Mid Year Retried Insurance Pondery

[EricEng]

Just retired at mid 30s with family of 5, but plan went off a bit with my working longer into 2021 and some unexpected short term gains that pushed our income high (good problem to have).

Anyway, that means we barely don't qualify for a subsidy in 2021 on insurance.  CO Bronze plans are $1,100-1,200/month.  Silver is $1,200-$1,400 month.  Both have deductibles/out of pocket limit around $17,000!  That means I would be spending $1,200x6months+$17,000=$24,200 before seeing any benefit and needing $24,200 to reach deductible/out of pocket limit just to break even on my insurance premiums.  If my families expenses for rest of the year are under $24k I'd be better off without insurance.  We are all healthy with no existing issues.  Even my wife's previous births barely reached $30k level based on hospital claims against insurance.  I do have some dangerous hobbies I have injured myself in the past, but never enough to benefit from insurance (soccer injury, ski accident, etc), so I might curtail my hobbies a bit for remainder of year.

We ended up without almost double our normal FIRE target amount saved so an unexpected expense of $100-200k would be unpleasant, but not really impact our FIRE success.  Would you self insure for the remainder of 2021 in my shoes? We have until August 15th to sign up for a marketplace plan due to covid extension, so really only uncovered from mid August to Dec.  For 2022 our income will be kept at an optimized level so we can get marketplace plans at a reasonable amount.

Side thought: Saw an interesting article on Forbes saying uninusred people have a 1% chance of a $116,000 expense in the year which means insurance coverage at $1,161 a year would break even (that's less than one month insurance premium for me).  Little out of context statistic, more accurate to say 1% of people see expenses in excess of $116k and that is not going to be perfectly randomly distrubted, I suspect most of those know they have on going conditions (ie cancer).  By that logic, no brainer to skip insurance this year.
https://www.forbes.com/sites/theapothecary/2014/04/14/how-risky-is-it-to-be-uninsured-part-ii-financial-risk/?sh=5d17c581372c

Edit: Corrected my numbers some.

[Fishindude]

Going without health insurance for a whole family is just plain stupid in my opinion.

Sorry if I don't sympathize with you on the costs, we pay $1500 per month for ACA (shitty) coverage, and have been doing so for a couple years.

Only really two options in my opinion.
a. Suck it up and pay for the insurance.
b. You can't afford to retire, go back to work somewhere and get some cheap insurance.

[boarder42]

i mean from your own link you picked the wrong uninsured category to use as a metric.  50% pay 11k so thats 5500 a year to break even.

you made extra money so you have more than you expected. so ... spend it on some health insurance.

[EricEng]

i mean from your own link you picked the wrong uninsured category to use as a metric.  50% pay 11k so thats 5500 a year to break even.

you made extra money so you have more than you expected. so ... spend it on some health insurance.

11k wouldn't break even though nor get any benefit from insurance at all.  I'd need $24k in charges to break even.

Going without health insurance for a whole family is just plain stupid in my opinion.

Even MMM posted at one point about self insuring his family.  Large corporations self insure as well.   Insurance companies exist to make a profit, so odds are stacked in their favor.

What risks are you forseeing that would trip me up?  Even severe injuries tend to top out at $100k.

b. You can't afford to retire, go back to work somewhere and get some cheap insurance.

It isn't a matter of being able to afford it.  It is a matter of, does it make financial sense.  Would you buy an overpriced insurance plan starting in December 15th with deductible starting Jan1?  Buying it at the start of the year has a different math to it than end of year, your chance of getting a return is much smaller the later in the year you are.  In this case I can be covered until August 15th effectively. 

[SKL-HOU]

I had an unexpected premiee, 500k. If no more babies, there are illnesses that would just bankrupt you like cancer. You’ve come so far, don’t get cheap at the end.

[yachi]

We ended up without almost double our normal FIRE target amount saved

The above phrase doesn't make any sense. 

I don't think $1,200 a month is a terrible price to pay to cover 5 people with insurance.  You're adding in the deductible for your comparison, which you only actually pay if you have claims.  How much will you gain from your insurance without meeting the deductible?  Do you get an annual physical out of it?  Peace of mind that if something happens you'll be covered?

[Kathryn K.]

Self-insuring for a family of 5 is insane. And many people pointed out that MMM was making a highly questionable decision with skipping insurance.

"Even severe injuries tend to top out at $100K". What about someone in your family getting cancer or needing something like an organ transplant? Speaking as someone whose family member needed an organ transplant, you can't even get on the list without insurance.

[dandarc]

You're rich - just buy some insurance. Also just to be sure - you do know the premium tax credit cliff at 400% of FPL is not a thing for 2021 and 2022. Because parts of your post read like maybe not, or is it that you're just not wanting to spend up to 8.5% of your income on health insurance if that is in your analysis?

[dandarc]

I bring that up because you used the words "barely don't qualify for a subsidy". In years past, that was a big, big deal assuming you're referring to the premium tax credit cliff. I'd imagine for a family of 5, that would be $1,000 per month or maybe even more in subsidy on one side of the income line vs. $0 on the other.

But included in one of the pandemic relief bills is a provision that in 2021 and 2022 only (lets hope they make this permanent!), that cliff is no more - "barely don't qualify" and "barely do qualify" are pretty much the same financial result - PTC phases out at 8.5 cents on the dollar.

[CindyBS]

Get an extremely high deductible catastrophe insurance for your family.

For my family of 4, with the exception of the years I gave birth to our 2 kids, we never reached our out of pocket deductible.  All healthcare was routine physicals, an occasional sick visit to the pharmacy, virtually no prescription drugs, no specialists, etc.  That went on for 10+ years.  We also had no family history of diseases that affected people under 50.  Sometimes insurance seemed like a waste of money.

Then out of nowhere several years ago, my 13 year son was not well.  It was cancer.  After hundreds of thousands of dollars of chemo, it was determined he needed a bone marrow transplant.  He had one, survived, and he is now 18 and doing well.  In the last 5 years, we've had $3 Million of medical expenses.  Just one of the drugs he took (a pill) costs $11,000/ month.  We would get bills for around $300,000/ month. Every month. For more than a year.  The worst month (his transplant) our hospital bill was $789,000. (part of qualifying for the transplant was proving we had insurance to pay for it).   And that was 4 years ago, so I'm sure prices have gone up.

Trust me, when your world is falling apart, you do not want to even try to self pay for this or even have to worry about paying for this.  Cancer or other disasters are EXTREMELY expensive and only the exceptionally wealthy can afford to self insure.  Also remember, as your world is falling apart, you are less likely to be able to work more, get a new job with new insurance, etc.   "I'll just go back to work" is not a good plan. 

Just because lightening doesn't strike often does not mean it is smart to stand in a field during a thunderstorm holding a golf club.

Please get insurance.

[EricEng]

You're rich - just buy some insurance. Also just to be sure - you do know the premium tax credit cliff at 400% of FPL is not a thing for 2021 and 2022. Because parts of your post read like maybe not, or is it that you're just not wanting to spend up to 8.5% of your income on health insurance if that is in your analysis?

I'm around the 400% level for family of 5 and subsidy being offered was about $50/month against $1,200 premium, so I was leaving it out for simplicity.  This isn't an estimate, this is from the actual CO marketplace after I went through the whole process.  I thought the law just smoothed it out so there weren't sudden cliffs, but it still phased to nothing.

What about someone in your family getting cancer or needing something like an organ transplant? Speaking as someone whose family member needed an organ transplant, you can't even get on the list without insurance.

Well my wife and I are in 30s and my kids are under 5, so almost non existent risk of cancer.  Cancer also doesn't hit fast at this age.  It's a big expense over time, but it's not typically a big immediate expense.  So I would simply start insurance in January (which I plan to do anyway).  Cancer would have to be detected between August 16th and EOY and require exorbitant treatment by EOY.  That's extremely unlikely.

 

We ended up without almost double our normal FIRE target amount saved

The above phrase doesn't make any sense. 

Our target was $XDollars, we ended up with $2X Dollars.  How does that not make sense?  We weren't aiming for lean nor fat fire either.

Get an extremely high deductible catastrophe insurance for your family.

Those are effectively the only option...at the prices I mentioned. 

I had an unexpected premiee, 500k. If no more babies, there are illnesses that would just bankrupt you like cancer. You’ve come so far, don’t get cheap at the end.

We have no more kids on the way and not expecting anymore (they couldn't finish by this point anyway, even premiee).

Then out of nowhere several years ago, my 13 year son was not well.  It was cancer.  After hundreds of thousands of dollars of chemo, it was determined he needed a bone marrow transplant.  He had one, survived, and he is now 18 and doing well.  In the last 5 years, we've had $3 Million of medical expenses.  Just one of the drugs he took (a pill) costs $11,000/ month.  We would get bills for around $300,000/ month. Every month. For more than a year.  The worst month (his transplant) our hospital bill was $789,000. (part of qualifying for the transplant was proving we had insurance to pay for it).   And that was 4 years ago, so I'm sure prices have gone up.

How quick did this happen?  From time he was detected to $300k/month bills and transplant?  Was that all within a 4 month window?

[Paul der Krake]

You're rich - just buy some insurance. Also just to be sure - you do know the premium tax credit cliff at 400% of FPL is not a thing for 2021 and 2022. Because parts of your post read like maybe not, or is it that you're just not wanting to spend up to 8.5% of your income on health insurance if that is in your analysis?

I'm around the 400% level for family of 5 and subsidy being offered was about $50/month against $1,200 premium, so I was leaving it out for simplicity.  This isn't an estimate, this is from the actual CO marketplace after I went through the whole process.  I thought the law just smoothed it out so there weren't sudden cliffs, but it still phased to nothing.

The law is too new and updating software is hard. Just like Healthcare.gov, Colorado likely just hasn't updated theirs yet. You should call them and ask, but if I'm right, you would be able to pay the expensive premiums now, claim back what you "overpaid" at tax time.

edit: assuming your income qualifies you for premium subsidies. It's not clear what you expect your income to be for the year. Just above 400% FPL?

[Kathryn K.]

"Cancer also doesn't hit fast at this age." Are you also a medical doctor? While it's true that cancer is uncommon at young ages, anecdotally it does often "hit fast" in a young person. On this very thread you had someone where this happened in their family tell you about their experience.

Not sure why you asked for input since it seems like you're disregarding everyone telling you not to self-insure. Hopefully your wife and kids don't pay the price.

[CindyBS]

Well my wife and I are in 30s and my kids are under 5, so almost non existent risk of cancer.  Cancer also doesn't hit fast at this age.  It's a big expense over time, but it's not typically a big immediate expense.  So I would simply start insurance in January (which I plan to do anyway).  Cancer would have to be detected between August 16th and EOY and require exorbitant treatment by EOY.  That's extremely unlikely.

Cancer is the biggest disease killer of children under 16 and much more common than people think in children.   The most common of childhood cancer is leukemia (the acute forms) and  is very fast growing.  Most kids with cancer are diagnosed before age 8.  My son was diagnosed on the 13th of the month.  By the 30th, he had spent 12 days in the hospital, had an operation, and tens of thousands of chemo.  I think we had hit something like $150K of expenses in less than 30 days.  Then then $300K/month bills started the next month.  You could easily have $800K - $1 Million in expenses between Aug - Dec.  Kids with cancer do most of their treatment inpatient, not once every 3 weeks in an outpatient clinic like some adults.  Some kids' cancer treatment is so intense they are hospitalized from the day they are diagnosed until treatment ends.   BTW if you refuse treatment for a child with cancer, the hospital will take you to court to have your parental rights severed.  "I'm holding out till January for treatment" is not going to fly. 

Do what you'd like, but your assumptions about how these types of emergencies really go is not correct. 

[UnleashHell]

Appendix treatment 9 years ago. 23k

can't happen to someone in your group.

as for calculating the risk Insurance companies can look at a large homogenous group when calculating rates. could be based on a million people. they don't care if someone them get sick from a financial aspect - they have enough premium from the group to cover individual losses.

Its nothing more than a gamble. but the amounts you are putting at risk are not confined to the premium you'd have to pay. One large sudden injury or illness and the amount you've risked can be a hell of a lot larger than the premium you are talking about.


Its times like this that a catastrophe policy would be ideal where is a simple financial policy - you cover the first xxxxx of losses and the policy covers the rest. If you can't get that then suck it up buttercup and use some of those gains and income to protect your people and your stash.

[iluvzbeach]

Just retired at mid 30s with family of 5, but plan went off a bit with my working longer into 2021 and some unexpected short term gains that pushed our income high (good problem to have).

Anyway, that means we barely don't qualify for a subsidy in 2021 on insurance.  CO Bronze plans are $1,100-1,200/month.  Silver is $1,200-$1,400 month.  Both have deductibles/out of pocket limit around $17,000!  That means I would be spending $1,200x6months+$17,000=$24,200 before seeing any benefit and needing $24,200 to reach deductible/out of pocket limit just to break even on my insurance premiums.  If my families expenses for rest of the year are under $24k I'd be better off without insurance.  We are all healthy with no existing issues.  Even my wife's previous births barely reached $30k level based on hospital claims against insurance.  I do have some dangerous hobbies I have injured myself in the past, but never enough to benefit from insurance (soccer injury, ski accident, etc), so I might curtail my hobbies a bit for remainder of year.

We ended up without almost double our normal FIRE target amount saved so an unexpected expense of $100-200k would be unpleasant, but not really impact our FIRE success. Would you self insure for the remainder of 2021 in my shoes? We have until August 15th to sign up for a marketplace plan due to covid extension, so really only uncovered from mid August to Dec.  For 2022 our income will be kept at an optimized level so we can get marketplace plans at a reasonable amount.

Side thought: Saw an interesting article on Forbes saying uninusred people have a 1% chance of a $116,000 expense in the year which means insurance coverage at $1,161 a year would break even (that's less than one month insurance premium for me).  Little out of context statistic, more accurate to say 1% of people see expenses in excess of $116k and that is not going to be perfectly randomly distrubted, I suspect most of those know they have on going conditions (ie cancer).  By that logic, no brainer to skip insurance this year.
https://www.forbes.com/sites/theapothecary/2014/04/14/how-risky-is-it-to-be-uninsured-part-ii-financial-risk/?sh=5d17c581372c

Edit: Corrected my numbers some.

If your family is as healthy as you believe, and remains so through the end of the year, your total costs are most likely to just be the bolded part above. Isn’t this an expense you’re willing to incur vs. potentially gamble your entire ‘stache? Imagine a catastrophic car accident that results in one or more family members being hospitalized or, as others have mentioned, a pediatric cancer involving one of your children? Peace of mind alone should make this an expense you’re willing to pay. The stress of dealing with a serious injury or illness should be enough, don’t add financial worries on top of that.

As another poster experienced, I have a friend who’s very healthy (think all American) kid was diagnosed with leukemia totally out of the blue and was immediately hospitalized and began treatment within a matter of days. They remained hospitalized for two months during initial treatment and treatment still continues. I cannot begin to imagine what their out of pocket expenses would be without insurance.

Don’t be penny wise & pound foolish. It could come back to haunt you.

P.S. Is COBRA through year-end an option? Depending on your state, Medicaid could also be an option, if you plan to have minimal income for the remainder of the year.

[terran]

I think you're getting bad information on the subsidies. As you and others have mentioned, the cliff has been eliminated for 2021 and 2022. Using the Kauffman Foundation calculator, a family of 5 making $125k, which is just over 400% FPL should pay $885 for a silver plan (8.5% of income). The subsidy varies based on location and age of the adults (I called it 35 since you said mid thirties), so if you pick something other than a silver plan you can end up with a higher/lower total cost depending on the relationship between silver plan costs vs the plan you pick for your location and age.

[Steeze]

I'll echo others here -

If you have more than enough to retire, the next thing to do is insure your wealth. High liability limits on home / auto + umbrella, premium health insurance, etc. If you have double what you need then spend some on insurance! Just part of the game. If it is $1,500/mo, can you use your excess stash to create an extra $1,500/mo cashflow? Buy an asset to cover this liability.

You are in a position of great abundance, time to shift that mindset!

[yachi]

 

We ended up without almost double our normal FIRE target amount saved

The above phrase doesn't make any sense. 

Our target was $XDollars, we ended up with $2X Dollars.  How does that not make sense?  We weren't aiming for lean nor fat fire either.

Lol, because "without almost double" is nonsense.  Thanks for clarifying.  I agree you should get insurance.

[seattlecyclone]

I would not go without health insurance in America. The ACA marketplace plans are one option. If your current income is low Medicaid might also be an option, because that looks at your month-to-month income and not your full-year income. Also consider COBRA for the remainder of this year. While COBRA is often a bad deal compared to ACA plans for people who are eligible for ACA subsidies, you may find that your corporate plan offers better terms than unsubsidized ACA insurance, plus you won't be resetting your deductibles mid-year.

[reeshau]

Food for thought:  while Covid vaccinations are covered for free, Covid treatment is not.  There are provisions in legislature for no "surprise billing," but people who end up in ICU are paying for ICU, either themselves or their insurance.

Self-insuring for medical care in the US is dumb.  At the very least, it will leave you paying very high "rack rates" for procedures, rather than your insurer's negotiated rates.  Self-insuring during a pandemic, which might be getting better but is far from over, is doubly stupid.  If $100k-$200k wouldn't make a difference, why are you sweating $25k?

Edited to add:  I was I your situation last year: repatriated in May, money not a problem.  We found an option for coverage here that was the same insurance plan, but $0 deductible, for about $200 a month more.  We chose to take that as a known cost, and minimize the unknowns we faced last year.

[Fishindude]

Not sure why you asked for input since it seems like you're disregarding everyone telling you not to self-insure. Hopefully your wife and kids don't pay the price.

Ditto !

[jim555]

...If your current income is low Medicaid might also be an option, because that looks at your month-to-month income and not your full-year income. ...

Realize all the income in one month and have low in the other months seems like a way around the problem.

[epritch7]

I think you are looking at it all wrong.  You're wanting to avoid the cost which is natural for folks like us but what I see is someone that can afford the coverage, temporarily higher cost because you're going to fix the taxable income side of things next year.  I'd gladly pay $6k for the peace of mind, I mean what is that like .5-1% of your NW come on...  Quit losing sleep over it and get the coverage.

[ericrugiero]

The cost of insurance would be high for the last 4 months of the year.  That amount won't disrupt your FIRE plans but a sudden major illness would.  I would absolutely pay for insurance those few months if it was me.  You can roll the dice but it doesn't seem like a good gamble. 

If the cost bothers you, shop around and see what other options you have.  Maybe a catastrophic plan or a health sharing plan would be better? 

[Acastus]

Biden's Rescue Plan eliminated income caps for ACA subsidies for 2021 and 2022. You still have to pay 8.5% (only!, not 9.8%) of income toward premiums, so at some point you will run out of subsidy with high income. It is above $ 123k limit for a family of 5. My plan refreshed subsidies in May, and I had to go in and increase the subsidy manually. I suggest you reapply.

When your income is normal again, look at CHIP for the kids. In CO, you qualify up to $77k household income for a family of 5. It cost me 15 per month for my son.

[The 585]

I'm in this dilemma too, my plan is to do one month of a healthshare plan through Zion, and during that time apply for medicaid through New York State since they consider month to month changes in income. I think the healthshare itself could be risky -- but gives me peace of mind to have something at least!

[jim555]

I'm in this dilemma too, my plan is to do one month of a healthshare plan through Zion, and during that time apply for medicaid through New York State since they consider month to month changes in income. I think the healthshare itself could be risky -- but gives me peace of mind to have something at least!

COBRA can be a free ride for at least a month, maybe you have that as an option?

[The 585]

I'm in this dilemma too, my plan is to do one month of a healthshare plan through Zion, and during that time apply for medicaid through New York State since they consider month to month changes in income. I think the healthshare itself could be risky -- but gives me peace of mind to have something at least!

COBRA can be a free ride for at least a month, maybe you have that as an option?

Yeah, my 60 day COBRA eligibility window ends July 9th, but it would be insanely expensive to enroll. ($500/mo)

I'm in this dilemma too, my plan is to do one month of a healthshare plan through Zion, and during that time apply for medicaid through New York State since they consider month to month changes in income. I think the healthshare itself could be risky -- but gives me peace of mind to have something at least!

Typically healthshares are exactly what you don't need.   They cover you for any moderate costs -- the sorts of things that your portfolio could withstand if you hit them.   If a huge cost hits, many of them decide your needs are too great to fall under the sharing.  So precisely the costs and needs that you need insurance to cover, the things that could wipe out your portfolio, those you are not protected from.   

Well crap, that's not what I thought. They won't cover catastrophic events? I need to rethink this then, because I missed the window for enrolling in July ACA coverage (probably ineligible for subsidies), but should qualify for medicaid starting August 1st. What would be the best one-month gap coverage option if healthshare wouldn't be reliable? Thanks!!!

[The 585]

I'm in this dilemma too, my plan is to do one month of a healthshare plan through Zion, and during that time apply for medicaid through New York State since they consider month to month changes in income. I think the healthshare itself could be risky -- but gives me peace of mind to have something at least!

COBRA can be a free ride for at least a month, maybe you have that as an option?

Yeah, my 60 day COBRA eligibility window ends July 9th, but it would be insanely expensive to enroll. ($500/mo)

I'm in this dilemma too, my plan is to do one month of a healthshare plan through Zion, and during that time apply for medicaid through New York State since they consider month to month changes in income. I think the healthshare itself could be risky -- but gives me peace of mind to have something at least!

Typically healthshares are exactly what you don't need.   They cover you for any moderate costs -- the sorts of things that your portfolio could withstand if you hit them.   If a huge cost hits, many of them decide your needs are too great to fall under the sharing.  So precisely the costs and needs that you need insurance to cover, the things that could wipe out your portfolio, those you are not protected from.   

Well crap, that's not what I thought. They won't cover catastrophic events? I need to rethink this then, because I missed the window for enrolling in July ACA coverage (probably ineligible for subsidies), but should qualify for medicaid starting August 1st. What would be the best one-month gap coverage option if healthshare wouldn't be reliable? Thanks!!!

They might or might not cover catastrophic events.  I do believe their intent is to cover everything, but health shares in general can, and many have, walked away from major claims because they are too expensive to ask others to share.  You don't have to do much googling to find cases where someone with a major diagnosis was told, sorry, we aren't going to share this expense with you.

I presume some are better than others about this, but the thing that's crazy about them is when you need them most is when you can count on them the least.

Personally I'd just pay for the COBRA.  Health insurance is expensive because healthcare is expensive.

You might be able to pick up cheap short term coverage; how available that is depends on where you live.  Google "short term health insurance" and you'll find options.

My concern with paying for the COBRA is that in my mind I'd be paying three months worth $1500 for only three weeks of coverage.  Correct me if my logic is wrong, but my 60 day enrollment window goes through July 9 (which I intended to enroll only if something catastrophic happens in that window), and hopefully I'll enroll in medicaid or at least an ACA plan starting August 1st.

Is it true that enrolling in medicaid enables you to have medical bills covered that occurred up to three months prior to enrollment? Because this would give me peace of mind if healthshare backs out of paying any emergency bills. Do ACA plans have this same sort of perk, or are you SOL until your plan actually starts? Thanks!

[jim555]

Is it true that enrolling in medicaid enables you to have medical bills covered that occurred up to three months prior to enrollment? Because this would give me peace of mind if healthshare backs out of paying any emergency bills. Do ACA plans have this same sort of perk, or are you SOL until your plan actually starts? Thanks!

Retroactivity is only for Medicaid.  I think you should just not bother with healthshare and risk it until Medicaid begins.  If something happens request retroactivity, you said your income is low enough in July so you would qualify.

[The 585]

Is it true that enrolling in medicaid enables you to have medical bills covered that occurred up to three months prior to enrollment? Because this would give me peace of mind if healthshare backs out of paying any emergency bills. Do ACA plans have this same sort of perk, or are you SOL until your plan actually starts? Thanks!

Retroactivity is only for Medicaid.  I think you should just not bother with healthshare and risk it until Medicaid begins.  If something happens request retroactivity, you said your income is low enough in July so you would qualify.

Thanks, assuming Medicaid eligibility is black and white right? I've earned around $40k in the first five months of the year, but I've stopped working so my June calendar income will be under $500 (quarterly dividends and interest) so based on that number can I guarantee eligibility?

[jim555]

Thanks, assuming Medicaid eligibility is black and white right? I've earned around $40k in the first five months of the year, but I've stopped working so my June calendar income will be under $500 (quarterly dividends and interest) so based on that number can I guarantee eligibility?

You are under $1,482 so you will qualify.  Prior months don't count.

[The 585]

Thanks, assuming Medicaid eligibility is black and white right? I've earned around $40k in the first five months of the year, but I've stopped working so my June calendar income will be under $500 (quarterly dividends and interest) so based on that number can I guarantee eligibility?

You are under $1,482 so you will qualify.  Prior months don't count.

Jim, you rock. Thanks so much. That finally clears up a dilemma I've been worrying about for months!

[Dicey]

WTF is "Retried" Insurance?

[EricEng]

The short version, though, is that "self-insuring" by setting aside the premiums you would otherwise have paid as your "self-insurance" is not going to do you any good.  If you could cover yourself just by putting away the money you'd otherwise pay for insurance, insurance wouldn't be a thing.

Sure, it would.  Insurance exists to subsidize the cost to others.  Since most can't handle $500-1,000 emergencies or save anything, insurance covers that behavior.  Vast majority of medical expenses could be covered out of pocket by typical Mustachian with the .01% of cases being exceptionally high, like in my original link. 

If you are leaving your job you are eligible for COBRA for up to eighteen months.  You should take advantage of that.

Cobra is around triple the market rate for me, so not the ideal option, but is a fall back if large expense occurs within 2 months of leaving.

As another poster experienced, I have a friend who’s very healthy (think all American) kid was diagnosed with leukemia totally out of the blue and was immediately hospitalized and began treatment within a matter of days. They remained hospitalized for two months during initial treatment and treatment still continues. I cannot begin to imagine what their out of pocket expenses would be without insurance.

Accute lymphocytic leukemia (ALL) in children is the fast acting, but very rare kind (less than 6k cases a year).  It killed my cousin's child decades ago, so I know it fairly well.
https://www.cancer.org/cancer/acute-lymphocytic-leukemia/about/key-statistics.html
https://www.roswellpark.org/cancer/leukemia/about

Cancer is the biggest disease killer of children under 16 and much more common than people think in children.   The most common of childhood cancer is leukemia (the acute forms) and  is very fast growing.  Most kids with cancer are diagnosed before age 8.  My son was diagnosed on the 13th of the month. By the 30th, he had spent 12 days in the hospital, had an operation, and tens of thousands of chemo.  I think we had hit something like $150K of expenses in less than 30 days.  Then then $300K/month bills started the next month.  You could easily have $800K - $1 Million in expenses between Aug - Dec. Kids with cancer do most of their treatment inpatient, not once every 3 weeks in an outpatient clinic like some adults.  Some kids' cancer treatment is so intense they are hospitalized from the day they are diagnosed until treatment ends.

Cost for first month of ALL treatment in US is around $100k, most being from in patient expenses as you said.  Then drops to around $40k/month typically.  See Page 24 for what insurance typically pays out by month on ALL and Chronic.  After a couple months I would likely be into new year with market insurance or perhaps snagged a job with health insurance (hello Starbucks).  Out of pocket costs are actually usually 30% lower than what insurance pays. Cancer is expensive, but just screaming "infinity dollars for everything" isn't accurate either.
https://www.lls.org/sites/default/files/Milliman%20study%20cost%20burden%20of%20blood%20cancer%20care.pdf

Cost for treatment is around $110k in Finland for comparison, surprisingly close to US.  Not cheap, but not bankruptcy.
https://pubmed.ncbi.nlm.nih.gov/10830464/#:~:text=Total%20mean%20cost%20of%20the,47%25%20patient%2Dspecific%20costs.

"Cancer also doesn't hit fast at this age." Are you also a medical doctor? While it's true that cancer is uncommon at young ages, anecdotally it does often "hit fast" in a young person. On this very thread you had someone where this happened in their family tell you about their experience.

Not sure why you asked for input since it seems like you're disregarding everyone telling you not to self-insure. Hopefully your wife and kids don't pay the price.

Your argument is double edged.  Are you a doctor specializing in children's cancer either?  I can Google Ninja to look up statistics as good as the next (linked above) to show that the rates are extremely low.  5 in 100,000 or .005% for any leukemia and even far less for the acute.  Most is the slow acting chronic kind that works over months and years and would be irrelevant to the discussion at hand.

Given the audience size on this board and the number of connections each person has, there will likely always be someone that knows someone affected.  Even I know someone affected as I stated.

Anyway, work requested I stay on for 1-2 days a week for a few months to help with multiple transitions occurring.  So that will cover us to sometime in Fall at which point I have the 2 month window of COBRA to cover us.  So at most looking at 1-2 months gap of uninsured before new years or I just pay the high rate for a couple months.

[Peter Gibbons]

I was in OP's situation when I FIRED in June 5 year ago.  I went with COBRA for the rest of the year.  Then ACA the following years.  It was expensive, but I would recommend this.

I also had a child with Leukemia (prior to FIRE) and I can echo prior comments in this thread.  It came on suddenly, lengthy immediate hospital stay.  Very expensive (for insurance company).  He went through the treatments and is well now. 

One thing I can add to the conversation is that I learned that in Michigan there is a program that provides assistance to families with children facing life threatening / expensive illnesses called Children Special Health Care Services.  You become eligible for this based on the diagnosis of a child's severe disease and eligibility is not based on income.   I ended up getting this even though I already had insurance through my employer at the time.  It covered my deductible and co-pays for my son's Leukemia treatments until I hit the max out-of-pocket threshold for my primary insurance.

[Rollin]

Anyway, work requested I stay on for 1-2 days a week for a few months to help with multiple transitions occurring.  So that will cover us to sometime in Fall at which point I have the 2 month window of COBRA to cover us.  So at most looking at 1-2 months gap of uninsured before new years or I just pay the high rate for a couple months.
[/quote]

In the voice of the late Roseanne Roseannadanna, "never mind."

[Omy]

If you were just single, I'd say go ahead and self-insure. You can choose to wait 6 months for the care you need. It might not end well, but it's your choice.

As soon as you are responsible for other people, you need to consider their health and welfare. How will waiting 3 or 6 months for care affect their health outcomes? While million dollar health events are not the norm, they happen with enough regularity that paying $1100 a month for a few months is a drop in the bucket. Both of my siblings had million dollar cancer incidents in their early 30s. Without insurance they would not be here today.

With double your FIRE number, $6K is not going to change a thing. I have daily market swings that are 3+ times that on a regular basis. Losing half or all of your FIRE stash (or losing a family member) because you decided to take on the risk of self-insuring 5 people is just foolish.

[maisymouser]

@EricEng, it sounds like you've mostly made up your mind about it but if you really think it's fair to yourself and to your family to take that risk, I've got to say: You're out of your mind.

Any number of health issues can come up and outright bankrupt you. I was diagnosed with MS at age 18 and another chronic illness shortly thereafter. My medications alone cost >50k per month. Per month. I was otherwise healthy and fit and probably could have rationalized a number of ways in which I wouldn't need health insurance.

Don't make the mistake of convincing yourself that you and your family are invincible. You are probably right, the likelihood of something catastrophic happening is low, insurance is a racket in this country, blah blah blah... But you are sounding really arrogant about it when numerous people on this thread are telling you, it can totally happen to you. Do you really want the stress of dealing with illness or injury without insurance?

For me, even if I suddenly became 100% healthy again, it would instantly ruin FIRE'ing for me to know the health and the safety of my family wasn't covered under a health insurance policy. I agree with one of the original repliers of this thread: You either ought to suck it up and pay for health insurance, or you're not FIRE'd (at my comfort level, at least).

[jim555]

The worst part with no insurance is they give you the highest possible rates for anything.  With insurance they give a negotiated rate.

[CindyBS]

As another poster experienced, I have a friend who’s very healthy (think all American) kid was diagnosed with leukemia totally out of the blue and was immediately hospitalized and began treatment within a matter of days. They remained hospitalized for two months during initial treatment and treatment still continues. I cannot begin to imagine what their out of pocket expenses would be without insurance.

Accute lymphocytic leukemia (ALL) in children is the fast acting, but very rare kind (less than 6k cases a year).  It killed my cousin's child decades ago, so I know it fairly well.
https://www.cancer.org/cancer/acute-lymphocytic-leukemia/about/key-statistics.html
https://www.roswellpark.org/cancer/leukemia/about

Cancer is the biggest disease killer of children under 16 and much more common than people think in children.   The most common of childhood cancer is leukemia (the acute forms) and  is very fast growing.  Most kids with cancer are diagnosed before age 8.  My son was diagnosed on the 13th of the month. By the 30th, he had spent 12 days in the hospital, had an operation, and tens of thousands of chemo.  I think we had hit something like $150K of expenses in less than 30 days.  Then then $300K/month bills started the next month.  You could easily have $800K - $1 Million in expenses between Aug - Dec. Kids with cancer do most of their treatment inpatient, not once every 3 weeks in an outpatient clinic like some adults.  Some kids' cancer treatment is so intense they are hospitalized from the day they are diagnosed until treatment ends.

Cost for first month of ALL treatment in US is around $100k, most being from in patient expenses as you said.  Then drops to around $40k/month typically.  See Page 24 for what insurance typically pays out by month on ALL and Chronic.  After a couple months I would likely be into new year with market insurance or perhaps snagged a job with health insurance (hello Starbucks).  Out of pocket costs are actually usually 30% lower than what insurance pays. Cancer is expensive, but just screaming "infinity dollars for everything" isn't accurate either.
https://www.lls.org/sites/default/files/Milliman%20study%20cost%20burden%20of%20blood%20cancer%20care.pdf

Cost for treatment is around $110k in Finland for comparison, surprisingly close to US.  Not cheap, but not bankruptcy.
https://pubmed.ncbi.nlm.nih.gov/10830464/#:~:text=Total%20mean%20cost%20of%20the,47%25%20patient%2Dspecific%20costs.

"Cancer also doesn't hit fast at this age." Are you also a medical doctor? While it's true that cancer is uncommon at young ages, anecdotally it does often "hit fast" in a young person. On this very thread you had someone where this happened in their family tell you about their experience.

Not sure why you asked for input since it seems like you're disregarding everyone telling you not to self-insure. Hopefully your wife and kids don't pay the price.

Your argument is double edged.  Are you a doctor specializing in children's cancer either?  I can Google Ninja to look up statistics as good as the next (linked above) to show that the rates are extremely low.  5 in 100,000 or .005% for any leukemia and even far less for the acute.  Most is the slow acting chronic kind that works over months and years and would be irrelevant to the discussion at hand.

Given the audience size on this board and the number of connections each person has, there will likely always be someone that knows someone affected.  Even I know someone affected as I stated.

Anyway, work requested I stay on for 1-2 days a week for a few months to help with multiple transitions occurring.  So that will cover us to sometime in Fall at which point I have the 2 month window of COBRA to cover us.  So at most looking at 1-2 months gap of uninsured before new years or I just pay the high rate for a couple months.

You claim to know ALL pretty well because someone several degrees of separation from you had it.  What type?  What risk level? Did you ever see a bill for this child?  Did you know what form of cancer s/he had? Did go you to a single appointment or meet with a single doctor?  If you can't answer all those questions, I'd hardly say you know it "fairly well".   By your own admission, it was decades ago (when you were like what - 10?), so the cousin's kid is no way representative of how it is now anyway.

Then you refer to ALL and "Chronic" like those are the only 2 leukemias.  Chronic what - Chronic Lymphoid Leukemia? Chronic Myloid Luekemia? ALL is no where near the only acute form either.   Try mapping out the costs for Burkitt's Lymphoma and see how that goes.


Then you proceed to cite studies with averages on ALL with apparently ZERO knowledge that adult ALL and childhood ALL are VERY different and can't be lumped together in what looks like some attempt to refute my actual life experiences of receiving bills for childhood cancer care.  You also assume my son had ALL without even knowing.  You are actually arguing with me about ACTUAL bills are not representative of what this *could* cost you.   I give my example as what is possible, not what is average.  By definition, half of all people with any condition will have it worse than average.

That is some grade A mansplaining on your part.

Do what you want with your family and insurance, justify your decision all you want -  but telling a parent of a kid with cancer their ACTUAL BILLS are not representative of what an ACTUAL cancer case *could* cost because you don't want to believe it and read some studies that don't even apply to the population in question is absurd and shitty.   

[friedmmj]

The whole premise of OPs post was incorrect with regard to the subsidy not being available, so probably this thread should have simply been deleted at the point once that was clarified.