Author Topic: Health Insurance with a chronic condition  (Read 5142 times)

Seawolf

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Health Insurance with a chronic condition
« on: October 02, 2012, 04:55:41 PM »
Hi all, first time poster, lurker for a while.

I have a chronic health condition that requires a prescription that costs about $300 a month.  Otherwise my wife and I are mostly healthy (she has a condition where, if she avoids sodium, she avoids long term hearing loss at a $0 cost).  The problem is that I am having trouble in finding a health insurance plan that will cover prescription medications at a $20 or $30 copay like my current employer coverage does.  Has anyone else come across a high deductible plan that covers prescriptions but with a 5 or 10k deductible?  If I were to get a plan with a 10k deductible, I would pay 3600 annually toward just my prescription, which seems like it's defeating the purpose of having insurance...

My info: I will be living in Oregon City, OR 97045 shortly (getting a job up there soon), I am 25 and my wife is 30.  Also my condition cannot be controlled without this prescription or cured in any official way (some new therapies are about 5-25 years out).

arebelspy

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Re: Health Insurance with a chronic condition
« Reply #1 on: October 02, 2012, 05:54:44 PM »
Hopefully someone has an idea for you, but if there isn't anything that will work, here's my thoughts.

I would just treat it like a normal expense.

300/mo. at a 4% SWR is an extra 90k 'stache'd that you'll need to cover that expense.

Sometimes nonnegotiable expenses like that happen, and if you can't find an insurance plan that will work, you may have to go out of pocket.  It'll take an extra year or two of work to build up the 'stache to cover it, basically.  It's another factor in your expenses, but luckily not too expensive.
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justchristine

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Re: Health Insurance with a chronic condition
« Reply #2 on: October 02, 2012, 06:00:24 PM »
I'm not sure if this would help in your case but i have an online friend whose husband needs very expensive medication and she gets it through a Canadian pharmacy at a fraction of the cost of what they would pay locally.  That might help you keep the costs down if you can't find an insurance plan that covers at the level you need.

prosaic

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Re: Health Insurance with a chronic condition
« Reply #3 on: October 02, 2012, 06:06:06 PM »
A few thoughts, as we are in a similar situation (but my husband's prescription is $900 out of pocket if not covered).

1. Is it the only possible therapy? My husband learned he could switch to a generic that was 90% as good and cost about $100 vs. $900. When we are retired, 90% effectiveness with less stress will be about the same health impact as 100% effectiveness + current job stress and copay for expensive drug.

2. Will the patent expire before you plan to retire, and is it a fairly popular drug -- in other words, will it go generic? If so, the out of pocket will drop dramatically.

3. Can you go to Canada or Mexico, see a private physician and pay for that out of pocket, and get 3-12 months of drugs at a savings? Some people do this and I've read conflicting reports about the legalities. (Not advocating it -- just mentioning it).

4. Will your income be so low after retirement that you qualify for prescription drug coverage through Medicaid or free meds through pharmaceutical company programs?

5. That $3600 might not count toward the $10K deductible in a high-deductible plan. Be careful. We learned this the hard way with a BCBS higher-deductible plan in which prescription costs did NOT count toward the deductible, as the drug policy was a separate entity from the health insurance policy.

twinge

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Re: Health Insurance with a chronic condition
« Reply #4 on: October 02, 2012, 08:07:17 PM »
Quote
5. That $3600 might not count toward the $10K deductible in a high-deductible plan. Be careful. We learned this the hard way with a BCBS higher-deductible plan in which prescription costs did NOT count toward the deductible, as the drug policy was a separate entity from the health insurance policy.

Building on this, I would just caution everyone (as I have done on several other threads) to really look at what is in the high deductible plans--it's eye-opening what doesn't count towards that deductible and until you (or someone in your family) has a health issue it's easy to gloss over.   

tooqk4u22

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Re: Health Insurance with a chronic condition
« Reply #5 on: October 03, 2012, 09:27:39 AM »
Hopefully someone has an idea for you, but if there isn't anything that will work, here's my thoughts.

I would just treat it like a normal expense.

300/mo. at a 4% SWR is an extra 90k 'stache'd that you'll need to cover that expense.

Sometimes nonnegotiable expenses like that happen, and if you can't find an insurance plan that will work, you may have to go out of pocket.  It'll take an extra year or two of work to build up the 'stache to cover it, basically.  It's another factor in your expenses, but luckily not too expensive.

Chronic issues, surprise issues, etc is why there is so much concern about health care costs in retirement (early or otherwise) and why so many people here take exception with MMM's cavalier attitude toward this topic. Also, I realize that MMM may live on less than a 4% SWR or has side income to pay this but his recent post said his high deductible plan is $239/month that means all else being equal he needs an additional $72k in investments and is not including the possibility of using the deductible. 




bogart

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Re: Health Insurance with a chronic condition
« Reply #6 on: October 03, 2012, 09:35:04 AM »
Building on this, I would just caution everyone (as I have done on several other threads) to really look at what is in the high deductible plans--it's eye-opening what doesn't count towards that deductible and until you (or someone in your family) has a health issue it's easy to gloss over.

Agree completely; note that the same is true of the more traditional plans.  Mine (traditional) doesn't count either copays or drugs, which when after an accident for a time I was going for twice-weekly PT at a $45 per copay (plus miscellaneous Rx painkillers, though those cost very little) and for a much longer time for once weekly, added up.

arebelspy

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Re: Health Insurance with a chronic condition
« Reply #7 on: October 03, 2012, 11:32:03 AM »
Chronic issues, surprise issues, etc is why there is so much concern about health care costs in retirement (early or otherwise)

I absolutely agree, but too many people use it as an excuse to not save up, or dismiss early retirement out of hand as "impossible" for them due to health issues.

I think that's where MMM's attitude about it comes - he goes over the top in saying how it can be done because of all the doubts and concerns.  (See: the most recent, or maybe one or two ago, MMM blog post with so many of the comments being about health care.)

If you have something that is treatable with medication, factor in the cost of the medication to your FI number.

But don't dismiss ER out of hand.
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tooqk4u22

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Re: Health Insurance with a chronic condition
« Reply #8 on: October 03, 2012, 12:25:46 PM »
Chronic issues, surprise issues, etc is why there is so much concern about health care costs in retirement (early or otherwise)

I absolutely agree, but too many people use it as an excuse to not save up, or dismiss early retirement out of hand as "impossible" for them due to health issues.

I think that's where MMM's attitude about it comes - he goes over the top in saying how it can be done because of all the doubts and concerns.  (See: the most recent, or maybe one or two ago, MMM blog post with so many of the comments being about health care.)

If you have something that is treatable with medication, factor in the cost of the medication to your FI number.

But don't dismiss ER out of hand.

Absolutely, I don't view it as an impediment to FIRE at all, but if you ignore it out right, which MMM has somewhat done and is still doing - although I am sure he thinks about more than he lets on or takes comort in the side income, which in that case would not be truly FIRE. 

There are two components with the health care issue:

1. the monthly/annual premium
Easy enough to figure out and for MMM as noted above equates to $71k in additional investment.  Sure premiums can change but lets ignore that for now. 

2.  the deductible and non-covered costs
This one is far more difficult to figure out.  On one hand you can assume perfect health for oneself and ones family as MMM does and therefore there will never be another cost or need for additional investments at 4%SWR to be set aside.  On the other hand you can assume use of the full deductible and a bit more for other non-covered costs such as prescriptions (based on his premium MMM likely has a $10k deductible plan) and even assuming no other costs the $10k works out to another $250k needed based on a 4% SWR - thats a lot more coin on top of the $71k for the premium.  I think these are the extremes - assuming nothing is foolish and assuming the full amount is too conservative. 

The problem is that there is no way to know or calculate for an individual what ones experience will be - insurance companies base the rates/deductible combination on actuarial data for large populations and for them it doesn't matter if you have a high octane plan (i.e. no deductible/copay) or the opposite, the math is basically the same for them but it gives one an option.

Like MMM I believe that current health and lifestyle is a good indicator but then there are bacon eating sedentary smokers that have no issues and live forever and the pictures of health and fitness and have heart issues, cancer, whatever....genetics play a big part.

So where do I stand - if I were to FIRE right now and use a $10K deductible, I would assume that I will regular need to use half to 2/3rds of the dedutible.  The reason - we are a family of five so statistically speaking there is a greater chance that one of us will incur some illness/injury in any given year and an extra $3-5K is easy enough to come up with if through cutting/side jobs if needed. And I don't see this changing after the kids become adults (a long way off) because then wife and I will be older and premiums higher.


bogart

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Re: Health Insurance with a chronic condition
« Reply #9 on: October 03, 2012, 02:02:08 PM »

There are two components with the health care issue:


Besides the two you note, I'd add a third:  insurability in the private market.  This may have improved since I looked into it or may improve under the ACA, but at least in my state, last time I helped a family member with a chronic health condition look into buying individual coverage it was literally not available at all, period, end of conversation.  The only option was first to exhaust COBRA coverage and at that point the person would have had some legal rights to buy a personal plan. Those rights vary widely by state, see:  https://www.disabilityrightslegalcenter.org/about/documents/HIPAAOptionsByState2011.pdf

Of course this isn't just a personal issue, it can shape options as a function of spouse's and dependent status.

As for MMM:  does he still have (or have access to) Canadian citizenship and/or the health care system up there?  Because if he could move back north if, heaven forbid, he or one or his family members contracted cancer (e.g.) then as far as I'm concerned he doesn't have a leg to stand on when it comes to offering advice about accepting risks (in this case).

Seawolf

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Re: Health Insurance with a chronic condition
« Reply #10 on: October 04, 2012, 12:30:44 PM »
I'm just trying to figure out if I need to work the extra year and a quarter it's going to take to get financially independent with a 3600/yr pill regimen.  It's sounding like I'll have to, but hopefully when the ACA kicks off state insurance group plans, I'll be able to purchase something cheaper in the state pool.

NestEggChick (formerly PFgal)

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Re: Health Insurance with a chronic condition
« Reply #11 on: October 05, 2012, 08:21:02 PM »
Seawolf, since you have a pre-existing condition of some sort, make sure you'll be eligible for insurance in your new state before you move.  Even if you look at plans where you have to pay out of pocket for the meds, it's important to have some sort of coverage in case something catastrophic happens, and you may not be eligible for those.  The part of the ACA that would ensure you'd be covered doesn't go into effect until 2014.  Right now, in 2012, if you can prove that you've been denied coverage because of a pre-existing condition (meaning you apply and you have the denial letter) then there are certain insurances available to you, but I believe you have to be uninsured for 6 months in order to be eligible for those, and that's a big risk.

In order to save money with your high deductible plan if you get one, choose one that's eligible for an HSA and then fund the HSA - that'll be tax-free money that you can use to pay for health costs.

Good luck!