Author Topic: Health Insurance and FIRE...am I missing something?  (Read 1711 times)

reese_c_c

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Health Insurance and FIRE...am I missing something?
« on: December 31, 2018, 06:50:27 AM »
I just did a query on ehealth.com for my family and I (wife:32+3kids:8,6,3) and the quote was over $1200/month! Is this right? This seems almost impossible to afford. This would be roughly 1/2 of monthly expenses over again just for insurance. Advice please.

Thanks

Cranky

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Re: Health Insurance and FIRE...am I missing something?
« Reply #1 on: December 31, 2018, 07:04:20 AM »
I'm assuming that for a family of 5 you'd get an ACA subsidy?

Schaefer Light

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Re: Health Insurance and FIRE...am I missing something?
« Reply #2 on: December 31, 2018, 08:22:10 AM »
I just lost my job, and I've learned that it would cost me about $600 per month for individual coverage with no subsidy.  If you can adjust your income so that it's between 100% and 400% of the federal poverty level, then you will receive a subsidy to help cover some of the cost.


Altons Bobs

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Re: Health Insurance and FIRE...am I missing something?
« Reply #4 on: December 31, 2018, 03:16:19 PM »
If your passive income is above 400% of the FPL, or if the subsidy goes away, then yes, you will have to pay full price.

DreamFIRE

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Re: Health Insurance and FIRE...am I missing something?
« Reply #5 on: December 31, 2018, 05:30:50 PM »
If your passive income is above 400% of the FPL, or if the subsidy goes away, then yes, you will have to pay full price.

It's actually based on MAGI income.  Be sure to view the MAGI chart specific to the ACA.  For example, it includes both taxable and untaxable SS benefits, not an uncommon scenario for 62 to 64 year olds.

In my state, they expanded Medicaid, so a MAGI of 100% of FPL would not be sufficient to qualify for a PCT.

reese_c_c

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Re: Health Insurance and FIRE...am I missing something?
« Reply #6 on: January 01, 2019, 08:49:08 AM »
I guess my question is how is this remotely affordable in retirement? Let's say the subsidy doesn't exist or goes away. If I retired today and was only looking at an income of $27 - $30k per year following our standard 4% rule, do I just have to adjust and add the extra $1000+ to my monthly expenses or are there other options, Medicaid, healthshare?
I guess it's just one of those things you have to plan for whereas when you're working it's just sort of taken care of with the company, at least for us it is. I think my monthly bill for family coverage health, vision, & dental is around $140/month.

Laserjet3051

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Re: Health Insurance and FIRE...am I missing something?
« Reply #7 on: January 01, 2019, 11:17:21 AM »
I just did a query on ehealth.com for my family and I (wife:32+3kids:8,6,3) and the quote was over $1200/month! Is this right? This seems almost impossible to afford. This would be roughly 1/2 of monthly expenses over again just for insurance. Advice please.

Thanks

That price looks about right ("fair market value"). I am paying about $2000 per month for a family of 4, we receive no subsidy. It is the 2nd largest expense in my budget and will strain our household moving forward. We havent quite figured out how to get the math to work in 2019 for this ungodly expense.

reese_c_c

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Re: Health Insurance and FIRE...am I missing something?
« Reply #8 on: January 01, 2019, 11:36:21 AM »
That price looks about right ("fair market value"). I am paying about $2000 per month for a family of 4, we receive no subsidy. It is the 2nd largest expense in my budget and will strain our household moving forward. We havent quite figured out how to get the math to work in 2019 for this ungodly expense.

Ugh...that really sucks. I'd love to hear what you and your family decide for 2019. As we move closer to FIRE this is weighing heavy on us and what we would do. One thing that I've been doing over the last few years is maxing out my contributions to my HSA, which we never touch. So that will be a small rainy day fund for expenses when/if needed but won't last very long.

Paul der Krake

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Re: Health Insurance and FIRE...am I missing something?
« Reply #9 on: January 01, 2019, 11:43:47 AM »
The choices are, in no particular order:
- remain employed
- move to another country
- get an ACA subsidy or Medicaid
- suck it up and pay full price

Those are the choices. Most people here go with #3.

DreamFIRE

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Re: Health Insurance and FIRE...am I missing something?
« Reply #10 on: January 01, 2019, 11:46:14 AM »
I guess my question is how is this remotely affordable in retirement? Let's say the subsidy doesn't exist or goes away. If I retired today and was only looking at an income of $27 - $30k per year following our standard 4% rule, do I just have to adjust and add the extra $1000+ to my monthly expenses or are there other options, Medicaid, healthshare?
I guess it's just one of those things you have to plan for whereas when you're working it's just sort of taken care of with the company, at least for us it is. I think my monthly bill for family coverage health, vision, & dental is around $140/month.

Remember that spending and income (and MAGI) aren't necessarily the same.  I'm planning about $50K/yr spending on $24K/yr income.  For example, drawing from a Roth and the drawing of principal investment dollars isn't income and does not count towards your MAGI.  So you need consider that when figuring how much subsidy (PCT) and (CSR) that you might qualify for.

If the subsidy goes away, it probably means the ACA goes away (as currently ruled unconstitutional by a federal judge), and that includes the Medicaid expansion.  Premiums go up as you age as well, so it could only get worse depending on what happens with the healthcare law.  Healthshare is one option that could save you some money - there's another thread with some discussion about that.

The most practical plan for the ACA going away may be to simply work longer.  I never really thought much about retiring before Medicare age until the ACA came along to make it affordable.

OurFirstFire

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Re: Health Insurance and FIRE...am I missing something?
« Reply #11 on: January 01, 2019, 02:49:35 PM »
Our youngish family of four pays $1100 a month on the exchange, which is the cheapest $12k deductible bronze option. This isn't really a FIRE or health exchange problem, it's a cost of healthcare in the US problem.  I found out from COBRA that my old mega-corp plan total cost was $2400/month (of which I paid $450), so unfortunately everything is just freaking expensive.  It's part of your US cost of living (literally!) whether or not it's hidden in your pay package as a working person or out of pocket as a RE person.

OTOH, there are subsidies that bring that way down for any family in the passive income range discussed on this forum.  And if you are earning a bit extra have an income above $100k and end up having to pay $13k/year for health insurance then that's 13%. . . sucks but not the end of the world, and commensurate with the extra tax you would be paying on that money in any country with government healthcare.

It may be wishful thinking, but I would expect the US to nationalize healthcare before I'd expect subsidies to go away.  At a minimum it's a very dynamic situation, so it doesn't make sense to fixate on one particular bad scenario.  Somehow the country has to arrive at a solution that works for the majority of people, and along the way FIREd people with money in the bank are going to have a lot easier ride than the general population.

DreamFIRE

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Re: Health Insurance and FIRE...am I missing something?
« Reply #12 on: January 01, 2019, 08:43:12 PM »
If the subsidy goes away, it probably means the ACA goes away (as currently ruled unconstitutional by a federal judge), and that includes the Medicaid expansion.  Premiums go up as you age as well, so it could only get worse depending on what happens with the healthcare law.  Healthshare is one option that could save you some money - there's another thread with some discussion about that.

Here's a link to the Healthshare thread I mentioned:
https://forum.mrmoneymustache.com/ask-a-mustachian/let's-talk-about-health-share/

wenchsenior

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Re: Health Insurance and FIRE...am I missing something?
« Reply #13 on: January 02, 2019, 09:37:00 AM »
Our youngish family of four pays $1100 a month on the exchange, which is the cheapest $12k deductible bronze option. This isn't really a FIRE or health exchange problem, it's a cost of healthcare in the US problem. I found out from COBRA that my old mega-corp plan total cost was $2400/month (of which I paid $450), so unfortunately everything is just freaking expensive.  It's part of your US cost of living (literally!) whether or not it's hidden in your pay package as a working person or out of pocket as a RE person.



Yes, I think a lot of people don't realize how much their health care costs b/c it's 'hidden' in their employment package.  DH and I are covered by his civilian federal employee health insurance.

Total premium annually for TWO people (not family coverage) is just over $20,000, of which we pay just a bit <$7,000 (plus a few hundred deductible, copays, our share of tests, meds, etc.)  And this is coverage that many people would envy.

Paul der Krake

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Re: Health Insurance and FIRE...am I missing something?
« Reply #14 on: January 02, 2019, 10:19:54 AM »
Our youngish family of four pays $1100 a month on the exchange, which is the cheapest $12k deductible bronze option. This isn't really a FIRE or health exchange problem, it's a cost of healthcare in the US problem. I found out from COBRA that my old mega-corp plan total cost was $2400/month (of which I paid $450), so unfortunately everything is just freaking expensive.  It's part of your US cost of living (literally!) whether or not it's hidden in your pay package as a working person or out of pocket as a RE person.



Yes, I think a lot of people don't realize how much their health care costs b/c it's 'hidden' in their employment package.  DH and I are covered by his civilian federal employee health insurance.

Total premium annually for TWO people (not family coverage) is just over $20,000, of which we pay just a bit <$7,000 (plus a few hundred deductible, copays, our share of tests, meds, etc.)  And this is coverage that many people would envy.
There's clearly a spectrum of what "employer coverage" means to different people... I would be pissed if I were paying 7k of premiums per year for two.

wenchsenior

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Re: Health Insurance and FIRE...am I missing something?
« Reply #15 on: January 02, 2019, 10:43:21 AM »
Our youngish family of four pays $1100 a month on the exchange, which is the cheapest $12k deductible bronze option. This isn't really a FIRE or health exchange problem, it's a cost of healthcare in the US problem. I found out from COBRA that my old mega-corp plan total cost was $2400/month (of which I paid $450), so unfortunately everything is just freaking expensive.  It's part of your US cost of living (literally!) whether or not it's hidden in your pay package as a working person or out of pocket as a RE person.



Yes, I think a lot of people don't realize how much their health care costs b/c it's 'hidden' in their employment package.  DH and I are covered by his civilian federal employee health insurance.

Total premium annually for TWO people (not family coverage) is just over $20,000, of which we pay just a bit <$7,000 (plus a few hundred deductible, copays, our share of tests, meds, etc.)  And this is coverage that many people would envy.
There's clearly a spectrum of what "employer coverage" means to different people... I would be pissed if I were paying 7k of premiums per year for two.

Heh.  Didn't you know? Fed employees get 'free' health care.

WGH

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Re: Health Insurance and FIRE...am I missing something?
« Reply #16 on: January 03, 2019, 03:34:46 PM »
It may be wishful thinking, but I would expect the US to nationalize healthcare before I'd expect subsidies to go away.  At a minimum it's a very dynamic situation, so it doesn't make sense to fixate on one particular bad scenario.  Somehow the country has to arrive at a solution that works for the majority of people, and along the way FIREd people with money in the bank are going to have a lot easier ride than the general population.

The US historically moves very slowly on many issues (women's suffrage, civil rights, pot legalization, gay marriage, etc.) and I fully expect we will have universal health care eventually, just much later than we should have. I just hope it occurs in at least the next decade.