532 comments

When Your Shitty Health Insurance Doubles in Price

Well, despite Mr. Money Mustache’s outrageous optimism, I think we all saw this coming. I opened up my premium renewal email from Kaiser and saw this:

Figure 1: My new insane medical insurance premiums for the minimum available “Bronze” program, with a $6500 deductible.

My family’s monthly health insurance premium, which had already more than doubled in the last few years to $674 per month, was going up a further 44% for the coming year. For no good reason, other than perhaps the the current government’s attempts to kill off the Affordable Care Act. (By cutting various parts of the structure, the insurance market becomes less stable and predictable, and thus more expensive).

Now, before we go any further, I have to note that this is a situation that only affects high income earners. If we were really retired on a $30,000 passive income as we were for some of the decade before this blog started making significant money, our family’s monthly cost would be more like $128, due to tax credits and the Children’s Health Plus plan.:

Figure 2: Net insurance cost for a $30k per year family of three.

But in my email, I just saw the thousand bucks. And if you know how I feel about rules, unnecessary costs, and insurance in general, you can probably guess what my initial gut reaction was:

“Fuck. FUCK THAT! This is absolute bullshit. Fuck you, I quit, I’m not paying it.”

But, since I’m not sixteen years old anymore, I was eventually able to get past this first stage of the analysis and think about an actual course of action.

After all, all the power and freedom in the world is of no use at all, if you choose to wallow in your anger rather than taking steps to create the life you want. So I thought about why I was so angry. It boiled down to this:

The premiums are not an accurate representation of my risk.

The value of medical insurance is pretty easy to estimate: the National Institute of Health calculates that the average person consumes about $449,000* in health care spending over an 80-year lifetime, or $5600 per year.  This is less than my plan’s deductible alone, which eliminates the value of insurance right off the bat. My plan really only covers catastrophically expensive events, which means it is unlikely that I will ever use it.

Plus, most medical spending is loaded towards the last decades of life, where the Medicare program already picks up the bulk of the costs. And, we are healthier than average – aside from one baby delivery about twelve years ago, none of us have ever actually benefited from health insurance in over nineteen years in the country.

When you add up these factors, it is obvious that the insurance is a bad deal. When presented with overpriced insurance, I always just choose not to buy it, which is also called “self-insuring”. But whenever I talk about self-insuring for medical expenses, everyone asks the same question:

“But what if you do get hit by a falling piano and have to spend months in the Intensive Care Unit?”

The answer is that I guess I’d receive some large medical bills!

I’m not denying that an expensive treatment absolutely can never happen to me. I’m just putting an estimate and a limit on how much I am willing to pay for insurance on it.

Remember, health insurance is not really health insurance. It’s just “large medical bill insurance” – a shaky precaution against having to pay for expensive procedures, so you can keep your investments instead of using them to pay the bills, perhaps eventually becoming poor enough that you are covered by public health insurance (Medicaid). A better name for it might be wealth insurance.

We have been trained to think that going without medical bill insurance is very risky. But that’s just because the subject appears frequently in the news. If it weren’t such a hot topic these days, the average person without a chronic illness would rarely think about it.

After all, by comparison, what precautions have you taken against being hit by a meteorite? There could be one streaking towards you right now. It could kill you, or your children, or it could leave you with a lifetime of chronic care costs. Are you telling me you don’t have separate meteor insurance? Why not?

In 2013 a 60-foot chunk of rock came from space and hit Russia with the force of 30 Hiroshimas. The human race escaped with just 1500 injuries, but only because the rock came in at a shallow angle and landed in a very remote area.

If space rocks are too far-fetched, how about motor vehicles? If you choose to drive a car, you are willingly throwing yourself into a far riskier situation than simply self-insuring for medical bills. Even more dangerous, statistically: being inactive and/overweight, a boat in which over 66% of us sail every day.

The point is that while huge, uncovered medical bills are inconvenient, they are rare. Therefore, my willingness to pay for insurance against them must have a limit. I’d definitely pay $50 per month for it, but should I be willing to pay $1000?

What about $2000? $4000? $12,000 or $1 million per month? I think that everyone would hit their “Fuck That” point somewhere in there.

And remember, this problem of expensive medical procedures is unique to the US. You can take your dollars almost anywhere else in the world and pay out-of-pocket to get the same (or better) quality care for a fraction of the cost. At some point, a rational person has to be willing to stop overpaying for this inefficient system.

After doing the math, I decided that my limit is definitely less than $1000, which means I should at least consider other options. So I looked into some of them:

  • Full Self Insurance
  • 2.9 Months per year of Self Insurance (to avoid IRS penalty)
  • Medical Tourism
  • joining a “Healthshare Ministry” like Libertyshare
  • expat insurance like Cigna
  • Artificial poverty (reducing my income to a level where we’d qualify for subsidies)

Self Insuring is the easiest choice: you just don’t renew your insurance and start banking that sweet surplus right away.  There is a tax penalty for that: $695 per adult, $347 per child, or 2.5 percent of your adjusted gross income – whichever is greater. Thus, a family with $100,000 of income would pay a $2500 fee. With my new premium at $11,500 per year, the penalty would still be cheaper all the way up to $461,000 in income. Plus, there are a surprising number of qualifying exemptions, including a death in the family within the last three years, a category which unfortunately includes me.

A 90 Day Insurance Vacation is the lightweight version of self-insurance. The penalty only applies if you were uninsured for three months or more. So if you start your insurance during the enrolment period but then cancel it on, say, October 2nd, you cut your premiums by about 25% in exchange for the reduced risk protection. Just be sure to postpone your Wingsuit Jumping vacation until at least the new year.

Medical Tourism is an important thing that every US resident should be aware of. After all, we live in the country with the most overpriced medical procedures in the world – why should we insist on doing 100% of our shopping here? This would be like insisting you buy only US-produced goods and services: no electronics, no shoes, no Amazon and no blueberries in winter. We should all read a book or two on the subject to understand just how easy it is, to free ourselves from the US-centric assumption that doctors are shockingly expensive.

There’s a lightweight version of medical tourism too: simply comparing insurance pricing from one state and city to another.  From a quick search I see that Colorado is one of the more expensive states for health insurance, with New York being the worst, and the best three being California, Utah and New Mexico. As with everything, it’s good to shop around when choosing where to live, and regularly challenge yourself by asking, “Is this where I’d settle down if starting from scratch?”

Health Sharing Ministries  like Liberty HealthShare looked like the most promising loophole. Due to the strong influence of organized religion in the US, if you can join one of these, you are exempt from the tax penalty. The downside is the same as the upside: these ministries are exempt from ACA rules, which means they can drop you for having a pre-existing condition. And they also want you to affirm their value system, which can range from agreeable stuff like “taking care of your health” to excluding coverage for things that violate religious taboos like abortion or attempted suicide.

Expat Insurance sounded promising when I first heard about it from some fellow Canadian early retirees who write the blog Millennial Revolution. Companies like Cigna will cover you for worldwide medical costs for a fraction of what we pay here in the US. But the hitch is it only applies if you are truly on the road and don’t actually reside here. So it’s not an option for now. But in the long run when I retire to an oceanfront compound (or commune?) in Costa Rica, yes.

Reduced Income is the last and least feasible option on the list for me right now, but it’s genuine and not even artificial in the case of the typical early retiree.

Suppose you are retired with, say, a mortgage-free home and $800,000 in index funds, and living on a plentiful $30,000 per year. Your income tax return will show only about $18,000 in dividends, some of them even tax-exempt. On top of that, you’ll sell just a few shares and pay taxes only on the capital gains. This taxable income in the mid-20s will keep you in a very low tax and health insurance bracket.

 So What Path Did the Mustache Family Take?

I brought all this stuff up to Mrs. MM – the other, less morally-outraged, leader of our household.  Our conversation brought up a few things:

  • Although a $12k insurance bill is insane, we would not even notice a $12,000 difference in income taxes if the brackets were to change. We currently have a high income, but this has not caused us to increase our family spending at all. This is because of the magic of living below your means: once you have enough money, the surplus is just that: a big, fat, awesome bonus. Since I want this enormous surplus to go back to society over my lifetime, why should I be upset about some of it paying for other peoples’ health insurance right now?
  • But, I countered, this doesn’t apply to everyone. The typical MMM reader earns enough money to be hit by these higher premiums, and many are raising families and running small businesses, thus purchasing health insurance on the open market. At the same time, they are trying to save as much money as possible to reach financial independence while they are still young enough to enjoy it. Burning $12,000 per year on mostly-useless insurance can wipe out 25% or more of the amount you could otherwise save for retirement.
  • Given this, the Healthshare ministry was one of the better compromises. However, she felt that pretending to agree with a religion (especially if it’s one that actively oppose some things we value like same-sex couple equality and women’s reproductive rights) wasn’t worth it for us.
  • In my own hypothetical pre-retirement situation (a self-employed couple making $200,000)  I would probably go for full self-insurance, simply paying the tax penalty whenever necessary and using medical tourism for any expensive procedures.
  • But also remember that if you’re a high-income business owner, your business can pay for your health insurance with pre-tax money. This cuts your net cost after taxes by 30-40%, making it a subsidized program after all.

So in the end, we’re just letting the policy auto-renew for now, using that last bullet point as a consolation prize.  And these premiums will probably remain outrageous, unless we fix the underlying problem in the US: it’s not the insurance, it’s how much money we waste on medical care. If the Medical system could grow a Money Mustache**, I am certain we could cut our costs down by at least 75%, just as the average consumer can cut their costs by a similar portion just by learning to life a joyful and efficient life.

 


Further Research:

After this article came out, a reader told me about the site “Health Care Bluebook“, which allows consumers to look up typical costs of various medical procedures. Many are less expensive than I had assumed.

Footnotes:

* I adjusted the NIH paper’s 2000 numbers to 2017 dollars.

** Ideas for making US healthcare less expensive – please critique and add your own in the comments!

  • Eliminate the 75% of healthcare spending we currently waste on self-imposed lifestyle diseases: eliminate subsidized urban car infrastructure in favor of muscle-powered transportation. Treat soda and products with added sugar in the same way we currently treat liquor. Treat health and fitness (rather than medical treatment) like a human right, instead of a vanity accessory just for rich mountain-dwellers and celebrities.
  • Make health care purchasing look more like Wal-Mart and Amazon, and less like the DMV. Every standard procedure needs to be listed on a menu with a price, and those need to be on the front door so they are subject to competition. By huge national or even international companies and co-ops.
  • Drastically increase the supply of doctors, and make the job more enjoyable: Cut mandatory work hours for residents from 80 to 40 per week. Modernize the medical school curriculum to eliminate pointless memorization, reflect current technology and reduce the cost of the degree.  Open the borders to qualified doctors from other countries. Allow telemedicine – let doctors in other countries certify easily for US diagnostics and prescriptions.
  • Elevate nurses to do all the stuff they already do, but in their own clinics without working for a doctor and paying the money up the chains.
  • Start using search engines and artificial intelligence for diagnosis, rather than flawed and expensive humans.
  • Open state and national boundaries for insurance and hospital services with only the required regulations for safety as we do with other imports.
  • Eliminate the right for anybody to sue for medical malpractice, or indeed for pretty much anybody to sue anybody else for anything. Let’s make our professional reputation and our actions public and then just suck it up like adults, reinvesting the enormous proceeds currently wasted on litigation.
  • Figure out if we can make single-payer health insurance work for us as it already does for most countries. There are many benefits, but the biggest is probably just eliminating all the mental energy we each waste on thinking about this mundane topic. As an analogy, imagine if every citizen had to hire their own police force for personal security – just think of how much energy and fear would be wasted on this topic, which we barely have to think about right now. As it turns out, it works the same way with health insurance.

 

 

 

 

  • CapitalistRoader November 6, 2017, 7:42 am

    Be careful on the individual mandate:

    “Next year, for the first time, the I.R.S. will reject your tax return when filed electronically if you do not complete the information required about whether you have coverage, including whether you are exempt from the so-called individual mandate or will pay the penalty. If you file your tax return on paper, the agency said it could suspend processing of the return and delay any refund you might be owed.”
    ‘The New York Times’, 20 Oct 2017

    https://www.nytimes.com/2017/10/20/health/irs-obamacare-mandate.html

    Reply
  • GB November 6, 2017, 8:27 am

    Haven’t read all the comments here – but add to the list of recommendations for making healthcare cheaper in the U.S.: robotic surgery for simple procedures.

    Reply
    • Call 911 November 7, 2017, 6:31 pm

      Thay sounds nice, but would be catastrophically expensive. The da Vinci robot costs the hospital ~$5000 every time you turn it on. Ignoring the $1,000,000+ cost to buy it in the first place and the infrastructure change to build the enormous OR it is housed in.

      Reply
  • likesBacon November 6, 2017, 9:19 am

    Providing health insurance to people with pre-existing conditions and people with extremely unhealthy lifestyles is not “insurance”, it’s taxpayer funded healthcare. All maladies in the system flow from this simple truth.

    It’s like a casino where some players get to know the outcome of the games before they even bet. Everything works as long as the casino is kept packed with suckers who keep forking over chips. Uncle Sam forces everyone to gamble, so the casino isn’t too concerned that the suckers will walk out the door.

    Eventually the suckers will find a way out of the casino and the casino well go belly up. When all the subsidized gamblers turn to Uncle Sam to pay out we’ll finally have single payer healthcare. Exciting right?! WRONG! We’ll still have the same crazy situation above, except now there is no casino and Uncle Sam is just going to send the suckers the tax bill in the mail instead of making them go into the casino. Yay!

    Taking care of the less fortunate is the noblest of causes. We need to stop kidding ourselves about where this is going. Let’s let insurance go back to being insurance.

    Reply
    • Dirk November 7, 2017, 7:18 am

      In the 1990’s, Israel, Switzerland, and Taiwan were working on healthcare reform and each country looked the world over for what worked, and what didn’t, and each country created a very different system with two things in common: they deliver and their citizens are happy with them. To say Americans can’t do the same seems to be a belief in the American Religion …

      Reply
  • LX November 6, 2017, 9:19 am

    I’m shocked to see the public opinion on this site that doctors and nurses are essentially the same thing. I can see why the doctors don’t defend themselves because of the nursing backlash. Medicine is complicated. There’s a reason you have to see thousands of patients and go to school for a long time. You can see 100 people with heart attacks and it might present a bit differently in each person. A missed diagnosis could cost someone thousands of dollars down the wrong rabbit hole at best and at worst cost them their life. I know someone who presented with the common flu and actually had underlying Addison’s disease. And talk about reverse medical tourism, there’s a reason the richest people in the world come here for their health care. In fact the Cleveland Clinic has a whole floor for sheiks from Saudi Arabia. God forbid you get diagnosed with cancer or have a difficult to manage chronic disease and go abroad only to realize you don’t have the same access you do here.

    Reply
    • HCH November 6, 2017, 10:13 am

      Ummm … Sheiks have access ‘cos they are rich and can afford to pay for it verses the majority of the population of Saudi Arabia.

      My health insurance premium (two adults without any health issues or history of issues) in August went from around $800 to $1,800 and after questioning that down to about $1,300 per month on a Cobra policy. I can no longer afford it! I therefor have access, but ‘no access’ to this wonderful healthcare in the USA!!

      Reply
      • Call 911 November 7, 2017, 6:56 pm

        I think you missed the point. The sheiks can buy their way into any facility. They pick American ones. There is no special “sheik team”. Just the same folks taking care of your mom last week and you tomorrow. Why are they picking the same people you have access to? Because the sheiks/CEOs/government ministers think we’re the best.

        Reply
        • MKE December 10, 2017, 4:14 pm

          Really, if I get hit by some maniac driver they will take me to the “sheik team” at the Cleveland Clinic?

          Of course not. I will get the chumps down the street. I will overpay, too. I will not, though, pay as much as the sheiks. Those sheiks are getting that treatment for a reason – it’s called money. I do not have access to those people. Like the previous poster pointed out, the rest of the people in Saudi Arabia don’t have access to them, either.

          You have access if you have the money, and a lot of people are getting priced out of “decent.” They don’t even know about the special “sheik team” that you pointed out.

          Reply
  • Brian Y November 6, 2017, 9:21 am

    Regarding the Artificial Poverty/Reduced Income, is there ever a case where the actual assets are considered when approving a persons eligibility for reduced insurance rates, or do they strictly rely on annual reported income tax?

    Brian Y

    Reply
  • Theresa Wiggen November 6, 2017, 9:28 am

    I think someone needs to start a Flying Spagetti Monster Healthcare Cost Sharing Ministry.

    I’m a part of one of these (not an FSM one – I don’t think it exists…), and it’s so fantastically rational: we get the bill, we negotiate with the hospital for discounts, WHATEVER DISCOUNTS WE SECURE COUNT TOWARDS OUR DEDUCTIBLE, and the rest of the costs are “shared” (covered by the fund that everyone pays into).

    It’s that bit about whatever discounts we negotiate are credited to us that is so magical.

    I had to get a CT Scan, blood work, etc, for chest pain that turned out to be a stomach hernia. ER costs and a full day of tests cost $7500. We asked for a discount – they made us run through a bunch of paperwork to see if we qualified for gov’t assistance (we didn’t), and so they give us their “standard self pay discount” – which is 71%. 71% discount – that’s their standard.

    That discounted our price by $5,325. We have a $5,000 “deductible” – which is less than the discount that we got credit for, so the whole thing cost us $0. We pay $175/mo for the two of us and two kids – adults with a $5k deductible and kids with a $1k deductible – that’s a “deductible” per incident (not per year – so there’s a difference). No preventative stuff is covered, but that stuff is cheap – again, with a standard 71% discount.

    Here’s the thing – medical care doesn’t cost that much. Just insurance companies negotiate for 70% discounts, so hospitals have to inflate the cost of care so that they 30% they get will still allow them to pay their people and buy equipment. Our local hospital doesn’t want to screw us though, so if we’re willing to do paperwork and talk to their billing dept, they’ll give us the same discount they give the insurance company. A CT scan doesn’t cost less if I’m paying for it with insurance money vs. paying for it with my money, and the hospital saves tons billing me and getting paid 2 days later (and then I wait to get reimbursed by my healthcare sharing ministry – that takes 4 mos, but hey – I’m good for it. I read this blog, so I’m set).

    I disagree that the cost of healthcare is the problem. The way I see it, the insurance companies are the problem. This is a old business category that should be illegal. They stand between nurses and doctors (passionate, care-givers; driven intellectuals; salt of the earth) and the people who need their care, and they pretend to add value – but they don’t. It’s MUCH easier talking to the billing dept of the hospital than to any insurance company I’ve ever hired.

    If you don’t share Mennonite values or Protestant values or whatever, that’s fine. The case can be made the FSM, or Atheism, or other “anti-religions” (hope that doesn’t sound unkind… I’m sure I’m using the wrong words to describe it, and it’s truly not my intent to offend) to be categorized as religions. Someone should get on this. Mustachian Healthcare Cost Sharing Ministry – requirements include a moral objection to wasting money, as evidenced by participating in the Mustachian Cost Sharing Ministry. Anyone? Anyone?

    Reply
    • 9 O'Clock Shadow November 8, 2017, 12:55 pm

      Theresa! That’s brilliant! And your example shed critical details on the costs. It would be great if one could obtain statistics per hospital on their discounts over the year by billing code. The best way to have a rational discussion is for people to look at the same numbers.

      Anecdotally, a friend told me about a trip to Vegas for a trade show (we’re all Canadians under single payer here). His colleague had to go to the ER for stomach pains, which were the result of food poisoning. The staff used a DISPOSABLE blood pressure cuff! The margins on those are certainly better than a reusable cuff that literally every other hospital would use. In other words, if a hospital can charge an insured person for a disposable blood pressure cuff every time they come in, they make a small profit. Multiply this by other non-necessary disposables/procedures/monitoring and you have a pretty good profit per patient, with no increase in care and huge increase in cost.

      If I ever had to move to the US, I’d ensure to head a breakaway Church of FSM for low-carbers. We are the Keto-stants!

      Reply
      • Kite January 1, 2018, 8:12 am

        Yes, disposable cuff.
        MRSA.

        Hospitals are fabulous places to pick up an nasty bug, especially in an ER.

        Reply
  • Michael Bacarella November 6, 2017, 9:34 am

    One factor missing from your excellent as usual analysis is the possibility of your premium being rebated back to you at the end of the year.

    I assume the cost of health care did not double in your state since last year, but rather the insurance company has lost confidence in their risk assessment models.

    It’s entirely possible that insurers, concerned with bankruptcy because they can’t predict costs, are choosing the route of collecting far more in premiums than they would expect. In this case the ACA requires them to rebate whatever they didn’t pay out back to the policyholders.

    Indeed during the first few years of the ACA I did know people who received rebates on their premiums at the end if the year.

    It will be interesting to see if that happens again this time around, or if costs really did double for the Bronze cohort year-over-year.

    Reply
    • Mr. Money Mustache November 6, 2017, 11:18 am

      Excellent point Michael – I’ll keep an eye on that and definitely report on any rebates if they happen.

      Reply
  • Rounding the Bend November 6, 2017, 9:45 am

    The monthly bill of $961 is FOR THREE OF YOU! Or $320 per person per month. It’s a great price and comparable to what other countries like Germany, the UK, and Canada charge in premiums/taxes. You should be happy that you can buy from Kaiser Permanente which is a great value and is not available in many states.

    A person with a good salary in Germany pays about $1000 a month in health care premiums (with about half of that paid by the employer). For that $1000, the German person gets full coverage with almost no out-of-pocket costs. Your plan, at $320 per month but with a large deductible probably is pretty comparable in value to the German plan.

    Sorry to say, MMM, but I think you are being a bit of a complanypants about this. There are a lot of problems in the US health care system, but your Kaiser plan is pretty good. The your readers who live in other states (like New York) are paying costs that are more in line with the argument you are making.

    Reply
    • Mr. Money Mustache November 6, 2017, 11:17 am

      Thanks RB, that positive perspective does cheer me up quite a bit. But to really compare, we would have to look at the deductibles. Wouldn’t a German plan have a very full coverage at that price? My insurance, with a $6000+ deductible per person, is very unlikely to ever be used, over the course of an entire human lifetime.

      Reply
      • Rounding the Bend November 6, 2017, 11:46 am

        There are many sides to this argument. USA costs are roughly twice that of other industrialized economies, but your Kaiser plan is closer to the other countries than any other insurers/HMOs. But the other countries aren’t perfect and all of us are paying to much for health care.

        Reply
  • Dr. Phil November 6, 2017, 9:59 am

    I live Norway, and when we got our children all we had to pay for was the parking at the hospital. We have to pay for dental, and as far as I know that’s about it.

    I only have insurance on the house.
    Don’t see the need for any health insurance. But I think we pay more tax though…

    Reply
  • Kirsten November 6, 2017, 10:06 am

    Make the cost of doing business in Healthcare less expensive. Hospital procurement offices now have Amazon Business as an option: https://www.amazon.com/b2b/info/for-healthcare?layout=landing

    Reply
  • Art November 6, 2017, 10:28 am

    There were very obvious components left out of the ACA for purely political reasons. A BIG one was limiting the geographical coverage, as you listed in your blog entry above. Open borders for health coverage would enable competition. another was allowing preconditions, and making coverage of some things mandatory. Why should I not be able to pay less for coverage by choosing which things I want to have covered? Why should I have to pay for, say, mental health coverage? Or, non life-threatening ailments? Companies like Geico and Progressive should be running commercials advertising how low my rates can be if I switch, just like for auto and homeowner’s insurance. I want the lizard and Flo competing for my business.

    Health insurance really is wealth insurance. If you have a lot of wealth you should self-insure. Or if you have no significant wealth. Just let others pick up the tab. For those just at the threshold of financial independence, it really is a wealth transfer mechanism, just like our progressive income tax system. One can talk about self-coverage but getting cancer with a modest nest egg would pretty much wipe it out.

    Making health care more cost-efficient and encouraging healthy behavior in consumers will not help if these behaviors are not rewarded with lower rates. That is, if the system remains a politically-motivated wealth transfer mechanism.

    That is why there remains such outrage over the ACA: it’s politics. Just ask Plumber Joe.

    Reply
  • Yermak Timofeyevich November 6, 2017, 10:31 am

    Actually the current administration is considering eliminating the fine for not having insurance :http://www.washingtonexaminer.com/trump-readies-executive-order-to-unravel-obamacares-individual-mandate/article/2639728. So it is not all bad…
    I definitely agree with the Single Payer suggestion. It works everywhere else for far less costs, even for the government (because just with the money we spend on Medicare and Medicaid processing we could have had a functioning system for everyone).
    The main problem is that prominent political donors, both R and D, want the system to stay that way. It is too profitable to break.

    Reply
  • Acastus November 6, 2017, 10:37 am

    The new cost is similar to a cost for a couple in New York. Family coverage is $300-400/mo more. I think we are a community rated state, so age does not matter here. Some contributors:
    *You might have passed an actuarial age threshold that hurts.
    * Did CO tell insurers to assume cost sharing payments would continue? Some states are reworking costs based on the new federal payments.
    *The cancelled payments for cost sharing increases everyone’s premiums. Those that get subsidies are covered. The upper middle class get hit.
    * All insurance is financial protection. Homeowners insurance does not keep the tree from falling on your house. It just pays to fix it.
    * Consider the tail of health costs. At the top end, procedures and medications are enormous costs. 50-100k for chemo, 400k for the latest gene therapy, 200k for heart surgery. Does it make sense to self insure against these? Some ailments are random bad luck, not lifestyle side effects.
    * I am curious whether health ministries have properly evaluated their risks. I am skeptical about getting something for nothing.

    Reply
  • Cowboy Doc November 6, 2017, 10:50 am

    We have a single-payer system already, covering a vast portion of the US population: Medicare. Wildly successful, but incredibly expensive. So we have empirical evidence on how a very large single-payer system looks (and costs). Expanding it to the entire population would obviously require even more of the federal budget to be eaten each year by this new entitlement and would grow the unfunded future liability for our kids (already pegged at perhaps $60 trillion). When you combine the math with the politics, single-payer for all is going nowhere in the US.

    Sure, other countries have state-driven systems that offer excellent care. But they have evolved that way over the last 70 years, while the US went in a different direction. This can’t be ignored. Culture and history matter and can’t be magically swept away. All the suggestions here are either good or great ideas, but they all run into highly motivated opposition, heavily invested in the status quo of the last 70 years. I don’t think any of these admittedly good changes can actually become reality because of the entrenched culture and entities.

    So, my guess is that change will either happen very incrementally and slowly (such as tweaks to the insurance regulatory environment or perhaps changing scope of practice laws at a state level or Amazon making it one-click to engage in medical tourism), or there will be something(s) so incredibly disruptive as to make the changes unnecessary. I’m talking Utopian stuff here: for example, finding and fixing disease-causing genes, wiping out entire categories of disease. Short of that, every big change will be painful and resisted.

    Reply
  • Harriet November 6, 2017, 10:55 am

    Don’t know if someone posted this already, but it’s informative:

    https://www.huffingtonpost.com/entry/trump-obamacare-shopping-confusion_us_59de8645e4b0fdad73b1d75e

    Reply
  • Matt November 6, 2017, 11:01 am

    Hi MMM,

    As a Canadian citizen living in the US full-time, my wife was able to get Cigna expat insurance. They have two options, living in the US or living anywhere else in the world, with the former being more expensive. I’m not 100% sure it’s offered to US citizens, but it’s definitely offered to US residents. My wife (25 years old, no pre-existing conditions) paid $55/month for a policy with a $10,000 deductible. Including the fine this is still less than ACA health insurance, and the $55 protects us from crazy medical bills.
    Since she now has a job she pays a ridiculous $300/month pre-tax (her employer pays another $300), which we accepted to avoid the fine.

    Reply
  • Kashmani November 6, 2017, 11:08 am

    Since you are running a web-based business, there is also always the option of returning to Canada. It’s not like you are tied to the U.S.

    But I suspect that on the income this blog is generating, $12,000 a year in health insurance is a drop in the bucket compared to the additional income taxes you would pay in Canada. I sometimes feel like weeping when I see how low U.S. income taxes are. An absolutely horrible country in which to be poor, but a great country in which to be upper middle class or rich.

    Then again, depending what happens to the Liberal policy agenda on tax planning using private corporations, it may just work out. Earn $400K per year in a corporation, alternate between the Mr. and the Mrs. as to who writes blog posts, and draw $25K in income each. Leave the rest in retained earnings.

    Reply
  • snowcanyon November 6, 2017, 11:18 am

    I should add that not only are you being overcharged, but Kaiser is terrible health insurance unless you have an out-of-network option. They are great for well-child checks, asthma management, and routine care, but they seem unable to handle either complex medical issues or trauma. Luckily all three of you can return to Canada, but others might want to bear in mind that Kaiser has not a single Level 1 trauma center because they just can’t do a good enough job, and that their kidney transplant program was shut down in California because of excess deaths.

    To me this defeats the purpose of health insurance for generally healthy folks such as yourselves who are unlikely to get something common and easy to treat, but might be unlucky enough to get something rare and serious. You probably won’t need chronic disease management, but you might need a trauma center if an uninsured driver hits you on your bike, and you might need an NIH cancer center if you are unlucky enough to get a rare cancer.

    In my experience, most health care professionals really try and avoid Kaiser.

    Reply
    • Dirk November 7, 2017, 7:23 am

      A specialist told me when I asked him if there were any difference among the various large insurance providers, they were all the same until it came time to get treated and then Kaiser was the worst …

      Reply
  • bdr November 6, 2017, 11:21 am

    Your last point is a good one, MMM. As a Canadian, I consider myself fortunate not to have to worry about how I would cover a catastrophic injury. I can only imagine how having this at the back of one’s mind could impact daily life.

    While I believe that the free market is the best way to distribute goods and services in most cases, I think health care is an exception. If you truly wanted to make it an efficient (national) market, the cost of health care would need to fluctuate with supply and demand. As it stands, this is not the case (from my understanding). A buyer of health care generally does not have the option to shop around. One cannot choose to schedule a cheaper MRI in “off-hours” rather than “peak”, nor can they settle for a cheap, serviceable doctor rather than the expensive, world renowned one. City residents don’t have cheap health care relative to rural residents as you would expect since there are more resources and competition in the city. In a free market, no insurer would touch a 90 year old with a ten-foot pole. You’d probably see a decline in life expectancy for that reason; an 80 year old with prostate cancer might decide to run down the clock rather than seek treatment.

    I also don’t think the single payer system is perfect. For elective treatments in Canada, some people will wait for over a year. I’ve experienced it with an elective orthopaedic surgery. However, there are great cost benefits that come with this system. Pharma companies will charge whatever the market can bear. If the market is controlled by the government, the government has the upper hand in negotiations. Physicians bill the government and must justify treatments administered. This, coupled with their protection by a national association, prevent them from prescribing unnecessary treatments to cover their asses in the case of a malpractice suit. As a side benefit, there may be fewer malpractice suits since people don’t need to win huge amounts of money to fund additional treatment when a doctor messes up. Additionally, since the government is involved in university funding, there’s more of an impetus to train more autonomous non-physician health professionals such as midwives and nurse practitioners. This reduces overall costs too.

    Free-market purists will argue that there are numerous perverse incentives that arise under this system. Physicians, due to job security and government protection, don’t need to be as good, or perhaps it’s harder to get rid of the bad ones. I agree, but the same can be said for all government employees (teachers, bureaucrats, elected officials, etc.). Pharma and equipment companies will have less incentive to innovate since profit margins would decrease. This is true, but there is a lot of publicly funded R&D that happens at universities. Regardless, I would argue that most pharma companies are not particularly incentivized to find cures since treating symptoms is so much more profitable.

    Anyway, that’s my take. Perhaps I’m missing a big issue since I don’t live this, so correct me if I’m wrong.

    Reply
  • Neil November 6, 2017, 11:21 am

    I think suing for malpractice is the only one that I disagree with on your list. The US in particular has a problem with being overly litigious, but the idea that someone can screw up in a big way – potentially shortening your life or causing you to live in chronic pain, maybe without the use of some limbs – and the only consequence be to their reputation isn’t acceptable.

    Narrow the definition of malpractice. Make any punitive damages flow to the state instead of the plaintiff, (thus restricting compensation to exclusively be for actual damages incurred), and generally take steps to limit unreasonable and excessive litigation. But don’t close the door on malpractice. Reputation alone isn’t enough, and does nothing for the person who’s been hurt.

    Reply
  • Laura Casasanto November 6, 2017, 11:32 am

    Another strategy for cutting costs: move to a midwifery model of prenatal and birth care for low risk women. Midwives have drastically lower cesarean rates and and intervention rates overall, they are less expensive than doctors, and they get sued a lot less.

    Reply
  • Cornelius November 6, 2017, 11:38 am

    Reading this post and the comments is very interesting. The market (if you can even call it that) for individual health insurance is completely and utterly broken. I understand the concept of the healthy and wealthy subsidizing the sick and poor, and I think that’s great – but this is not what is happening. Most of the wealthy continue to exist outside the “exchanges” by having employer provided insurance and are oblivious to the actual costs. Nothing will change until the majority of people realize how broken our system is. Instead we’re stuck with the insurance companies operating in the small individual market charging as much as they can in the hopes of making enough money. I know you have to make the decision that is best for your family, but I think the system is so broken that people should opt out until things become so bad there’s a wholesale change. I understand not everyone can opt out, which is a real problem, but I think it’s important to support policies that make sense, instead of supporting a system that is clearly broken and unsustainable. Politicians on all sides have their heads in the sand, as do most people because the true cost is masked by their employer provided insurance.

    Reply
  • Daniel November 6, 2017, 11:43 am

    https://www.linkedin.com/pulse/why-health-insurance-wont-work-what-loel-fenwick
    According to the RAND corporation. Approximately, 42% of every dollar paid into the health system goes to paperwork, overhead, and government programs. This only leads me to believe that the vast complexity of insurance companies having to manage providers, claims, and governments has nearly doubled the cost of health care in America. We have seen a surge in Concierge medicine, and companies like Google or Amazon strait up hiring doctors to work at their office and take care of the employees on salary. Thus there is no messy paperwork or negotiations. The Doctor gets paid, and people get care.

    I think this is a major reason some doctors, like mine, don’t even accept insurance, and others give discounts for not using it.

    Reply
  • Sally November 6, 2017, 12:16 pm

    I’m currently employed for the foreseeable next 10 years. However, my game plan on health insurance coverage after becoming FI and leaving the workforce – leveraging the health care system from my birth country Taiwan. I’ll be paying the annual premium (think it’s couple hundred dollars, but for sure under USD$1,000/year) for as long as the program allows me. It’s a better plan B than expecting the US healthcare system will be there for me when I need it. Plan A – just stay healthy!!!! Green smoothie all day errrrday.

    Some interesting read between healthcare in Taiwan and the U.S.
    https://www.huffingtonpost.com/entry/how-does-american-health-care-compare-to-taiwan_us_591c4efbe4b021dd5a829047

    Reply
  • Karen November 6, 2017, 12:19 pm

    We have employer sponsored health, and pay $324/mo for the premium, plus $53/mo for Dental and Vision for 3 people. The deductible is $4000/yr. I feel that is very expensive as we really don’t go to the doctor that often. But we do have an HSA that his company contributes to, so that’s free money and it offsets a little bit of the premium. I do like having the HSA because we all wear contact lenses and glasses and those get paid for out of those funds. We also contribute to the HSA which lowers our Federal Tax bill a bit. All of our premiums are pre-tax as well.

    My husband has A-Fib, just diagnosed this year, that was a $30k event and in the end he just got a scrip for a pill he needs to take for the rest of his life. So we had to pay “only” $4,000. So this year it worked out for us, sort of, but we usually don’t have any other crazy things happen. Earlier this year we were without insurance for about 2 months, and I got pneumonia, it was pretty terrible. I went to the doctor and she diagnosed me for $162 and wrote me a scrip for $30 Zpack and I was better in a couple of days.

    I would happily pay a low monthly premium to pay for catastrophic events, and pay to go to the doctor when I really need to and my annual check up. But that type of insurance is not really offered.

    Open Enrollment is coming soon for my husband’s company – I hope the #’s don’t increase too much!!!

    Reply
  • Lance! November 6, 2017, 12:51 pm

    If we want to see a change, we need to put all our effort in redirecting the political conversation towards to root of the problem – the prices! All the battles with coverage and insurance is just a matter of cost-shifting – every stakeholder is trying to get someone else to pay. If the costs came down, then nobody would be complaining about premiums and subsidies.

    The number one issue is the lack of price transparency where every provider is incentivized to charge as much as they can get away with and as such, there are vested institutional interests in maintaining this status quo. Human nature also prevents medicine operating as a rational market; when people get sick, they want the best care and here at least, people tend to correlate cost with quality (“you get what you pay for”) – you can keep cool and shop around if your car breaks down, but the psychological effect is different when it’s your body that fails you.

    The free-market fundamentalists may argue that if we had price transparency then the invisible hand will work its magic, but all of the effective health systems around the world have the government strongly involved in price controls. My point is that this is definitely solvable, but the politics are daunting.

    Hey Pete, are you well-versed in the history of the Canadian universal care system? The fight for universal care was just as ugly and vicious as here; the U.S. just happens to be ~50 years behind the curve.

    Reply
  • Peter Lazzopina November 6, 2017, 1:14 pm

    Dear MMM readers,

    You will be happy to learn that the medical community is growing its own money mustache. The short version of the story is that most medical care (80% or more) happens in primary care settings and is really ïnexpensive to deliver if you can cut out the middlemen. There is a small but rapidly growing shift to direct primary care and free market pricing. You can find out more in the links below.

    https://www.wsj.com/articles/with-direct-primary-care-its-just-doctor-and-patient-1488164702
    https://healthrosetta.org/
    https://surgerycenterok.com/

    With direct primary care and free market surgery centers around the country you really don’t even need to do medical tourism outside the United States to get the best care and best prices. I’d be happy to do a Q&A session to explain things for your readers or you might pursue an interview with someone like Josh Umbehr of Atlas MD. He’s a nationally recognized leader of the DPC movement and I think your readers would love to hear about his take on how to hack the ridiculously overpriced health care system.

    Reply
  • Paul November 6, 2017, 1:18 pm

    As a person living with universal health care in Canada I thought I would take a look at the cost here just as a comparison. I live in Ontario and the cost per person based on the government spending on health care is $3,703 per year. I used the 2016 actual spending and quickly divided by the population. So for a family of 3 like MMM’s the cost would be $11k. Not a perfect comparison but it is a start. Also note, that the universal does not cover drug costs. Most employers have health plans, costs shared between the company and employee, that cover drugs. For people like myself who do not have an employer plan I would have to purchase individual insurance. I am not sure the cost of an individual plan but when I was working the employer I had paid the full amount and I think it was $84 a month. This covered some of the items not covered under the universal health care such as massage therapy, dental, etc. In Ontario when you turn 65 you are covered under the government drug plan which pays for drug coverage with a co-pay for the individual. If you are single and have an income less than $19k per year you pay $2 per prescription, if you make more than $19k per year you would pay $6.11 per prescription to a maximum of $100 per year.

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  • Mark November 6, 2017, 1:20 pm

    I picked up a plan on December 31st, 2014 – the last possible chance to get one grandfathered in. For some reason, Virginia congress keeps renewing it. It’s been $60-$70/month the whole time (unfortunately after tax dollars). Has a $10k deductible which shrank to $5k because I didn’t reach it for 3 years (didn’t use it at all, actually). Also has a max out-of-pocket of $30k. It’s encouraged me to monitor my own health, so I’ve been ordering a panel test online at the beginning of every year, which gives me a full breakdown of my bloodwork-based and urine-based health status. This helps me see if part of my system is acting up in a detectable way. I also had a couple moles removed and paid cash ($200 cash vs $2400 insurance estimate – wtf?). Also found that going to the local county health offices for vaccines costs like $20-50.

    Reply
    • Mark November 6, 2017, 1:21 pm

      **Virginia congress keeps extending the deadline for when it’s considered no-longer ACA compatible/grandfathered-in

      Reply
  • Paul November 6, 2017, 1:28 pm

    Interesting thing about health care costs in Canada or at least Ontario is I use to work for a not for profit organization with a lot of doctors and scientists doing research into health care. One of the studies they did showed the 80/20 rule come into effect in health care. 80% of the costs are attributed to 20% of the patients, actually I think it was even more than that but I cannot remember the exact numbers. As for cost savings I believe there are many to be had. I know at just one hospital here in Ontario the cost of the salaries for the finance group was at least $8 million per year. I am a finance person and this amount seems crazy to me. It is a government funded hospital that doesn’t have all the problems of dealing with insurance claims etc and yet they have some many finance people that the salaries add up to over $8 million. The government had started to implement a plan that would reduce these costs but once the various hospitals clued into what was going on they put a stop to it. Everyone protecting their little fiefdoms. The government caved as it was an election year and you don’t mess with a unionized group with the power of the health care industry in an election year if you want to be reelected.

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  • Josh November 6, 2017, 1:57 pm

    Hey just wanted to say love the blog! I find it one of the few with practical advice, I bought a used Leaf because of your advice and traded in a gas guzzling Subaru Cross-trek and now I don’t have a car payment so thank you!

    I’m also an RN and I work in geriatrics and I think you nailed it with your earlier comment..for you it’s “wealth insurance”.

    Because yes, sadly in this country right now if you or a loved one becomes ill, you will want the best, and the best is here in the US of A and you have about 3 or 4 hospitals by the way where the very best reside and you will want those people, trust me. That type of care without insurance? It will totally wipe out a person’s wealth in matter of months if not a year.

    The solution for many nearing the end is to start giving everything away before they head to long term care that way they look “poor” and qualify for medicaid. I’m not saying I agree with this but it happens all the time, constantly actually.

    But for a younger person? It’s insurance, and yes if your healthy at times it may seem like money down the drain.

    Nice to see folks having a rational conversations about this.

    Reply
  • EnjoyIt November 6, 2017, 2:01 pm

    The cost of US healthcare has been discussed ad nauseam in the forums. In the US we spend a little over $10k per person per year on healthcare via insurance, self pay or medicare/medicaid. This is almost twice as much as the second most expensive developed country. What I find most unsettling is that our politics don’t discuss the actual cost of healthcare but argue on who will cover the cost. Republicans want to spread the costs to the poor and the democrats want the rich to cover everything. There is no discussion of actually making it more affordable just the cost shifting to different demographics.

    Being a physician and maybe a partial insider to the industry here is how I would go about cutting the cost of healthcare in the US.
    1) Eiminate health insurance from low cost transactions. There is no reason to need insurance to see a doctor and get your blood pressure medication adjusted. Dealing with insurance increases cost via required personnel, technology, and the insurance company needing to make a profit.
    2) I would also remove the need for another prescription to have non narcotic medication refilled every 3-6 months.
    3) Stop providing medical care to those who have no quality of life. I mean no mental function and bedridden. This costs the US a fortune and provides no benefit to society. Allow patients to die with dignity instead of multiple tubes sticking out of every orifice including the creation of new orifices just to place more tubes.
    4) Eliminate all the regulations that provide no benefit to patients. Hospitals and physician offices have to hire significant personal just to keep up with all this nonsense regulations some of which actually increases harm to patients. A great example was the government push of pain being a 5th vital sign while at the same time adjusting reimbursement by patient satisfaction scores. This lead to a rampant increase in narcotic utilization and has created the opioid epidemic we have today. This also created an increase in testing which is shown to increase patient satisfaction but, adds risk by doing unnecessary procedures for minor incidental findings.
    5) The pharmaceutical industry has way more hoops to jump through in the US as compared to other developed countries which increases cost. This needs to be reduced as well.
    6) Cap malpractice to allow physicians to minimize “cover their ass testing.”
    7) Allow CMS to negotiate rates with the pharmaceutical industry
    8) Allow complete transparency in cost for medical care instead of this hidden cost structure that no one knows about until after the care is provided.
    9) Allow patients to shop around for their medical care crating competition and lower prices
    10) Decrease the cost of obtaining a medical license and then decrease reimbursement to those physicians. Allow physicians to decrease their taxes for providing charity care.

    This is not an all inclusive list but some of the things that can decrease the cost of healthcare. There are plenty other items not listed but just fixing the above would likely put us closer in line with the rest of the developed world and allow us to provide affordable healthcare to all Americans.

    Reply
  • Beriberi November 6, 2017, 2:11 pm

    People like to classify “lifestyle diseases” as anything that affects someone who is different. There are a wide variety of preventable, expensive things that plague mustachians too: Knee and hip replacement (less activity will definitely protect you from this, running marathons will devastate your joints). STDs (including cervical cancer, HIV, pelvic inflammatory disease – sometimes not always). People who ride bikes are at a much greater risk per mile than car drivers – accidents happen even in absences of collisions with motorized vehicles. Perhaps an accident with a helmet on is okay to treat, but without a helmet is a “lifestyle”? And what about motorcycles – very good gas mileage, lots of expensive health care? Other “lifestyle problems” – woodworking or anything that puts you up on a ladder, high school football and soccer (oh! the number of teenagers getting surgery these days). Insulin pen for a diabetic is a terrible waste of money, but a rotator cuff surgery for a weekend warrior is a good use of health care dollars?

    Additionally, there is some data that suggests that cigarette use may decrease health care spending – kills people off before they become burdens on the system.

    If you walk around a medical office, ER or hospital and look and see who is there and why, you might find that there are lots of people who look like you and make choices like the ones you have made.

    Reply
    • Stephen November 6, 2017, 2:27 pm

      “Additionally, there is some data that suggests that cigarette use may decrease health care spending – kills people off before they become burdens on the system.”
      (citation needed)

      As for the rest, while a number of things could be brought back to “lifestyle,” I think we need to address the activities that are both unhealthy at their core and widespread. Sure, non-fatal hang gliding accidents could cost a lot on an individual basis, but they don’t move the needle enough to tax at a rate in addition to whatever some form of nationalized medicine would cost.

      Reply
  • Accidental Fire November 6, 2017, 2:17 pm

    Great post Pete, and the crazy healthcare system in the U.S. is the reason I’m only semi-FIRE right now and now full-monty. I reached my FI number easily three years ago and since then it’s been padded very well, but instead of quitting my job as you did I just went half-time. It allows me to keep my health insurance, which is a good deal. I simply just don’t have the ballsyness and risk-tolerance that you and others have to fully separate because of this issue.

    As for the what-ifs behind self-insuring, that would scare me silly after seeing that my 1 hour minor arthroscopic knee surgery back in March would have cost $12,500. Absolutely crazy.

    Reply
  • John November 6, 2017, 2:47 pm

    One other thing that makes Health Insurance important, is to keep Hospitals and other services from charging you whatever they feel like. Here’s an example:
    My ex went to the ER because she couldn’t breathe. Turns out she had a lung infection and also required a pneumonia treatment. Two night in the hospital total. The hospital’s main charge was for $35,000. Anthem said no way, you can only charge $3,500 for that.
    If we did not have insurance, we would have been stuck with an outrageous bill…

    Reply
    • Mark November 6, 2017, 3:38 pm

      I think it’s designed to scare you in that way. See, for instance, the first page of comments, where someone claims they got a standard 71% discount for self-pay just for asking about it. Also, my own personal experience has been that I can get a 90% discount on insurance-website-quoted numbers.

      Reply
  • Daniel November 6, 2017, 5:10 pm

    Most of the healthcare money goes to hospitals and doctors (50% – 60% depending where you look):
    https://altarum.org/sites/default/files/uploaded-related-files/CSHS-Spending-Brief_February_2017.pdf

    Drugs are about 10% of costs. Insurance about 15%. Malpractice about 2%.
    If you factor in unhealthy habits that’s 25% and all the above need to be repercentaged.

    Average physician compensation went from 206K in 2011 to $294K in 2017, close to 50% increase (and $90K in absolute amount) in 6 years.
    https://www.medscape.com/slideshow/compensation-2017-overview-6008547#3

    I don’t think there is any other profession that had such good 6 years. My neighbor doctors (2 adults, 3 kids) have 1 top of the line BMW 5 series, top of the line BMW X5, top of the line Mercedes SUV and recently bought a 4th car, a 200K Maserati. There is your cost increases.

    Reply
    • MKE November 9, 2017, 11:42 am

      Wow! But doctors encompass a large group, and they are well-versed in how to stoke fear, create confusion, invoke a sense of obligation in others. They will happily lie to you about costs, their salaries, and how the problem can all be laid at the feet of insurers and patients. They know this isn’t true. They are an entitled, arrogant set, and predatory at that. Thank you for pointing out the problem.

      Reply
  • Emily November 6, 2017, 5:20 pm

    My company offers health insurance that meets the criteria as being ‘affordable’ under the ACA. That policy had a $5,000 deductible, per person, with a $1,400 per month premium (4 kids, 2 adults and my employer kicking is around $300 a month for me).
    Holy smokes! 2 of my kids didn’t even SEE a doctor in the year we had that coverage! It was crazy!
    We were able to transfer to my husband’s insurance – roughly $500 a month with much better coverage. I can’t believe how health insurance rates have climbed in recent years!
    The first year the ACA took affect, my premium – for the exact same policy I had on 9/30 for $300 a month – cost OOP $800 a month on 10/1. It’s unsustainable!

    Reply
  • Helen November 6, 2017, 5:42 pm

    I had once to fly to my home country Ukraine to get dental job done. After US doctor insisted I remove two teeth and install implants. Plus I had questions about other teeth. So instead I went to Ukraine and was able to avoid implants. Doctor installed quality crowns that still serve (5 years) and did other important crown job for me. Double root canal- $200, three crowns with one buildup – $500. The quality of the job is outstanding (they use US materials that they buy using dollars, that’s why the cost is so “high” as doctor explained to me).

    Reply
  • Mary November 6, 2017, 6:31 pm

    I just found out today that the jacked up silver plan (thanks, gubbermint!) I blindly re-upped for 2018 is only five bucks a month cheaper than a gold plan which has half the deductible and almost two grand less in out of pocket max. I’m old and have some weird neurological problems that lead to hitting the deductible every year and need this damned insurance, so I switched to the gold.
    I guess the point of this comment is that reading your blog has made me *slightly* more canny about money, and! sometimes the cheaper plan isn’t cheaper.

    Reply
  • Laura November 6, 2017, 7:40 pm

    Are you familiar with Gretchen Rubin’s framework “The Four Tendencies”:
    https://www.forbes.com/sites/danschawbel/2017/09/12/gretchen-rubin-how-to-use-the-four-tendencies-to-improve-our-lives/#500554fc6d2b. From this post and your post about “The Rules,” it sounds like your predominant tendency might be that of “questioner” (and your wife an upholder or an obliger). I’d be interested in hearing any suggestions you might have for those of us who aren’t questioners or rebels and find it much harder to shirk or significantly question The Rules. Thanks for all the great posts!!

    Reply
  • Marion Oja November 6, 2017, 8:04 pm

    One of the reasons I went back to work after an 18 year hiatus…meaning I “retired” at 34 and went back to work at 52 was because of the unrelenting increase of our health insurance premium. It was exceeding our mortgage payment. The first job I had was with the local school district and I was astounded that the deductible was $200…while my deductible was $2500. The premiums were a fraction of what we paid as a self-employed family. It pissed me off…we were subsiding the cost of insurance for state employees via property taxes and we were struggling to keep up with premium increases. Plus we weren’t able to use the insurance since our medical costs were always less than the deductible. Flash forward 10 years. I no longer work for the school district. Our insurance premiums are a manageable $440 a month because the company I work for subsidizes a big chunk of the costs. I could retire now and pay a $1000/month plus on the open market, but now, I won’t be able to keep my provider that I’ve used for the last 25 years since the insurance companies on the health exchange have pulled out of my area and I have to find someone who will accept a 61 year old woman that will soon be on medicare… they definitely don’t want. If I quit working, I’m thinking about getting a provider in a foreign country. The air costs will be far cheaper that the cost of premiums here.

    Reply
  • superlurkerguy November 6, 2017, 9:24 pm

    Long time reader, possibly first time poster.

    Why not start the first church of savings or something? Make some savings audit conditions because that is the belief structure. Contribute x dollars for 10 years times the number of readers then have some coverage with reasonable premiums after the 10 year mark. Some type of trust for the Church of Savings. In the 1920’s some like minded people started an insurance company. If 10k Users, cough members of said church per month would add $1,666,666.67 @ 2k / 12 per member per year over 10 years compounded would be $57,703,043,755.21 with 8% growth over period. Someone should check my math. If there is an actuary in the house please weigh in. Those same persons would would just enough to hit the HSA limit for the health care. 60B. Rotational board of members blah blah. Bet we could get by with handful of full time partitioners.

    PS… I’d join.

    Reply
  • Wilkop November 6, 2017, 10:14 pm

    May not happen now, but years ago when I lived in Montana medical tourism was a Canada to US trip, It was common for Canadians to come to the hospital in Great Falls for procedures (mostly non life threatening) that they did not want to wait for in Canada. US costs have probably now escalated to the point where this is no longer feasible.

    Reply
  • Jeff November 6, 2017, 10:42 pm

    I’ve always wondered if switching most medicine over to Nurse Practitioners rather than General Practitioners would cut most of the non-prescription costs. Nurse practitioners can prescribe medicine, or refer you to an actual doctor if it is not obvious what is needed. It seems like the outrageous cost of education for a doctor has to have at least some impact on premium cost.

    Reply
  • SteveinFL November 7, 2017, 5:15 am

    Holly – thanks for your comments on Liberty.

    I would love to hear of anyone else’s expereince wih Liberty Healthshare.

    As a self employed 49 year old man in Flroida, my ACA insurance is going from $500/momth to nearly $800 month.

    Liberty would be $200/month.

    I ran all the numbers and analyses liked MMM did above. If I could guarantee my income for 2018, I would know whether I’d receive subsidized ACA or not. As a new consultant, I’m not sure what I will make next year.

    I like the idea of a health sharing coop. My concern is, will they really cover my bills in the event of a catastrophic health problem like a major injury or cancer? Or, will I be stuck with massive bills or unending administrative nightmares trying to get reimbursed?

    Reply
  • Dirk November 7, 2017, 7:06 am

    This is worth a read: The More Lavish the Gifts to Doctors, the Costlier the Drugs They Prescribe

    https://www.nytimes.com/2017/10/25/well/live/the-more-lavish-the-gifts-to-doctors-the-costlier-the-drugs-they-prescribe.html

    A few years back I went to a physician in the USA and got a prescription for an antibiotic. When I took it to get it filled, the pharmacist told me I was lucky to have health insurance that covered the cost entirely because if I hadn’t, it would cost more than $200. Later I asked another physician about this antibiotic, and he told me that I didn’t need that expensive antibiotic, that a generic would be just as effective for me, and that the prescribing physician had his strings pulled by whatever Big Pharma that manufactures that drug.

    Reply
  • Cameron November 7, 2017, 7:14 am

    This reminds me, does anyone know of an affordable source for insulin pens. Specifically Lantus and Novolog?

    Reply
  • martin November 7, 2017, 11:41 am

    I’m in the same boat here in Colorado – my premiums just jumped as well. I’m looking at $1,169/month for a family of four (up from $828).

    Some of the health plans here in Colorado offer access to Health Savings Accounts (HSAs), while others do not. As the Mad Fientist pointed out in one of his posts (http://www.madfientist.com/ultimate-retirement-account/), HSAs generate significant tax benefits. If your marginal federal tax rate is 25%, then contributing $6,900 (the max for a family in 2018) to an HSA will reduce your taxes by $1,725.

    For me, the fact that my plan with Brighthealth allows for a HSA will save me $1,932 annually in Fed taxes (28% bracket) plus another $320 in Colorado state taxes.

    The last thing I try is to find a health plan that permits payments from credit cards. If I can do that, I link it to a card that pays 2% back, which will translate to $280 annually in cash back rewards.

    Reply
  • littlecrabtara November 7, 2017, 1:18 pm

    Move back to Canada, the land of free healthcare! Well I guess it’s not completely free in my province, British Columbia, we have a Medical Services Premium (MSP) that we pay monthly. The MSP is rated according to a salary scale. My salary of $81K/year means that I have to pay $70 a month to cover any hospital visits/stays or family doctor appointments. It’s a pretty good deal if you ask me. I previously lived in Alberta where there is no cost for healthcare at all. BC is moving towards getting rid of the MSP as well. Next year all MSP costs will be cut by 50% and the government will then transition into no MSP costs at all in the next couple of years.

    When I read stories like yours it makes me so grateful to live in a country that values free healthcare. It is easy to take it for granted when you live somewhere that has had free health care for decades. I wish you luck with navigating your health system!

    Reply
    • Greg November 8, 2017, 9:44 am

      You’re paying a lot more than that for healthcare. The British Columbia government spends about $19 billion per year on health expenditures for a population of 4.6 million people. It works out to about $4,100 per person for healthcare. On top of your MSP you’re also paying thousands of dollars per year for healthcare through income taxation.

      Reply
  • Judah Gabriel Himango November 7, 2017, 1:44 pm

    I also reached the “F- that!” moment this year, with a $1800/mo cost for a healthy family of 4 in Minnesota.

    I switched to private health sharing ministry. I see MMM declined that partly because of religious reasons, but for me (a gen-you-wine religious person :-)), I had no such qualms. Since we’ve switched, instead of paying $1800/month for Blue Cross Blue Shield, I’m paying $450/month.

    That’s $1000/month savings. That’s real money. It’s been a huge blessing.

    A dear friend also had this same private health sharing ministry. This summer he got a pulmonary embolism, which required an ambulance trip to the emergency room. He survived, thank God and the medical professionals, but he was saddled with a $30,000+ health care bill. I’m glad to report that the health sharing ministry paid for everything except the ambulance ride. He showed me the check – indeed, it was a check for $30,000.

    I won’t say the name of the health sharing ministry so as to avoid being spammy. But I just wanted to let you and MMM readers know that health sharing has really worked for us, an upper-middle class family of 4.

    Reply

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