Health Insurance

[wantstoinvest]

Hi everyone,

I was wondering what strategies people have here for dealing with health insurance.

I am self-employed at a company I founded but we are too small to offer any practical competitive rates on health insurance. My wife was getting health insurance for us and our 1 year old through her job, but she was let go recently and she may not want to work full-time anymore (fine by me honestly)!

We save a lot of money and thankfully the business is making us enough to live off of. The only thing I'm struggling with is health insurance. We live in Brooklyn, NY and we tried looking at health insurance 'on the market' but its very expensive (maybe $2400 / month).

It seems crazy to me to spend that when I would rather invest that money so I was wondering what other people who are FIRE before Medicare/Medicaid age do. And if anyone has any tips for a cheaper plan, that would be great. My wife is looking to get another job solely for the insurance, but she doesn't want to work (and I don't blame her). I've even thought of taking a full time job on the side, solely for the health insurance.

If anyone has any specific or general advice, let me know! I would much appreciate it.

[seattlecyclone]

You're seeing high premiums to insure three people because health care is very expensive. Take a look at your wife's last W-2 and it should say how much the company was putting toward these premiums. I think a lot of people don't realize how much these actually tend to be subsidized. If your income is too high for the exchange to subsidize your premiums, count your blessings that you're a high earner, pay the cost, and maybe write a letter to your elected officials to explain how disappointed you are that our health providers are charging twice as much as in other developed countries.

[Greystache]

If you have a relatively high income, you will not qualify for any ACA subsidies. It's going to be expensive. If you and your family are relatively healthy, you might benefit from a bronze plan with an HSA. You need to be healthy because the deductible is very high, but you get access to an HSA. Any money you contribute to an HSA reduces your AGI by an equal amount. The money in your HSA grows tax free and is tax free when you spend it for future medical expenses. Still not cheap, but may help.

[reeshau]

What is the cost of your wife's policy through COBRA?  Your prices could be high this year, with dual incomes.  What will next year look like?  Price a plan with next year's / your sole income, and see if the ACA marketplace comes back with better prices.  (Meaning, subsidies)

Looking at COBRA also gives you a peek into the whole cost of your wife's plan, as you will pay the employer's contribution, too.

[wenchsenior]

You're seeing high premiums to insure three people because health care is very expensive. Take a look at your wife's last W-2 and it should say how much the company was putting toward these premiums. I think a lot of people don't realize how much these actually tend to be subsidized. If your income is too high for the exchange to subsidize your premiums, count your blessings that you're a high earner, pay the cost, and maybe write a letter to your elected officials to explain how disappointed you are that our health providers are charging twice as much as in other developed countries.

Correct.

My husband is a fed so we are covered under federal blue cross blue shield (this is the so-called 'gold plated' plan that you will hear random people frequently express envy over).

Looking at his last pay statement, it costs us 691$ per month for two people in premiums (not including deductibles and copays), and the govt kicks in an additional $1,213 per month. So total cost of our insurance policy for 2 adults is ~$1,900 per month.

[startingsmall]

We do not have employer insurance and our income is too high for ACA subsidies, so we pay roughly $1300/month for a family plan through BCBS.

[travel2020]

Costco offers small business health insurance in many states. Might be something to look into as it would allow you to have some/all of the insurance covered by your company. Keep in mind that if you have others working full time in the company, you will need to offer it to them on the same terms (e.g. 100% employer covered, or partially covered, etc.)

[MDM]

I am self-employed at a company I founded but we are too small to offer any practical competitive rates on health insurance. My wife was getting health insurance for us and our 1 year old through her job, but she was let go recently....

It won't eliminate the pain but might mitigate it: the self-employed health insurance subtraction.  Are you familiar with that?

[snic]

You're seeing high premiums to insure three people because health care is very expensive. Take a look at your wife's last W-2 and it should say how much the company was putting toward these premiums. I think a lot of people don't realize how much these actually tend to be subsidized. If your income is too high for the exchange to subsidize your premiums, count your blessings that you're a high earner, pay the cost, and maybe write a letter to your elected officials to explain how disappointed you are that our health providers are charging twice as much as in other developed countries.

Correct.

My husband is a fed so we are covered under federal blue cross blue shield (this is the so-called 'gold plated' plan that you will hear random people frequently express envy over).

Looking at his last pay statement, it costs us 691$ per month for two people in premiums (not including deductibles and copays), and the govt kicks in an additional $1,213 per month. So total cost of our insurance policy for 2 adults is ~$1,900 per month.

Sounds about right. The round numbers I've heard for the cost of a retired couple's health insurance before medicare kicks in is about $25k/year, assuming no ACA subsidy. I think the total cost of my health insurance for my family (employee+employer) is closer to $30k/year, and it's not quite as good as fed employee health insurance.

[lifeisshort123]

Mr. Money Mustache himself has a post about this. 

https://www.mrmoneymustache.com/2020/11/09/direct-primary-care/

I'm not sure I would recommend his strategy.  The S.E. health deduction should help take a big chunk of the sting out of it.  Can you at least look into a catastrophic or high deductible plan for you? Not sure what that would cost for your family, but in our area those plans aren't too expensive.

[wantstoinvest]

Thanks for the advice everyone, I should clarify one thing I forgot about. I was a self employed person until this year but we grew our business and hired employees, so now I am an employee of a business that I own. I don't think I get the SE tax benefit in this arrangement.

Seems like the general advice is suck it up, sadly, but I would appreciate any more insights from anyone else.

[tj]

Thanks for the advice everyone, I should clarify one thing I forgot about. I was a self employed person until this year but we grew our business and hired employees, so now I am an employee of a business that I own. I don't think I get the SE tax benefit in this arrangement.

Seems like the general advice is suck it up, sadly, but I would appreciate any more insights from anyone else.

I think you do.

nolo.com/legal-encyclopedia/deducting-health-insurance-with-s-corporation.html

[wantstoinvest]

Thanks everyone for the discussion.

I wanted to give everyone an update that my wife found a job and is deciding to go back to work that offers health insurance, so my problem has solved itself. BUT! I hope the info in here was helpful to other people.

[tj]

Thanks everyone for the discussion.

I wanted to give everyone an update that my wife found a job and is deciding to go back to work that offers health insurance, so my problem has solved itself. BUT! I hope the info in here was helpful to other people.

How was she able to find another job so quickly? What industry?

[wantstoinvest]

How was she able to find another job so quickly? What industry?

Content marketing for a SaaS company. My wife is a journalist turned content person who pivoted to tech when we got married and they move fast sometimes to fill roles. They also move fast to eliminate roles but that's the nature of the game.