General Discussion > Post-FIRE
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:
--- Quote from: boarder42 on June 01, 2021, 01:13:21 PM ---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.
--- End quote ---
11k wouldn't break even though nor get any benefit from insurance at all. I'd need $24k in charges to break even.
--- Quote from: Fishindude on June 01, 2021, 01:03:22 PM ---Going without health insurance for a whole family is just plain stupid in my opinion.
--- End quote ---
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.
--- Quote from: Fishindude on June 01, 2021, 01:03:22 PM ---b. You can't afford to retire, go back to work somewhere and get some cheap insurance.
--- End quote ---
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.
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