Author Topic: MMM's posts on Health Care Costs - Incomplete?  (Read 11172 times)

NYCMiniBee133

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MMM's posts on Health Care Costs - Incomplete?
« on: August 14, 2014, 09:56:10 AM »
I've been re-reading everything I can find on healthcare costs. It seems like MMM references his affordable $237 plan frequently as the answer to "how will you pay for healthcare", but when I ran searches for two kids in the high single digit age with parents in late 40's, I was getting $600-$700 a month in places like Austin, TX and Seattle, WA. We won't qualify for subsidies. MMM says healthcare is a frequently raised objection but I haven't found what I feel is a complete answer in his posts on this. Anyone have thoughts that has been through this situation? Did health care costs in fact truly triple as you age?

MayDay

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #1 on: August 14, 2014, 10:45:08 AM »
You also have to factor in the oop expenses, which you most likely will have as you age, no matter how much you bike/eat healthy/etc.


Freedom2016

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #2 on: August 14, 2014, 12:37:45 PM »
I agree, his health insurance posts didn't do much for me. (Going from memory, having read them months ago...) It seemed like he takes his good health for granted and downplays how much his out-of-pocket expenses could add up, over several years, for unexpected chronic or debilitating illnesses and accidents.

I too, felt immortal for many years and had very very low medical expenses. And then I got breast cancer (multiple surgeries, lots of monitoring). And then had a brush with infertility (lots of testing). My hubby has had any number of freakish accidents requiring surgery or pain treatments whose OOP costs have added up. Then we had a baby, who has been remarkably healthy, though a single blood draw we did 6 months ago to check for celiac and other stuff b/c he had been losing weight, cost us $800 OOP b/c we were on a high deductible plan. One prick of the needle: $800. We will soon have another baby, which will cost us $4000 OOP.

Anyway, all that to say, my own family's premium and OOP health care costs have easily been 5-8 times what MMM touted. And we're (only) in our early 40's -- who knows what (expensive) medical issues we're going to face in the coming decades?

BooksAreNerdy

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #3 on: August 14, 2014, 03:11:06 PM »
I don't think he, or anyone else in the ER world has much posted in the last 6-8 months. I feel like things will continue evolving with healthcare.

For us, we have decided that we can't know what healthcare will look like in 10 or 30 or 60 years. So, we are just maxing out our HSA now while we are healthy and hoping for the best in the future. I think as our ER date gets closer we will be able to plan better for costs.

annod

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #4 on: August 14, 2014, 09:56:59 PM »
I think MMM's post on Health Care Costs was rather old (pre-affordable care act). Both my husband and I work, and don't qualify for subsidy. My DH has a hereditary health condition, and in this country not getting health insurance is like playing Russian Roulette. We have only a high-deductible health plan with dental. Seems like catastrophic supplemental insurance is not available in California anymore (bummer, I live there)
We are both healthy, I haven't used my insurance aside from regular check-up in the past 8 years.
Pre ACA: $394/month with dental (for both). $3,500 deductible (per person), plan pays 100% after deductible is met.
After ACA: $582/month with dental (for both). $5,000 deductible (per person), plan pays 70% after deductible is met. And this is the cheapest plan we found (Bronze)
So ACA has made our health care unaffordable :-( , and makes our FIRE date further away. Anyone in the same boat?


Tyler

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #5 on: August 15, 2014, 10:00:08 AM »
For us (two late 30-something adults, no kids, Austin TX) the ACA is a great deal for early retirees.  With no subsidies, premiums are about $500/month for a  silver plan and OOP expenses aren't terrible.  Based on current law and our low expenses, we will be able to intelligently manage our income (Roth conversions) and taxes (investment choices) when we retire to maximize our subsidies and cost sharing, dropping the monthly premium to $100 and deductible to $1500 each.  That's fantastic from an ER perspective.

Now the law will almost certainly change over the next few years, so we have planned our finances around the assumptions of no subsidies.  Anything we qualify for will be gravy, and we won't freak out if costs escalate later.  In addition, we have planned for a ~3% starting SWR (even with no subsidies), so as rates increase in the future as we age we'll just naturally expand up to the more traditional 4%. We also have contingency plans if necessary, including moving to a state with lower property taxes to free up more money for healthcare, selecting a lower cost future plan, and getting a part time job to help cover future additional premiums & expenses

Long story short, with healthcare (or anything, really) it isn't particularly productive to try to construct a single bullet-proof plan to last a lifetime -- that plan will likely be shot in a year.  But flexible people with a reasonably conservative financial plan can definitely make it work, and as a prospective early retiree I particularly appreciate the blind eye to preexisting conditions. 
« Last Edit: August 15, 2014, 10:05:58 AM by Tyler »

Hannah

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #6 on: August 15, 2014, 10:24:46 AM »
The fact of the matter is that for young, healthy, and wealthy people, the affordable care act sucks. Premiums for the under 40 set have anywhere from doubled to tripled in most places across the nations with no commensurate increase in coverage. Mine will be approximately $470 per month for my family of 3 without subsidies anyhow.

That being said, 6-8 grand per year is an okay price for peace of mind, and its nice to never worry about getting kicked out of healthcare coverage due to long term illnesses, but to pay for healthcare premiums as young retiree you need about $200K more stashed than if you decide to go without coverage. Previously that number was something like 70-100K.

The affordable care act is my new favorite example of how even in free market democracies big business and big politics are a toxic combination when the get in bed together. Insurance companies are not complaining about the legislation, but healthcare providers are.

The Money Monk

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #7 on: August 15, 2014, 10:50:32 AM »

The affordable care act is my new favorite example of how even in free market democracies big business and big politics are a toxic combination when the get in bed together.

When politics is in bed with business it isn't exactly a free-market democracy

Hannah

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #8 on: August 15, 2014, 12:22:44 PM »

The affordable care act is my new favorite example of how even in free market democracies big business and big politics are a toxic combination when the get in bed together.

When politics is in bed with business it isn't exactly a free-market democracy

Maybe that should have been my point, but I think given the scope of all time and all places the US is relatively high on the scale for both Free Markets and Democracy (even after Too big to fail, bailing out GM, and the Affordable care act).

Eric

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #9 on: August 15, 2014, 12:44:04 PM »
but to pay for healthcare premiums as young retiree you need about $200K more stashed than if you decide to go without coverage. Previously that number was something like 70-100K.

But your health insurance premiums should shrink dramatically in retirement, as you'll have a very low income. (comparatively)  I'd re-run the numbers with your retirement spending/income in place of your current income, and I bet you'll find that you don't need to increase your estimates at all.

bacchi

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #10 on: August 15, 2014, 12:55:35 PM »
Pre-ACA, any chronic illness, including cancer (even if in remission), would've put you in the uninsurable category. That would've made ER, if not impossible, very challenging without having enough money to self insure.

protostache

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #11 on: August 15, 2014, 01:35:01 PM »
That's exactly the situation I would have found myself in. I got cancer and my wife has a chronic condition, so before ACA there was effectively no way for us to get health insurance without working full time for a good employer.

As it stands, we have vast oceans of options, and every single one of them makes me happy :)

MayDay

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #12 on: August 15, 2014, 01:54:27 PM »
Pre-ACA, any chronic illness, including cancer (even if in remission), would've put you in the uninsurable category. That would've made ER, if not impossible, very challenging without having enough money to self insure.

This post is kind of a summary if why I am here.

I heard of MMM maybe two years ago, but as someone with extremely high future medical costs likely, married to someone who was uninsurable on use former individual market, ER was not possible no matter how much we saved.  Then the ACA kicked in, and I decided hey, maybe this ER thing is worth investigating again.

myDogIsFI

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #13 on: August 15, 2014, 01:55:27 PM »
One of my favorite MMM posts is the "Middle Class to Kickass" post, here:

http://www.mrmoneymustache.com/2012/10/08/how-to-go-from-middle-class-to-kickass/

The last line item is "Prescription Medications and doctor visits for stress and overweight conditions," and he has kickass at $0.  I appreciate the idea, which is to take good care of yourself.  And if you strictly limit that item to "stress and overweight conditions," perhaps it's achievable.

But there's no other line item on the budget for "random medical stuff you can't control."  He's made the point that catastrophic medical issues throw a wrench into everything, but I think most of us, even if generally healthy, will occasionally run into medical issues that will quickly blow up the $0 number.

pdxbator

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #14 on: August 15, 2014, 02:18:47 PM »
I definitely think that his current health care costs and future costs are on the LOW side. I work in health care and every day see people who have huge out of pocket costs - not just on the insurance side but on medications as well. When doing ER you should definitely plan for these things. I see way too many seniors that have next to nothing and live in some out the way place and cannot even afford to come in to the hospital. Don't be one of those in your 'golden' years.

On the flip side I see a ton of people with life altering health issues. You only get one chance at life and being shackled to a desk for 40 years doesn't sound that enthralling. Save up, make a secure future, and be financially independent with enough money for some happy 'golden' years without having to worry about how you will pay for those pesky diabetes/cancer/high blood pressure meds.

Lian

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #15 on: August 15, 2014, 03:08:09 PM »
Health insurance gets insanely expensive as you get older – I’m in my mid-50s, generally healthy, and rarely go to the doctor. I was unemployed before ACA kicked in, so I got quotes for different levels of health insurance coverage.  The cheapest catastrophic plan would have been nearly $300 (rounded due to my faulty memory) and the cheapest full coverage would have been well over $700/month – for one person!  I would have been ok not working for a long time, but the cost of insurance made it unaffordable. I was very relieved to get a job with health insurance just about the time ACA kicked in.  Before the job, I was researching the possibility of moving from the U.S., as I could have afforded retirement in low-COL countries with much cheaper health insurance and healthcare costs, and I was afraid to be without insurance in the U.S.  I don’t see how this system can be sustained over the long term, even with the ACA.

Cassie

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #16 on: August 15, 2014, 04:13:13 PM »
It is great that the ACA has allowed people to be covered by pre-existing conditions. However, in many states the costs are too high if you don't qualify for subsidies.  If we choose to just live off our pensions and not each do consulting work we would get subsidies and have pretty cheap insurance.  Because we choose not to do that we pay $10,000/yearly from our former employer to have insurance.   For everyone young & healthy we were too and felt smug that we exercised, kept weight off, etc. Then when I turned 50 I developed 3 chronic health conditions that require meds and my hubby got cancer at 49.  As others have pointed out you never know what is down the road for any of us.

NoraLenderbee

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #17 on: August 15, 2014, 04:55:51 PM »
One of my favorite MMM posts is the "Middle Class to Kickass" post, here:

http://www.mrmoneymustache.com/2012/10/08/how-to-go-from-middle-class-to-kickass/

The last line item is "Prescription Medications and doctor visits for stress and overweight conditions," and he has kickass at $0.  I appreciate the idea, which is to take good care of yourself.  And if you strictly limit that item to "stress and overweight conditions," perhaps it's achievable.


This is where MMM is not being realistic, perhaps because he is still young. No matter how well you take care of yourself, you can still develop medical issues that are chronic and that require medications. They get more likely as you get older and genetics come to the fore. Cholesterol, blood pressure, pre-diabetes and diabetes, thyroid, triglycerides, cataracts, asthma, Crohn's disease, multiple sclerosis, depression--all of these affect people in my circle of active, clean-living friends who are over 40. Of course it's important to take care of your health, but you cannot control everything just by eating right and exercising.

Helvegen

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #18 on: August 15, 2014, 05:05:35 PM »
Health insurance gets insanely expensive as you get older – I’m in my mid-50s, generally healthy, and rarely go to the doctor. I was unemployed before ACA kicked in, so I got quotes for different levels of health insurance coverage.  The cheapest catastrophic plan would have been nearly $300 (rounded due to my faulty memory) and the cheapest full coverage would have been well over $700/month – for one person!  I would have been ok not working for a long time, but the cost of insurance made it unaffordable. I was very relieved to get a job with health insurance just about the time ACA kicked in.  Before the job, I was researching the possibility of moving from the U.S., as I could have afforded retirement in low-COL countries with much cheaper health insurance and healthcare costs, and I was afraid to be without insurance in the U.S.  I don’t see how this system can be sustained over the long term, even with the ACA.

Real problem is this:

Quote
The health care market is not a market at all. It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.

http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/

NYCMiniBee133

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #19 on: August 16, 2014, 11:59:45 PM »
These are all really helpful thoughts. Sounds like we are not the only ones confused about how to quantify the issue. I hadn't thought seriously about moving elsewhere in older age for health care cost considerations but it may in fact now be on the table.

Alabaster

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #20 on: August 17, 2014, 12:56:24 AM »
These are all really helpful thoughts. Sounds like we are not the only ones confused about how to quantify the issue. I hadn't thought seriously about moving elsewhere in older age for health care cost considerations but it may in fact now be on the table.

Which brings up the question: how is my 401K and Roth IRA going to work exactly if I'm living in another country in my middle to late retirement?

Beric01

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #21 on: August 17, 2014, 01:29:47 AM »
These are all really helpful thoughts. Sounds like we are not the only ones confused about how to quantify the issue. I hadn't thought seriously about moving elsewhere in older age for health care cost considerations but it may in fact now be on the table.

Which brings up the question: how is my 401K and Roth IRA going to work exactly if I'm living in another country in my middle to late retirement?

I plan to do the same (cheaper health care doesn't hurt). Not sure I understand your question though - you'll just withdraw the money.

Captain and Mrs Slow

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #22 on: August 17, 2014, 01:34:52 AM »

The fact of the matter is that for young, healthy, and wealthy people, the affordable care act sucks.


This is why the GOP went so ape shit, this inspite of plenty of evidence that universal healthcare (of what ever sort) is much better for the economy as a whole.

Regarding MMMs healthcare post what he rarely talks about, and for obvious reasons, is how much money he makes from his blog and how wealthy he is. So he can (or will shortly) afford even the most catastrophic event life can throw at him. So basically the early retirement math means having enough income to survive a million dollar health crisis with a lot left over.

Currently he's the most unassuming millionaire out there and soon (15 years I figure) the be the most unassuming billionaire out there. That based on his current investments plus 95% of blog income reinvested.

Christof

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #23 on: August 17, 2014, 05:35:12 AM »
Which brings up the question: how is my 401K and Roth IRA going to work exactly if I'm living in another country in my middle to late retirement?

I plan to do the same (cheaper health care doesn't hurt). Not sure I understand your question though - you'll just withdraw the money.

...and will pay taxes in the country that you are living in.

Living in another country isn't the same as visiting a country on the typical 3 months visa or working for a multi-national corporation in a foreign office.

Hannah

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #24 on: August 18, 2014, 05:51:41 AM »
but to pay for healthcare premiums as young retiree you need about $200K more stashed than if you decide to go without coverage. Previously that number was something like 70-100K.

But your health insurance premiums should shrink dramatically in retirement, as you'll have a very low income. (comparatively)  I'd re-run the numbers with your retirement spending/income in place of your current income, and I bet you'll find that you don't need to increase your estimates at all.

Yeah, a family of five in my state earning less than $50K can get insurance for $113 a month. This is where we hope to be in about 5 years.

I don't like to count on subsidies though. In the early stages of the bill being drafted (like when it was 200 pages not 2000), there was discussion of linking subsidies to work-like activities. I'm not sure what happened to that idea, but I'm guessing it will come back in the future.

Captain and Mrs Slow

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #25 on: August 18, 2014, 06:40:17 AM »
Quote
I don't like to count on subsidies though. In the early stages of the bill being drafted (like when it was 200 pages not 2000), there was discussion of linking subsidies to work-like activities. I'm not sure what happened to that idea, but I'm guessing it will come back in the future.

I believe the problem was they couldn't bring the bill back to the floor (house senate not sure) for amendments as it would have been defeated, so it was passed as is. This is the whole issue around the latest law suit.

NYCMiniBee133

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #26 on: August 18, 2014, 07:34:01 AM »
Which brings up the question: how is my 401K and Roth IRA going to work exactly if I'm living in another country in my middle to late retirement?

I plan to do the same (cheaper health care doesn't hurt). Not sure I understand your question though - you'll just withdraw the money.

...and will pay taxes in the country that you are living in.

Living in another country isn't the same as visiting a country on the typical 3 months visa or working for a multi-national corporation in a foreign office.

Ran across this article which is helpful though not comprehensive. It talks about what happens if you renounce citizenship. If you are still a US Citizen then I believe you won't have to pay taxes as you pay on where the income is earned unless you are a resident of that new country. I could be incomplete in my knowledge of this but that's what I got after an hour of digging.

http://finance.zacks.com/happens-united-states-ira-retire-different-country-5750.html

Beric01

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #27 on: August 18, 2014, 09:58:20 AM »
Which brings up the question: how is my 401K and Roth IRA going to work exactly if I'm living in another country in my middle to late retirement?

I plan to do the same (cheaper health care doesn't hurt). Not sure I understand your question though - you'll just withdraw the money.

...and will pay taxes in the country that you are living in.

Living in another country isn't the same as visiting a country on the typical 3 months visa or working for a multi-national corporation in a foreign office.

But if you're a US citizen and the US has a tax treaty with the country you're in, US taxes take precedence. That's the concern. Living in another country is great for healthcare cost purposes, but the problem is still paying US taxes. And if you renounce your citizenship, can you keep your 401(k)? Paying taxes at the highest rate is a bad deal if you have to withdraw it all at once.

Anyway, I think the best deal for healthcare costs after FIRE is living in a foreign country with cheap health costs, and keeping your investment withdrawals low enough that you pay minimal taxes in the US (and just make ATM withdrawals in foreign currency).

Second best deal is getting heavily subsidized by Obamacare, that is until they change Obamacare to not be subsidized if your net worth is too high.

Bob W

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #28 on: August 18, 2014, 09:32:21 PM »
I think what you all are talking about here is "illness insurance?"  Just because someone rebranded it healthcare insurance doesn't make it so.  Just like when the dept of war was rebranded dept of defense.  It is a fabrication.  We have a medical community that thrives on illness, not health.

beltim

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #29 on: August 18, 2014, 10:28:09 PM »
I think what you all are talking about here is "illness insurance?"  Just because someone rebranded it healthcare insurance doesn't make it so.  Just like when the dept of war was rebranded dept of defense.  It is a fabrication.  We have a medical community that thrives on illness, not health.

No. That is a doubleplus ungood comment.  No one calls it illness insurance.  Just like no one ever says death insurance, car crash insurance, or someone stole all the stuff from my apartment insurance.

Christof

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #30 on: August 19, 2014, 05:49:55 AM »
But if you're a US citizen and the US has a tax treaty with the country you're in, US taxes take precedence. That's the concern.

If you live in Germany as a US citizen you have to pay taxes in both countries. Germany does have a tax treaty with the US, which means that you can deduct taxes paid to the US from the taxes you pay in Germany. If the US investment is tax free, you don't pay any US taxes; you can't therefore deduct any taxes which means you are fully taxable in Germany. An investment that is tax free according to the US tax code does not magically become tax free in Germany.

It'll be different if you travel as a tourist, a different country every quarter. But then you might need extra healthcare coverage. Not all countries offer free healthcare to tourists. Germany doesn't. The UK does, I think.
 

Christof

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #31 on: August 19, 2014, 05:52:51 AM »
No one calls it illness insurance.

in English... The German word for healthcare insurance literally translated to English is indeed illness insurance. I bet that's the case in many languages. Our department of war is a department of defence, too, though.

jzb11

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #32 on: August 19, 2014, 06:37:13 AM »
Quotes 27-29 years old, single man, healthy. I don't remember all of the details of the ACA stuff, I just remember that it was more expensive and worse. It's a crock of shit if you ask me. Anyway here's a brief summary:

PRE ACA:

PPO:
$100 mo premium
$2500 deductible
$6000 out of pocket maximum

OFFICE VISIT: $40
EMERGENCY ROOM: $250
URGENT CARE: $75

POST ACA:

Bronze shit garbage plan:
HMO - $150

$6000 deductible
60% coinsurance until deductible is diminished on every fricking medical expense...

Silver PPO Plan: $275
Similar to my PRE ACA plan but still worse.

I am lucky in that I was able to keep my PRE ACA plan. I don't know how long I'll be able to keep it for though, I am hoping indefinitely. In fact I'll probably turn down employer provided care once I return to being a salaried employee.


Hannah

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #33 on: August 19, 2014, 09:04:22 AM »
In case anyone wants to look into a different version of nationalized health coverage, this is my favorite recap of Singapore's Health Care System.

http://econlog.econlib.org/archives/2008/01/singapores_heal.html

The one sentence recap is that nationalized health care must keep individualized incentives in mind.

The big thing that's missing from the article is more on this sentence:
Quote
"The government provides optional low-cost catatrophic health insurance, plus a safety net "subject to stringent means-testing."

Which if you study it is exactly the reason that US healthcare costs cannot be be as low as Singapore's. Tort law is really limited in Singapore, whereas its quite liberal (as in laissez-faire) in the US, so doctors have an incentive to take quite a few high cost scenarios and turn them into catastrophic scenarios to cover their butts.

This is an example from my life:

My mom had uterine cancer at age 50 to treat it required 30K of actual medical care, and 35K of testing. I think a lot of the testing was excessive, but doctors recommended it to make sure my mom wouldn't sue.

I'm not sure if 30K is catastrophic or not but 65K seems like it probably is. The cost of covering it would be approximately 2X or more as high in the US as in Singapore which leads to "Catastrophic" insurance costs being approximately 2X as high (or more) in the US as in Singapore for healthy young people (who qualify to buy Catastrophic insurance), and a safety net with twice as many costs or twice as many conflicts of interest to sort out.

bacchi

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #34 on: August 19, 2014, 10:15:20 AM »
Which if you study it is exactly the reason that US healthcare costs cannot be be as low as Singapore's. Tort law is really limited in Singapore, whereas its quite liberal (as in laissez-faire) in the US, so doctors have an incentive to take quite a few high cost scenarios and turn them into catastrophic scenarios to cover their butts.

Texas and 29+ other states have medical tort reform laws. In Texas, malpractice premiums did go down, substantially, but prices did not follow.

http://www.statesman.com/news/news/local/new-study-tort-reform-has-not-reduced-health-care-/nRpcp/

Quote
The researchers assumed that doctors who faced a higher risk of being sued — those in counties that had larger numbers of malpractice cases — would perform more tests and procedures than necessary to protect themselves from lawsuits. With tort reform, which limited damage awards against doctors, the need to practice such "defensive medicine" would decline, the argument goes.

But in comparing Texas counties in which doctors faced a higher risk of lawsuits with counties where the risk was lower, the researchers found no difference in Medicare spending after tort reform and indications that doctors in higher- risk counties did slightly more procedures.

Expensive healthcare in the US is not about lawsuits.

http://content.healthaffairs.org/content/22/3/89.full.pdf



Gin1984

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #35 on: August 19, 2014, 10:22:21 AM »
Pre-ACA, any chronic illness, including cancer (even if in remission), would've put you in the uninsurable category. That would've made ER, if not impossible, very challenging without having enough money to self insure.

This post is kind of a summary if why I am here.

I heard of MMM maybe two years ago, but as someone with extremely high future medical costs likely, married to someone who was uninsurable on use former individual market, ER was not possible no matter how much we saved.  Then the ACA kicked in, and I decided hey, maybe this ER thing is worth investigating again.
I was the same way.  I was unable to get insurance when I aged out of my mother's plan because of a pre-existing condition.  I could not even get coverage with a high deducible plan.  ACA gave me the ability to retire early.  It also allowed my mother to retire at age 58 when her employer decided to jerk her around.  She is on COBRA, then will be on Cal-COBRA for 18 months and then 2 years of ACA plans.  And they all are about the same cost.

Bob W

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #36 on: August 19, 2014, 12:48:14 PM »
Health Insurance $155 for a family of 3!


The information below is from the Kaiser Foundation Calculator -

Apparently the ACA is skewed toward income and doesn't care what your assets are.  So someone taking income of 35k from their portfolio with 2 adults and 1 kid is what I plugged in. 

For the silver plan the premium would come out to  $155 a month with all the subsidies included.  So basically 50 bucks per month per person.   

This is one way that being FI really can pay off for a person.   Just for my coverage alone, my employer pays $800 per month!

More power to the FI folks and demonstrating that income vs. assets is a not brainer.  I would rather have the 875K needed to generate 35K per year than pay something like 20 times as much for sickness insurance!  (I'm not there yet)
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Household income in 2014:179% of poverty levelMaximum % of income you have to pay for the premium, if eligible for a subsidy:5.34% Health Insurance premium in 2014 (for a silver plan, before tax credit):$6,680 per year You could receive a government tax credit subsidy of up to:$4,810 per year
(which covers 72% of the overall premium) Amount you pay for the premium:$1,870 per year
 (which equals 5.34% of your household income and covers 28% of the overall premium)

Bob W

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Re: MMM's posts on Health Care Costs - Incomplete?
« Reply #37 on: August 19, 2014, 01:27:52 PM »
I think what you all are talking about here is "illness insurance?"  Just because someone rebranded it healthcare insurance doesn't make it so.  Just like when the dept of war was rebranded dept of defense.  It is a fabrication.  We have a medical community that thrives on illness, not health.

No. That is a doubleplus ungood comment.  No one calls it illness insurance.  Just like no one ever says death insurance, car crash insurance, or someone stole all the stuff from my apartment insurance.

The point is that we have an entire system geared towards illness and virtually no system geared towards "health."     The doctors are not paid to keep you healthy --- they get paid when your sick.     The incentives and rewards are all completely backwards in the US. 

A huge percentage of so called healthcare dollars are spent on the last 90 days of a person's life.  Most of this is for very elderly people who are going to die soon.  And guess what, there are no studies or tracking to even assure that end of life care extends a person's life.   In any other business we would call that "milking the system."     

Here is an excerpt from a good piece --      http://www.dailyfinance.com/2013/10/19/health-care-why-america-overspends/

According to figures from the Organization for Economic Cooperation and Development, the United States spends more money on health care per capita than any other nation on Earth -- nearly $7,300 per citizen in 2007 (the latest for which firm figures are available), of which nearly half was financed by tax dollars through programs such as Medicare and Medicaid. That's 87 percent more than Canada paid to give its citizens universal health care that year, and more than three times the expenditures in the United Kingdom.

 And it gets worse. With an estimated $2.8 trillion expected to be spent on health care in the U.S. this year, we're on track to spend $8,920 per capita in 2013, a figure that could pass $14,000 per capita if health care spending rises to the expected $4.5 trillion in 2019.
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The medical and pharmaceutical industries have figured out how to game the system.  "Well, we're getting paid 100s of billions of dollars and the population keeps getting sicker.  Guess we need some more money,  Doctors, nurses and pharmaceuticals"

Mustachians will need to be very proactive in their personal "health" care.   Eat plenty of veggies,  get some good exercise,  stay fit and trim.   Some illnesses are unavoidable but the big ones, obesity, heart disease, lung cancer, diabetes, alcoholism, etc are behaviorally based.   

My wild ass guestimate is that 80% of health dollars are not spent in a Mustachian effective manner.   This would make sense as 80% of the US population pisses away their money as a matter of habit with little thought about the outcomes.   A case of the patients running the asylum. 


Whew! Glad I got that off my chest!