How to plan for health insurance at a young age?

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AlphaPilot
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How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 11:16 am

I'd like to reach financial independence long before my peers. I have been working on this since I was in high school and have been stashing away, building equity, investing, etc for the past 6 years and I am now in mid-twenties. When running my monthly COL spreadsheet I find that health insurance is one of the biggest unknowns for me. My utilities can be predicted by use and inflation, insurance and taxes are similar, but health insurance right now seems to be absolutely all over the place. Currently my employer pays this, or close to all of it, but when I reach FI I intend on being self employed doing something I love at my own pace. Because of this, I intend on having a gap of time that requires my own health insurance premium to pay each month - this may be covered by a spouse's insurance plan but I want to plan for the worst just in case it's not an option at that point in life. Just two years ago I looked into self coverage on healtchare.gov and was looking at a silver plan of 200 a month. I thought this was going to slowly go up each year with age and of course politics. However, I look again and I am seeing something like $500 a month before any subsidized costs, and with those kicking it, it's still $300-$350 for a similar silver plan from two years ago. As a healthy mid twenties male with no pre-existing conditions I thought this was kind of high. Family history has been a hit and miss, some family is very healthy, other have had some issues that I hope to prevent by scanning for them earlier in life. Regardless though, these rates do not take any family history into effect - so far it seems to be income, age, sex, and tobacco use.

With all of this, is there any general number I should be using for say 15 to 20 years from now? I've been on parents and now employers plans the majority of my life with a small gap that I paid $150/mo premium or so. I do not make 6 digits and do not ever plan on doing that with my current or future career. My CoL is also very cheap so it balances out that I am able to save an equal percentage to someone who does make 6 digits but also has much higher CoL. (Sorry, rambling now. That's a different topic different time.)

Any insight? Those who have been paying their own premium for several years - what have you noticed? Is it something that jumps all over or has it steadily raised with a certain percentage per year due to Age and Inflation?

bhsince87
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Re: How to plan for health insurance at a young age?

Post by bhsince87 » Wed Jul 11, 2018 11:24 am

I'm 53 and pretty much set financially, with about 3.5 million in assets. I'd retire tomorrow if I was assured health insurance. But alas, it's not to be.

I'm budgeting $40K per year for my wife and I, assuming I can find coverage when I do retire. A couple years ago I thought $20k might do it.

But my point for you is, just forget about it. Even knowing what will happen one year from now is unknowable.
Retirement: When you reach a point where you have enough. Or when you've had enough.

Broken Man 1999
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Re: How to plan for health insurance at a young age?

Post by Broken Man 1999 » Wed Jul 11, 2018 11:33 am

Honestly, attempting to project health care costs so far in the future is likely to produce an inaccurate amount of $$$. This is totally out of your control.

However, you can stash as much as you can into retirement investments, live below your means, and hopefully your savings/investments will sustain your medical costs as well. This is totally in your control.

Your early planning is good, at least you are considering important things well in your youth.

As you get closer to FI, the health care costs will get clearer, hopefully. Still, I think health care cost and delivery might be very different than the current model we have. The pessimist streak in me says it (health care) won't be as good, and will cost even more than today. I certainly hope my negative expectations are wildly incorrect, and healthcare turns out to be less expensive, and better for all.

Broken Man 1999
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Rupert
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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 11:33 am

There is absolutely no way to predict what sort of healthcare system we will have in this country 15-20 years from now, let alone what it will cost. You should read through the many posts written by early retirees in their 50s re what they pay for health insurance and how much the cost increases each year. It will be an eye-opening experience for you, I think.

runner3081
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Re: How to plan for health insurance at a young age?

Post by runner3081 » Wed Jul 11, 2018 11:36 am

Broken Man 1999 wrote:
Wed Jul 11, 2018 11:33 am
Still, I think health care cost and delivery might be very different than the current model we have.
Agreed. By then, health care could be six figures per year, or free. Who knows.

AlphaPilot
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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 12:19 pm

bhsince87 wrote:
Wed Jul 11, 2018 11:24 am
I'm 53 and pretty much set financially, with about 3.5 million in assets. I'd retire tomorrow if I was assured health insurance. But alas, it's not to be.

I'm budgeting $40K per year for my wife and I, assuming I can find coverage when I do retire. A couple years ago I thought $20k might do it.

But my point for you is, just forget about it. Even knowing what will happen one year from now is unknowable.
40k a year just for your health insurance? :? - I guess one thing we both agree on is that a couple years ago it seemed nearly half!
Broken Man 1999 wrote:
Wed Jul 11, 2018 11:33 am
As you get closer to FI, the health care costs will get clearer, hopefully. Still, I think health care cost and delivery might be very different than the current model we have. The pessimist streak in me says it (health care) won't be as good, and will cost even more than today. I certainly hope my negative expectations are wildly incorrect, and healthcare turns out to be less expensive, and better for all.
Broken Man 1999
I hope that the closer I get the better idea I will have.
Rupert wrote:
Wed Jul 11, 2018 11:33 am
There is absolutely no way to predict what sort of healthcare system we will have in this country 15-20 years from now, let alone what it will cost. You should read through the many posts written by early retirees in their 50s re what they pay for health insurance and how much the cost increases each year. It will be an eye-opening experience for you, I think.
What should I be searching in the forums for? I tried Healthcare costs but that was all over the place for posts.
runner3081 wrote:
Wed Jul 11, 2018 11:36 am
Broken Man 1999 wrote:
Wed Jul 11, 2018 11:33 am
Still, I think health care cost and delivery might be very different than the current model we have.
Agreed. By then, health care could be six figures per year, or free. Who knows.
I don't believe it would be six figures ;) But I understand the point you are making. I was hoping my lack of ability to predict it was just because I didn't know a lot about it, and not that it truly does fluctuate this much. I'm not sure a system like Canada has is better, but in terms of FI it sure seems to be! Just hope we'd never have a real health emergency..... :oops:

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Pajamas
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Re: How to plan for health insurance at a young age?

Post by Pajamas » Wed Jul 11, 2018 12:22 pm

AlphaPilot wrote:
Wed Jul 11, 2018 11:16 am
However, I look again and I am seeing something like $500 a month before any subsidized costs, and with those kicking it, it's still $300-$350 for a similar silver plan from two years ago. As a healthy mid twenties male with no pre-existing conditions I thought this was kind of high.
That sound inexpensive to me. Think about what you pay for other types of insurance that you don't expect to use. Health coverage is different because you expect to use it. Pretty much everyone needs health care at some point even ignoring preventive care and everyone dies.
bhsince87 wrote:
Wed Jul 11, 2018 11:24 am
But my point for you is, just forget about it. Even knowing what will happen one year from now is unknowable.
Pretty much this. If you want to plan conservatively, assume you would have to pay entirely on your own current commercial, free-market rates for coverage and then plan for the high rates of health care inflation that we have seen in the past to continue in the future. Just accept that health care costs may be your greatest expense by far, even with coverage.

Health care is expensive and it must be paid for somehow by someone.

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dm200
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Re: How to plan for health insurance at a young age?

Post by dm200 » Wed Jul 11, 2018 1:04 pm

Impossible to predict that far into the future -

BUT I might consider setting up some kind of Company/organization - perhaps even a 'non-profit' that could get and provide health insurance over time.

Or, perhaps some kind of "affiliation" with or for an entiry that could do so. Sometimes, members of a Board of directors can qualify.

averagedude
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Re: How to plan for health insurance at a young age?

Post by averagedude » Wed Jul 11, 2018 1:20 pm

Only thing in healthcare that is known is it is going to go thru changes in the future. If you are single and keep your magi under 40000, you can get affordable healthcare from the ACA. 65000 and under for a married couple will do the same. To do this you need to live a frugal lifestyle, have no mortage or debts, have most of your money in tax deferred accounts, but still have some money in taxable accounts preferably with a low tax basis. That is the strategy today. When it changes, you adjust your strategy. You can have millions and this will work.

Rupert
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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 1:23 pm

AlphaPilot wrote:
Wed Jul 11, 2018 12:19 pm

What should I be searching in the forums for? I tried Healthcare costs but that was all over the place for posts.
Search for "healthcare sharing ministry." That's not what most of those prior threads are all about, but healthcare sharing ministries always seem to come up in those threads. So it's a good way to weed out other healthcare topics. When searching for "healthcare costs," you're going to get a lot of surprise billing threads.

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VictoriaF
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Re: How to plan for health insurance at a young age?

Post by VictoriaF » Wed Jul 11, 2018 1:28 pm

If you expand your question from "health insurance" to "affordable health coverage," you'll have both insurance and other options:
- have enough money to buy private health insurance
- have a job that provides you with health insurance at a relatively young age
- stay healthy and increase your chance for not having per-existent conditions
- move to another country until you reach Medicare age
- become poor and qualify for Medicaid

Victoria
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bhsince87
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Re: How to plan for health insurance at a young age?

Post by bhsince87 » Wed Jul 11, 2018 1:44 pm

averagedude wrote:
Wed Jul 11, 2018 1:20 pm
Only thing in healthcare that is known is it is going to go thru changes in the future. If you are single and keep your magi under 40000, you can get affordable healthcare from the ACA. 65000 and under for a married couple will do the same. To do this you need to live a frugal lifestyle, have no mortage or debts, have most of your money in tax deferred accounts, but still have some money in taxable accounts preferably with a low tax basis. That is the strategy today. When it changes, you adjust your strategy. You can have millions and this will work.
That will work in 2019. After that, nobody knows what will happen.
Retirement: When you reach a point where you have enough. Or when you've had enough.

adamthesmythe
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Re: How to plan for health insurance at a young age?

Post by adamthesmythe » Wed Jul 11, 2018 2:02 pm

Plan for not knowing.

Right now (as I understand it) the best way to have health insurance for early retirement is to retire from the military, police, or fire departments.

The way to be confident of health insurance until 65 is to work for a large company or institution until 63.5.

You could also consider emigrating to Canada or one of the many other countries with universal health care.

In my opinion many of those planning for early retirement in the US are living in a dream world.

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dm200
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Re: How to plan for health insurance at a young age?

Post by dm200 » Wed Jul 11, 2018 3:06 pm

adamthesmythe wrote:
Wed Jul 11, 2018 2:02 pm
Plan for not knowing.
Right now (as I understand it) the best way to have health insurance for early retirement is to retire from the military, police, or fire departments.
The way to be confident of health insurance until 65 is to work for a large company or institution until 63.5.
You could also consider emigrating to Canada or one of the many other countries with universal health care.
In my opinion many of those planning for early retirement in the US are living in a dream world.
I know that some organizations (including some charities and non-profits) provide health insurance for members of the Boards of Directors. Does anyone know any specifics?

Maybe get elected to some office (such as Congress) that would provide it. In some northeastern states, there are many levels of government and lots of offices - that may provide such benefits - maybe part-time dog catcher.

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Re: How to plan for health insurance at a young age?

Post by Jordan4FI » Wed Jul 11, 2018 3:09 pm

Also ensure that you do not smoke (or quit if you are) and stay lean (not become obese by choice) and your lifetime diet and exercise are in good condition. Preserving health is a good way to keep costs low in the future.

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dm200
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Re: How to plan for health insurance at a young age?

Post by dm200 » Wed Jul 11, 2018 3:11 pm

Jordan4FI wrote:
Wed Jul 11, 2018 3:09 pm
Also ensure that you do not smoke (or quit if you are) and stay lean (not become obese by choice) and your lifetime diet and exercise are in good condition. Preserving health is a good way to keep costs low in the future.
Absolutely - but even the healthiest person COULD be hit by a bus, get cancer and die soon after, have a fatal stroke or heart attack. A healthful lifestyle really improves the odds, though.

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Re: How to plan for health insurance at a young age?

Post by Jordan4FI » Wed Jul 11, 2018 3:26 pm

Absolutely - but even the healthiest person COULD be hit by a bus, get cancer and die soon after, have a fatal stroke or heart attack. A healthful lifestyle really improves the odds, though.
[/quote]

Well if its fatal.. then whats the point of insurance hehe.. but ya be covered for the big stuff..

AlphaPilot
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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 3:41 pm

Well this thread was enlightening and also full of gloom. Hah! Basically the best advice is just like anything else...expect and plan for the worst costs in the history of xyz, in this case; health insurance premiums. The religious insurance groups are very appealing to me, because they do benefit me if I take care of my body and am frugal. However, the $1m caps I see on these forums is scary enough to make me keep looking. To me, the whole point in me paying for insurance is to cover for when I find out I do have cancer or I do get hit by a bus..etc..etc. Life is so filled with twists and unpredictable things yet here I am trying to plan 20, 30, 40 years in the future when I may not be fortunate enough to make it back here to check the latest threads and replies. :oops:

GAAP
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Re: How to plan for health insurance at a young age?

Post by GAAP » Wed Jul 11, 2018 3:43 pm

I use twice my normal inflation rate guess as an estimate -- but I'm not trying to go out 15 years.

15 years is a really long time to project anything. It's also a lot easier to do at age 70 than age 20 -- not as many potential changes (besides mortality).

JoeRetire
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Re: How to plan for health insurance at a young age?

Post by JoeRetire » Wed Jul 11, 2018 3:43 pm

AlphaPilot wrote:
Wed Jul 11, 2018 11:16 am
I'd like to reach financial independence long before my peers.
Why? What does it matter what your peers do?
Any insight? Those who have been paying their own premium for several years - what have you noticed? Is it something that jumps all over or has it steadily raised with a certain percentage per year due to Age and Inflation?
Healthcare expenses have risen as long as I can remember. So you certainly plan on more.

But there's no way to predict how much more, or assume any kind of steady increase. The effects of different political parties being in power after elections has meant that recent years have seen major jolts to the health insurance marketplace with no particular end in sight.

Costs could continue to rise dramatically at higher than inflation rates, they could get lower due to a more robust economy than has ever been seen, or they could drop to zero and be paid for completely out of taxes. At this point it's all a guess.

The only way to be prepared is to save, invest, and hope for the best.
Last edited by JoeRetire on Wed Jul 11, 2018 3:50 pm, edited 1 time in total.

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Re: How to plan for health insurance at a young age?

Post by VictoriaF » Wed Jul 11, 2018 3:47 pm

dm200 wrote:
Wed Jul 11, 2018 3:11 pm
Jordan4FI wrote:
Wed Jul 11, 2018 3:09 pm
Also ensure that you do not smoke (or quit if you are) and stay lean (not become obese by choice) and your lifetime diet and exercise are in good condition. Preserving health is a good way to keep costs low in the future.
Absolutely - but even the healthiest person COULD be hit by a bus, get cancer and die soon after, have a fatal stroke or heart attack. A healthful lifestyle really improves the odds, though.
The healthiest person not only does not smoke and stays lean, but he also gets sufficient sleep, avoids stress, spends some time outdoors in the sun and full-spectrum light, does not sit for more than an hour at a time, eats a lot of produce, and does not eat sugar and high-glicemic index foods. While there are still no guarantees, a comprehensive healthy lifestyle protects from cancers and cardiovascular diseases.

Victoria
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JoeRetire
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Re: How to plan for health insurance at a young age?

Post by JoeRetire » Wed Jul 11, 2018 3:53 pm

VictoriaF wrote:
Wed Jul 11, 2018 3:47 pm
a comprehensive healthy lifestyle protects from cancers and cardiovascular diseases.
Or not. Cancer seems to have a mind of its own.

Rupert
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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 3:54 pm

Scientists at Johns Hopkins recently reported that 66% of cancers are caused by random DNA copying errors, 29% are attributable to lifestyle/environmental factors, and 5% are inherited. See https://www.hopkinsmedicine.org/news/me ... g_mistakes .

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VictoriaF
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Re: How to plan for health insurance at a young age?

Post by VictoriaF » Wed Jul 11, 2018 3:58 pm

JoeRetire wrote:
Wed Jul 11, 2018 3:53 pm
VictoriaF wrote:
Wed Jul 11, 2018 3:47 pm
a comprehensive healthy lifestyle protects from cancers and cardiovascular diseases.
Or not. Cancer seems to have a mind of its own.
My complete statement was:
VictoriaF wrote:
Wed Jul 11, 2018 3:47 pm
While there are still no guarantees, a comprehensive healthy lifestyle protects from cancers and cardiovascular diseases.
Arguing with an extracted clause is poor etiquette.

Victoria
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willthrill81
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Re: How to plan for health insurance at a young age?

Post by willthrill81 » Wed Jul 11, 2018 4:00 pm

AlphaPilot wrote:
Wed Jul 11, 2018 3:41 pm
Well this thread was enlightening and also full of gloom. Hah! Basically the best advice is just like anything else...expect and plan for the worst costs in the history of xyz, in this case; health insurance premiums. The religious insurance groups are very appealing to me, because they do benefit me if I take care of my body and am frugal. However, the $1m caps I see on these forums is scary enough to make me keep looking. To me, the whole point in me paying for insurance is to cover for when I find out I do have cancer or I do get hit by a bus..etc..etc. Life is so filled with twists and unpredictable things yet here I am trying to plan 20, 30, 40 years in the future when I may not be fortunate enough to make it back here to check the latest threads and replies. :oops:
Healthcare costs are something that I too am keeping in my periphery. I'd like to retire in about 15 years or so (early 50s) if possible but should very likely be able to work a decade or more past that if I really needed to.

As it stands right now, using the income that I anticipate we'll have after I retire and our ages at that time, my wife and I could get a 'bronze' insurance plan for $400-$500 monthly with around a $7k individual deductible or a 'silver' plan for $500-$600 with a $3k individual deductible. For someone whose primary concern is major medical costs and not a periodic $5-$10k medical deductible, those premiums sound very reasonable to me.

I've also looked into health sharing ministries, and the costs would be about half of that. The $1 million cap wouldn't personally worry me too much right now as it's more difficult to run up a bill that high than some realize; I know from both personal and family experience. But if healthcare costs keep outpacing inflation for another decade or two, that might be a serious problem.

Medical tourism is sometimes an option as well and can cost a fraction of what it costs in the U.S. Some are going overseas for heart surgery, cancer treatment, etc. with good success all around.

But as others have noted, 'the times they are a-changin'. Nobody knows what healthcare will look like next year, let alone 15 years from now.

I do know this: you are very unlikely to regret having saved as much as you did. You are much more likely to wish you had saved more, and not just for paying for healthcare.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

AlphaPilot
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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 4:09 pm

JoeRetire wrote:
Wed Jul 11, 2018 3:43 pm
AlphaPilot wrote:
Wed Jul 11, 2018 11:16 am
I'd like to reach financial independence long before my peers.
Why? What does it matter what your peers do?
It doesn't matter what they do, it matters what they are not doing. If I say "I'd like to reach financial independence" that throws me in a pool of anyone who wants to do that. But when I say before my peers it is a benchmark to use.

AlphaPilot
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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 4:15 pm

willthrill81 wrote:
Wed Jul 11, 2018 4:00 pm
AlphaPilot wrote:
Wed Jul 11, 2018 3:41 pm
Well this thread was enlightening and also full of gloom. Hah! Basically the best advice is just like anything else...expect and plan for the worst costs in the history of xyz, in this case; health insurance premiums. The religious insurance groups are very appealing to me, because they do benefit me if I take care of my body and am frugal. However, the $1m caps I see on these forums is scary enough to make me keep looking. To me, the whole point in me paying for insurance is to cover for when I find out I do have cancer or I do get hit by a bus..etc..etc. Life is so filled with twists and unpredictable things yet here I am trying to plan 20, 30, 40 years in the future when I may not be fortunate enough to make it back here to check the latest threads and replies. :oops:
Healthcare costs are something that I too am keeping in my periphery. I'd like to retire in about 15 years or so (early 50s) if possible but should very likely be able to work a decade or more past that if I really needed to.

As it stands right now, using the income that I anticipate we'll have after I retire and our ages at that time, my wife and I could get a 'bronze' insurance plan for $400-$500 monthly with around a $7k individual deductible or a 'silver' plan for $500-$600 with a $3k individual deductible. For someone whose primary concern is major medical costs and not a periodic $5-$10k medical deductible, those premiums sound very reasonable to me.

I've also looked into health sharing ministries, and the costs would be about half of that. The $1 million cap wouldn't personally worry me too much right now as it's more difficult to run up a bill that high than some realize; I know from both personal and family experience. But if healthcare costs keep outpacing inflation for another decade or two, that might be a serious problem.

Medical tourism is sometimes an option as well and can cost a fraction of what it costs in the U.S. Some are going overseas for heart surgery, cancer treatment, etc. with good success all around.

But as others have noted, 'the times they are a-changin'. Nobody knows what healthcare will look like next year, let alone 15 years from now.

I do know this: you are very unlikely to regret having saved as much as you did. You are much more likely to wish you had saved more, and not just for paying for healthcare.
Good to know! I'd be fine with those rates by the time I am of that age ;) But $500 in today's dollars compared to then is probably gonna be a bit different, hah. One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.

Rupert
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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 4:19 pm

AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
In economic terms, signing up for insurance only when you get really sick (or expensively sick) would make you a free rider. If everyone behaved that way, the entire system would collapse. Google "tragedy of the commons."

ConcernedKid
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Re: How to plan for health insurance at a young age?

Post by ConcernedKid » Wed Jul 11, 2018 4:21 pm

You can look at comprehensive global policies. Many will cover most things in all countries outside of the US. If you are close to Canada or Mexico w/i the US it could be an option. If you are amenable to living abroad it could also be an option. Other than that, if you can keep your expenses low, you may qualify for some form of subsidized health care. I'm not sure what the association health plans will entail, but freelance work may qualify for participation in a plan. Health care is a huge issue in the FI space. The ACA helped a great deal but now that is up in the air.

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Re: How to plan for health insurance at a young age?

Post by willthrill81 » Wed Jul 11, 2018 4:24 pm

AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
Pre-existing conditions are no longer an issue once you get on a health insurance plan. That was included in the ACA.
Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.
https://www.hhs.gov/healthcare/about-th ... index.html
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 4:25 pm

Rupert wrote:
Wed Jul 11, 2018 4:19 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
In economic terms, signing up for insurance only when you get really sick (or expensively sick) would make you a free rider. If everyone behaved that way, the entire system would collapse. Google "tragedy of the commons."
I wouldn't intend on having no coverage, because yes that would be gaming the system. I meant in terms of ministry / group insurance for all common health needs but when facing the $1m cap, what do those folks do?

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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 4:26 pm

willthrill81 wrote:
Wed Jul 11, 2018 4:24 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
Pre-existing conditions are no longer an issue once you get on a health insurance plan. That was included in the ACA.
Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.
https://www.hhs.gov/healthcare/about-th ... index.html
They were an issue before the ACA and may be again, which is what OP is concerned about. Even now, under the ACA, if you develop an expensive condition outside of the ACA's open enrollment period, you are out of luck.

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Re: How to plan for health insurance at a young age?

Post by dm200 » Wed Jul 11, 2018 4:26 pm

willthrill81 wrote:
Wed Jul 11, 2018 4:24 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
Pre-existing conditions are no longer an issue once you get on a health insurance plan. That was included in the ACA.
Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.
https://www.hhs.gov/healthcare/about-th ... index.html
In fact, even before the ACA - if you had continuous coverage from one company to another there was protection from pre-existing conditions exclusion.

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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 4:27 pm

AlphaPilot wrote:
Wed Jul 11, 2018 4:25 pm
Rupert wrote:
Wed Jul 11, 2018 4:19 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
In economic terms, signing up for insurance only when you get really sick (or expensively sick) would make you a free rider. If everyone behaved that way, the entire system would collapse. Google "tragedy of the commons."
I wouldn't intend on having no coverage, because yes that would be gaming the system. I meant in terms of ministry / group insurance for all common health needs but when facing the $1m cap, what do those folks do?
I keep asking that question too. No one enrolled in one of those plans who has actually experienced that event ever writes back to tell us what happened.

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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 4:27 pm

dm200 wrote:
Wed Jul 11, 2018 4:26 pm
willthrill81 wrote:
Wed Jul 11, 2018 4:24 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
Pre-existing conditions are no longer an issue once you get on a health insurance plan. That was included in the ACA.
Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.
https://www.hhs.gov/healthcare/about-th ... index.html
In fact, even before the ACA - if you had continuous coverage from one company to another there was protection from pre-existing conditions exclusion.
But how does that help OP, who hopes to be FI and not working?

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Re: How to plan for health insurance at a young age?

Post by dm200 » Wed Jul 11, 2018 4:28 pm

Rupert wrote:
Wed Jul 11, 2018 4:27 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:25 pm
Rupert wrote:
Wed Jul 11, 2018 4:19 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
In economic terms, signing up for insurance only when you get really sick (or expensively sick) would make you a free rider. If everyone behaved that way, the entire system would collapse. Google "tragedy of the commons."
I wouldn't intend on having no coverage, because yes that would be gaming the system. I meant in terms of ministry / group insurance for all common health needs but when facing the $1m cap, what do those folks do?
I keep asking that question too. No one enrolled in one of those plans who has actually experienced that event ever writes back to tell us what happened.
Things like such caps were common before the ACA - even with employer plans.

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Re: How to plan for health insurance at a young age?

Post by willthrill81 » Wed Jul 11, 2018 4:29 pm

Rupert wrote:
Wed Jul 11, 2018 4:26 pm
willthrill81 wrote:
Wed Jul 11, 2018 4:24 pm
AlphaPilot wrote:
Wed Jul 11, 2018 4:15 pm
One thought, assuming 99% of things are covered under the ministry plan insurance.... if/when someone finds they do have an ailment that will cost more than the $1m cap, what do they do? Try signing up for a regular insurance plan in hopes the pre-existing condition doesn't prevent them from getting care? For some things I think I would be okay with this idea if time was on my side. For emergency operations, that tends to be a bit different.
Pre-existing conditions are no longer an issue once you get on a health insurance plan. That was included in the ACA.
Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.
https://www.hhs.gov/healthcare/about-th ... index.html
They were an issue before the ACA and may be again, which is what OP is concerned about.

Conjecture or discussion about what might happen with legislation is off limits for discussion. What we have now is what we can discuss and work with because no one knows what the future will hold.
Rupert wrote:
Wed Jul 11, 2018 4:26 pm
Even now, under the ACA, if you develop an expensive condition outside of the ACA's open enrollment period, you are out of luck.
Absolutely. You'd have to either wait until the next open enrollment period or experience one of the specified events that allows you to purchase outside that period. But that might not be a real problem for someone on a healthshare plan as they may know that hitting that $1 million cap is a possibility well before it actually happens.
Last edited by willthrill81 on Wed Jul 11, 2018 4:31 pm, edited 1 time in total.
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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 4:31 pm

I won't get into politics, but I do believe that was one thing nice about the ACA. I hope the same law / rule applies regardless of future changes.

And yes, Rupert, that would be interesting to know or find out. Maybe there are some folks who have insight!

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Re: How to plan for health insurance at a young age?

Post by Rupert » Wed Jul 11, 2018 4:36 pm

willthrill81 wrote:
Wed Jul 11, 2018 4:29 pm
But that might not be a real problem for someone on a healthshare plan as they may know that hitting that $1 million cap is a possibility well before it actually happens.
That's an example of gaming the system, which will lead to the system's eventual collapse (edited to add: if enough people do it. Enrollment in healthcare sharing ministries is skyrocketing.).

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Re: How to plan for health insurance at a young age?

Post by AlphaPilot » Wed Jul 11, 2018 4:44 pm

Rupert wrote:
Wed Jul 11, 2018 4:36 pm
willthrill81 wrote:
Wed Jul 11, 2018 4:29 pm
But that might not be a real problem for someone on a healthshare plan as they may know that hitting that $1 million cap is a possibility well before it actually happens.
That's an example of gaming the system, which will lead to the system's eventual collapse (edited to add: if enough people do it. Enrollment in healthcare sharing ministries is skyrocketing.).
Why wouldn't they be skyrocketing when it looks like they cost half that of the basic plans online? :moneybag I'm guessing everyone is looking for a way to save.

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Re: How to plan for health insurance at a young age?

Post by Spirit Rider » Wed Jul 11, 2018 4:46 pm

averagedude wrote:
Wed Jul 11, 2018 1:20 pm
Only thing in healthcare that is known is it is going to go thru changes in the future. If you are single and keep your magi under 40000, you can get affordable healthcare from the ACA. 65000 and under for a married couple will do the same. To do this you need to live a frugal lifestyle, have no mortage or debts, have most of your money in tax deferred accounts, but still have some money in taxable accounts preferably with a low tax basis. That is the strategy today. When it changes, you adjust your strategy. You can have millions and this will work.
I would add that it is good to have money in Roth accounts and large capital loss carryforwards. Living through the 2000-2002 and 2008-2009 crashes and capital loss harvesting all the way down had its advantages. I can easily qualify for the highest premium subsidies and cost-sharing subsidies without being the least bit frugal. I could even qualify for Medicaid if I wanted to, but that seemed a bit much.

Of course this only works as long as there are subsidies and they are solely based on MAGI like the ACA. I think subsidies will likely be with us, but asset testing could very likely be added. Luckily, I will be on Medicare long before that happens.

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Re: How to plan for health insurance at a young age?

Post by Pajamas » Wed Jul 11, 2018 4:59 pm

AlphaPilot wrote:
Wed Jul 11, 2018 4:25 pm
I meant in terms of ministry / group insurance for all common health needs but when facing the $1m cap, what do those folks do?
It's not insurance and can't legally be called insurance and even many of the terms associated with insurance are not allowed to be used by the cost sharing groups. I strongly object to your use of the word insurance in referring to it and will caution people that it is NOT insurance when I see anyone doing that.

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Re: How to plan for health insurance at a young age?

Post by averagedude » Wed Jul 11, 2018 5:06 pm

Spirit Rider wrote:
Wed Jul 11, 2018 4:46 pm
averagedude wrote:
Wed Jul 11, 2018 1:20 pm
Only thing in healthcare that is known is it is going to go thru changes in the future. If you are single and keep your magi under 40000, you can get affordable healthcare from the ACA. 65000 and under for a married couple will do the same. To do this you need to live a frugal lifestyle, have no mortage or debts, have most of your money in tax deferred accounts, but still have some money in taxable accounts preferably with a low tax basis. That is the strategy today. When it changes, you adjust your strategy. You can have millions and this will work.
I would add that it is good to have money in Roth accounts and large capital loss carryforwards. Living through the 2000-2002 and 2008-2009 crashes and capital loss harvesting all the way down had its advantages. I can easily qualify for the highest premium subsidies and cost-sharing subsidies without being the least bit frugal. I could even qualify for Medicaid if I wanted to, but that seemed a bit much.

Of course this only works as long as there are subsidies and they are solely based on MAGI like the ACA. I think subsidies will likely be with us, but asset testing could very likely be added. Luckily, I will be on Medicare long before that happens.
You are absolutely correct. Having ALL of your retirement income in Roth's is a dream when getting cheap insurance from the affordable care act. This could also help you get most of your out of pocket costs covered. Also this could qualify you to get medicaid regardless of your net worth. Of course i wouldn't recommend medicaid because if you had a serious heath crisis, it could limit you on the quality of care you may get. In the roth/traditional debate, this is another reason where tax diversification can be a benefit.

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Re: How to plan for health insurance at a young age?

Post by Jordan4FI » Wed Jul 11, 2018 5:16 pm

You could also move abroad (or medical travel) and be a thrifty ex-pat. It is the good life. Cheaper everyday medical issues and then just need to insure for big ticket stuff.. Here in Honduras, I can not even use my Insurance cause it it too cheap here.. 15$ Xrays, $300 MRI, 20$ dental cleaning..ext.. I just had back surgery in Costa Rica, now I did use my employer insurance, but if i didnt have it, it would have only been 10K. My same procedure in the US is 60K+
Last edited by Jordan4FI on Wed Jul 11, 2018 5:23 pm, edited 1 time in total.

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Re: How to plan for health insurance at a young age?

Post by dual » Wed Jul 11, 2018 5:21 pm

The presumption here seems to be that you absolutely must have medical insurance. What about self-insuring?

I am sure someone will immediately come up with some scenario where care for an illness costs millions. Well, those are exceedingly rare else no one could afford insurance. In that scenario you spend your savings on getting care and once you spend everything declare bankruptcy and try to get care from the taxpayers.

Or more likely, you die before you spend all your money. I have enough savings that I am pretty sure that would be the case. Hospitals are dangerous places and all medicines and treatments have side effects. From what I have seen with my relatives and friends, you have to be in fairly good condition to tolerate most treatments for severe conditions like cancer. Most likely you just die before racking up huge $$.

If you have dependents, that is another issue that is too complicated to include here.You could buy term life insurance with guaranteed renewal while you are healthy. From what I understand about Medicaid, they do not require you to spend all your family's assets before qualifying.

I self-insured for many years. The biggest problem was convincing clerks that I could pay out of pocket. But after some talking I eventually convinced them and they allowed me to get an appointment. I avoided big clinics where the doctors were on salary and I had no problem getting discounts from individual doctors by offering to pay cash.

Getting into a hospital for an expensive procedure would be another issue but see above about the dangers of medical care. I never had to do that but I would have gone to as private and entrepreneurial a hospital as I could find and offered to put down a big deposit and see what happened. Another possibility would be medical tourism.

I am not making light of the problem but if getting insurance is what is keeping you from retiring early then you should consider alternatives.

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Re: How to plan for health insurance at a young age?

Post by Jordan4FI » Wed Jul 11, 2018 5:26 pm

dual wrote:
Wed Jul 11, 2018 5:21 pm
The presumption here seems to be that you absolutely must have medical insurance. What about self-insuring?

I am sure someone will immediately come up with some scenario where care for an illness costs millions. Well, those are exceedingly rare else no one could afford insurance. In that scenario you spend your savings on getting care and once you spend everything declare bankruptcy and try to get care from the taxpayers.

Or more likely, you die before you spend all your money. I have enough savings that I am pretty sure that would be the case. Hospitals are dangerous places and all medicines and treatments have side effects. From what I have seen with my relatives and friends, you have to be in fairly good condition to tolerate most treatments for severe conditions like cancer. Most likely you just die before racking up huge $$.

If you have dependents, that is another issue that is too complicated to include here.You could buy term life insurance with guaranteed renewal while you are healthy. From what I understand about Medicaid, they do not require you to spend all your family's assets before qualifying.

I self-insured for many years. The biggest problem was convincing clerks that I could pay out of pocket. But after some talking I eventually convinced them and they allowed me to get an appointment. I avoided big clinics where the doctors were on salary and I had no problem getting discounts from individual doctors by offering to pay cash.

Getting into a hospital for an expensive procedure would be another issue but see above about the dangers of medical care. I never had to do that but I would have gone to as private and entrepreneurial a hospital as I could find and offered to put down a big deposit and see what happened. Another possibility would be medical tourism.

I am not making light of the problem but if getting insurance is what is keeping you from retiring early then you should consider alternatives.
Agreed, the system has got most Americans scared.. with maybe a bit of good reason, but most pay in and never claim.

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Re: How to plan for health insurance at a young age?

Post by adamthesmythe » Wed Jul 11, 2018 5:34 pm

dual wrote:
Wed Jul 11, 2018 5:21 pm
The presumption here seems to be that you absolutely must have medical insurance. What about self-insuring?

I am sure someone will immediately come up with some scenario where care for an illness costs millions.
Illnesses that will cost near a million to treat and will leave you with an expectation of a normal lifespan are not unusual. For example- the incidence of a bicuspid aorta is ~1%, and many with this condition will need (a very expensive) valve replacement. For most of us, going without insurance is making a bet with a considerable fraction of our net worth.

But let me lay a little optimism on you. In the US the health care sector accounts for about 20% of GDP. There is a natural limit on its growth somewhere south of 100%. This places a limit on health care spending and hence insurance costs. I believe the system will adjust. Now the MANNER in which it will adjust- and the impact on all of us- is uncertain. I believe some form of access, price, or quality control is inevitable.

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Re: How to plan for health insurance at a young age?

Post by averagedude » Wed Jul 11, 2018 5:51 pm

AlphaPilot wrote:
Wed Jul 11, 2018 11:16 am
I'd like to reach financial independence long before my peers. I have been working on this since I was in high school and have been stashing away, building equity, investing, etc for the past 6 years and I am now in mid-twenties. When running my monthly COL spreadsheet I find that health insurance is one of the biggest unknowns for me. My utilities can be predicted by use and inflation, insurance and taxes are similar, but health insurance right now seems to be absolutely all over the place. Currently my employer pays this, or close to all of it, but when I reach FI I intend on being self employed doing something I love at my own pace. Because of this, I intend on having a gap of time that requires my own health insurance premium to pay each month - this may be covered by a spouse's insurance plan but I want to plan for the worst just in case it's not an option at that point in life. Just two years ago I looked into self coverage on healtchare.gov and was looking at a silver plan of 200 a month. I thought this was going to slowly go up each year with age and of course politics. However, I look again and I am seeing something like $500 a month before any subsidized costs, and with those kicking it, it's still $300-$350 for a similar silver plan from two years ago. As a healthy mid twenties male with no pre-existing conditions I thought this was kind of high. Family history has been a hit and miss, some family is very healthy, other have had some issues that I hope to prevent by scanning for them earlier in life. Regardless though, these rates do not take any family history into effect - so far it seems to be income, age, sex, and tobacco use.

With all of this, is there any general number I should be using for say 15 to 20 years from now? I've been on parents and now employers plans the majority of my life with a small gap that I paid $150/mo premium or so. I do not make 6 digits and do not ever plan on doing that with my current or future career. My CoL is also very cheap so it balances out that I am able to save an equal percentage to someone who does make 6 digits but also has much higher CoL. (Sorry, rambling now. That's a different topic different time.)

Any insight? Those who have been paying their own premium for several years - what have you noticed? Is it something that jumps all over or has it steadily raised with a certain percentage per year due to Age and Inflation?
I would like to point out one important thing. You are in your mid twenties and living in one of the greatest countries in the world. Healthcare is going to change, it is inevitable. Don't focus on it. If FI is your goal, focus on increasing your income, increasing your savings rate, and getting your savings to compound at a good rate of return. Time is on your side, and spending time at this site will increase your rate of return. I don't remember where i seen it, and i apologize to the author, but the formula to building wealth is.
Money X Time X Rate of return

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Re: How to plan for health insurance at a young age?

Post by Pajamas » Wed Jul 11, 2018 6:16 pm

Jordan4FI wrote:
Wed Jul 11, 2018 5:16 pm
You could also move abroad (or medical travel) and be a thrifty ex-pat. It is the good life. Cheaper everyday medical issues and then just need to insure for big ticket stuff.. Here in Honduras, I can not even use my Insurance cause it it too cheap here.. 15$ Xrays, $300 MRI, 20$ dental cleaning..ext.. I just had back surgery in Costa Rica, now I did use my employer insurance, but if i didnt have it, it would have only been 10K. My same procedure in the US is 60K+
Correct me if I'm wrong but all of that is cheap only for ex-pats. For average Hondurans and their incomes, none of those medical expenses are cheap at all.

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Re: How to plan for health insurance at a young age?

Post by LadyGeek » Wed Jul 11, 2018 6:34 pm

This thread is now in the Personal Finance (Not Investing) forum (health insurance).

The discussion is getting derailed. Please stay focused on helping the OP, which is:
AlphaPilot wrote:
Wed Jul 11, 2018 11:16 am
With all of this, is there any general number I should be using for say 15 to 20 years from now?
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