Why buy medical insurance ?

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beyou
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Why buy medical insurance ?

Post by beyou »

Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
mhalley
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Re: Why buy medical insurance ?

Post by mhalley »

You can’t predict how much medical costs will be because of the possibility of catastrophic illness or injury. You can get hit by a bus or have a heart atttack or cancer diagnosis out of the blue. If that happens, you can probably get treated, but it could result in bankruptcy and facing living only in SS upon retirement. You are rolling the dice. Do you feel lucky, punk? Well, do ya? (Quote from Dirty Harry movie). ;)
adamthesmythe
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Re: Why buy medical insurance ?

Post by adamthesmythe »

beyou wrote: Mon Sep 21, 2020 8:00 pm Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?
Likely? Probably not. But we don't buy insurance for likely outcomes.

If you look around you you will probably find that you know people who are doing just fine- now- after some very expensive medical care. Heart surgery comes to my mind because of a relative but there are many other conditions. Again, not likely, but, well, around.

Going bare is not a bad choice for those without family or much in the way of assets.

Oh. And something could hit you next month...after you have put away...$2K.
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Nate79
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Re: Why buy medical insurance ?

Post by Nate79 »

Worst case? Drain all your money and end in bankruptcy. You can't self-insure.
sailaway
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Re: Why buy medical insurance ?

Post by sailaway »

My parents spent an inordinate amount of time in hospitals in their 50s. My mother has no gall bladder, appendix or uterus, plus she had severe flu a couple of times (maybe only once in her 50s?) My father has fused discs and had some weirdo thyroid problem that resolved itself before they could schedule radiation. Mom and I often comment that she is healthier and more active now than she was 20 years ago.

Active people sometimes injure themselves.

Then there are all kinds of cancers, especially if you start skipping screenings and wait until they have take hold...
stats99
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Re: Why buy medical insurance ?

Post by stats99 »

My 26 year old son had a lung collapse, needed an operation, 10 days in hospital, total $130,000.
wanderer
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Re: Why buy medical insurance ?

Post by wanderer »

A 2-hour e-room visit last month was billed at over $10k. Insurance negotiated rates knocked that in half. Some went to covering deductible and some to the 80/20 copy so I’m out $1200. Addressing that issue now, and my normally self managed back issues flared up.
So I’m out over $8k this year and insurance discounts and coverage together covered over $20k.

I have been 17 years since my last medical claim other than routine exams and tests. Was never on medication until now. Earlyish 60s, pre-medicare

As the other poster said “Do you feel lucky”😃
123
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Re: Why buy medical insurance ?

Post by 123 »

It doesn't take much to create a $250K hospital bill. An traffic accident, a slip and fall, an assault, let alone a heart attack, stroke, etc. Some hospitals are significantly more expensive than others and you likely have no control over what hospital you go to if you're unconscious.

Even with insurance you can have significant out-of-pocket expense, the value of insurance is in the negoitiated pricing.
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MarkRoulo
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Re: Why buy medical insurance ?

Post by MarkRoulo »

beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
Imagine, hypothetically (of course), that mid-40s you have a cold/flu that won't clear up and you schedule an appointment with your primary care physician. Imagine that the conversation goes something like this:

Her: So, what brings you in.
You: I've got some sort of cold/flu thing that isn't clearing up. Also, I'm out of breath after climbing stairs. That's weird.
Her: Okay (takes out stethascope and listens to chest ... eyes widen).
...
Her: I think you are going to need heart valve replacement surgery. I want you to go get some blood work done NOW. I'll call the blood folks and tell them not to close.

... three weeks later you are taking a two month leave of absence to recover from heart valve reconstruction (hooray! reconstruction! Not replacement!) surgery.


This is RARE. Which is why we can insure against it. If this happened routinely insurance would not be provided. You can't purchase insurance for your food (or electric) bill going up.

If you go without insurance you will very likely be fine.

Insurance is for that one or two percent chance.
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willthrill81
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Re: Why buy medical insurance ?

Post by willthrill81 »

beyou wrote: Mon Sep 21, 2020 8:00 pmAm I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?
No, you're definitely not likely to spend more than that. If you were, then the insurance would cost even more.
beyou wrote: Mon Sep 21, 2020 8:00 pmWhat worst case scenarios make the insurance necessary ?
Because it is very possible that either you or your spouse could encounter an expense that would far exceed $240k. Many cancers will cost far more than that to treat. One heart attack can cost more than that.

We only buy insurance to cover risks that would be financially detrimental if they occurred to us. Healthcare is definitely one of those areas for most of us plebeians. Those with portfolios exceeding $10 million can probably self-insure but I would imagine that few do.

If you're balking at the cost of insurance, you might want to check out health sharing ministries. They can be a fraction of the cost of insurance, and I've heard mostly good things about them, more so than traditional insurance actually. Read the fine print though. They may exclude pre-existing conditions and certain treatments that insurance would. But contrary to what some hear fear, I've not heard of any of the larger ministries ever failing to pay for qualified expenses.
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Emilyjane
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Re: Why buy medical insurance ?

Post by Emilyjane »

Breast cancer at 62 yo last year. Not exactly uncommon, unfortunately. Surgery, chemo, radiation came to $400,000 over a years time. I was glad I had insurance.
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runninginvestor
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Re: Why buy medical insurance ?

Post by runninginvestor »

beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
Varying sources will give different answers, but I generally see average costs around $5,000 - $10,000 a year for those 50+ in reports. Off the top of my head, I can't recall if those are before or after insurance.

In my personal experience, I've had a year of $6 million in hospital charges (paid OOP max of <$6,000), another year of $200K (similar OOP max).

Worst case scenarios would have been really crappy without insurance!

[Edit to add] If you are in a position where you have to worry about medical costs (hopefully never), the last thing you want to worry about is how you will pay for it/how much it will be.
Last edited by runninginvestor on Mon Sep 21, 2020 9:39 pm, edited 1 time in total.
wolingfeng
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Re: Why buy medical insurance ?

Post by wolingfeng »

Unfortunately US is the most expensive when it comes to medical care. If you are diagnosed with any chronic disease, I am not even taking about rare ones, it may take a huge financial toll without health insurance. Thousands, tens of thousands... it’s sad but real.
coachd50
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Re: Why buy medical insurance ?

Post by coachd50 »

beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
As someone mentioned above, the negotiated rates are SIGNIFICANTLY lower than what someone uninsured would be paying. So yes, I can easily see you paying more than $240,000 for a few issues.

Also, keep in mind that your scenario here is that the expense will be at the end of the time period, once you have accumulated that sum. Isn't it just as likely that any unexpected medical issue would occur much earlier in that window? What about avery modest $42,000 expense the 5th month you are uninsured?
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

When insurance companies deny claims and/or docs refuse to take patients at negotiated rates, seems to me you aren’t paying for much. You wont know how good is your
insurance until you need it, and after you have spent 5 or 6 figures. Paying for insurance really bothers me unless black and while (term life). Most insurances you pay and have to fight tooth and nail to get claims paid. Larger the claim more of a fight, and those are the claims that make it “worthwhile” to buy. We all know horror stories.

I have been lucky with my employer provided insurance, and likely to pay for Cobra for the 18 months, not sure what I’ll do after that. Keep thinking maybe I should not retire until 65, but the thought of another decade is really unattractive to me (did my 35+ years already).
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JoMoney
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Re: Why buy medical insurance ?

Post by JoMoney »

Not something I would advise, but maybe you don't need it :confused It's easy to feel that way when you've never needed any major medical service, but as you get older the odds of something happening grow larger.

FWIW, if you developed some sort of severe chronic condition requiring medical treatment, like kidney failure requiring dialysis, it might qualify you for medicare under SS disability before 65... You might not make it to 65 under conditions that were severe enough for you to qualify, but at least you might have medical coverage under medicare. Unfortunately, you would still need to have had enough recent work (credits) to be considered eligible, and it might be a lengthy process to apply and get approved, requiring medical records, all the while not having coverage...
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quantAndHold
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Re: Why buy medical insurance ?

Post by quantAndHold »

When dad had his first heart attack, the bill, before insurance, for the first six days in the hospital, was $100k.

That was just for the first week of the first heart attack.

Medical insurance is expensive because the need for expensive healthcare is actually pretty common, especially for people who are 50+.
Yes, I’m really that pedantic.
Grt2bOutdoors
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Re: Why buy medical insurance ?

Post by Grt2bOutdoors »

beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
A heart attack will cost you a cool $500K. Your $240K is not enough for that. Get hit by a hit and run driver and the costs could be even more. We like to think - oh, these things won't happen to me, but when your luck runs out, it will really run out if you continue on with thoughts like you write above. You can self insure when you have multiple 7 figures in the bank, but even the folks I personally know who are worth that and more, still pay for health insurance, because it's cheaper.

I spent 4 hours in the ER, false alarm but they pegged me as a heart attack in the ambulance - I got a full workup. The bill was $24K, the discount was $19K, the insurance paid $17K, I was out $2K. A bad prescription cost me $2K. Now, try that with your idea and you'll see your life savings go up faster than a lit match. I won't tell you what the ancillary costs were - hint, it involved multiple trips and special tests with a cardiologist who advised I keep working as long as possible to save for my old age. He then proceeded to tell me about his elderly patients who had to move further away because they never thought they'd live so long and could not afford to pay the property taxes.

I never understand these ideas of self-insurance. Do you drive a car? Would you give up your car insurance on the idea you could self-insure? How about home insurance? You buy insurance to cover the risks that you are not able to or willing to - since many of the costliest health issues involve a hospital or specialist setting, why would you risk it all that you earned over a lifetime? You aren't saving and you aren't taking it with you either.
Last edited by Grt2bOutdoors on Mon Sep 21, 2020 9:34 pm, edited 2 times in total.
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quantAndHold
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Re: Why buy medical insurance ?

Post by quantAndHold »

beyou wrote: Mon Sep 21, 2020 9:07 pm When insurance companies deny claims and/or docs refuse to take patients at negotiated rates, seems to me you aren’t paying for much.
I’m not saying our medical system isn’t broken, because it clearly is. But the number of horror stories people post on the internet, about any topic, not just health insurance, are completely out of proportion with how often they happen in real life. People post when they’re riled up. I had a major illness a couple of years ago. I paid my deductible and copays, hit my out of pocket max, and the insurance company took care of the rest. I had some minor problems with the billing department of one of the medical practices, but I had no trouble getting care, and the insurance company paid exactly what it was supposed to pay. I could post that, but that wouldn’t be a very interesting post.
Yes, I’m really that pedantic.
toofache32
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Re: Why buy medical insurance ?

Post by toofache32 »

What makes everyone think rates are "negotiated?"
phantom0308
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Re: Why buy medical insurance ?

Post by phantom0308 »

Sounds risky. I was a supposedly healthy 26 year old running 30 miles per week, then one day varices in my esophagus ruptured and I was in the hospital for cryptogenic cirrhosis. Total cost for the week and follow up procedures that year were over $100k.
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2pedals
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Re: Why buy medical insurance ?

Post by 2pedals »

toofache32 wrote: Mon Sep 21, 2020 10:08 pm What makes everyone think rates are "negotiated?"
Okay what is it then, down east dickering?
toofache32
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Re: Why buy medical insurance ?

Post by toofache32 »

2pedals wrote: Mon Sep 21, 2020 10:15 pm
toofache32 wrote: Mon Sep 21, 2020 10:08 pm What makes everyone think rates are "negotiated?"
Okay what is it then, down east dickering?
The insurance provides a contract of adhesion. They don't negotiate unless you are a university or hospital.
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Re: Why buy medical insurance ?

Post by MathIsMyWayr »

Don't worry. After you drain every single penny you have, it will be a turn of tax payers and they will feed you.
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2pedals
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Re: Why buy medical insurance ?

Post by 2pedals »

toofache32 wrote: Mon Sep 21, 2020 10:19 pm
2pedals wrote: Mon Sep 21, 2020 10:15 pm
toofache32 wrote: Mon Sep 21, 2020 10:08 pm What makes everyone think rates are "negotiated?"
Okay what is it then, down east dickering?
The insurance provides a contract of adhesion. They don't negotiate unless you are a university or hospital.
The way I see it:

They call a union contract before the signing a negotiation. The contract is binding. Similar to a union contract, before the joining of the network the doctor is in negotiation with the insurance company since doctors can "take it or leave it". If the insurance contract is not good enough for doctors to make enough money they can leave it. Based on all the medical insurance billing horror stories, in many cases the "binding or adhesion" between medical insurance, providers and insured is not strong at times.
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Re: Why buy medical insurance ?

Post by BarbBrooklyn »

At age 49, my very healthy husband had a crick in his neck. After several days, went to doc, thinking pinched nerve.

Doc sent his him to cadio that week (doc couldnt find reason for neck pain, dh's dad died in hisn40s from cardiac illness). Cardio does scan and finds 5.8 cm aortic aneurysm. Go to hospital. Do further testing. Find congenital malformation of valve. Both aneurysm and valve are repaired/replaced. Total cost was in the range of 600k (Top NYC hospital).

Get the insurance.
Last edited by BarbBrooklyn on Mon Sep 21, 2020 10:57 pm, edited 1 time in total.
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toofache32
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Re: Why buy medical insurance ?

Post by toofache32 »

BarbBrooklyn wrote: Mon Sep 21, 2020 10:54 pm At age 49, my very healthy husband had a crick in his neck. After several days, went to doc, thinking pinched nerve.

Doc sent his him to cadio that week (doc couldnt find reason for neck pain, dh's dad died in hisn40s from cardiac illness). Cardio does scan and finds 5.8 mm aortic aneurysm. Go to hospital. Do further testing. Find congenital malformation of valve. Both aneurysm and valve are repaired/replaced. Total cost was in the range of 600k (Top NYC hospital).

Get the insurance.
Is that what was billed or what was paid by insurance? People like to post the more dramatic numbers.
BarbBrooklyn
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Re: Why buy medical insurance ?

Post by BarbBrooklyn »

toofache32 wrote: Mon Sep 21, 2020 10:56 pm
BarbBrooklyn wrote: Mon Sep 21, 2020 10:54 pm At age 49, my very healthy husband had a crick in his neck. After several days, went to doc, thinking pinched nerve.

Doc sent his him to cadio that week (doc couldnt find reason for neck pain, dh's dad died in hisn40s from cardiac illness). Cardio does scan and finds 5.8 mm aortic aneurysm. Go to hospital. Do further testing. Find congenital malformation of valve. Both aneurysm and valve are repaired/replaced. Total cost was in the range of 600k (Top NYC hospital).

Get the insurance.
Is that what was billed or what was paid by insurance? People like to post the more dramatic numbers.
What insurance paid. They did not cover the 3K for the specialized anethesia.

We went to the hosoital that we were sent to by an in network doctor. Turns out the hospital and surgeon were both out of network, but because it was an emergency, they agreed to accept insurance.

The last thing I wanted to do that night was negotiate the price of my husband's aorta. Or decide that a more local hospital was "good enough".

I self insure for a LOT of things. But having seen a friend with a kid with a brain tumor and a couple of very scary non-predictable critical illnesses in my family, I have always opted for medical insurance.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
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cheese_breath
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Re: Why buy medical insurance ?

Post by cheese_breath »

$240K might be fine if you need it at age 64 and 11 months. But what if you need it three months from now?
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

Grt2bOutdoors wrote: Mon Sep 21, 2020 9:22 pm
beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?

I never understand these ideas of self-insurance. Do you drive a car? Would you give up your car insurance on the idea you could self-insure? How about home insurance? You buy insurance to cover the risks that you are not able to or willing to - since many of the costliest health issues involve a hospital or specialist setting, why would you risk it all that you earned over a lifetime?
Well I pay about the same in a year for my house or my car as I will pay for a single month of medical insurance. So I can insure maybe 400k cost to replace my home for a fraction of the cost to lay the same 400k in medical bills I may pay. The chance of a fire is low, similar to chance of having multiple six figure med expenses.

I can shop and change auto/home insurers anytime I want, not with medical ins.

And don’t tell me people go to doctors every year, that is what high deductibles are for, you pay for most of your routine care today.
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

cheese_breath wrote: Mon Sep 21, 2020 11:07 pm $240K might be fine if you need it at age 64 and 11 months. But what if you need it three months from now?
I would not retire early if I didn’t have $240k now.
Kruser64
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Re: Why buy medical insurance ?

Post by Kruser64 »

Just playing devil's advocate, what is so bad about bankruptcy especially if the bulk of your assets are in bankruptcy exempt vehicles?
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cheese_breath
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Re: Why buy medical insurance ?

Post by cheese_breath »

beyou wrote: Mon Sep 21, 2020 11:08 pm
cheese_breath wrote: Mon Sep 21, 2020 11:07 pm $240K might be fine if you need it at age 64 and 11 months. But what if you need it three months from now?
I would not retire early if I didn’t have $240k now.
Then why did your OP refer to setting aside $2K per month over the next decade?
The surest way to know the future is when it becomes the past.
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

This thread for me is for multiple purposes.

1) Thought exercise that may remind me why I should not gag when I start paying COBRA next year.

2) Stimulate thoughts about life beyond COBRA and possibly without ACA. I know politics are banned, but I have a real set of decisions to make. I have to decide I can either get decent insurance, live without it or NOT retire. I cannot make my decision now ignorant of the choices before me. I do have a wife with a serious past medical condition, she is supposedly ok now, but should it recur, the pre-existing condition issue becomes real important. She may have no choice but to go uninsured or one/both must keep working to get an employer plan. Note I think we could have paid her hospital bills in cash for her treatment, easily had we saved $2k/mo for years.
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

cheese_breath wrote: Mon Sep 21, 2020 11:14 pm
beyou wrote: Mon Sep 21, 2020 11:08 pm
cheese_breath wrote: Mon Sep 21, 2020 11:07 pm $240K might be fine if you need it at age 64 and 11 months. But what if you need it three months from now?
I would not retire early if I didn’t have $240k now.
Then why did your OP refer to setting aside $2K per month over the next decade?
It was more a reference to see just how much retiring at 55 may cost you in insurance. Not a small number and that is before you see a single doc.
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William Million
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Re: Why buy medical insurance ?

Post by William Million »

You can gamble on collision insurance for your car. If you lose, you're out $20k or $40k. If you lose without health insurance, you end up broke.

Only people who don't insurance are ultra-rich or poor.
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

Kruser64 wrote: Mon Sep 21, 2020 11:11 pm Just playing devil's advocate, what is so bad about bankruptcy especially if the bulk of your assets are in bankruptcy exempt vehicles?
Wish that was true. Maybe 1/4 -1/3 of retirement savings will be in 401k/IRA.
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

William Million wrote: Mon Sep 21, 2020 11:17 pm You can gamble on collision insurance for your car. If you lose, you're out $20k or $40k. If you lose without health insurance, you end up broke.

Only people who don't insurance are ultra-rich or poor.
I have no issue paying for umbrella insurance, costs me little for protection of millions. And every time you drive you risk such liability. Point is, everything has a value. Umbrella insurance seems a good price for what you get, medical insurance less so. Dental no value at all.
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Re: Why buy medical insurance ?

Post by MathIsMyWayr »

beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy,thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
FIRE, but cannot accept ACA without subsidy? What is "I" for?
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

MathIsMyWayr wrote: Mon Sep 21, 2020 11:23 pm
beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy,thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
FIRE, but cannot accept ACA without subsidy? What is "I" for?
Billionaires don’t get to that point throwing their money away. I am also not buying a yacht, a second vacation home, so I doesn’t apply ?
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kramer
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Re: Why buy medical insurance ?

Post by kramer »

I don't really see any rational way a person with means can go bare in the US ... it's not just the uniquely high cost of US health care, but the unnegotiated rates paid by the uninsured.

But you can go bare in other countries, where cash for services is much more common (and often even the norm). But you have to live there and you have to be willing and ready to spend when the time comes (for even some people with sufficient means their portfolio is not structured in a way for this to be possible). Buy short term or travel insurance for visits to the US.
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William Million
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Re: Why buy medical insurance ?

Post by William Million »

kramer wrote: Mon Sep 21, 2020 11:31 pm I don't really see any rational way a person with means can go bare in the US ... it's not just the uniquely high cost of US health care, but the unnegotiated rates paid by the uninsured.

But you can go bare in other countries, where cash for services is much more common (and often even the norm). But you have to live there and you have to be willing and ready to spend when the time comes (for even some people with sufficient means their portfolio is not structured in a way for this to be possible). Buy short term or travel insurance for visits to the US.
Yeah, in the US, I don't think I could withstand having to negotiate every time I need a medical service. You're right - the equation is different abroad. You could get a non-lucrative visa to live in Spain and get affordable health insurance with it, then visit the US 5 months per year.
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cheese_breath
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Re: Why buy medical insurance ?

Post by cheese_breath »

Read my signature line. We all have opinions, but nobody will know the real answer until you guys reach Medicare age.

My DW had a lot of medical issues. I expected that someday she might have a heart attack or other sudden event, spend maybe a week or so in a hospital, and then she'd be gone. I never anticipated a massive stroke that would keep her confined to nursing homes for 3 1/2 years and still counting.
The surest way to know the future is when it becomes the past.
bhsince87
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Re: Why buy medical insurance ?

Post by bhsince87 »

If you're low income/low asset, it can make sense to go without insurance.

I have a cousin who was in an auto accident, and his costs were about $800,000. He put all his assets in a trust, and went on Medicaid. That covered most of it. But he didn't have a lot of money to begin with.

If you have a pension or a lot of assets, that's harder to do.

DW and I will be paying about $32,000 a year for health insurance and deductible once COBRA runs out. About half that with COBRA.

It sucks, but we're still willing to do it because of the alternatives.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams
anoop
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Re: Why buy medical insurance ?

Post by anoop »

beyou wrote: Mon Sep 21, 2020 8:00 pm Was reading another thread about in-network doctors refusing to honor the contract prices. Also facing layoff in my 50s (refusing to relo with employer and thinking FIRE instead). Given cost of Cobra and ACA without subsidy, thinking whether it makes sense to self-insure.

Assume 2,000/mo unsubsidized with high
deductible, why not put aside $2k/mo or $240k over next decade. Am I really likely to spend more than $240 k for a couple in their mid 50s until we hit Medicare ?

What worst case scenarios make the insurance necessary ?
Cost of health care is a big scam in the US. You will risk bankruptcy no matter the size of your assets if you end up with a significant chronic condition. I am in the midst of a chronic condition and I really don't know what I would have done without insurance. Between hospitals and drugs we are talking six figures each year without insurance. Yes, I occasionally get a surprise bill because something was out-of-network or a certain blood test or procedure was not covered. Hospitals could be playing a part in the scam too. Get insurance or immigrate to another country where self insuring won't completely destroy your hard-earned savings. I met an uber driver that said he went bankrupt because of cancer pre-ACA.
kaneohe
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Re: Why buy medical insurance ?

Post by kaneohe »

If you have insurance, you probably get the benefit of negotiated rates which are lower than the initial rates. For Medicare, the initial rates are often something like 2-3x the rate that Medicare uses for their calculation. If you get a cancer treatment that Medicare treats as costing 60K, then w/o insurance you might pay 150K. You might get lucky.......or not.......but consider seriously the
downside of no insurance. And you might have to repeat the treatment over time.
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

cheese_breath wrote: Mon Sep 21, 2020 11:36 pm Read my signature line. We all have opinions, but nobody will know the real answer until you guys reach Medicare age.

My DW had a lot of medical issues. I expected that someday she might have a heart attack or other sudden event, spend maybe a week or so in a hospital, and then she'd be gone. I never anticipated a massive stroke that would keep her confined to nursing homes for 3 1/2 years and still counting.
So sorry to hear that. Do you have LTCI ? How well is it covering your costs ? This is another type of insurance I am living without so far. Many of the plans offered have a relatively low cap on payout, which to me defeats the purpose of insurance. Some pay for 3 years, and you are
now beyond that point.
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dwickenh
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Re: Why buy medical insurance ?

Post by dwickenh »

Emilyjane wrote: Mon Sep 21, 2020 8:45 pm Breast cancer at 62 yo last year. Not exactly uncommon, unfortunately. Surgery, chemo, radiation came to $400,000 over a years time. I was glad I had insurance.
I hope all is well with you!!

Best wishes,

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
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beyou
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Re: Why buy medical insurance ?

Post by beyou »

Emilyjane wrote: Mon Sep 21, 2020 8:45 pm Breast cancer at 62 yo last year. Not exactly uncommon, unfortunately. Surgery, chemo, radiation came to $400,000 over a years time. I was glad I had insurance.
My wife had very early stage diagnosed and treated, while under my employer plan. She was able to get treatment from a top area hospital and doctors which gave her great psychological comfort and she is clear for a few years now.

That said, ACA plans in my area would not cover the doctors and hospital who treated her and continue with checkups. Right on the hospital website it says all the insurers they take in-network but that they exclude all metal level (ACA) plans. Same plans would not even cover out of network (for any services at all). So part of my concern is if ACA is the only options, our choice of docs are very limited and the cost of insurance is very high. Can’t imagine things would improve if ACA is repealed and insurance companies can chip away further at coverage.
runninginvestor
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Re: Why buy medical insurance ?

Post by runninginvestor »

The $2,000 a month combined for the both of you, is that the lowest you can get for premium? If you are trying to stomach the premium cost, maybe if it's available you can get a lower tier ACA plan with an HSA. And just treat it as true catastrophic coverage. That way you still have a cap on overall out-of-pocket expenses for the year, but you also can save in a tax advantaged way. If you never need those funds by the time you can get on Medicare, you were still able to partially save some of that $240K.

Based on your signature, being in the Northeast, most of those states have some form of balance billing protections. So if you have an in network hospital stay, or an out of network emergency hospital visit, you have a higher chance to be protected based on state law for surprise billing. Outside of a cancer diagnosis, the emergency or impatient stay will be what will wipe out your emergency fund without insurance.
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