Personal Budgeting --> Healthcare

[Abe Froman]

In the approach toward FI/RE - how are you estimating healthcare costs?

From the article https://www.usatoday.com/story/money/business/2018/06/06/health-care-costs-price-family-four/676046002/ ... in 2017 Employers paid $13,430 and employees paid $6,050 of the premium on average.

Looking at my old paystubs - I was paying $368/month for PPO - which with Co-Insurance and minimus - is about right.

How are you planning for Healthcare costs in your future budget?
Shall I ....

• Take this average number of $20K total and increase it 5% a year? YIKES. That is $1666 a month (and climbing) and no where planned in my target FIRE number. :(
• Take a look at the average Gold or Platinum Plan in my State ... and plan for a 10% increase there?
• Take a look at HealthShare Costs - like Liberty et al

Any guidance as to how you estimate would be really helpful !!!!

[Greystache]

Here is what we (married couple, 58 yrs old) did to control our healthcare costs:
If you are healthy and don't require a lot of meds., consider a high deductable bronze plan with an HSA.
Keep your MAGI as low as possible to qualify for more premium subsidy. In our case, taxable income is $50K. We add $10K after tax money to bring our annual budget up to $60K. We then contribute $7600 to HSA every year to bring our MAGI down to $42,400. This qualifies us for subsidies of around $1000/mo. Over the last 3 years, our premium payments have varied from $26 to $287 per mo. Next year will be $97/mo. Our out of pocket medical payments, including eye care and dental have been $1500 to $2000 per year.
Also, if you are young, remember that there is an "age tax". Older people pay up to 3 times as much for insurance as young people. If the GOP had passed their plan, it would have been up to 5 times as much.  You need to expect your premiums to go up as you age.
Hope this helps. It may not apply to your situation.  If you are not able to keep, your income low, and require lots of medical care/meds., then you better be prepared to spend over $1000/mo for premiums.

[EnjoyIt]

We are currently budgeting 1.5x what we pay for healthcare every year today for when we FIRE. We have an HSA that holds a few years of deductible in it.  We do not consider the HSA as part of our stache as more of a healthcare Emergency fund. Which we will use to pay our deductible in the years that we need to. If we find ourselves in need of this kind of outlay every year, we will decrease our taxable income to qualify for subsidies until medicare kicks in many years down the road.  If we spend less than $1.5k/month on healthcare then we will either save that cash or spend it elsewhere.

I do not believe that premiums can keep increasing by the percentages we are seeing today indefinitely.  At some point the upper middle class will just say No and stop buying health insurance and the whole system will collapse.  A family making $100k/yr will not be spending $30-40k/yr in health care costs.

[dude]

I'm more or less not. I'll have retiree health care at the same rate active employees pay (currently @$375/mo for my plan), and I have an LTC plan. My health care plan has a catastrophic limit (it's like $11k/year). That's more or less our travel budget, so we'd just not travel if we somehow ended up spending that much.