On dealing with one of the biggest ERE vulnerabilities: health expenses

[TopHatFox]

On the Efficacy of Health Insurance Companies:

Maybe I'm just cynical with health insurance companies, but if their entire gig is to maximize premiums, minimize payouts, and invest the float, wouldn't it make sense for them to make it incredibly complex for a client to actually receive money for their claims?

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On Dental and Vision Insurance:

I also noted that the ERE book suggests to avoid dental and vision insurance, but what if, for example, you smash your face one day while riding your bike and need your mouth partially re-built (which can cost ~$50k). Does a high deductible health insurance plan cover something like that without dental insurance?

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On the Health Insurance Corporate or other Jobs Provide:

As it turns out, I still need to fix my overbite to avoid future teeth problems. I'm a little mad at my parents for not saving a few thousands to do it earlier in my life, and that I will end up paying for it now even though almost all of my peers had the privilege to have their parents pay for it (out of my control I know). I was thinking, though, do ya'll know if work insurance tends to cover things like orthodontic treatment or jaw surgery (if necessary)?

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On the Inevitable Decay of the Human Body and Appropriate Financial Planning:

Finally, one other idea I'd like to touch upon is the idea that human bodies simply decay over time--there does not seem to be a way to escape that 100%, only to delay it. In fact, health providers capitalize on it (i.e. fillings that only last 5-10 years, glasses a few years, etc.). How do you calculate and plan for these likely increasing costs into your ERE master plan?

[JL13]

1.) The incentive is there, but they've got to balance it out somehow. They can't pay NOTHING, because then they'd lose all their customers.

2.) Yes, health insurance in USA covers dental injuries due to accident. Dental insurance is a joke.

3.)If medically necessary it might, though it depends on the insurance company. You might do well to max out an FSA and schedule the procedure at the beginning of the year. that way you can use the remainder of the prior year's FSA money plus the funding of the current year's FSA. That could get you $5,000 tax free towards it.

4.)Dental tourism. Budgeting. Minimizing risk (floss and brush regularly, exercise, eat healthy etc). Flexibility.

[Scott 2]

Dental insurance usually has a cap that makes it worthless. It's essentially pre-paying your fees for the 6 month exam and cleaning, annual x-rays. There's some additional overhead to pay the insurer, to cover the very slight risk mitigation provided. If your employer pays for it, hey, nice perk.

Vision insurance is even worse than that. In my experience (VSP), it is a marketing tool that funnels you into an eye doctor, that has high prices, due to the overhead of paying the insurance company for clients. If you can get it company paid, you can do some paperwork to get maybe 60 bucks out of it a year, by buying glasses out of network. That's really the only way to come out ahead. The doctor they sent me through wouldn't even give me my pupillary distance. IMO - Eye exam at Costco, glasses through Zenni. Far cheaper, little BS.

[OTCW]

One strategy:

Get an HSA/high deductable health plan when you are young, (hopefully) healthy, and in a high(ish) tax bracket because you are in the ERE accumulate assets phase.

Try not to use it, instead pay for out of pocket medical costs using other money. Save the medical receipts - they are good for life and can be redeemed against the HSA at any time.

Upon ERE, switch to a gold or platinum plan through the exchanges and take advantage of a good subsidy due to your low ERE income.

Withdrawal money from the HSA for any need using any previous receipts you saved up. Use the HSA for any other medical expenses as you see fit.

Anything remaining in the HSA past normal age (59.5??) can be treated like a traditional IRA and withdrawn without penalty, but subject to (low ERE) income tax, and used for any purpose, not just medical.

[jennypenny]

Dental insurance usually has a cap on orthodontic work. The two plans we've had both capped at $1500/pp paid out over 18 months. Braces ran about $5000 each. The invisilign are more expensive but I really like them better if you're a candidate. So many people need dental work after braces because of brushing/flossing issues. With invisilign, you can take care of your teeth properly so there's no damage and no surprise dental bills at the end.

Medical insurance pays for any surgeries including oral.