Health Insurance

[KONTRARIAN]

I have high deductible health insurance. At the moment it's mini-COBRA costing me $1049.88 per mo ($12,599 per annum); after that, I think I can buy it for about $800/mo ($9600 per annum). I'd like to hear more from you, Jacob, and others. What percentage does insurance account for in a $7000 per year, or other, budget?

[jacob]

In my case, total insurance (health, dental, car, house, umbrella) is 25% of the budget. After RE tax at 33%, it is our second biggest budget item. Health insurance is 8.3% and currently acquired via DW's employer. If neither of us worked or whatever employer or ex-employer only offered a $$$$-plan (like COBRA), I'd look at the exchange. The exchange prices are pretty good in the county/state we live in. Last time I checked prices and effective after-tax cost on the exchange, it would have been a wash to switch.

It's hard to give general advice in the US, since pricing is very location dependent due to politics and the way the pricing system is rigged. Some states and counties are much more "problematic" than others. The only way to solve that currently is to vote, possibly with your feet.

[Frita]

Some states and counties are much more "problematic" than others. The only way to solve that currently is to vote, possibly with your feet.

So true! We live in the state with the highest health insurance (and medical) costs in the US. Though we do have house, auto, and umbrella insurance; this is our second year being self-insured. When I was teaching half-time, high-deductible health/dental premiums would have eaten up all of my salary.

[sky]

I pay $160 a month for an ACA Bronze Plan with $8,000 deductable in rural Michigan.

[fiby41]

Suddenly I don't feel so bad for shelling $100 for a year's medical insurance...
It is mandatory according to a Russian federal government rule but nobody checks. The institute is funded through the federal budget so they make it a point to tell you to buy insurance after you pay the fees and when you are processing visa at the institute when there. The penalty/insurance charge was $1/day after the seventh day in the country which the institute had to enforce.
The options were 7000 rubles with father's money before leaving, same amount with 'my' money there, or sit out and see what unfolds... I chickened out with the first.
Bought online at http://russia.study . There were only two options, Tinkoff bank with 500000 ruble cover and Raffaele bank with 150000 ruble cover.

[KONTRARIAN]

...total insurance (health, dental, car, house, umbrella) is ...our second biggest budget item. Health insurance ...currently acquired via DW's employer.
...

Thank you. Just wanted a reality check. I've got to get me one of those DW's.

[Jean]

I pay 258 per month for a plan with 2500 deductible. I get 196 refunded per month. So I end up not paying that much.

[classical_Liberal]

@KONTRATIAN
Think of your health insurance just like you would other insurances. What are you insuring against for, say, the next 12 months. Do you currently have chronic illness? or are you only insuring against a potential emergency situation? Do a little research and see what common treatments actually cost. Can you afford them out of pocket in an emergency? https://www.healthcarebluebook.com/

Would an emergent, event-based healthshare/non ACA insurance plan cover most of your needs?

Remember the qualifying events that would allow you to reapply for ACA should any chronic disease enter the picture. https://www.healthcare.gov/glossary/qua ... ife-event/

Could you manufacture one of those events if you needed to increase coverage in the middle of the year due to a newly diagnosied chronic illness? Would you be willing to use medical tourism for nonemergency or elective life improving procedures?

[jacob]

Thank you. Just wanted a reality check. I've got to get me one of those DW's.

If anything, consider other options. COBRA is usually the very most expensive option short of going without and getting sick.

As mentioned, the price and availability depends highly on the political situation of the state and county you choose to live in. Wherever ACA works, which is not everywhere for political reasons, it's generally a pretty good deal as you get to deduct some of the cost on your taxes just like employers do for employment based insurance. Thus, if you live in an insurance death-zone (pardon the pun), relocating is an alternative to the active workarounds c_L suggested.

[AnalyticalEngine]

Out of curiosity, what factors constitute an insurance death-zone? I've been on a Bronze plan for awhile due to working as a contractor, and I've had to pay the full premium rate due to being too high income.

One thing to watch out for too is if you live in a state where balance billing is legal or not. That's one thing that can really hurt you even if you are insured.

[jacob]

@AE - Any area where political efforts to undermine the ACA has been sufficiently successful for insurers to pull out of the exchange entirely or render remaining plans unavailable or largely unaffordable for people with pre-existing conditions or below average incomes. People consequently go without insurance. As a result, significant areas of the US now offer only 1 or 0 [metal-grade] plans whereas other areas still offer many competitive plans. Last time I checked, I had several options and the cheapest would be about what @sky pays pre-tax (less post-tax) which is much less than the COBRA plan in the OP.

[5ts]

Costs will vary greatly even within the US, so specifics aren't really as helpful as general principles. If you are healthy, then realize how lucky you are and get the cheapest plan available. If you are sick because of lifestyle, fix it, and then get the cheapest plan. If you are sick through no fault of your own and you live in some place with ridiculous insurance, well, you're screwed and health insurance will blow out your budget and you will probably never be able to retire.

[AnalyticalEngine]

Ages makes a big difference too in some states. Pre-ACA, I think insurers were allowed a 5x range (iirc) between what they charged the young and what they charged the old. So if they charged the young $200/mo, they could charge the older age brackets up to $1000/mo. I believe ACA changed this so they're only allowed a 3x spread. This effectively raised prices on young people, who then went without insurance. I'm not sure if this age bracket still holds up though or if that's one of the things that got undermined.

Some places like NY don't allow any price difference depending on age, which does mean moving with your feet might also be important depending on how old you are.

[flying_pan]

I work as a contractor, so no employer-based insurance. My wife is not employed, so no luck here either.

We pay $630 per month for a silver plan with I think $7,000 deductible per person, which obviously sucks, but I am fine with it because I want that extra protection. Probably statistically we would be better off by just paying out of pocket, but I want to feel safe. Also, Oregon has a balance billing law, so I should be protected from "surprise bills".

If you want to reach $7,000 spending in the USA with paying for health insurance full price you are out of luck. However, if your income is pretty low, you can qualify for ACA and pay almost nothing. Depends on the state, but you can run numbers on healthcare marketplace calculator. This is my plan when we retire/semi-retire and our income will be pretty low.

[classical_Liberal]

@flying_pan
The balance billing issue is HUGE and most people don't even understand it. It's even possible to be balanced billed when in-network if one of the providers consulted in an emergency is technically out-of-network, due to how the hospital has contracted the services. It's a frigg'en nightmare and is one of the major reasons I personally decided to go with a healthshare over ACA bronze. I travel a lot, have no preexisting conditions, and my home state has no balance billing protections. The healthshare has no network. Here's a starting point on current state level protections. https://www.commonwealthfund.org/blog/2 ... ce-billing

Also a great point about ACA subsidies. Anyone who can survive at a cashflow rate of <2JAFI's should get a pretty huge subsidy as you can manufacture your income correctly. A great tool for this is Roth conversions, if you have deferred accounts. They count toward your MAGI, so it's pretty easy to look at income towards the end of the year, if you are coming up short to reach ACA level over the medicaid rabbit-hole, you can just convert the money to a Roth to max subsidy level. One more reason to have some money in a deferred account.

[5ts]

Cheap with subsidies assumes you don't have to use the health insurance. If it's just an insurance that you never use than it can be cheap. If you have to use the insurance regularly, your budget will take a huge hit. There is a big gap here.

[Tyler9000]

Just one data point, but a few years ago when DW and I were both not working at all and optimizing our taxable income for ACA purposes, our total health insurance bill (in central TX) was something like $100/month with a deductible of less than $1000. Getting very inexpensive healthcare isn't too difficult on an ERE-level budget these days if you know how to effectively manage your taxes.

BTW, if you have low income and are shopping on the ACA marketplace be sure to check out the silver plans. All plans qualify for premium subsidies, but only silver plans qualify for cost-sharing subsidies that reduce the deductible.

[sky]

I am planning to work part time. I checked the impact of additional income on my ACA insurance. For every $1,000 earned, I lose $120 annual subsidy (12%). On top of this, my current income is roughly at the standard deduction level, so any additional income will be taxed. Another reason for being more frugal instead of earning more.

[SavingWithBabies]

I think* we're paying $685/month for family of 4 on ACA with estimated $70,000 income. Without subsidy, it would be $1,327/month and I think I'll end up earning more so I'll pay back some or all of the subsidy. The coverage is for plan with $7,400/$15,000 deductible which compares poorly to what I've had before as an employee. But main goal is to not go broke if something big hits. At least it's a HDHP plan so I can contribute to an HSA.

* Say that because seems like billing is jumping around but I think it's just new plan getting started and should shake out to $685/month.