your budget.  It makes no significant impact to your daily spending abilities.

I'm thinking MMM is possibly being a clickbait scam here.  Either that or he's delusional and has some sort of bone-headed male invincibility complex. 

[EscapeVelocity2020]

...Especially in MMM's case, where he is sooo rich and yet spends so little that he would easily qualify for the ACA subsidies.

What you spend has no bearing on your subsidies.  It is your MAGI income that they look at, MMM has way too much income to get any subsidy.

What you spend has a direct bearing on your subsidies when you're FIRE, because that's the only amount of money that you need to generate in "income". Blog income or whatever could always be sheltered in a corporation, from which MMM only draws a salary large enough to cover his expenses. Now I certainly have no clue what I'm talking about when it comes to corporate taxes so maybe there's some catch I'm not aware of, but for your average retiree yes the two are directly related.

The average retiree is not using a corporation to funnel income and expenses, so this is not a usual situation.

Completely irrelevant. People deal with the situation they find themselves in. If the average retiree found themselves with a blog that generated a half-mil in income a year, then yes they absolutely would funnel income and expenses through a corporation. In the same way that I, a more-normal FIRE pursuant, find myself using a DAF to lump charitable giving into single tax years for tax purposes, and intimately familiar with the workings of ROTH pipeline.

Just admit you were wrong. FIRE expenses == income == ACA subsidy.

I understand what you are getting at, but the fact of the matter is that Pete does not buy health insurance.  If he is keeping his income low enough to qualify for ACA subsidies, then he is even more foolish not to buy subsidized insurance, but this really doesn't add much to solving the conundrum as to why anyone would go without health insurance if they can easily afford it.

[afox]

hmmm.

Consider that
a. heath insurance is mostly "health care". its like prepayment for health services. it should be more efficient to shop directly for health care vs. going thru a middleman. it defintiley takes more work though. I know when i have done some shopping for health care I have found great deals.
b. if you're willing to die instead of undergo costly and painful end of life treatments much of health insurance becomes un-necessary. you're really left with things like acute injuries/broken bones/etc that aren't really the most expensive things to treat.

To really evaluate the financial decisions go without health insurance you'd need to do some heavy math to determine what max out of pocket costs would be and compare to the opportunity costs of spending all that money on premiums. Obviously the insurers are making money or they wouldn't do it, so it seems like it would be possible to self-insure. The magic numbers are what actuaries get paid big bucks to calculate.

I think it should be possible to get health insurance that does not cover expensive end of life care if you sign an agreement to refuse such services. This would be a much cheaper product.

[sherr]

Just admit you were wrong. FIRE expenses == income == ACA subsidy.

No.  Just no.  You don't even need to get into business deductions to prove this wrong, as there are many more common situations that show the above wrong.  The two off the top of my head that could happen every year are selling taxable investments (you only pay capital gains tax on the gain, not the net proceeds), and making withdrawals from Roth IRAs or 401ks, which are not taken into account for income or subsidies, but certainly go towards paying expenses.

Both of which are examples of it being more easy to qualify for ACA subsidies, not less.

So "==" is certainly an oversimplification. And Mr. Green points out that maybe the scenario I was laying out is undesirably anyway.

My original point, which I felt like Joe was disagreeing with, is that it's completely nonsensical to not pay for health insurance when you have a high income and low expenses. Such a person has options. If it's best to shelter income in a corp then they can do that. And the corp can set up a 401k with "employer" matching, and all the other benefits one could want. And if all of the things that they want to do involve expanding MMM Inc's operations or giving to charity then they can do that directly through the corp and not have to realize income at all. Or if they do want to realize all that income they can, and simply pay the entire insurance cost.

High-income low-expenses individuals have a tremendous amount of flexibility on how exactly they want to handle that - and there are a large number of paths one can take to reduce expenses - but it makes no sense not to handle it at all. That was the point I was trying to make, and hopefully one we can all agree on.