Ultra High Deductible Health Insurance?

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EnjoyIt
Posts: 3358
Joined: Sun Dec 29, 2013 8:06 pm

Re: Ultra High Deductible Health Insurance?

Post by EnjoyIt » Wed Feb 12, 2020 6:14 pm

atomicsquirrel wrote:
Wed Feb 12, 2020 5:50 pm
EnjoyIt wrote:
Wed Feb 12, 2020 4:42 pm
1130Super wrote:
Wed Feb 12, 2020 4:09 pm
aristotelian wrote:
Wed Feb 12, 2020 3:00 pm
simplesimon wrote:
Wed Feb 12, 2020 10:07 am


You'd need significant Roth assets.
Not even. Roth assets would be helpful to stay under the subsidy cliff, but not essential. 400% of Federal Poverty Line is $68K. If your stocks are half gains, you could actually spend close to $140K without touching your Roth. With Roth accounts you could withdraw even more.

Folks in the FIRE community spend less so it is even easier for them.
Most of the FIRE community probably have an income level inside the 0% LTCG tax bracket
We don't want to live on $40k/yr which means we need to manage our income in such a way as to get subsidies.

Just curious, lets just assume that we live on $68k/yr income which means we are at the top of the subsidy cliff. How does the subsidy work? How much would we have to pay?

I logged in my area and put in family at 50 years old and played around with the numbers. At $67k income we get a subsidy of $338/month and insurance would cost about $300/month with an $8k deductible. It still is not cheap if we actually need $8k worth of healthcare.

For early retirees with kids still at home who want an income above ACA subsidies insurance costs $800/month with a $16k deductible. Basically We spend about $10k a year and if things go wrong may need to spend as much as $26k per year. On the bright side, if we spend $16k in healthcare expenses with an income of $100k we can deduct $6k from our taxes because we spent more than 10% of AGI on healthcare. So in our area, if we want to live on income above ACA subsidies we should save up an additional $650k (4% SWR) so that we can cover health insurance and deductible. I suspect when we actually retire that number will be higher. If we are low utilizers of insurance we can probably save a little less and bank the difference for when we will need to hit our out of pocket max.

It definitely does not look pretty for the FAT FIRE crowd.
How do you get insurance for a family without subsidy for only $800/ mo?
I ran my options for a family of 3 at 50 years old and that is what I got in my area with a $16k deductible.
I used healthinsurance.org

BGeste
Posts: 64
Joined: Wed Jul 24, 2019 11:55 am

Re: Ultra High Deductible Health Insurance?

Post by BGeste » Wed Feb 12, 2020 7:28 pm

Look at Golden Rule / United Health Care short term plans. Up to one year coverage in some states before you have to reapply. Up to 2 million per person in coverage. Deductibles 12,500 and even higher with co-insurance. Must have no pre-existing conditions to qualify. Less expensive than ACA plans.

Northern Flicker
Posts: 5187
Joined: Fri Apr 10, 2015 12:29 am

Re: Ultra High Deductible Health Insurance?

Post by Northern Flicker » Wed Feb 12, 2020 8:05 pm

BGeste wrote:
Wed Feb 12, 2020 7:28 pm
Look at Golden Rule / United Health Care short term plans. Up to one year coverage in some states before you have to reapply. Up to 2 million per person in coverage. Deductibles 12,500 and even higher with co-insurance. Must have no pre-existing conditions to qualify. Less expensive than ACA plans.
And limited to 1 year of coverage in some states, 2 years in others, with a 1 year gap before another short-term plan can be selected. You can also read online about the very high number of consumer complaints with the new short-term plans.
Index fund investor since 1987.

Topic Author
atomicsquirrel
Posts: 32
Joined: Tue Feb 28, 2017 8:53 am

Re: Ultra High Deductible Health Insurance?

Post by atomicsquirrel » Thu Feb 13, 2020 10:37 am

EnjoyIt wrote:
Wed Feb 12, 2020 6:14 pm
atomicsquirrel wrote:
Wed Feb 12, 2020 5:50 pm
EnjoyIt wrote:
Wed Feb 12, 2020 4:42 pm
1130Super wrote:
Wed Feb 12, 2020 4:09 pm
aristotelian wrote:
Wed Feb 12, 2020 3:00 pm


Not even. Roth assets would be helpful to stay under the subsidy cliff, but not essential. 400% of Federal Poverty Line is $68K. If your stocks are half gains, you could actually spend close to $140K without touching your Roth. With Roth accounts you could withdraw even more.

Folks in the FIRE community spend less so it is even easier for them.
Most of the FIRE community probably have an income level inside the 0% LTCG tax bracket
We don't want to live on $40k/yr which means we need to manage our income in such a way as to get subsidies.

Just curious, lets just assume that we live on $68k/yr income which means we are at the top of the subsidy cliff. How does the subsidy work? How much would we have to pay?

I logged in my area and put in family at 50 years old and played around with the numbers. At $67k income we get a subsidy of $338/month and insurance would cost about $300/month with an $8k deductible. It still is not cheap if we actually need $8k worth of healthcare.

For early retirees with kids still at home who want an income above ACA subsidies insurance costs $800/month with a $16k deductible. Basically We spend about $10k a year and if things go wrong may need to spend as much as $26k per year. On the bright side, if we spend $16k in healthcare expenses with an income of $100k we can deduct $6k from our taxes because we spent more than 10% of AGI on healthcare. So in our area, if we want to live on income above ACA subsidies we should save up an additional $650k (4% SWR) so that we can cover health insurance and deductible. I suspect when we actually retire that number will be higher. If we are low utilizers of insurance we can probably save a little less and bank the difference for when we will need to hit our out of pocket max.

It definitely does not look pretty for the FAT FIRE crowd.
How do you get insurance for a family without subsidy for only $800/ mo?
I ran my options for a family of 3 at 50 years old and that is what I got in my area with a $16k deductible.
I used healthinsurance.org
Maybe your state has much cheaper plans? I priced both New Jersey and Florida, both were $1500+ / mo, cheapest plan, for two people, not 3, at 50 years of age. Something seems amiss. $800 sounds too cheap compared to what most are paying, especially for a family.

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