No Employer Supplemented Inurance - 2020 Health/Dental/Vision budget for 56 yo couple

[scfr]

For 2020, I'm budgeting $2,100 per month for health/dental/vision for our 2-person household:

- $1,150 per month health insurance premium through the ACA market place (not eligible for subsidies), bronze HDHP HSA-qualified plan with $13,500 family deductible and out of pocket max in-network (out of network: $20K deductible and $50K max).

- For peace of mind, I want to be prepared to cover $20K out of pocket (up to the out of network deductible) this year. We currently have a $10K balance in our HSA, so I'll budget $833/month for "additional to savings to cover out of pocket." I'll contribute what I'm allowed to the HSA and keep the rest in regular savings. Going forward, 2021 and beyond, I'll continue to contribute the max allowed to the HSA. Assuming we carry over more and more of the HSA balance each year, eventually we'll have enough in our HSA to cover the out of network max. (In the unlikely event that we hit the $20K out of pocket early in the year, we have enough in our general EF to cover us.)

- $100 per month for dental, vision, OTC meds, and first aid supplies.

$1,150 + $833 + $100 = $2,083 per month … I'll round to $2,100

*We will save approx. 2,000 on taxes due to the HSA contribution.
$2,100 x 12 months - $2,000 tax savings = $22,200

Hopefully this information is helpful for any of the younger forum members who are contemplating FIRE, or self-employment, and wonder what health insurance costs when you get older if you don't have employer-provided or employer-supplemented health insurance. I think self-employment is great, and I think FIRE is fine, but only if you go in to it with your eyes wide open.

[kork13]

Wow, definitely eye-opening. Appreciate you laying out the numbers. That's basically a part-time job just to earn enough for health insurance. Makes me grateful for the military healthcare coverage, but even that only covers most things, and only while I'm active duty...

:::Mentally adding an extra half-million to my "number":::

[corn18]

Wow, definitely eye-opening. Appreciate you laying out the numbers. That's basically a part-time job just to earn enough for health insurance. Makes me grateful for the military healthcare coverage, but even that only covers most things, and only while I'm active duty...

:::Mentally adding an extra half-million to my "number":::

Tricare for retirees is great and affordable. So no half mil needed. I have been on Tricare for retirees since 2008. We still have 4 on the plan. There is a cap of $3k for out of pocket expenses (might be higher since I last looked). There were many years where our health care "costs" were north of $50k and we only paid $3k. And the wonderful part was I didn't need to get health care through work which saved us about $12k / year. How awesome is that? Still have to get dental and vision, but that is a lot cheaper. And once you hit 65, it turns into a medicare supplement, so it keeps on giving. It's worth at least a half mil, but it won't come out of your pocket.

[riverwed070707]

Appreciate you sharing. That is positively insane. It's disgusting that we allow this to be a reality in a country that is supposed to be the land of opportunity. You're paying more for annually for healthcare than many American's spend on their combined monthly expenses. Hate that employees are forced to work for a corporation just in case something were to happen and they were to need extensive medical care.

[disneysteve]

Appreciate you sharing. That is positively insane. It's disgusting that we allow this to be a reality in a country that is supposed to be the land of opportunity. You're paying more for annually for healthcare than many American's spend on their combined monthly expenses. Hate that employees are forced to work for a corporation just in case something were to happen and they were to need extensive medical care.

Yep. Insurance needs to be uncoupled from employment, but still remain affordable. Employers could still give you a "healthcare stipend" as part of your benefits package, but your insurance shouldn't be provided by your employer. You shouldn't lose coverage when you leave your job. And yes, you could get COBRA for 18 months but most people can't afford that.

[LivingAlmostLarge]

DS you and I agree. I also want to point out if we decouple employment and healthcare we may have a true health market economy which another poster has mentioned. I think this is a reasonable option to try in lieu of single payer system. I don't think it'll work in the US because people will not be able to be responsible however I think we need to try it because so many people believe that single payer is not the answer I think the US has to try a truly free market system where EVERYONE buys health insurance. Where everyone isn't tied to military, federal/state governments, and private company insurance. Like "obamacare" tried to do was make it so the markets had enough people participating instead of only sick people. If we decoupled insurance and forced people to buy insurance we in theory would have the right pool of everyone participating.

[TexasHusker]

I subscribed to Medi-share years ago and it is considerably less than the ACA plans. The caveat is that there is no prescription coverage. But we had to buy for a family. We currently pay around $740 a month - about a $1500 per month discount from ACA even three years ago.

If we had someone on major prescriptions for a dread disease, we would of course be back on ACA.

[Fishindude77]

Spouse and I 57 & 60 are paying $1400+ per month for our ACA plan with no vision or dental coverage.
Could have bought the same coverage for around half that price on the private market before ACA got shoved down our throats.

[LivingAlmostLarge]

i think it needs to be decoupled. It's unfortunate but not having the individual mandate weakens the market for healthcare. The ACA is supposed to be the "free market" answer to private insurance.

And Fishin and Texas what makes you so sure before the ACA you would let alone SCFR would have been able to buy insurance at 55? Before ACA without the preexisiting guarantee I'm going to guess most people in their 50s would not be able to buy insurance that even covers anything because the actuarial tables would make it next to impossible. Insurance companies hate people in their 50s, women 25-45 child bearing age especially, and children and elderly. I am just pointing out it's easy to blame ACA but buying insurance is a huge difference if it wasn't forced for insurance companies to provide coverage for everyone and especially those 50 and above.

[TexasHusker]

i think it needs to be decoupled. It's unfortunate but not having the individual mandate weakens the market for healthcare. The ACA is supposed to be the "free market" answer to private insurance.

And Fishin and Texas what makes you so sure before the ACA you would let alone SCFR would have been able to buy insurance at 55? Before ACA without the preexisiting guarantee I'm going to guess most people in their 50s would not be able to buy insurance that even covers anything because the actuarial tables would make it next to impossible. Insurance companies hate people in their 50s, women 25-45 child bearing age especially, and children and elderly. I am just pointing out it's easy to blame ACA but buying insurance is a huge difference if it wasn't forced for insurance companies to provide coverage for everyone and especially those 50 and above.

Most states had high risk pools where you could buy individual insurance. I had friends do that. In Texas, it was more affordable than ACA and better insurance. Because of the way it is designed, ACA can never be "affordable". So "Affordable Care Act" is an oxymoron. The only way it could be conceived that it is affordable is if Uncle Sam, himself is paying your share through subsidies.

[disneysteve]

Most states had high risk pools where you could buy individual insurance. I had friends do that. In Texas, it was more affordable than ACA

I don't believe that was universally true in every state, though.

[TexasHusker]

I don't believe that was universally true in every state, though.

I think about two thirds had high risk pools.

[disneysteve]

I think about two thirds had high risk pools.

You've mentioned the high risk pools before and even though I've been a doctor for 25+ years, I had never heard of them. I just did a little research and it turns out that most of the states that didn't have a high risk pool were in the northeast where I live, so it just wasn't something I was familiar with. PA, NJ, NY, DE, OH, MA, RI, VT and more all didn't have it.

Also, most of the pools had pre-existing condition exclusions of 6-12 months, including TX which was among the states that had a 12-month exclusion period. Not much good getting insurance that won't pay for anything related to the medical conditions you actually have for the first year.

[TexasHusker]

Pre-existing conditions exclusions are a key part of the concept of insurance, which is the transfer of risk in exchange for a certain payment. Without some protections for the underwriter of the risk, it isn’t insurance, but welfare.

If you are asking an insurer to accept the risk of your house (homeowners insurance), the insurer is unlikely to insure a roof that is already in need of repair. If you are asking an insurer to accept the risk of your car, the insurer is unlikely to indemnify you for a fender bender that you sustained beforehand.

Underwriting and actuarial analysis are vital parts of the concept of insurance. In the U.S., we’ve come to a place where we want the right to drive the car with no insurance, and when we wreck it, why we not only want to then buy insurance to have it repaired, but do so at the most expensive body shop in town.

That is why the ACA such a mess and will continue to be. The only way it is “working” (being generous here) is because of massive continuous infusions of antibiotic from the tax payers. But the patient is forever terminal, by design.

[disneysteve]

Pre-existing conditions exclusions are a key part of the concept of insurance

But it was also one of the biggest problems with the system before the ACA. You have insurance through your job. You lose your job or change jobs for any reason. You get insurance through the new job but for 3 months or longer, they won't cover your existing medical conditions.

What's the answer if not banning pre-existing condition exclusions? There needs to be some way for people to have uninterrupted coverage.