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How much to budget for health insurance/expenses in early retirement?

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  • jfoxcpacfp
    replied





    Ask if he knows how that worked out for Steve Jobs.
    Click to expand…


    He had the rare pancreatic cancer that was a curable neuroendocrine type rather than the common garden variety adenocarcinoma.
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    Wow, I didn’t know that part. Interesting to learn a physician perspective. It was really sad to me. He was a nutcase in many ways, maybe just to a mere mortal like me, but no question brilliant and one of the few that truly found his calling and optimized it.

    Leave a comment:


  • Kamban
    replied


    Ask if he knows how that worked out for Steve Jobs.
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    Jobs might be a genius of a inventor / designer but he was a nut case initially as far as his healthcare was concerned. This is what happens when you think being a genius in one field translates to other fields too. He had the rare pancreatic cancer that was a curable neuroendocrine type rather than the common garden variety adenocarcinoma. But he wasted 9 months with holistic therapy, acupuncture, herbs etc etc not wanting to undergo surgery to remove the head of the pancreas. By dilly-dallying for 9 months he let the cancer spread to the liver, and even a liver transplant did not save him.

    A simple minded Joe six-pack would have followed physician's orders and would have been alive today.

     

    Leave a comment:


  • snowcanyon
    replied




    I believe the United States will eventually transition to a single-payer government run health care program with cost controls, rationed care, and higher taxes.

    Until then, and if I decide to retire before age 65, I’ll either take advantage of the much lower costs of a healthcare sharing ministry, or if I develop a costly pre-existing condition, I’ll budget around $20k per year for health insurance on the individual marketplace for me and my wife.

    If costs on the individual marketplace exceed this or I can’t afford health insurance in early retirement, I’ll work 20 hours per week at REI (a fun low stress gig) and get full health insurance benefits (https://www.rei.com/stewardship/report/2013/workplace/employee-pay-benefits.html).

    If REI decides to stop offering health insurance, that means the whole system has collapsed and a single payer system is imminent.

     

     

     
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    Are you concerned about the lack of regulation and actuarial standards for health sharing ministries? Or the extremely low max reimbursements (often as low as 125k) per condition? Are there ministries that don't have these issues?

    Leave a comment:


  • snowcanyon
    replied
    I've had individual insurance both before and after the ACA in several states, and while the ACA has many, many issues, it's actually made solo insurance useful IME. Prior to the ACA there were tons of problems with rescission in states like California, among others. If you incurred big expenses, they would simply rescind your policy. Not exactly insurance IMHO. Pointless. They took your money and ran. It just wasn't worth paying for.

    And while many may whine about guaranteed issue, one day you might well be that person who is rejected for insurance because you had one high blood pressure reading last year. Not great for you, then, either.

    I agree with @CM that people are "whistling past the graveyard", as his link states: https://www.bogleheads.org/forum/viewtopic.php?f=2&t=213839&newpost=3428004&start=150

    Not saying the ACA is a panacea, but the individual market was way worse before unless you were perfectly healthy and just wanted to pay money for a junk plan that might disappear at a moment's notice. I don't understand why that is preferable.

    Leave a comment:


  • q-school
    replied










    There’s a current Bogleheads thread on this exact topic, FYI.
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    I recommend the June 29, 9:33 a.m. post by AntsOnTheMarch. It’s a long post but begins with:

    “Generally speaking (not addressing anyone in particular), I see a lot of whistling past the graveyard on early retirement and medical issues. If you have 5, 10m you’ll be fine. Then again, with high enough net worth you’ll be fine (financially speaking) with anything short of world economic meltdown. But if your net worth is 2m and you’re a long way from Medicare, maybe you should read this:”

    https://www.bogleheads.org/forum/viewtopic.php?f=2&t=213839&newpost=3428004&start=150
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    I read it and it’s a good post. As doctors, we often have the ability to mitigate healthcare costs for ourselves somewhat but the overall point is valid IMO.  That’s why I’m skeptical of some of the more aggressive FIRE scenarios out there such as retiring at 45 on a modest budget & savings.

    Unless your spouse is working and has employer coverage options, you’re looking at 20 some years on the individual market or self-insuring.  That’s a tall order.
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    or at least relies on luck and chance as much as planning.  some people will be lucky.  some people will pass younger than they should and not 'test' the plan.  others will have lost the opportunity to pad their healthcare savings, but some people don't look at life with those kind of regrets.  truthfully, if you make a lot less, the numbers are so daunting you kind of have to rely on the system to write off most of your bills (at least the inflated amounts, if not more) anyways.

     

    Leave a comment:


  • jfoxcpacfp
    replied


    I love MMM, but he has no understanding of medicine and sickness. He actually posted awhile back that he didn’t realize people got sick if they had healthy habits. Insane. I’ve challenged him multiple times about this on his site, and he just can’t answer, because there isn’t an answer. His plan, I’m sure, even if he  won’t mention it, would be to go back to Canada.
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    Ask if he knows how that worked out for Steve Jobs.

    Leave a comment:


  • snowcanyon
    replied







    Yes when I was in my 30s and 40s I did not understand why people were complaining about health insurance costs.
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    Yeah, that’s why I call into question some of these more aggressive FIRE scenarios where someone is retiring 20+ years before Medicare eligibility and budgeting $60K/yr for “comfortable” expenses ($30K in MMM’s case).
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    I love MMM, but he has no understanding of medicine and sickness. He actually posted awhile back that he didn't realize people got sick if they had healthy habits. Insane. I've challenged him multiple times about this on his site, and he just can't answer, because there isn't an answer. His plan, I'm sure, even if he  won't mention it, would be to go back to Canada.

    Living abroad would be a reasonable answer, I suppose, as long as you are comfortable with the quality and culture of care. I know people like the health-sharing ministries, but am I the only one bothered by the lack of actuarial standards and regulation?

    Leave a comment:


  • EntrepreneurMD
    replied
    Not only do you need to account for premiums and current estimated health care expenses, but it would be wise to factor in a worst case scenario - where you have a diagnosis that year over year means you max out your deductible/co-payments and coinsurance such as a treatable late stage malignancy. I've seen it as high as $15K/year plus premiums. I've seen patients shell out $20-25K annually. So $200K-$250K in reserves if you retire 10 years early is more than safe, and if not spent it could offset costs in your Medicare years.

    Leave a comment:


  • jz
    replied
    At age 61 each, our total premium and OOP costs were $11,000 last year, using husband's state retiree insurance. He continues part-time at the shop, but resigned from the state instructor role. Most of the cost was forfeiting an annuity in exchange for access to  insurance, premiums, and dentistry.

    Leave a comment:


  • Physician Finance Basics
    replied




    This is a question for early retirees and aspiring early retirees. Health insurance is a turbulent marketplace with ever-changing rules and ever-rising prices. How much are you budgeting for health insurance (and, more generally, health expenses, like deductibles and copays, dental work, vision, etc.), how did you arrive at this number, and how confident are you in your projections?
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    Digging up this old post- since it remains relevant as ever. Though not addressing early retirement specifically, here is a little bit about Healthcare Costs in Retirement: Part 1 and Part 2.

    Hope it helps.

    Leave a comment:


  • WendellDunn
    replied
    It's great to be a part of such helpful community.

    Leave a comment:


  • jfoxcpacfp
    replied
    I just read about this report "2017 Retirement Health Care Costs Data Report©" in Financial Advisor Magazine and thought of you - lot of good stuff. Here's the original article: Health-Care Burden to Top $400,000 For Retirees.

    Leave a comment:


  • q-school
    replied




    Agree that healthcare costs cannot go up as they have been, it is unsustainable and if continued at this pace will be more than 100% of our economy, and a time after, greater than the world gdp. This is what Crixus is talking about, since humans think linearly we have big problems with seeing these kinds of things.

    It simply cannot go on and believe it will be more reasonable in the future than it is today, we will try everything else first and have some sort of crisis of course.
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    yes but one of the ways they will try to bend the curve will be to reduce physician incomes.  

    when that fails, since physician incomes are such a small part of overall expenditures, they will reduce them further.

     

    Leave a comment:


  • CM
    replied


    I believe the United States will eventually transition to a single-payer government run health care program with cost controls, rationed care, and higher taxes.
    Click to expand...


    I also think this is likely, but when? Might be with next administration or might be 20+ years away.

    Leave a comment:


  • Live Free MD
    replied
    I believe the United States will eventually transition to a single-payer government run health care program with cost controls, rationed care, and higher taxes.

    Until then, and if I decide to retire before age 65, I'll either take advantage of the much lower costs of a healthcare sharing ministry, or if I develop a costly pre-existing condition, I'll budget around $20k per year for health insurance on the individual marketplace for me and my wife.

    If costs on the individual marketplace exceed this or I can't afford health insurance in early retirement, I'll work 20 hours per week at REI (a fun low stress gig) and get full health insurance benefits (https://www.rei.com/stewardship/report/2013/workplace/employee-pay-benefits.html).

    If REI decides to stop offering health insurance, that means the whole system has collapsed and a single payer system is imminent.

     

     

     

    Leave a comment:

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