Does it make sense to drop health insurance?

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denovo
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Re: Does it make sense to drop health insurance?

Post by denovo » Wed Nov 29, 2017 6:07 pm

fredflinstone wrote:
Wed Nov 29, 2017 1:14 pm
bottlecap wrote:
Wed Nov 29, 2017 12:59 pm
Sad to say it probably makes sense to drop it.

Some people, including many otherwise rationale people on this site, will never consider going without no matter the costs. I can’t justify that.

Look into asset protection for a complete picture. Health care costs could never ruin me because much of my assets are in retirement accounts. Health insurance costs could.

My family did drop it after the ACA. My employer then offered a half-decent plan so we got back on. Employer insurance is getting unaffordable again. We might be back without insurance in a year or two.

Good luck,

JT
JT: Thank you for your comments. I am thinking along the same lines. In my state, 401K assets and 529 assets are exempt from creditors in the case of bankruptcy. We have put a lot of our assets into those vehicles -- far more in the 529s than is necessary to pay for college tuition. In addition, my wife and I have separate bank accounts and separate brokerage accounts. If I am hit by a bus and go bankrupt paying my hospital bills, I believe it will not affect her assets. (I could be mistaken, but I don't think creditors can go after her money.)
Hospitals and offices aren't stupid. When they figure out you are not insured, they will demand payment upfront, so you can't stiff them later.
"Don't trust everything you read on the Internet"- Abraham Lincoln

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fredflinstone
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Re: Does it make sense to drop health insurance?

Post by fredflinstone » Wed Nov 29, 2017 6:11 pm

dbr wrote:
Wed Nov 29, 2017 5:51 pm
I have never, ever heard of a situation where one should not have health insurance even for a day. Even dental insurance is a good idea to avoid being gouged by the fictitious "regular" cost.
I'm glad you brought that up. In fact, we do not have dental insurance. Our dentist completely understands and is very reasonable. If I ever need expensive dental care, I will pay for it out of pocket. It is not the end of the world.

If our health insurance premiums go up 20 percent per year, we will be looking at premiums of $2,700 per month five years from now. I actually feel that is a conservative projection. (Google "health insurance adverse selection death spiral" to see why.) Would premiums that high change your opinion?

I feel that many people are making valid points but the people who say there is never any reason to forego insurance regardless of the premium ... well I'll just say that that argument leaves me cold.

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fredflinstone
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Re: Does it make sense to drop health insurance?

Post by fredflinstone » Wed Nov 29, 2017 6:16 pm

denovo wrote:
Wed Nov 29, 2017 6:07 pm
fredflinstone wrote:
Wed Nov 29, 2017 1:14 pm
bottlecap wrote:
Wed Nov 29, 2017 12:59 pm
Sad to say it probably makes sense to drop it.

Some people, including many otherwise rationale people on this site, will never consider going without no matter the costs. I can’t justify that.

Look into asset protection for a complete picture. Health care costs could never ruin me because much of my assets are in retirement accounts. Health insurance costs could.

My family did drop it after the ACA. My employer then offered a half-decent plan so we got back on. Employer insurance is getting unaffordable again. We might be back without insurance in a year or two.

Good luck,

JT
JT: Thank you for your comments. I am thinking along the same lines. In my state, 401K assets and 529 assets are exempt from creditors in the case of bankruptcy. We have put a lot of our assets into those vehicles -- far more in the 529s than is necessary to pay for college tuition. In addition, my wife and I have separate bank accounts and separate brokerage accounts. If I am hit by a bus and go bankrupt paying my hospital bills, I believe it will not affect her assets. (I could be mistaken, but I don't think creditors can go after her money.)
Hospitals and offices aren't stupid. When they figure out you are not insured, they will demand payment upfront, so you can't stiff them later.
Excellent point. Thank you. Of course, in a bona fide emergency situation hospitals are legally required to provide care regardless of the patient's ability to pay. https://en.wikipedia.org/wiki/Emergency ... _Labor_Act

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fredflinstone
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Re: Does it make sense to drop health insurance?

Post by fredflinstone » Wed Nov 29, 2017 6:19 pm

michaeljc70 wrote:
Wed Nov 29, 2017 6:05 pm
flamesabers wrote:
Wed Nov 29, 2017 5:30 pm
michaeljc70 wrote:
Wed Nov 29, 2017 5:23 pm
Unfortunately, I don't believe catastrophic policies are legal anymore (or at least you'd be subject to the penalty). I think the deductibles and OOP and a lot of plans now are what used to be considered catastrophic 15 years ago. If they sold a policy with a $50k deductible for a minimal cost, that would be ideal for some.
Catastrophic policies are still legal, but OP would have to meet the hardship /affordability exemption.

Per healthcare.gov:
Who can buy a Catastrophic plan

Only the following people are eligible:

People under 30
People of any age with a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable)
Oddly enough, the highest deductible for a catastrophic plan is less then Fred's current policy:
For 2017, the deductible for all Catastrophic plans is $7,150. After you spend that much, your insurance company pays for all covered services, with no copayment or coinsurance.
https://www.healthcare.gov/choose-a-pla ... ategories/
The OP has work income of $120k plus (presumably) investment income so they aren't going to be eligible for an exemption.

If a "catastrophic" plan has a deductible less than my bronze plan, it isn't really catastrophic and will probably cost the same or more money. It says "catastrophic" plans include all essential health benefits (after deductible).
The deductible for my plan is $7,350 per individual and $14,700 per family. I said "$10,000" in my OP because I was too lazy to look up the details at the time. This plan is the highest-deductible plan offered in Bedrock.

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fredflinstone
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Re: Does it make sense to drop health insurance?

Post by fredflinstone » Wed Nov 29, 2017 6:22 pm

Christine_NM wrote:
Wed Nov 29, 2017 3:13 pm
OP -

I don't see the important number for the policy you would be using -- what is the maximum out of pocket annual cost to you and your family, after which insurance pays everything?

If MOOP is 50k, for example, that is the most you would spend in any one year on healthcare. Compare that with the open-ended, undiscounted costs of having no insurance.

I have no idea how MOOPs run in the high deductible market. The MOOP on my Medicare Advantage plan is $1,500 per YEAR. For that I pay medicare plan b and d, plus $50/month premium.
Hi Christine. The maximum out of pocket for my plan is $7,350 Ind/$14,700 Fam. This is the same as my deductible.

delamer
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Re: Does it make sense to drop health insurance?

Post by delamer » Wed Nov 29, 2017 6:23 pm

nisiprius wrote:
Wed Nov 29, 2017 4:23 pm
delamer wrote:
Wed Nov 29, 2017 1:22 pm
It is my understanding that doctors are not legally required to treat either Medicaid or Medicare patients,
Yes, according to Medicare.
Make sure your doctor, provider, or supplier accepts assignment. Most doctors, providers, and suppliers accept assignment, but you should always check to make sure. Participating providers have signed an agreement to accept assignment for all Medicare-covered services.

Non-participating providers haven't signed an agreement to accept assignment for all Medicare-covered services, but they can still choose to accept assignment for individual services. These providers are called "non-participating."

A private contract is a written agreement between you and a doctor or other health care provider who has decided not to provide services to anyone through Medicare.
delamer wrote:...and that many do not because of the low reimbursement rates.
I've heard this too, but so far I haven't found a doctor who didn't accept assignment. I've heard that they dislike the low reimbursement rates, but they like collecting from Medicare, which is said to be faster and easier than from insurers. In any case, I have a challenge for you: see if you can find any doctors that you go to, or think you might go to, who do not accept Medicare assignment. You can look them up here. Start with the ones least likely to accept it, try a few, then report your results.
Sorry, not accepting your challenge. :( Not on Medicare or Medicaid myself.

My point simply was that doctors and other providers do not have to accept you as a patient, using Medicare and Medicaid patients as examples. So, especially for more expensive treatments and procedures, they might hesitate to take on a patient who was totally self-pay.

Also, see dm200's response.

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mrc
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Re: Does it make sense to drop health insurance?

Post by mrc » Wed Nov 29, 2017 6:29 pm

Healthy people can become sick people in the blink of an eye.

If you can sleep without any insurance, great. I couldn't.

I find both dental and vision insurance more of a prepay plan. I don't see going in for an eye exam or a cleaning leading to a $64,000 bill.
If it’s not long term it’s small talk

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MP123
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Re: Does it make sense to drop health insurance?

Post by MP123 » Wed Nov 29, 2017 6:30 pm

fredflinstone wrote:
Wed Nov 29, 2017 6:11 pm
If our health insurance premiums go up 20 percent per year, we will be looking at premiums of $2,700 per month five years from now. I actually feel that is a conservative projection. (Google "health insurance adverse selection death spiral" to see why.) Would premiums that high change your opinion?
Don't forget that your premiums will go up just based on your age being 5 years older too so don't extrapolate based on your current rate but rather your age in five years. In your 50s and early 60s the rates really start to get high, jumping 10% or so a year just based on age alone.

Of course since you're living in the Stone Age it might be different in Bedrock :D

denovo
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Re: Does it make sense to drop health insurance?

Post by denovo » Wed Nov 29, 2017 7:03 pm

fredflinstone wrote:
Wed Nov 29, 2017 6:16 pm
denovo wrote:
Wed Nov 29, 2017 6:07 pm
fredflinstone wrote:
Wed Nov 29, 2017 1:14 pm
bottlecap wrote:
Wed Nov 29, 2017 12:59 pm
Sad to say it probably makes sense to drop it.

Some people, including many otherwise rationale people on this site, will never consider going without no matter the costs. I can’t justify that.

Look into asset protection for a complete picture. Health care costs could never ruin me because much of my assets are in retirement accounts. Health insurance costs could.

My family did drop it after the ACA. My employer then offered a half-decent plan so we got back on. Employer insurance is getting unaffordable again. We might be back without insurance in a year or two.

Good luck,

JT
JT: Thank you for your comments. I am thinking along the same lines. In my state, 401K assets and 529 assets are exempt from creditors in the case of bankruptcy. We have put a lot of our assets into those vehicles -- far more in the 529s than is necessary to pay for college tuition. In addition, my wife and I have separate bank accounts and separate brokerage accounts. If I am hit by a bus and go bankrupt paying my hospital bills, I believe it will not affect her assets. (I could be mistaken, but I don't think creditors can go after her money.)
Hospitals and offices aren't stupid. When they figure out you are not insured, they will demand payment upfront, so you can't stiff them later.
Excellent point. Thank you. Of course, in a bona fide emergency situation hospitals are legally required to provide care regardless of the patient's ability to pay. https://en.wikipedia.org/wiki/Emergency ... _Labor_Act
Correct, but that's in very limited situations, not going to cover stuff like chemo or other chronic conditions that require, or to fix a broken leg.
"Don't trust everything you read on the Internet"- Abraham Lincoln

J295
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Re: Does it make sense to drop health insurance?

Post by J295 » Wed Nov 29, 2017 7:07 pm

To answer your question… To me does not make sense to go without insurance under the current situation.

Of course, you are free to assume the risk and it will probably work out fine for a while… Until it doesn’t, as the saying goes

One option you might consider is reducing your consulting income so that your magi qualifies you for premium tax credits if you are inclined to work less.

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Artsdoctor
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Re: Does it make sense to drop health insurance?

Post by Artsdoctor » Wed Nov 29, 2017 7:13 pm

"JT: Thank you for your comments. I am thinking along the same lines. In my state, 401K assets and 529 assets are exempt from creditors in the case of bankruptcy. We have put a lot of our assets into those vehicles -- far more in the 529s than is necessary to pay for college tuition. In addition, my wife and I have separate bank accounts and separate brokerage accounts. If I am hit by a bus and go bankrupt paying my hospital bills, I believe it will not affect her assets. (I could be mistaken, but I don't think creditors can go after her money.)"

This is a false argument, and I would ask you to think something through from beginning to end.

It's not the emergency. If you were to show up in the ER with a perforated appendix, you're going to have surgery. If everything goes well, you can negotiate with everyone afterwards (you will be kept very, very busy).

But imagine an all too common scenario. You are diagnosed with a malignancy and require care. Now that you have a "chronic illness," where are you going to get treatment? Wherever you go, they're going to want your insurance information. They're not going to treat you without it and the cash package is going to be relatively restrictive. If you develop a complication related to your cancer, it wouldn't be part of the cash package and you're back to square one, negotiating all over again. If you put everything in your wife's name, for example, and have an illness which requires care, I would imagine that she's not going to sit back and watch you suffer--she's going to pay for treatment.

There are innumerable illnesses out there and trying to imagine a scenario for each of them is not possible. By definition, there will always be surprises and unknowns. If you've ever been really sick, you would know that the last you need to worry about is negotiating. It would be very unpleasant for you and everyone around you.

Before anyone really opts out of insurance, I would suggest talking to someone who's been really ill and get their take on your arguments.

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DaftInvestor
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Re: Does it make sense to drop health insurance?

Post by DaftInvestor » Wed Nov 29, 2017 7:16 pm

Last year when someone asks this question I walked through both the financial risk and life risk the OP was taking - OP got angry - others took offense - and my post was removed.
Thus - rather than the full real life example I will give you the short version:
You are risking not only financial ruin but risk of life. There are some treatments you won't get with out coverage.

letsgobobby
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Re: Does it make sense to drop health insurance?

Post by letsgobobby » Wed Nov 29, 2017 7:47 pm

Artsdoctor wrote:
Wed Nov 29, 2017 7:13 pm
"JT: Thank you for your comments. I am thinking along the same lines. In my state, 401K assets and 529 assets are exempt from creditors in the case of bankruptcy. We have put a lot of our assets into those vehicles -- far more in the 529s than is necessary to pay for college tuition. In addition, my wife and I have separate bank accounts and separate brokerage accounts. If I am hit by a bus and go bankrupt paying my hospital bills, I believe it will not affect her assets. (I could be mistaken, but I don't think creditors can go after her money.)"

This is a false argument, and I would ask you to think something through from beginning to end.

It's not the emergency. If you were to show up in the ER with a perforated appendix, you're going to have surgery. If everything goes well, you can negotiate with everyone afterwards (you will be kept very, very busy).

But imagine an all too common scenario. You are diagnosed with a malignancy and require care. Now that you have a "chronic illness," where are you going to get treatment? Wherever you go, they're going to want your insurance information. They're not going to treat you without it and the cash package is going to be relatively restrictive. If you develop a complication related to your cancer, it wouldn't be part of the cash package and you're back to square one, negotiating all over again. If you put everything in your wife's name, for example, and have an illness which requires care, I would imagine that she's not going to sit back and watch you suffer--she's going to pay for treatment.

There are innumerable illnesses out there and trying to imagine a scenario for each of them is not possible. By definition, there will always be surprises and unknowns. If you've ever been really sick, you would know that the last you need to worry about is negotiating. It would be very unpleasant for you and everyone around you.

Before anyone really opts out of insurance, I would suggest talking to someone who's been really ill and get their take on your arguments.
I’m not arguing for going naked, but it seems many posters do not believe it is possible to pay cash. That is not correct, in my experience. Many providers are happy to take cash - very happy. They may require payment up front, but they will take cash (with a smile). I take cash. My made up rate is $400 per hour, insurance typically pays half of that or less, but if you want to pay $400 per hour, my office is happy to take your money.

Certainly places like Mayo, MD Anderson, etc., ie quarternary care centers, are quite used to cash paying patients from all over the world. They do not discriminate.

As to whether one can afford to pay the cash rates they demand, that is a different story.

JBTX
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Re: Does it make sense to drop health insurance?

Post by JBTX » Wed Nov 29, 2017 8:00 pm

I guess you have to ask yourself why the cost of insurance is so high? Is it because the insurance companies are gouging you and taking massive profits? No, because medical insurance profit and administrative cost are now regulated. Insurance companies profit margins are relatively thin. The reason insurance is so high is that they are paying for actual claims.

Now you can argue that you and your family are healthy, compared to many on insurance who are less healthy, and you are less likely to experience claims. That could very well be true, but it isn't an absolute given. While your probability of catastrophe may be lower than average, not having insurance your likely cost of catastrophe is a lot higher given you will be paying exhorbitant "chargemaster" rates for emergency and critical care.

What if a family member develops some rare disorder where the treatment is tens, or even hundreds of thousands of dollars? Or god forbid cancer?

While I wouldn't do it, I could see one rationalizing gaming the odds on their own health. I can't imagine doing it with a family member, especially a child. If you are as FI as you indicate, then why do it at all? I am off and on self employed and have paid more than that for health insurance for our family through COBRA, and still paid full deductible amounts. What is the purpose of having "substantial assets" if you aren't going to insure against the worst case health outcomes of your children? I could understand the question coming from somebody who can't afford it, but from somebody who easily can it is puzzling.

Reminds me of the example of "picking up nickels in front of a steamroller". Surely you can pick up that nickle before the steamroller gets there, correct? Or surely you can make it across that train track before that train 1/4 mile down the track gets to you, right? I mean....what could go wrong?

As an aside, if you set up the policy correctly and you are self employed you can deduct the premium cost on your tax return.

ragnathor
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Re: Does it make sense to drop health insurance?

Post by ragnathor » Wed Nov 29, 2017 8:13 pm

bloom2708 wrote:
Wed Nov 29, 2017 1:20 pm

OP, have you looked into health sharing plans? Liberty Health Share is one.

https://www.libertyhealthshare.org/
I wanted reiterate this question. I don't have personal experience with these but have heard from some that this can be a viable alternative to traditional health insurance. Does anyone have experience? They don't seem to have the legal backing of a standard insurance, but it seems a better way than going it alone.

https://en.wikipedia.org/wiki/Health_ca ... g_ministry

I think they have a religious component but based on the members I know I'm not sure how heavily enforced that is.

JBTX
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Re: Does it make sense to drop health insurance?

Post by JBTX » Wed Nov 29, 2017 8:35 pm

ragnathor wrote:
Wed Nov 29, 2017 8:13 pm
bloom2708 wrote:
Wed Nov 29, 2017 1:20 pm

OP, have you looked into health sharing plans? Liberty Health Share is one.

https://www.libertyhealthshare.org/
I wanted reiterate this question. I don't have personal experience with these but have heard from some that this can be a viable alternative to traditional health insurance. Does anyone have experience? They don't seem to have the legal backing of a standard insurance, but it seems a better way than going it alone.

https://en.wikipedia.org/wiki/Health_ca ... g_ministry

I think they have a religious component but based on the members I know I'm not sure how heavily enforced that is.
In a way this is kind of what most large employers do. Most of them are self insured. The premiums you pay are a function of the total claims incurred by employees (plus estimated reserve). The insurance company is merely the network administering the health care.

michaeljc70
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Re: Does it make sense to drop health insurance?

Post by michaeljc70 » Wed Nov 29, 2017 8:43 pm

ragnathor wrote:
Wed Nov 29, 2017 8:13 pm
bloom2708 wrote:
Wed Nov 29, 2017 1:20 pm

OP, have you looked into health sharing plans? Liberty Health Share is one.

https://www.libertyhealthshare.org/
I wanted reiterate this question. I don't have personal experience with these but have heard from some that this can be a viable alternative to traditional health insurance. Does anyone have experience? They don't seem to have the legal backing of a standard insurance, but it seems a better way than going it alone.

https://en.wikipedia.org/wiki/Health_ca ... g_ministry

I think they have a religious component but based on the members I know I'm not sure how heavily enforced that is.
I looked into this. Because it is not insurance, they have zero obligation to cover all your bills. That made me not consider it. I imagine that if you got a very serious/expensive condition, you would be the one they don't cover as they would rather cover 100 (or 1000) smaller claims than 1 claim if they run low on funds. They are not required to have the same reserves as insurance companies. I suppose it is better than nothing.

quantAndHold
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Re: Does it make sense to drop health insurance?

Post by quantAndHold » Wed Nov 29, 2017 9:01 pm

I know too many people who’ve suddenly had catastrophic (and catastrophically expensive) health problems to gamble with my family’s lives by going without coverage.

Dental insurance, sure. The most expensive dental problem is well within my ability to pay for it. But the six and seven figure bills for cancer treatments, and the lifetime of added medical expenses that follow surviving something like that? Nope. Penny wise and pound foolish.

I did have more than one friend die in pre-ACA America, because they couldn’t get insurance and couldn’t get treated in time. To voluntarily subject your family to that...boggles the mind.

iamlucky13
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Re: Does it make sense to drop health insurance?

Post by iamlucky13 » Wed Nov 29, 2017 9:32 pm

quantAndHold wrote:
Wed Nov 29, 2017 9:01 pm
I know too many people who’ve suddenly had catastrophic (and catastrophically expensive) health problems to gamble with my family’s lives by going without coverage.
I don't think that quite gets at what the question is about. To look at it from your perspective, I'd phrase the question as whether he's reached the point where he's not gambling with their lives - can he cover any conceivable healthcare expense on his own?

Or a little less comprehensively perhaps, can he cover any expense that is as likely as other threats to his family's lives, such as an auto accident. After all, face it, getting in your car is gambling with your family's lives, and 30,000 people lose that bet every year.

Suppose the odds of experience a $1 million health catastrophe are the same as dying in an auto accident, and he can make reasonable retirement lifestyle changes to absorb a $1 million unplanned expense. Is going without health insurance in that case a less reasonable gamble than getting in a car?

dbr
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Re: Does it make sense to drop health insurance?

Post by dbr » Wed Nov 29, 2017 9:43 pm

I know one person who is not alive today and might well be alive today if insurance issues did not obstruct getting the right treatment at the right time. The case involved an injury that would have been treated in a routine way and not some untried treatment for an obscure disease.

quantAndHold
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Re: Does it make sense to drop health insurance?

Post by quantAndHold » Wed Nov 29, 2017 10:10 pm

iamlucky13 wrote:
Wed Nov 29, 2017 9:32 pm
quantAndHold wrote:
Wed Nov 29, 2017 9:01 pm
I know too many people who’ve suddenly had catastrophic (and catastrophically expensive) health problems to gamble with my family’s lives by going without coverage.
I don't think that quite gets at what the question is about. To look at it from your perspective, I'd phrase the question as whether he's reached the point where he's not gambling with their lives - can he cover any conceivable healthcare expense on his own?

Or a little less comprehensively perhaps, can he cover any expense that is as likely as other threats to his family's lives, such as an auto accident. After all, face it, getting in your car is gambling with your family's lives, and 30,000 people lose that bet every year.

Suppose the odds of experience a $1 million health catastrophe are the same as dying in an auto accident, and he can make reasonable retirement lifestyle changes to absorb a $1 million unplanned expense. Is going without health insurance in that case a less reasonable gamble than getting in a car?
It isn’t really that, though. There isn’t really an alternative to getting into a car. Sure, you could walk or ride a bike, but your odds as a pedestrian or bike rider are probably worse than your odds in the car. So you take the risk because you have to take some risks as part of living life.

Going without health insurance is taking a risk that is unnecessary, since they have enough family income to pay the premium. And we can talk in theory about how they can make a choice to self insure. But people are terrible at evaluating risk, and this is one of those cases where the risk is small, but it’s there, and if it happens, it’s catastrophic. Because it isn’t a fixed $1M risk. It’s maybe $1M now, certainly a lot more in a few years, and people who have those big bills tend to have large medical expenses for the rest of their lives. And these kinds of things happen exactly when the person is not in a position be negotiating a better deal, or getting a better job to pay the cost.

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Sandtrap
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Re: Does it make sense to drop health insurance?

Post by Sandtrap » Wed Nov 29, 2017 10:27 pm

DaftInvestor wrote:
Wed Nov 29, 2017 7:16 pm
Last year when someone asks this question I walked through both the financial risk and life risk the OP was taking - OP got angry - others took offense - and my post was removed.
Thus - rather than the full real life example I will give you the short version:
You are risking not only financial ruin but risk of life. There are some treatments you won't get with out coverage.
As always, "Daftinvestor". . . .Excellent point!
Last year DW and I were fumbling through our last year of ACA before medicare and figuring out coverage. Shortly after I got slammed with several 911 episodes out of the blue. Nobody can predict these things. And, it's all speculative until the stinky brown stuff hits the fan.
Thus insurance is called. . . . insurance.
j :D

TTBG
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Re: Does it make sense to drop health insurance?

Post by TTBG » Wed Nov 29, 2017 11:32 pm

My 2 cents on the original question: Is my family at the point where it is rational to forego coverage?

I don't think so.

My employer's high deductible plan is upwards of $1800/month for family coverage, with the employee paying about $400/month and the employer covering the rest. Deductibles are 2000/4000 and max out-of-pocket is 3500/7000. Coinsurance is 30%. So your plan doesn't seem that different, except that in your case, you have to bear the entire cost. That's why contractors get paid more :-).

Another way to look at it is, $1300/month for 3 people is less than $450 per person. You and Wilma can afford that, and do you really want to gamble on Pebble's health for $450 a month?

I'm not sure where I'd draw the line on deciding coverage was too expensive, but it wouldn't be in your scenario.

ncbill
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Re: Does it make sense to drop health insurance?

Post by ncbill » Wed Nov 29, 2017 11:44 pm

fredflinstone wrote:
Wed Nov 29, 2017 6:11 pm
dbr wrote:
Wed Nov 29, 2017 5:51 pm
I have never, ever heard of a situation where one should not have health insurance even for a day. Even dental insurance is a good idea to avoid being gouged by the fictitious "regular" cost.
I'm glad you brought that up. In fact, we do not have dental insurance. Our dentist completely understands and is very reasonable. If I ever need expensive dental care, I will pay for it out of pocket. It is not the end of the world.

If our health insurance premiums go up 20 percent per year, we will be looking at premiums of $2,700 per month five years from now. I actually feel that is a conservative projection. (Google "health insurance adverse selection death spiral" to see why.) Would premiums that high change your opinion?

I feel that many people are making valid points but the people who say there is never any reason to forego insurance regardless of the premium ... well I'll just say that that argument leaves me cold.
As other posters have mentioned, can you move and still earn?

Many expats in Mexico buy into the national health plan as catastrophic, "hit-by-a-bus" insurance.

Here are the 2017 annual rates, by age, in pesos:

http://www.chapala.com/webboard/index.p ... 017-rates/

All 3 of you would probably cost under $1,000/year.

jalbert
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Re: Does it make sense to drop health insurance?

Post by jalbert » Thu Nov 30, 2017 12:05 am

If our health insurance premiums go up 20 percent per year, we will be looking at premiums of $2,700 per month five years from now.
What health insurance premiums might look like five years from now really should have little or no bearing on your decision to enroll in coverage for 2018.
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Re: Does it make sense to drop health insurance?

Post by Epsilon Delta » Thu Nov 30, 2017 12:39 am

Artsdoctor wrote:
Wed Nov 29, 2017 3:31 pm
I don't have the data to back this up, but I think you'd be hard-pressed to find someone who's had a significant illness in the past you would recommend going without coverage. Usually, the people who drop coverage have never been sick and are sometimes operating under the illusion that if you exercise and eat well, you won't get sick. That sort of thought process is magical thinking.
For a majority, probably a vast majority, of customers the insurance company pays less (over any time frame you want) in claims than they receive in premiums. Most people do not get (very) sick and could pay for needed care out of pocket if they didn't buy insurance, and we had some sort of sane billing system for cash payments. It's not magical thinking to think that you won't get an expensive illness. Most people don't.

If you want magical thinking it's the idea that medical insurance will avoid the worst case of your child dieing. A worse case* is your child is dieing and there is nothing that can be done about it.

* There is no worst case. The idea of a worst case shows a lack of imagination.

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Re: Does it make sense to drop health insurance?

Post by HIinvestor » Thu Nov 30, 2017 1:27 am

To me, the worst case is by deciding to go without insurance for xx days/months/years, you and your loved ones incur huge health costs, are unable to get good care with permanent bad health consequences, and become unable to get insurance at any price due to pre-existing conditions you all develop.
Last edited by HIinvestor on Thu Nov 30, 2017 2:44 am, edited 1 time in total.

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Re: Does it make sense to drop health insurance?

Post by White Coat Investor » Thu Nov 30, 2017 1:30 am

fredflinstone wrote:
Wed Nov 29, 2017 12:24 pm
I recently retired from the quarry (early retirement). The wife (Wilma) and I are too young to go on Medicare so we buy health insurance on our own through the individual market. In our town of Bedrock, premiums are going up big-time in 2018. We will have to pay more than $1,300 per month for our family of three (me, Wilma, and Pebbles). That's for a plan with a family deductible of about $10,000. So we would pay $25,600 out of pocket ($15,600 in premiums plus a $10,000 deductible) before we would receive even a penny from the insurer.

Let's say I work as an independent contractor and our income next year will be $120,000. If we go without health insurance, we will have to pay a penalty to the federal government of $3,000.

We have substantial assets and of course I worry about a very high cost health care expense that would wipe out those assets. That said, there surely is a point at which premiums become so high that even a risk-averse person would prefer to go without coverage. For example, even a highly risk-averse person would not pay $100,000 per month for a health insurance plan since surely it would be more sensible in that case to simply self-insure.

My question is: Is my family at the point where it is rational to forego coverage?

Obviously, I am taking some liberty with the names of my family members and other details, but the numbers are roughly correct and this is a serious question.

Thoughts?
What did you do to Bam Bam?

Your best bet if you want to save money is Health Sharing. I do the math every year and so far I'm still coming out ahead with traditional insurance thanks to the tax deductions. But it won't take much more of a rise in my premiums to change that.
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Re: Does it make sense to drop health insurance?

Post by White Coat Investor » Thu Nov 30, 2017 1:40 am

delamer wrote:
Wed Nov 29, 2017 1:22 pm
It is my understanding that doctors are not legally required to treat either Medicaid or Medicare patients, and that many do not because of the low reimbursement rates.

So I assume that a doctor could refuse to treat you if you did not have the insurance, other than in an emergency situation.

Does anyone know if that is true?
Of course its true. In fact it's bizarre that emergency rooms are required to provide unreimbursed medical care but grocery stores aren't required to provide free food and hotels aren't required to provide free shelter.

But beyond that, Medicare certainly does not entitle you to care. In Anchorage, my parents can't find a primary care physician who takes Medicare. Period. There is a "Medicare clinic" or two but you'll see a PA. And there's very high turnover of them. That may spread to other states. BTW- I'd love to be proven wrong about that if anyone knows a doc in AK taking new Medicare patients. So far, no luck in several years of looking.
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Re: Does it make sense to drop health insurance?

Post by White Coat Investor » Thu Nov 30, 2017 1:43 am

alfaspider wrote:
Wed Nov 29, 2017 1:28 pm
Some years ago, the CFO of my company retired. This person's net worth is likely in the $50m range. One of their biggest regrets is that they didn't negotiate retiree medial benefits as part of the retirement package.

The issue was not cost, but the fact that dealing with medical providers when you are uninsured is a huge pain. But open market plans did not have the same network and wide availability. Add to that- when you get hit by a bus and taken to the hospital unconscious the hospital may assume you are indigent if you do not have evidence you are insured. In a perfect world, none of that would impact care- but it might. Is it really worth the risk if you can afford it?
That's not going to affect the care you get. Nobody does a wallet biopsy in a situation like that. But you will be sent a bill after you recover (or if you don't, the estate will get the bill.)

The bigger issue is being diagnosed with a tumor when you don't have insurance and discharged from the ED to follow-up as an outpatient.
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Re: Does it make sense to drop health insurance?

Post by Tamarind » Thu Nov 30, 2017 7:36 am

I don't think I could in good conscience advise OP to drop coverage, particularly because we're taking about a family. A lot of folks here taking about worst case scenarios that are relatively predictable and planned, like heart bypass surgeries.

There is a lot further to go than that for worse. How about repairing a brain aneurysm, plus physical therapy in recovery? How about traumatic injury including the brain plus other organs due to car accident? How about time in the ICU? How about pediatric cancer? These kinds of bills can run into the millions, and they are not especially dependent on lifestyle risk factors.

A dear friend of mine with a young child died suddenly a few years back of ARDS. She spent a week on a respirator in an induced coma. She had only minimal life insurance through her work, but her health insurance covered her end-of-life bills that otherwise would have eaten not only the life insurance payout, but also her family's whole savings. She was the breadwinner. Health insurance saved her survivors from having their grief compounded by bankruptcy.

I don't think I saw anyone ask OP yet if he and Wilma have adequate life and disability insurance. That could partially offset the risks. But I really think searching harder for a catastrophic-only plan is in order. Something that doesn't start to pay until $100k+, if they like. Surely there's an independent agent somewhere who can help find a policy that for the need.

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Re: Does it make sense to drop health insurance?

Post by JBTX » Thu Nov 30, 2017 9:43 am

White Coat Investor wrote:
Thu Nov 30, 2017 1:40 am
delamer wrote:
Wed Nov 29, 2017 1:22 pm
It is my understanding that doctors are not legally required to treat either Medicaid or Medicare patients, and that many do not because of the low reimbursement rates.

So I assume that a doctor could refuse to treat you if you did not have the insurance, other than in an emergency situation.

Does anyone know if that is true?
Of course its true. In fact it's bizarre that emergency rooms are required to provide unreimbursed medical care but grocery stores aren't required to provide free food and hotels aren't required to provide free shelter.

But beyond that, Medicare certainly does not entitle you to care. In Anchorage, my parents can't find a primary care physician who takes Medicare. Period. There is a "Medicare clinic" or two but you'll see a PA. And there's very high turnover of them. That may spread to other states. BTW- I'd love to be proven wrong about that if anyone knows a doc in AK taking new Medicare patients. So far, no luck in several years of looking.
It’s my understanding you can still go to a doctor who doesn’t take Medicare, they charge you whatever they will, and you can independently file the claim with Medicare, correct? That I am sure is a major PITA and you will almost certainly take a haircut on the Medicare reimbursement but it’s better than nothing.

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Re: Does it make sense to drop health insurance?

Post by wrongfunds » Thu Nov 30, 2017 10:28 am

jayk238 wrote:
Wed Nov 29, 2017 2:54 pm
I'm sorry but I have to disagree strongly with this statement. It drips with a certain amount of envy and is patently untrue. Healthcare costs are enormously expensive but not because of doctors incomes despite what people have you believe.

Doctors income constitute 8% of expenses at apprx 80billion in a 2.5 trillion economy.
If we cut off salaries for doctors and go to zero the healthcare industry would be 1.7 trillion dollars.
I have no axe to grind here but the above math just does not add up. All of the numbers are internally inconsistent. Being an engineer, this really gets my goat. Who provided this data?

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Re: Does it make sense to drop health insurance?

Post by Artsdoctor » Thu Nov 30, 2017 10:37 am

Epsilon Delta wrote:
Thu Nov 30, 2017 12:39 am
Artsdoctor wrote:
Wed Nov 29, 2017 3:31 pm
I don't have the data to back this up, but I think you'd be hard-pressed to find someone who's had a significant illness in the past you would recommend going without coverage. Usually, the people who drop coverage have never been sick and are sometimes operating under the illusion that if you exercise and eat well, you won't get sick. That sort of thought process is magical thinking.
For a majority, probably a vast majority, of customers the insurance company pays less (over any time frame you want) in claims than they receive in premiums. Most people do not get (very) sick and could pay for needed care out of pocket if they didn't buy insurance, and we had some sort of sane billing system for cash payments. It's not magical thinking to think that you won't get an expensive illness. Most people don't.

If you want magical thinking it's the idea that medical insurance will avoid the worst case of your child dieing. A worse case* is your child is dieing and there is nothing that can be done about it.

* There is no worst case. The idea of a worst case shows a lack of imagination.
I'm not sure how we went from discussing the pros and cons of having medical insurance to the death of a child. Both occurrences are not common: you're right that most people remain healthy and most children do not die. The issue will always be which statistic are you? You will not find a reasonable physician who will tell you that if you maintain a healthy lifestyle, you will never be diagnosed with a serious illness. I will freely admit that my take is skewed by the fact that I see "exceptions" every single day, but there are enough of those exceptions to keep all of us in the healthcare field employed.

You're going to buy insurance in most situations without using it. It's the same for homeowners and car owners. If you play the odds, you will not need any of the insurance you have. If you're going to go without health insurance, then you may as well cancel all of your other insurance policies that you can.

wrongfunds
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Re: Does it make sense to drop health insurance?

Post by wrongfunds » Thu Nov 30, 2017 10:50 am

I can't fathom the idea of buying insurance after getting sick. Why do people believe that purchasing insurance is birthright and no politics is involved whether pre-existing conditions are covered or not? You would not expect to be able buy collision insurance on the car after it gets in to an accident!

Another illogical thought seems to be that after 65 the government will take care all these health care issues. What makes people believe that there no politics involved in that belief?

One can NOT discuss health care in this country without involving politics. The sooner you understand that, sooner we can find a solution.

DetroitRick
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Re: Does it make sense to drop health insurance?

Post by DetroitRick » Thu Nov 30, 2017 11:26 am

The single biggest issue to consider is simply the potential for catastrophic, expensive and unpredictable health events. These can easily happen to healthy people without warning. I think most of us can think of a few examples from people in our lives - cancer, stroke, accident, etc. These are the events that can make that large premium and deductible seem like chump change. Even the ones you mention. Everybody wants to think these things are predictable, but they are not. With substantial assets, there is big financial risk. There is a reason why medical debts are such a key factor behind bankruptcy filings in this country.

I think there is a point where it makes sense to just risk it. That point would be different for each of us and I wouldn't give advice in that regard. I don't even know at what point I would make that decision to go without insurance. But I, for example, would be unwilling to fork out, say, $50k per year in deductible and premium - no way. But $20k I have tolerated in the recent past (not joyfully though). My personal cutoff would probably be somewhere in between I suppose.

The second issue is that without insurance, your cost for doctors, labs, prescriptions and hospitals will change. They will be substantially higher, except those that you can negotiate down. Some you would be able to negotiate fairly easily, some you would not - and how do you know that in advance? I look at our (wife and me) medical costs over the last 5 years or so - modest and we are in good health - the biggest benefit we received from insurance is simply those reduced prices. Could we have done the same as uninsured by negotiating? I don't think so.

Anyway, for me personally, I would never consider not having any health insurance as things currently stand. The only time I would make that choice is if I were either destitute (I'd pick eating and shelter over insurance) or extremely rich.

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Re: Does it make sense to drop health insurance?

Post by delamer » Thu Nov 30, 2017 11:30 am

White Coat Investor wrote:
Thu Nov 30, 2017 1:40 am
delamer wrote:
Wed Nov 29, 2017 1:22 pm
It is my understanding that doctors are not legally required to treat either Medicaid or Medicare patients, and that many do not because of the low reimbursement rates.

So I assume that a doctor could refuse to treat you if you did not have the insurance, other than in an emergency situation.

Does anyone know if that is true?
Of course its true. In fact it's bizarre that emergency rooms are required to provide unreimbursed medical care but grocery stores aren't required to provide free food and hotels aren't required to provide free shelter.

But beyond that, Medicare certainly does not entitle you to care. In Anchorage, my parents can't find a primary care physician who takes Medicare. Period. There is a "Medicare clinic" or two but you'll see a PA. And there's very high turnover of them. That may spread to other states. BTW- I'd love to be proven wrong about that if anyone knows a doc in AK taking new Medicare patients. So far, no luck in several years of looking.

Thanks for confirming. I hesitate to make blanket statements because there is frequently someone on the forum who knows of one exception to the rule in a county in South Dakota with 400 residents that requires doctors to see anyone who can pay $20 at the time of their visit, or some such outlier.

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Re: Does it make sense to drop health insurance?

Post by Teague » Thu Nov 30, 2017 11:33 am

6 years ago I had surgery for cancer, which was apparently successful. I belonged to a HMO at the time but wanted a very well-known surgeon to do the job, rather than the local one assigned by the HMO. I managed to get the total bill down to $40,000 (from a rack rate of $120,000) and paid cash out of my pocket for the presumably better care. I was happy to pay. After all, if I died from cancer, it wouldn't matter very much how much money I had left, would it?

After that I switched to more expensive insurance that would give me more covered options should anything else serious happen.

Good thing I switched. This year I received radiation therapy (the cancer had returned) which was billed at a rack rate of $440,000. Thanks to the better insurance, I was able to be treated at an internationally known tertiary referral hospital, and my total cost (besides lodging out of town) was about $1,000. Best estimate based on current primary literature is about an 80% chance this finally cured the problem. That's good, but of course, there is no guarantee I couldn't get some equally or more expensive condition as time marches on. I'm 58 years old, and have plenty of time to develop another malady (no thank you.)

My monthly insurance premium is not cheap, but I am beyond happy to pay it. Just one anecdotal story, but the point is, this stuff really does happen.
Semper Augustus

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Re: Does it make sense to drop health insurance?

Post by bhsince87 » Thu Nov 30, 2017 12:10 pm

I would not drop, no way. As contractors, a better option might be to cut back working so you can recieve ACA subsidies. Someone laid out some good math further up thread.

In the case of my wife and I (ages 50 and 52), our "cheapest" option next year is $2350 per month, with a $4k deductable. So we're essentially looking at $32000 per year. Yes, that's a lot of money. In a typcal year, we would never come close to spending that much on health care costs alone. But as other have said, it's insurance.

However, if we keep our income under about $65k, we're eligable for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.

I beleive for a family of three, the number is around $80k max. With some 401k and HSA contributions, it might not be hard for you to get there.
Retirement: When you reach a point where you have enough. Or when you've had enough.

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Re: Does it make sense to drop health insurance?

Post by bottlecap » Thu Nov 30, 2017 12:35 pm

Let's say you work for 43 years and your average monthly premium is $1,500 (slightly more than OP because a) that's where it will be in two years and b) the increases will always outpace inflation). That's 516 months of premiums from 22 to 65. Compounded annually over that time at a rate of 5%, that's $2.7 million by 65.

Cost of getting treated for a stroke is, let's say, $50,000 (https://www.ncbi.nlm.nih.gov/pubmed/23954598; http://health.costhelper.com/treating-stroke.cost.html). These suggest the average cost is probably less.

Cost of getting treated for cancer is variable. Let's say it costs $50,000. (https://costprojections.cancer.gov/annual.costs.html) Sure, you could get a rare form that costs a zillion dollars, but outside of that if you actually go to the doctor regularly, your chances of having something that can't be treated or so advanced that it costs a lot more are pretty slim.

You can argue with the numbers, but if you assume the links are true, the numbers are at least on the conservative side.

Let's say you make $100,000 per year and can save about $600 per month (you've got kids, a mortgage, expected "unexpected" expenses, taxes, and $18,000 per year in health insurance premiums alone, after all). Your retirement, growing at the same rate, amounts to $1,081,000 at 65 years old.

Withdrawing 4% per year allows you $43,000 per year - in today's dollars - in retirement. Don't forget you've still got medicare premiums to pay!

So, $1,100,000 in retirement or $4 million in retirement, perhaps minus a $100,000 in medical costs if you're unlucky. We have no choice but to deal in averages.

I know "retirement" isn't everything, but this is a "numbers" game and a good way to quantify it for Bogleheads. It also doesn't account for the stress of coming up with the monthly healthcare premiums, which, from the posts, is obviously not an issue and never will be an issue for most Bogleheads.

Anyone change their minds even slightly?

JT

Rupert
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Re: Does it make sense to drop health insurance?

Post by Rupert » Thu Nov 30, 2017 1:08 pm

bottlecap wrote:
Thu Nov 30, 2017 12:35 pm
Let's say you work for 43 years and your average monthly premium is $1,500 (slightly more than OP because a) that's where it will be in two years and b) the increases will always outpace inflation). That's 516 months of premiums from 22 to 65. Compounded annually over that time at a rate of 5%, that's $2.7 million by 65.

Cost of getting treated for a stroke is, let's say, $50,000 (https://www.ncbi.nlm.nih.gov/pubmed/23954598; http://health.costhelper.com/treating-stroke.cost.html). These suggest the average cost is probably less.

Cost of getting treated for cancer is variable. Let's say it costs $50,000. (https://costprojections.cancer.gov/annual.costs.html) Sure, you could get a rare form that costs a zillion dollars, but outside of that if you actually go to the doctor regularly, your chances of having something that can't be treated or so advanced that it costs a lot more are pretty slim.

You can argue with the numbers, but if you assume the links are true, the numbers are at least on the conservative side.

Let's say you make $100,000 per year and can save about $600 per month (you've got kids, a mortgage, expected "unexpected" expenses, taxes, and $18,000 per year in health insurance premiums alone, after all). Your retirement, growing at the same rate, amounts to $1,081,000 at 65 years old.

Withdrawing 4% per year allows you $43,000 per year - in today's dollars - in retirement. Don't forget you've still got medicare premiums to pay!

So, $1,100,000 in retirement or $4 million in retirement, perhaps minus a $100,000 in medical costs if you're unlucky. We have no choice but to deal in averages.

I know "retirement" isn't everything, but this is a "numbers" game and a good way to quantify it for Bogleheads. It also doesn't account for the stress of coming up with the monthly healthcare premiums, which, from the posts, is obviously not an issue and never will be an issue for most Bogleheads.

Anyone change their minds even slightly?

JT
No, because the choices aren't limited to (a) buy insurance at a cost of $1500/month or (b) go without insurance. I would give up my dream of being self-employed in favor of taking a job with subsidized health insurance before I would place my family's health OR my successful retirement at risk.

[OT comments removed by admin LadyGeek]

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Re: Does it make sense to drop health insurance?

Post by LiterallyIronic » Thu Nov 30, 2017 1:28 pm

bhsince87 wrote:
Thu Nov 30, 2017 12:10 pm
However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.
This confuses me. Our household income is under $65k (which, by the way, I would not classify as "low") and the insurance we have is way more than $55/month. Per person. With a family deductible of $9,000 and perfect health. How could you have higher income than us and still get subsidized into very cheap health insurance?
EnjoyIt wrote:
Wed Nov 29, 2017 2:20 pm
LiterallyIronic wrote:
Wed Nov 29, 2017 1:22 pm

But, then again, I'm pretty jaded by health insurance because we had health insurance, including maternity coverage, and we still ended up paying the entire $12,000 bill for our baby being delivered earlier this year with insurance not chipping in a cent.
I had a friend with a high deductible who paid the hospital in advance to have the baby and negotiated a rate in case of c-section. Ended up costing a fraction of the $12k you paid. I can't remember the exact figure, but I was amazed at how little it was to pay in advance.
We paid $4,000 in advance. Didn't help at all. We paid the entire $6,000 bill for the emergency c-section, the entire $3,000 bill for my wife's four day recovery period, and the entire $3,000 bill for my baby's four day hospital stay. We paid the remaining $8,000 (after the $4,000 prepaid) in the weeks after the delivery, as the many, many bills landed in our mailbox.

How, you ask? Well, we kept my wife on her old health insurance, which wasn't through a job, despite me having health insurance through my job. This was because hers offered maternity coverage and mine didn't. So her health insurance had a deductible of $7,500 and a maternity deductible of $7,500. Mine had a deductible of $4,500. When she had the baby delivered via emergency c-section, the cost of the c-section was applied against the maternity deductible. Since it was less than $7,500, we paid for the entire c-section out of pocket. My wife's recovery from the c-section, however, was applied to her regular deductible. This, too, was under $7,500, so we paid for the entire recovery out of pocket as well.

Then there was the baby's stay. Well, we had the option of putting the baby on my wife's insurance, or on my insurance. Well, if we put the baby on my wife's, then her deductible would change from the $7,500 individual deductible to a $15,000 family deductible and therefore the baby's stay wouldn't hit the deductible and we'd pay for the whole thing out of pocket. Or if we put the baby on my plan, it would go from a $4,500 individual deductible to a $9,000 family deductible, which also wouldn't get get. We had to pay out of pocket for the baby's stay either way. We ended up putting the baby on mine because it had the smaller increase in premiums that way.

We told the hospital that we weren't going through insurance on the baby's stay, so we got the 40% discount for paying in cash, which resulted in that $3,000 figure instead of $5,000. Otherwise it would've been a $14,000 delivery. Instead it was $12,000 to have the baby, after paying hundreds every month for supposed insurance to cover us and maternity expenses.

If we hadn't been on separate insurance plans, just mine, then we wouldn't've had maternity coverage, so we'd still end up paying the $6,000 for the c-section, and my wife's and baby's hospital stays (a combined $8,000, because we wouldn't've had the 40% cash discount) still would've come up short of the $9,000 deductible and had to pay for the entire thing anyway. Or if we would've been combined on my wife's insurance, the deductible wouldn't've been hit either, so we'd still have to pay for the entire thing.

You can see why I got pretty jaded about the whole thing earlier this year. I asked the lady at the hospital's finance department, when I was paying one of the bills, "How do most people manage to pay a $12,000 bill? Surely most don't have that much lying around." The answer was, "Most people either: A) are on Medicaid; B) are on WIC; or C) have their baby and then we never hear from them again." So that's great.
Last edited by LiterallyIronic on Thu Nov 30, 2017 1:52 pm, edited 1 time in total.

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MP123
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Re: Does it make sense to drop health insurance?

Post by MP123 » Thu Nov 30, 2017 1:34 pm

LiterallyIronic wrote:
Thu Nov 30, 2017 1:28 pm
bhsince87 wrote:
Thu Nov 30, 2017 12:10 pm
However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.
This confuses me. Our household income is under $65k (which, by the way, I would not classify as "low") and the insurance we have is way more than $55/month. Per person. With a family deductible of $9,000 and perfect health. How could you have higher income than us and still get subsidized into very cheap health insurance?
Are you buying ACA insurance from the Exchange? With an income under $65k and a family size of at least two you should be getting substantial subsidies.

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Re: Does it make sense to drop health insurance?

Post by Yooper16 » Thu Nov 30, 2017 1:45 pm

I worked with a lady, whose 3rd child she and hubby referred to as their"million dollar baby" as the first couple of years of life, insurance billings totaled in excess of a million. The company hubby got is insurance through self insured or something to that effect. If I recall correctly it no longer provides coverage directly but provides some form of premium assistance. I retired and left the area about 18 months ago.

Her water broke at about 5 months and she spent the next 4 in isolation and the little one upon birth spent her first number of months in neo natal ICU. Don't know what the status is now, as I have retired and moved but the little one has significant developmental issues. It wasn't until around 2 years old that the little one could hold her head up without support and as of 18 months ago(when I left) still could not form a word and was only beginning to crawl.

There probably is a point when going without insurance makes sense. But at the present prices even with as crazy as they may seem--- not yet.

I would also not be so sure that the "retirement" exclusion will stay forever--- things change.

smitcat
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Re: Does it make sense to drop health insurance?

Post by smitcat » Thu Nov 30, 2017 1:46 pm

MP123 wrote:
Thu Nov 30, 2017 1:34 pm
LiterallyIronic wrote:
Thu Nov 30, 2017 1:28 pm
bhsince87 wrote:
Thu Nov 30, 2017 12:10 pm
However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.
This confuses me. Our household income is under $65k (which, by the way, I would not classify as "low") and the insurance we have is way more than $55/month. Per person. With a family deductible of $9,000 and perfect health. How could you have higher income than us and still get subsidized into very cheap health insurance?
Are you buying ACA insurance from the Exchange? With an income under $65k and a family size of at least two you should be getting substantial subsidies.
Yes -absolutely. Better to view it as a health tax rather than insurance.

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bottlecap
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Re: Does it make sense to drop health insurance?

Post by bottlecap » Thu Nov 30, 2017 1:52 pm

Rupert wrote:
Thu Nov 30, 2017 1:08 pm

No, because the choices aren't limited to (a) buy insurance at a cost of $1500/month or (b) go without insurance. I would give up my dream of being self-employed in favor of taking a job with subsidized health insurance before I would place my family's health OR my successful retirement at risk.

[OT comments removed by admin LadyGeek]
It's okay not to want to answer the question, but you can't a) come up with a fantasy third option or b) change the rules.

My example does not assume self-employment. But if it did, you present a false choice. If your earning ability is $100,000, no one is going to pay you more than that. Your insurance, though subsidized by your employer so you don't see it, will come out of your $100,000. Not to mention that employer-sponsored plans are usually more expensive after you account for the employee and employer's contribution.

So if you are being honest from an economic theory perspective, when you become a W-2 employee, you won't get more than $100,000 total compensation and all insurance costs come out of that whether you see it or not.

JT

LiterallyIronic
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Re: Does it make sense to drop health insurance?

Post by LiterallyIronic » Thu Nov 30, 2017 2:02 pm

MP123 wrote:
Thu Nov 30, 2017 1:34 pm
LiterallyIronic wrote:
Thu Nov 30, 2017 1:28 pm
bhsince87 wrote:
Thu Nov 30, 2017 12:10 pm
However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.
This confuses me. Our household income is under $65k (which, by the way, I would not classify as "low") and the insurance we have is way more than $55/month. Per person. With a family deductible of $9,000 and perfect health. How could you have higher income than us and still get subsidized into very cheap health insurance?
Are you buying ACA insurance from the Exchange? With an income under $65k and a family size of at least two you should be getting substantial subsidies.
No. Wife has a grandmothered plan that included maternity coverage, so we kept it. It's at $108/month to cover her. Guess we don't need maternity coverage anymore, though. Mine (and my baby's) is through my work, and it's $131/month (after my work apparently pays $375/month) to cover the two of us. So we're at $239/month, roughly 5% of our gross household income.

michaeljc70
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Re: Does it make sense to drop health insurance?

Post by michaeljc70 » Thu Nov 30, 2017 2:22 pm

MP123 wrote:
Thu Nov 30, 2017 1:34 pm
LiterallyIronic wrote:
Thu Nov 30, 2017 1:28 pm
bhsince87 wrote:
Thu Nov 30, 2017 12:10 pm
However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.
This confuses me. Our household income is under $65k (which, by the way, I would not classify as "low") and the insurance we have is way more than $55/month. Per person. With a family deductible of $9,000 and perfect health. How could you have higher income than us and still get subsidized into very cheap health insurance?
Are you buying ACA insurance from the Exchange? With an income under $65k and a family size of at least two you should be getting substantial subsidies.
You might want to check this out:
https://www.kff.org/interactive/subsidy-calculator/

For two people making $65k in my zip and at our ages, we get zero subsidy. Even taking US average, 2 people, 60 yo, there is no subsidy. The levels people quote for getting subsidies are often incorrect. It is a myth any family of 4 making $90k is going to get a subsidy.

Even when I put in 10013 (Soho NYC) and $65k for a couple, no subsidy.

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MP123
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Re: Does it make sense to drop health insurance?

Post by MP123 » Thu Nov 30, 2017 2:30 pm

michaeljc70 wrote:
Thu Nov 30, 2017 2:22 pm
MP123 wrote:
Thu Nov 30, 2017 1:34 pm
LiterallyIronic wrote:
Thu Nov 30, 2017 1:28 pm
bhsince87 wrote:
Thu Nov 30, 2017 12:10 pm
However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law.
This confuses me. Our household income is under $65k (which, by the way, I would not classify as "low") and the insurance we have is way more than $55/month. Per person. With a family deductible of $9,000 and perfect health. How could you have higher income than us and still get subsidized into very cheap health insurance?
Are you buying ACA insurance from the Exchange? With an income under $65k and a family size of at least two you should be getting substantial subsidies.
You might want to check this out:
https://www.kff.org/interactive/subsidy-calculator/

For two people making $65k in my zip and at our ages, we get zero subsidy. Even taking US average, 2 people, 60 yo, there is no subsidy. The levels people quote for getting subsidies are often incorrect. It is a myth any family of 4 making $90k is going to get a subsidy.

Even when I put in 10013 (Soho NYC) and $65k for a couple, no subsidy.
But try it again with $64,900 as income. That's the subsidy "cliff".

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MP123
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Joined: Thu Feb 16, 2017 3:32 pm

Re: Does it make sense to drop health insurance?

Post by MP123 » Thu Nov 30, 2017 2:42 pm

michaeljc70 wrote:
Thu Nov 30, 2017 2:22 pm
You might want to check this out:
https://www.kff.org/interactive/subsidy-calculator/

For two people making $65k in my zip and at our ages, we get zero subsidy. Even taking US average, 2 people, 60 yo, there is no subsidy. The levels people quote for getting subsidies are often incorrect. It is a myth any family of 4 making $90k is going to get a subsidy.

Even when I put in 10013 (Soho NYC) and $65k for a couple, no subsidy.
So with that calculator: US average, 2 60 year olds making $65,000 get no subsidy and pay $2039/mo for health insurance.

Same scenario but at $64,900 income they do get subsidies and pay only $517/mo.

That extra $100 in income costs them $18,259 in lost subsidies.

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