Options for healthcare during FIRE (but before 65)?

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neb2020
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Options for healthcare during FIRE (but before 65)?

Post by neb2020 »

For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
- Have some kind of easy-to-manage business going into retirement and use that income to pay for healthcare premiums. So you're not really retired but self-employed.
- Game your income to be under 400% FPL to get ACA subsidies... but the premium still ain't cheap.
- Get a retirement visa / long-term-stay visa in another country, move there for cheaper healthcare, then come back at age 65.

Are there any better options?
chessknt
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Re: Options for healthcare during FIRE (but before 65)?

Post by chessknt »

You missed the most obvious--you can't fire unless you account for that cost the same as any other costs associated with a job you don't have anymore (eg dental carez child care, housing).

It should be a part of your financial plan not a surprise that you need to work around.
Pandemic Bangs
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Re: Options for healthcare during FIRE (but before 65)?

Post by Pandemic Bangs »

Have you visited the healthcare ministry thread? :D

This in a nutshell is what is wrong with health insurance in the US. Many folks fail to recognize how much their employer underwrites the cost and negotiates the benefits on their behalf.

If you are rich enough to retire early but can not afford health insurance, then you are actually not rich enough to retire early imo.

The cheap countries you can retire to generally have poor health care. Someone will come along and trot out the infant mortality data and how awful the US is, etc., but those are public health metrics and have nothing to do with the bypass surgery or cancer care you or I will need.

I don't think anyone with less than an eight-figure net worth can "self-insure" for health care in the US. Ironically, I bet the self-insuring folks still have homeowner's insurance.

Spouse had enough years of service with her last employer that she could continue the same plan and group at an increased (i.e., unsubsidized) rate. Otherwise you will be looking at an individual plan, which is expensive.
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TravelGeek
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Re: Options for healthcare during FIRE (but before 65)?

Post by TravelGeek »

chessknt wrote: Thu Jan 14, 2021 9:07 pm You missed the most obvious--you can't fire unless you account for that cost the same as any other costs associated with a job you don't have anymore (eg dental carez child care, housing).

It should be a part of your financial plan not a surprise that you need to work around.
This. We worked until we felt confident that all our expenses would be covered. That included COBRA for the first 15 months and now ACA (so far without subsidies).
mkc
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Re: Options for healthcare during FIRE (but before 65)?

Post by mkc »

neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?
We pay the premium. No subsidies. It's our largest expense.
TravelGeek
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Re: Options for healthcare during FIRE (but before 65)?

Post by TravelGeek »

mkc wrote: Thu Jan 14, 2021 9:23 pm
We pay the premium. No subsidies. It's our largest expense.
In normal years our travel budget exceeds the health insurance budget, but yeah, I just paid $1300 for the next month of ACA coverage for two.
Katietsu
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Re: Options for healthcare during FIRE (but before 65)?

Post by Katietsu »

You may also need to add geographic arbitrage. Quality, cost and potentially even availability of health insurance can be very dependent on location. Are you willing to move if your location does not have good options?
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JoMoney
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Re: Options for healthcare during FIRE (but before 65)?

Post by JoMoney »

Medical insurance is expensive. Not everyone has medical insurance, but the older you get the more likely you'll need it.
If you can't afford it when you FIRE, then you either can't afford to FIRE, or can't afford to FIRE with health insurance -which means you assume the financial risks if you need medical care.. which could spoil your early "retirement". If you don't don't pass the recent work test, it could leave you ineligible for social security disability as well... leaving you in an especially precarious situation if you become disabled.
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Kagord
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Re: Options for healthcare during FIRE (but before 65)?

Post by Kagord »

Curious how people budget for the unknown, I try to look at worst case, no ACA, a high deductible/high OOP plan, and factor premiums and a few years of going high OOP, even if reasonably healthy now. My number for this is $25K/year and adjusts up for inflation. But yeah, as the OP states, plenty of options today to bring that way down, especially for the next 2 years anyways, ACA isn't going anywhere for that time.
Last edited by Kagord on Thu Jan 14, 2021 10:04 pm, edited 1 time in total.
benderbr
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Re: Options for healthcare during FIRE (but before 65)?

Post by benderbr »

If you have multiple income sources like capital gains, Roth contributions, and savings in addition to the traditional ore-tax accounts you can tweak your income to fall below the ACA cliff. I found that will save me about 300-400 hundred a month, but I'll still be paying 700 after the subsidy. That 700 doesn't include the deductible, so figure a few hundred more for out of pocket costs.

In my plan the 700 is a fixed expense and the few hundred/unknown deductible is shared with the travel and entertainment budget. So if we have an expensive medical year and hit the out of pocket max it would mean fewer or less expensive vacations. If you have medical issues already you may want to just assume you hit the max every year.
leftcoaster
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Re: Options for healthcare during FIRE (but before 65)?

Post by leftcoaster »

What are people paying out of pocket for employer retiree plans? My mega Corp has one for 55+ but I haven’t checked the cost.
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JDCarpenter
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Re: Options for healthcare during FIRE (but before 65)?

Post by JDCarpenter »

We have non-ACA policies through tennessee farm bureau (united healthcare runs them per contract). We have been happy, as our biggest concerns are the hypothetical cost of being hit by an uninsured concrete truck (for example), and avoiding rack rate markups on everything else.

Mine went up quite a bit to $350 a month this year (I'm now age 61), but DW (a year younger) still pays $217 monthly for her HDHP plan, which supports her HSA contributions. Compared to both aca and our former employers' plans, this is very affordable. Oh, and you need to pay $20 or $30 for a bureau membership; no need to actually be a farmer.

Also have a joint geoBlue policy for international travel, which is another several hundred a year.

(Estimated up to 36,000 annually for all healthcare when retirement planning, but haven't come anywhere close to that.)
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wordsmith11
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Re: Options for healthcare during FIRE (but before 65)?

Post by wordsmith11 »

neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
This idea that low paying jobs with health insurance must be "simple" and "stress free" because they don't pay well is among the more obnoxious canards that ooze out of the more privileged sections of the FIRE 'community.'
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Watty
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Re: Options for healthcare during FIRE (but before 65)?

Post by Watty »

neb2020 wrote: Thu Jan 14, 2021 9:01 pm Are there any better options?
I don't know if it better or not but COBRA is an option. Normally it is 18 months but a few states(CA and NY, ???) have expanded that to 36 months but they may call it something else.

Some people don't realize that their state allows you to use COBRA for 36 months.
fortunefavored
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Re: Options for healthcare during FIRE (but before 65)?

Post by fortunefavored »

We saved an extra million dollars and hope that is enough. If things start looking bad, I guess we go back to work in some capacity.
fortunefavored
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Re: Options for healthcare during FIRE (but before 65)?

Post by fortunefavored »

Watty wrote: Thu Jan 14, 2021 10:50 pm
neb2020 wrote: Thu Jan 14, 2021 9:01 pm Are there any better options?
I don't know if it better or not but COBRA is an option. Normally it is 18 months but a few states(CA and NY, ???) have expanded that to 36 months but they may call it something else.

Some people don't realize that their state allows you to use COBRA for 36 months.
Extended COBRA, like "balance billing" laws, doesn't apply to self-funded health plans (ie, about 80% of large companies.)

Your mileage may vary - verify before pulling the trigger even if your state technically allows it.
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dziuniek
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Re: Options for healthcare during FIRE (but before 65)?

Post by dziuniek »

Find a state job which has retiree healthcare as part of benefits + allows early retirement.

Enjoy said healthcare.

My state allows retiree healthcare to start at 58. It does take 15 years to vest.....
Now, 58 is not really early - but atleast it bridges the gap from 58 - 65 and that's not insignificant. Additionally it becomes a kicker like program on top of medicare at 65.

I think most things have been mentioned.

Oh... You could get married to a citizen of a country where healthcare does not stink but is included in taxes. (no such thing as free healthcare)
So marry a Canadian or a European citizen + move there :) . Ha-ha.
Normchad
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Re: Options for healthcare during FIRE (but before 65)?

Post by Normchad »

Enroll as a university student that offers a student health plan.
gips
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Re: Options for healthcare during FIRE (but before 65)?

Post by gips »

Normchad wrote: Thu Jan 14, 2021 11:15 pm Enroll as a university student that offers a student health plan.
i looked at this but cost of tuition plus healthcare > aca
cacophony
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Re: Options for healthcare during FIRE (but before 65)?

Post by cacophony »

fortunefavored wrote: Thu Jan 14, 2021 10:54 pm
Watty wrote: Thu Jan 14, 2021 10:50 pm
neb2020 wrote: Thu Jan 14, 2021 9:01 pm Are there any better options?
I don't know if it better or not but COBRA is an option. Normally it is 18 months but a few states(CA and NY, ???) have expanded that to 36 months but they may call it something else.

Some people don't realize that their state allows you to use COBRA for 36 months.
Extended COBRA, like "balance billing" laws, doesn't apply to self-funded health plans (ie, about 80% of large companies.)

Your mileage may vary - verify before pulling the trigger even if your state technically allows it.
Short of asking HR is there any way to tell if the medical plan is self-funded?
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willthrill81
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Re: Options for healthcare during FIRE (but before 65)?

Post by willthrill81 »

Kagord wrote: Thu Jan 14, 2021 10:01 pm Curious how people budget for the unknown, I try to look at worst case, no ACA, a high deductible/high OOP plan, and factor premiums and a few years of going high OOP, even if reasonably healthy now. My number for this is $25K/year and adjusts up for inflation. But yeah, as the OP states, plenty of options today to bring that way down, especially for the next 2 years anyways, ACA isn't going anywhere for that time.
I think that your approach is sound. As long as you have $25k/annually that can cover those potential costs, you should be fine, though you should be prepared for that number to go up at a rate faster than inflation.
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willthrill81
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Re: Options for healthcare during FIRE (but before 65)?

Post by willthrill81 »

neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
- Have some kind of easy-to-manage business going into retirement and use that income to pay for healthcare premiums. So you're not really retired but self-employed.
- Game your income to be under 400% FPL to get ACA subsidies... but the premium still ain't cheap.
- Get a retirement visa / long-term-stay visa in another country, move there for cheaper healthcare, then come back at age 65.

Are there any better options?
Two other options include just buying an ACA plan or to participate in a health sharing ministry.

I know of one FIRE family who is paying about $150/month for their ACA plan, which I would most definitely call 'cheap'.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Normchad
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Re: Options for healthcare during FIRE (but before 65)?

Post by Normchad »

gips wrote: Thu Jan 14, 2021 11:16 pm
Normchad wrote: Thu Jan 14, 2021 11:15 pm Enroll as a university student that offers a student health plan.
i looked at this but cost of tuition plus healthcare > aca
I can believe that. For me, I believe the unsubsidized ACA would be about $24K per year. So considering the wife and I would both half to become full-time students, it might well cost that much; but I haven't seriously looked into it.

My plan will be to use COBRA until the end of the calendar year.

Then I will be on the ACA, and managing my MAGI to get optimal premium tax credits.
esteen
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Re: Options for healthcare during FIRE (but before 65)?

Post by esteen »

Normchad wrote: Thu Jan 14, 2021 11:33 pm Then I will be on the ACA, and managing my MAGI to get optimal premium tax credits.
If I were retiring soon this would be my tactic as well. If you saved in Roth IRAs, taxable accounts, Roth 401(k)s etc you can have a lot of money for your expenses without having much "income".

Sadly my time horizon is more like ~15 years, and any number of things could happen to the ACA in that timeframe so I am not planning on any subsidy available no matter what my income. I'm saving for retirement as if I will have to pay high premiums and large OOP costs for any years before 65.
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birdog
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Re: Options for healthcare during FIRE (but before 65)?

Post by birdog »

I’ll be FIREing soon from self-employment and plan to continue using a healthshare ministry in retirement. We’re paying $300 a month for a family of four for a high “deductible” plan. It’s saved us about a thousand dollars a month over the individual insurance plan that we had previously. I also plan to check on an ACA plan once my earned income drops to zero.
wtfire
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Re: Options for healthcare during FIRE (but before 65)?

Post by wtfire »

esteen wrote: Thu Jan 14, 2021 11:57 pm
Normchad wrote: Thu Jan 14, 2021 11:33 pm Then I will be on the ACA, and managing my MAGI to get optimal premium tax credits.
If I were retiring soon this would be my tactic as well. If you saved in Roth IRAs, taxable accounts, Roth 401(k)s etc you can have a lot of money for your expenses without having much "income".

Sadly my time horizon is more like ~15 years, and any number of things could happen to the ACA in that timeframe so I am not planning on any subsidy available no matter what my income. I'm saving for retirement as if I will have to pay high premiums and large OOP costs for any years before 65.
Don't you need to be over 59.5 years old to withdraw earnings from Roth IRA/401k? It won't help much on lowering the MAGI if poster is a lot younger than 60.
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neb2020
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Re: Options for healthcare during FIRE (but before 65)?

Post by neb2020 »

I know health sharing ministries plan are not ACA complaint and have many loopholes, so how do you justify it? Or maybe I should hop into the other thread?

My biggest issue is that I balk at budgeting $24k/yr for healthcare. It's ridiculous. That's more than my rent!
musicmom
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Re: Options for healthcare during FIRE (but before 65)?

Post by musicmom »

DH and I have employer retiree coverage from my old self funded PPO megacorp plan.
We pay $150/month premium for us both.
Provides medical, mental health and pharmacy. Low annual deductible each.
It will be our secondary when Medicare kicks in.

This unbelievable perk has since been discontinued, I was grandfathered in. It was definitely a consideration during my working career to qualify for it at early retirement.
We would have had to wait till 65 otherwise. We are comfortable but do not have $25k per year available for health coverage.
marcopolo
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Re: Options for healthcare during FIRE (but before 65)?

Post by marcopolo »

neb2020 wrote: Fri Jan 15, 2021 1:57 am I know health sharing ministries plan are not ACA complaint and have many loopholes, so how do you justify it? Or maybe I should hop into the other thread?

My biggest issue is that I balk at budgeting $24k/yr for healthcare. It's ridiculous. That's more than my rent!
It is difficult to have a balanced discussion of Health sharing ministries here because the positives are that they are cheaper. The negatives are that they have restrictions and limitations, many of which are religious based, and therefore can not even be mentioned here because it is a contentious topic (understandably so, this is not a criticism of the mods).

As far as balking at $24k/yr, health insurance is expensive because healthcare is expensive. Someone has to pay for it. There are some ways to soften the blow, as has been discussed above. But, there is really no way around it.

When we retired early, we made sure we had $30k/yr with increases higher than inflation included in our budget for healthcare. We do get some tax credits on the ACA currently, which is a nice bonus. We mentally "bank" those dollars in anticipation of them perhaps being reduced or eliminated some time in the future.

We don't really have to do anything out of the ordinary to get the tax credits. We spend about $120k/yr (less this year due to Covid), but much of that is withdrawn from our taxable portfolio as a return of capital. We would have to go out of our way to artificially generate income to get to a MAGI where the tax credits would be eliminated.
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tenkuky
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Re: Options for healthcare during FIRE (but before 65)?

Post by tenkuky »

marcopolo wrote: Fri Jan 15, 2021 4:43 am We don't really have to do anything out of the ordinary to get the tax credits. We spend about $120k/yr (less this year due to Covid), but much of that is withdrawn from our taxable portfolio as a return of capital. We would have to go out of our way to artificially generate income to get to a MAGI where the tax credits would be eliminated.
This is my plan too, but it begs a question:
To plan for the years from FIRE to 65, using the taxable portfolio first requires one to account for that pot paying healthcare and expense costs as above PLUS taxes yearly and taxes on Roth conversions (while keeping those under the ACA cliff).
That is tricky, plus needs a sizable taxable.
Do I have that right?
Means I have to really build up taxable and not worry about SORR at the wrong time.
Kagord
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Re: Options for healthcare during FIRE (but before 65)?

Post by Kagord »

neb2020 wrote: Fri Jan 15, 2021 1:57 am My biggest issue is that I balk at budgeting $24k/yr for healthcare. It's ridiculous. That's more than my rent!
You aren't alone, it is what it is, healthcare cost is motivation to keep people working, and, I suspect, frequently a bane for FIRE planners.
aristotelian
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Re: Options for healthcare during FIRE (but before 65)?

Post by aristotelian »

I plan to use ACA and budget for it.
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JDCarpenter
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Re: Options for healthcare during FIRE (but before 65)?

Post by JDCarpenter »

marcopolo wrote: Fri Jan 15, 2021 4:43 am
neb2020 wrote: Fri Jan 15, 2021 1:57 am I know health sharing ministries plan are not ACA complaint and have many loopholes, so how do you justify it? Or maybe I should hop into the other thread?

My biggest issue is that I balk at budgeting $24k/yr for healthcare. It's ridiculous. That's more than my rent!
It is difficult to have a balanced discussion of Health sharing ministries here because the positives are that they are cheaper. The negatives are that they have restrictions and limitations, many of which are religious based ...

...
We looked closely at them and found one that almost allowed us to squeeze in if we squinted hard. Unfortunately, almost isn't close enough. Instead of misrepresenting our thoughts/nonbeliefs, we kept searching and uncovered the farm bureau alternative.
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jayk238
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Re: Options for healthcare during FIRE (but before 65)?

Post by jayk238 »

dziuniek wrote: Thu Jan 14, 2021 11:09 pm Find a state job which has retiree healthcare as part of benefits + allows early retirement.

Enjoy said healthcare.

My state allows retiree healthcare to start at 58. It does take 15 years to vest.....
Now, 58 is not really early - but atleast it bridges the gap from 58 - 65 and that's not insignificant. Additionally it becomes a kicker like program on top of medicare at 65.

I think most things have been mentioned.

Oh... You could get married to a citizen of a country where healthcare does not stink but is included in taxes. (no such thing as free healthcare)
So marry a Canadian or a European citizen + move there :) . Ha-ha.
I see comments like this a lot. In jest or not.

For your hypothetical german with excellent healthcare, their average taxes are 45% starting at wages of 65k. Is this ‘stinky’ enough?
jayk238
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Re: Options for healthcare during FIRE (but before 65)?

Post by jayk238 »

marcopolo wrote: Fri Jan 15, 2021 4:43 am
neb2020 wrote: Fri Jan 15, 2021 1:57 am I know health sharing ministries plan are not ACA complaint and have many loopholes, so how do you justify it? Or maybe I should hop into the other thread?

My biggest issue is that I balk at budgeting $24k/yr for healthcare. It's ridiculous. That's more than my rent!
It is difficult to have a balanced discussion of Health sharing ministries here because the positives are that they are cheaper. The negatives are that they have restrictions and limitations, many of which are religious based, and therefore can not even be mentioned here because it is a contentious topic (understandably so, this is not a criticism of the mods).

As far as balking at $24k/yr, health insurance is expensive because healthcare is expensive. Someone has to pay for it. There are some ways to soften the blow, as has been discussed above. But, there is really no way around it.

When we retired early, we made sure we had $30k/yr with increases higher than inflation included in our budget for healthcare. We do get some tax credits on the ACA currently, which is a nice bonus. We mentally "bank" those dollars in anticipation of them perhaps being reduced or eliminated some time in the future.

We don't really have to do anything out of the ordinary to get the tax credits. We spend about $120k/yr (less this year due to Covid), but much of that is withdrawn from our taxable portfolio as a return of capital. We would have to go out of our way to artificially generate income to get to a MAGI where the tax credits would be eliminated.
Its not just religious issues as to why they are of concern. They arent legally obligated for a lot of things proper insurance is. Ill just leave it at that.
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JoeRetire
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Re: Options for healthcare during FIRE (but before 65)?

Post by JoeRetire »

neb2020 wrote: Thu Jan 14, 2021 9:01 pm- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
- Have some kind of easy-to-manage business going into retirement and use that income to pay for healthcare premiums. So you're not really retired but self-employed.
Neither of those qualify as "really retire". If you include those, I suppose you should add "Just stay in your existing job until you want to really retire".
- Game your income to be under 400% FPL to get ACA subsidies... but the premium still ain't cheap.
- Get a retirement visa / long-term-stay visa in another country, move there for cheaper healthcare, then come back at age 65.

Are there any better options?
It depends what you mean by "better".

Just paying for the healthcare insurance you need is certainly an option. If you are truly FI, that shouldn't be a problem.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
JoeJohnson
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Re: Options for healthcare during FIRE (but before 65)?

Post by JoeJohnson »

JDCarpenter wrote: Thu Jan 14, 2021 10:16 pm We have non-ACA policies through tennessee farm bureau (united healthcare runs them per contract). We have been happy, as our biggest concerns are the hypothetical cost of being hit by an uninsured concrete truck (for example), and avoiding rack rate markups on everything else.

Mine went up quite a bit to $350 a month this year (I'm now age 61), but DW (a year younger) still pays $217 monthly for her HDHP plan, which supports her HSA contributions. Compared to both aca and our former employers' plans, this is very affordable. Oh, and you need to pay $20 or $30 for a bureau membership; no need to actually be a farmer.

Also have a joint geoBlue policy for international travel, which is another several hundred a year.

(Estimated up to 36,000 annually for all healthcare when retirement planning, but haven't come anywhere close to that.)
What's the lifetime maximum benefit? If you develop a very serious condition, will you switch to Obamacare?
jharkin
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Re: Options for healthcare during FIRE (but before 65)?

Post by jharkin »

Retire from a job with retiree health benefits (i.e. state or federal job) - or
neb2020 wrote: Thu Jan 14, 2021 9:01 pm - Game your income to be under 400% FPL to get ACA subsidies... but the premium still ain't cheap.
Also realize that the ACA costs vary significantly by state - and some of the dreaded "expensive coastal states" offer the best benefits. You can use the estimator on KFF to explore costs: https://www.kff.org/interactive/subsidy-calculator/

For example - right now the raw cost of my employer health insurance (*if* I bought just for the 2 of us) would be about 13k/yr and they subsidize it so I only pay $2k of that.

The KFF calculator shows that if I paid full boat for a silver plan in my state it would be around 12k (inline with my work plan minus the employer subsidy). Or 6k with 400FPL subsidies.
The KFF tool shows the national average for that plan is more like 18k. So it makes a difference where you live.

In the grand scheme of things, even if I had to pay full boat ACA for 5-10 years the extra cost is within the noise of our overall retirement plan and only a drop in the bucket compared to the annual cashflow that will be dropped when we retire (taking childcare and retirement savings out of the budget). If the number is significant for you than it sounds like your plan just doesn't support early retirement... that's not the end of the world as hte vast majority of people work until 65 or later.


--
Last edited by jharkin on Fri Jan 15, 2021 8:00 am, edited 2 times in total.
Silk McCue
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Re: Options for healthcare during FIRE (but before 65)?

Post by Silk McCue »

I'd like to point out that some sharing ministries such as CHM Christian Healthcare Ministries have been around for decades and have an excellent record of doing EXACTLY what they say they will do. It's a simple fact that can't be wiped away by naysayers and skeptics. I was with them for close to 10 years, only had one claim which was paid without issue.

My wife just retired and we both went on a United Health Care (Golden Rule) Tri-term policy for the next 3 years (less one day) which will carry her to Medicare eligibility. Cost is $700 per month for the two of us, $12K deductible, and we pay out of pocket at the same negotiated rates as anyone else on a UHC plan and are in network for all providers nationwide. We could have managed our income to be on ACA but the only "affordable plans" even with a $1400 per month subsidy had very narrow networks.

Cheers
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dziuniek
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Re: Options for healthcare during FIRE (but before 65)?

Post by dziuniek »

jayk238 wrote: Fri Jan 15, 2021 7:38 am
dziuniek wrote: Thu Jan 14, 2021 11:09 pm Find a state job which has retiree healthcare as part of benefits + allows early retirement.

Enjoy said healthcare.

My state allows retiree healthcare to start at 58. It does take 15 years to vest.....
Now, 58 is not really early - but atleast it bridges the gap from 58 - 65 and that's not insignificant. Additionally it becomes a kicker like program on top of medicare at 65.

I think most things have been mentioned.

Oh... You could get married to a citizen of a country where healthcare does not stink but is included in taxes. (no such thing as free healthcare)
So marry a Canadian or a European citizen + move there :) . Ha-ha.
I see comments like this a lot. In jest or not.

For your hypothetical german with excellent healthcare, their average taxes are 45% starting at wages of 65k. Is this ‘stinky’ enough?
That does seem high. But that's taxes while working.
Any Europeans/Canadians wanna chime in with tax rates in retirement?

Also someone mentioned $1000 + in Obamacare. Tack that onto your tax rate and will it be much different than this German example?
Just curious.

There might be some geo arbitrage here, haha.
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Brianmcg321
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Re: Options for healthcare during FIRE (but before 65)?

Post by Brianmcg321 »

wordsmith11 wrote: Thu Jan 14, 2021 10:18 pm
neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
This idea that low paying jobs with health insurance must be "simple" and "stress free" because they don't pay well is among the more obnoxious canards that ooze out of the more privileged sections of the FIRE 'community.'
I agree. Some of the most stressful jobs I ever had were the lowest paying.
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oldfatguy
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Re: Options for healthcare during FIRE (but before 65)?

Post by oldfatguy »

Brianmcg321 wrote: Fri Jan 15, 2021 8:29 am
wordsmith11 wrote: Thu Jan 14, 2021 10:18 pm
neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
This idea that low paying jobs with health insurance must be "simple" and "stress free" because they don't pay well is among the more obnoxious canards that ooze out of the more privileged sections of the FIRE 'community.'
I agree. Some of the most stressful jobs I ever had were the lowest paying.
+2 Such suggestions are about as helpful and realistic as all the "get a government job" replies.
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Re: Options for healthcare during FIRE (but before 65)?

Post by Kagord »

Another point...is how many people, when they start budgeting for FIRE, budget everything but health care scenarios. I did this at the early stages (this was well before MMM and FIRE were a thing)...and then the rude awakening hits when you source premiums/deductibles/OOP and soon discover planning for health care contingencies is the biggest expense. Then the "That's not fair!" stage, and then capitulation.
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Re: Options for healthcare during FIRE (but before 65)?

Post by mkc »

JDCarpenter wrote: Thu Jan 14, 2021 10:16 pm We have non-ACA policies through tennessee farm bureau (united healthcare runs them per contract). We have been happy, as our biggest concerns are the hypothetical cost of being hit by an uninsured concrete truck (for example), and avoiding rack rate markups on everything else.
We looked at TN Farm Bureau health plans ourselves, but a few things gave us pause. The state doesn't consider their plans to be insurance so it doesn't regulate them, and won't help in the event of an issue. They also require underwriting, premiums depend on health history, and have a pre-existing condition exclusion (6 or 12 months, depending on plan type). That said, they do provide out-of-network coverage, which none of the BCBST EPO plans on ACA (the only coverage provider in our region) do, and they are potentially half the cost of our Bronze ACA plan.

Any feedback on their underwriting process?
fortunefavored
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Re: Options for healthcare during FIRE (but before 65)?

Post by fortunefavored »

mkc wrote: Fri Jan 15, 2021 11:11 am
JDCarpenter wrote: Thu Jan 14, 2021 10:16 pm We have non-ACA policies through tennessee farm bureau (united healthcare runs them per contract). We have been happy, as our biggest concerns are the hypothetical cost of being hit by an uninsured concrete truck (for example), and avoiding rack rate markups on everything else.
We looked at TN Farm Bureau health plans ourselves, but a few things gave us pause. The state doesn't consider their plans to be insurance so it doesn't regulate them, and won't help in the event of an issue. They also require underwriting, premiums depend on health history, and have a pre-existing condition exclusion (6 or 12 months, depending on plan type). That said, they do provide out-of-network coverage, which none of the BCBST EPO plans on ACA (the only coverage provider in our region) do, and they are potentially half the cost of our Bronze ACA plan.

Any feedback on their underwriting process?
Do these off-book plans have an out of pocket max? That's another previous gotchya in the bad pre-ACA days. $1 or 2M doesn't go very far these days. Similar thing to check around prescription coverage - cancer drugs can be 100s of thousands of dollars.

Until I hear otherwise, I'm assuming these plans are junk - but I'd love to be wrong.
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Re: Options for healthcare during FIRE (but before 65)?

Post by fortunefavored »

cacophony wrote: Thu Jan 14, 2021 11:19 pm
fortunefavored wrote: Thu Jan 14, 2021 10:54 pm
Watty wrote: Thu Jan 14, 2021 10:50 pm
neb2020 wrote: Thu Jan 14, 2021 9:01 pm Are there any better options?
I don't know if it better or not but COBRA is an option. Normally it is 18 months but a few states(CA and NY, ???) have expanded that to 36 months but they may call it something else.

Some people don't realize that their state allows you to use COBRA for 36 months.
Extended COBRA, like "balance billing" laws, doesn't apply to self-funded health plans (ie, about 80% of large companies.)

Your mileage may vary - verify before pulling the trigger even if your state technically allows it.
Short of asking HR is there any way to tell if the medical plan is self-funded?
Sorry, I don't know - but if your company has more than 1000 employees, almost guaranteed they self-fund. It is much much cheaper for them (they can fire old people, sick people can't keep working and drop off the plans, etc.)
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Re: Options for healthcare during FIRE (but before 65)?

Post by White Coat Investor »

neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
- Have some kind of easy-to-manage business going into retirement and use that income to pay for healthcare premiums. So you're not really retired but self-employed.
- Game your income to be under 400% FPL to get ACA subsidies... but the premium still ain't cheap.
- Get a retirement visa / long-term-stay visa in another country, move there for cheaper healthcare, then come back at age 65.

Are there any better options?
Same way we deal with grocery costs. We buy it. If you don't have the money to buy it, you don't have the money to FIRE. Yes, there are ways to reduce the cost (PPACA subsidies, health sharing ministries) or pay for it with pre-tax dollars (start a little part-time business), but it's like every other expense so I'm not sure why people always single it out.
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Re: Options for healthcare during FIRE (but before 65)?

Post by drzzzzz »

This is likeliest the biggest expense that people don't pay attention to when working since their employers are paying for it and they have no clue how expensive it really is, so are suprised when looking into getting insurance after leaving a job. I would just remind folks that unless you are a risk taker, the really bad option is having no insurance since healthcare expenses are one of the few things that can easily bankrupt you in America since none of us know when we will need it. Seen way too many people who decided to go a few months without insurance, get cancer, into an accident, or some other medical issue comes up.
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Re: Options for healthcare during FIRE (but before 65)?

Post by willthrill81 »

White Coat Investor wrote: Fri Jan 15, 2021 11:23 am
neb2020 wrote: Thu Jan 14, 2021 9:01 pm For those who plan to FIRE, as in really retire and not just financially independent, how do you deal with health care costs from retirement until age 65 when medicare kicks in?

So far I've read/heard about the following options
- Not retire, and get a simple stress free job for the health insurance... so you're not really retired. Also known as barista FI.
- Have some kind of easy-to-manage business going into retirement and use that income to pay for healthcare premiums. So you're not really retired but self-employed.
- Game your income to be under 400% FPL to get ACA subsidies... but the premium still ain't cheap.
- Get a retirement visa / long-term-stay visa in another country, move there for cheaper healthcare, then come back at age 65.

Are there any better options?
Same way we deal with grocery costs. We buy it. If you don't have the money to buy it, you don't have the money to FIRE. Yes, there are ways to reduce the cost (PPACA subsidies, health sharing ministries) or pay for it with pre-tax dollars (start a little part-time business), but it's like every other expense so I'm not sure why people always single it out.
I think that people single it out primarily for three reasons: (1) they've never bought it before, (2) they get sticker shock when they see the cost, and (3) they are concerned that the cost will rise above their ability to pay it.
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Re: Options for healthcare during FIRE (but before 65)?

Post by bwalling »

fortunefavored wrote: Fri Jan 15, 2021 11:18 amSorry, I don't know - but if your company has more than 1000 employees, almost guaranteed they self-fund.
True
It is much much cheaper for them (they can fire old people, sick people can't keep working and drop off the plans, etc.)
Great way to lose a lawsuit.
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