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.