The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: John Dough on August 21, 2019, 09:43:38 PM
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I have enough income to retire.
My fund will allow for about $750 a month for health insurance.
But why should I pay $9000 a year?
Seems like I should let my investment grow, and pay medical expenses in cash.
Especially with these high deductible policies, where I’d lay out money for insurance, plus more money for deductibles.
Self insurance. The insurance companies make good money.
I’m in NY state where ACA might be helpful too.
My insurance at work is $800 a month.
Has anyone here any advice on self insuring. If you have a couple hundred k in the bank, why insure?
I’m healthy and work out, so I’ll beat the odds the insurance companies would use my premiums to fund fat, sickly, out of shape smokers.
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If you can't get ACA subsidies without job income? Check out health shares in concert with medical tourism, they may work for you.
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If you have a couple hundred k in the bank, why insure?
Because a couple hundred k won't be enough if you get seriously sick.
In your scenario perhaps an HSA is the best option. You'll have a heavily tax advantaged investment account to use the funds to pay for routine medial expenses, and to be safe you'll have comprehensive coverage for serious accident or illness.
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The reason you need insurance is because one serious accident/illness could wipe out your entire savings. I'm in California, so I'm not sure this is relevant in your state, but when we retired, we got a high deductible HSA plan through the Obamacare exchange. It has varied in cost over the last 4 years, but in all but one of them, it has been under $100 per month for a 55+ aged couple. The key is to keep your MAGI low enough to get premium subsidies. Yes, we are on the hook for $6k deductible, but we have never spent more than $3k in any year so far. If we do have a serious problem, we won't be bankrupted as a result.
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Because....cancer.
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If you are in NY and your income is under $25K, the Essential Plan is only $20 a month.
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Personally, I would never go completely without health insurance but if I were in your exact shoes I'd do high deductible with HSA. Both my spouse and myself experienced big expensive health problems that had nothing to do with how healthy we kept ourselves (leukemia and brain aneurysm) and the bills from both of were in the $100 of thousands for both incidents but in both cases we only had to pay the max out of pocket which was about $6k-7k. After those incidents my main concern with any policy is what the max out of pocket is.
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Personally, I would never go completely without health insurance but if I were in your exact shoes I'd do high deductible with HSA. Both my spouse and myself experienced big expensive health problems that had nothing to do with how healthy we kept ourselves (leukemia and brain aneurysm) and the bills from both of were in the $100 of thousands for both incidents but in both cases we only had to pay the max out of pocket which was about $6k-7k. After those incidents my main concern with any policy is what the max out of pocket is.
This. An acquaintance recently went through cancer treatment. One of the chemo drugs cost thousands of dollars per month, and that wasn't counting the clinical fees for chemo administration, follow-up tests, or any other treatments. A high-deductible plan and HSA will keep you from burning through that $200K for a single illness.
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Because....cancer.
Pretty much this.
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You could probably self-insure if you had 2 or 3 million set aside for healthcare.
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You could probably self-insure if you had 2 or 3 million set aside for healthcare.
But is not safe even then. Insurance companies negotiate better rates for doctor visits, medications and hospital care than you can get as an individual. If there was some way you could get those negotiated rates as an individual, I think $3 million might be safe for self insurance.
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This is why I plan to be able to adjust my MAGI so that we can qualify for decent ACA plan at a reasonable price.
I would suggest you research ACA plans in your area based off different incomes and see where that leads you.
Like others have said, cancer, heart attack or even a freak accident could wipe out everything you have so at least catastrophic coverage of some type is probably a good alternative.
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Everyone has said this already but let me state it baldly:
We don’t have health insurance for health care reasons, we have health insurance to protect our stash.
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Everyone has said this already but let me state it boldly:
We don’t have health insurance for health care reasons, we have health insurance to protect our stash.
Same. We have had two of our closest friends experience freak medical situations in the past decade that would have resulted in bills in the multiple hundreds of thousands to million+, had they not been well-insured (in one case, the bills STILL ran to the hundred thousand range). The same could happen to us any time. Or to you.
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Because....cancer.
This. My brother has a type of cancer that is easily cured and was found very early. The cost of his treatment thus far is $350,000. A couple hundred thousand in the bank is nothing for serious illness or accident.
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My previously very healthy Dad was diagnosed with AML (leukemia) and just the first 30 days of the hospital care was $80,000+ and that didn’t include ANY doctor bills! That first 30 days was just ‘step 1’ of the treatment plan. I won’t even go into the prostrate cancer that followed nor the brain tumor.
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I have a friend who has some serious family money and who doesnt participate in health insurance.
She is self insured.
She continues to be self insured through ling term cancer treatments, gall bladder surgery, appendix surgery, now diabetes. And oh yeah—she was a pedestrian hit by a car. Just that latter incident racked up around $400,000 in medical bills.
It is interesting to me that she continues to bargain down her medical bills and then pay for the treatment. I dont know how much of her own money vs family money pays these bills. She does not discharge them thru bankruptcy. She does not live large, in fact lives in a small apartment that looks like that of a poor person, so when the social worker visited her about hospital bills and after care for the car accident, nothing clued social worker about finances.
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Everyone has said this already but let me state it baldly:
We don’t have health insurance for health care reasons, we have health insurance to protect our stash.
Well said! 5K/year *stashurance.
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I have a friend who has some serious family money and who doesnt participate in health insurance.
She is self insured.
She continues to be self insured through ling term cancer treatments, gall bladder surgery, appendix surgery, now diabetes. And oh yeah—she was a pedestrian hit by a car. Just that latter incident racked up around $400,000 in medical bills.
It is interesting to me that she continues to bargain down her medical bills and then pay for the treatment. I dont know how much of her own money vs family money pays these bills. She does not discharge them thru bankruptcy. She does not live large, in fact lives in a small apartment that looks like that of a poor person, so when the social worker visited her about hospital bills and after care for the car accident, nothing clued social worker about finances.
Thats really impressive - I just didn't think it was possible to bargain this well with medical service providers as an individual.
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I have a friend who has some serious family money and who doesnt participate in health insurance.
She is self insured.
She continues to be self insured through ling term cancer treatments, gall bladder surgery, appendix surgery, now diabetes. And oh yeah—she was a pedestrian hit by a car. Just that latter incident racked up around $400,000 in medical bills.
It is interesting to me that she continues to bargain down her medical bills and then pay for the treatment. I dont know how much of her own money vs family money pays these bills. She does not discharge them thru bankruptcy. She does not live large, in fact lives in a small apartment that looks like that of a poor person, so when the social worker visited her about hospital bills and after care for the car accident, nothing clued social worker about finances.
Thats really impressive - I just didn't think it was possible to bargain this well with medical service providers as an individual.
I don’t know that she is really bargaining. Sounds like she is likely taking financial aid. The hospital financial aid forms ask about income not net worth. So if you're only living off a small distribution and not working then you probably would qualify for much of the bills to be forgiven.
While hospital billing is really crazy, I think this is borderline unethical.
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I have a friend who has some serious family money and who doesnt participate in health insurance.
She is self insured.
She continues to be self insured through ling term cancer treatments, gall bladder surgery, appendix surgery, now diabetes. And oh yeah—she was a pedestrian hit by a car. Just that latter incident racked up around $400,000 in medical bills.
It is interesting to me that she continues to bargain down her medical bills and then pay for the treatment. I dont know how much of her own money vs family money pays these bills. She does not discharge them thru bankruptcy. She does not live large, in fact lives in a small apartment that looks like that of a poor person, so when the social worker visited her about hospital bills and after care for the car accident, nothing clued social worker about finances.
Thats really impressive - I just didn't think it was possible to bargain this well with medical service providers as an individual.
I don’t know that she is really bargaining. Sounds like she is likely taking financial aid. The hospital financial aid forms ask about income not net worth. So if you're only living off a small distribution and not working then you probably would qualify for much of the bills to be forgiven.
While hospital billing is really crazy, I think this is borderline unethical.
Financial aid? From the hospital? No. She isnt taking that.That is likely one reason why the social worker visited though. My friend doesn't reveal her reasons to the earnest social worker for no insurance or background, she said she politely listened to the social worker’s suggestions of qualifying programs but that is all.
For the car accident there was of course an insurance payout, but the driver had only the minimum for liability. My guess is $100,000. I dont remember exact numbers, but she negotiated the big hospital bill from somewhere around $250,000 to around $85,000.
I would not at all recommend taking this method though.
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It's very common for a private payer to "bargain" down large medical bills to <50%. Hospital systems know bankruptcy is a real option for most who rack up large debts, plus insurance companies routinely get this "bargain", so it's common practice.