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Interesting idea to beat crazy health care premiums
Old 03-12-2017, 02:51 PM   #1
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Interesting idea to beat crazy health care premiums

I have an idea on how to reduce my health insurance burden pre- Medicare and create a more interesting lifestyle at the same time. This is based on assuming some versionPlease find holes in this idea.

Right how DH and I have an average Silver Plan through the ACA costing us $22,740/year, no subsidies. For kicks, let’s say the new plan goes into effect in 2019. We will both be eligible for Medicare in 2024. Assume our premium jumps to 5x the minimum premium in 2019 and there is no premium decrease. Assume a 5% inflation rate per year, including next year. Assume we get ACA insurance next year but the program phases out starting in 2019. Our health insurance premiums from 2016-2024 will be the following:

2018 $22740 x 105% = $23,877
2019 $23,877 x 5/3 x105%-$8000 = $33,784
2020 $41,784 x 105% - $8000 = $35,874
2021 $43,874 x 105% - $8000 = $38,067
2022 $46,067 x 105% - $8000 = $40,371
2023 $48,371 x 105% - $8000 = $42,789
2024 $50,789 x 105% - $8000 = $43,328

Total: $228,023

I know this is a worst case scenario, but that's what we are in right now. There is no political will to reign in costs, and market forces won't work when costs are hidden behind insurance companies. Between us we have had less than 10 visits for anything other than routine health maintenance over the past 17 years. My husband is on a statin and I’m not on any meds, losing weight to my ideal weight in about a year. No big family history risk. We don’t smoke and we barely drink.

Here is the idea: In early 2019, buy a home in Mexico, either San Miguel de Allende or by Lake Chapala. Obtain a temporary visa, good up to four years (through 2023). DH moves exactly 4 years before his 65th birthday in January, I do the same in September. Move there, obtain Mexican health insurance. Also purchase Global Health Insurance for travel anywhere—this is for catastrophic problems. Snowbird back and forth, spending just over 6 months in Mexico, and the rest at home. At the end of that time, sell the Mexican home. Or if we like it better there...you get the idea.

Basically, we would use the money thrown away on these exorbitant health care premiums to buy a house, use Mexican residency to get health insurance and make us eligible for global health insurance which includes the U.S. for a fraction of the cost. We get an extra house which will appreciate over time. It seems to make sense to invest that money in real estate rather than throwing it at an insurance company.

What do you all think?
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Old 03-12-2017, 03:05 PM   #2
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Interesting idea. If our insurance goes up too much I may look into it.

Question: if you claim experience is so minimal, why do you buy a Silver plan rather than a Bronze plan?

Or you could just move to Vermont... a bronze plan there is ~$450/month or $10,800/year for the two of you.... but who knows how it will change.
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Old 03-12-2017, 03:14 PM   #3
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Two things to research. First, how good is medical care where you'd plan to live in Mexico? Like you and DH I'm blessed with excellent health but the older you get the higher the probability that that could change.

Second-if you're planning to use the "travel policy" to cover medical expenses while you're in the US for months at a time, check the fine print. It's likely to have restrictive language so that it doesn't cover people who are in the US for more than a few weeks- otherwise the premium would be crazy high (yeah, just like US residents pay!).
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Old 03-12-2017, 03:23 PM   #4
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An area of risk/volatility to consider is Mexican RE values. You might want to look for a place in Mexico that is not dependent on heavy cross-border flows (US expats or Mexican nationals supporting the economy with money sent home). It seems possible that relations between our countries might be in for a difficult period, at least temporarily, and this could affect RE values in tese areas. Similarly, Mexico could change their own policies toward US visitors as a result of/in retribution for US actions, and this might negatively affect the workings of your plan. Just something to think about.
I'd also visit those Mexican medical providers you'll be depending on.
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Old 03-12-2017, 03:37 PM   #5
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I think that is a good plan, but the travel insurance for the U.S. would likely be emergency services and evacuation costs only, so if you developed a condition like cancer you'd have to be prepared to have your non-emergency treatments in Mexico. Which might be fine, but for me that would be kind of a big unknown.

We're just keeping our options open at this point. Not ruling out either Mexico, Vermont, some place else or just staying put and absorbing the cost, as long as we can get coverage. Bills don't always pass and elections change the parties in power - things might be different by 2020.
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Old 03-12-2017, 03:40 PM   #6
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I lived full-time at Lake Chapala for three years, and my wife and I are going to be spending most of our time there at least until one of us hits Medicare age. I'd be happy to share recommended doctors and other resources with you if you decide to make the move.

Without turning this into a Tolstoy novel, here are some recommendations and observations:

1. Rent, don't buy. There's no upside investment-wise to buying down there and plenty of downside exposure. House construction and maintenance are very, very different from anyplace in the U.S. and as samclem points out residency laws and Mexican attitudes towards foreigners are subject to change.

2. Lake Chapala, to be clear, is NOT dependent on cross-border flows of money, or even all that much on expat residents. It is, more and more, a playground for the upper middle class and upper class from nearby Guadalajara, many of whom own second homes there. Gringos are less than 5% of the population and are generally appreciated and valued - thanks in no small part to many decades of them doing volunteer work, sponsoring local students and adding a lot of money to the economy.

3. Private health insurance is quite expensive (though it won't phase you given what you're paying). You may still want to look into it but a cheaper way to go once you have your residency visa is to apply for Seguro Popular, the government insurance and pay out-of-pocket for everything else. There's a surfeit of U.S. trained and/or excellent local doctors of every type. Figure $20-30 to see an English-speaking GP (locals pay more like $5 but that requires fluent Spanish), maybe $60 for a specialist, $30 for a dental cleaning, etc. There are hospitals in Guadalajara that can give anyplace in the U.S. short of the Mayo Clinic of Johns Hopkins a run for the money.

We've known several people who winged it and had to pay out of pocket for truly major procedures like quadruple bypass and breast cancer treatment. Total costs including multiple hospital stays and follow up were in the $30-40K range. Not cheap, but add a few zeros to get to U.S. costs.

I know many self-described health care and insurance refugees down there whose monthly rent and food costs them less than their insurance premiums did N.O.B. Most are or were in that especially difficult ~55-64 age range where U.S. premiums are sky-high and Medicare hasn't kicked in.

Feel free to PM me if you need more info once you're down there.
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Old 03-12-2017, 03:51 PM   #7
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If you are healthy what about buying catastrophic coverage only?
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Old 03-12-2017, 03:53 PM   #8
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Not a bad idea, do you think Long term renting would work? If healthcare costs as much as a mortgage, there maybe some savings in renting. Quality of life is also worth putting into the mix.
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Old 03-12-2017, 04:27 PM   #9
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I think this post just shows that US health costs have now reached the breaking point.
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Old 03-12-2017, 04:46 PM   #10
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Originally Posted by pb4uski View Post
Interesting idea. If our insurance goes up too much I may look into it.

Question: if you claim experience is so minimal, why do you buy a Silver plan rather than a Bronze plan?

Or you could just move to Vermont... a bronze plan there is ~$450/month or $10,800/year for the two of you.... but who knows how it will change.
No bronze plans offered on the ACA in our area this year. If there is a market correction this year, which could happen, we could end up getting a huge tax refund. I've been on bronze plans for the past two years. Even the cheapest off ACA bronze plan was about $1500/month for the two of us. I'm not sure why. It was a tough decision, I'll tell you.
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Old 03-12-2017, 04:54 PM   #11
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Not a terrible idea, worth looking into.

PS, if you are serious, start learning Spanish now. I'm sure more folks in Mexico speak English well, than in the US folks speak Spanish, but it will be a handy skill to have especially if you end up in hospital for any period.
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Old 03-12-2017, 05:14 PM   #12
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I think this is one of those situations in which we just don't know exactly what to expect for future health care costs. With that in mind, here's what I would do if I was in your situation.

First, I'd put $100K aside to deal with health care costs for a year or two if they skyrocket as in your projections. That way, you don't have to move now.... while you can still afford to pay for health care.... you can wait a while to see how things pan out.

Then, I'd put a lot of effort into finding any places within the US that meet these two criteria:
(1) low health care costs like Mexico, and
(2) as suitable to your needs and desires as Mexico.

There may not be any! But might as well look, since moving within the U.S. would probably be easier from a bureaucratic viewpoint as well as language (unless you are fluent in Spanish), culture, and so on. That is, unless the language and culture are what is driving you towards Mexico, but my impression from your post that costs are the main motivation.

If the time comes when health care costs are much worse than they are now, and if you haven't found a better place within the US, then you will not be up a creek without a paddle. You can take a year or so to choose a location in Mexico, find a house down there, move, and so on at your leisure with no need to rush at breakneck speed because you will have that lump sum to supplement your present health care budget.
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Old 03-12-2017, 05:22 PM   #13
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Makes great sense to me. We aver for diversification in investments. Diversifying other aspects of our lives, to include dual citizenship or residence, just sounds smart.
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Old 03-12-2017, 05:23 PM   #14
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I think this is a really good idea for someone who would like to live in Mexico (raising my hand saying "me, me!"). Or anywhere else that would solve the problem. As you are a retired physician, maybe some interesting doors might open to you if you unretired just a little?
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Old 03-12-2017, 06:13 PM   #15
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What do you all think?
Wouldn't work for me - my life is complicated enough as it is.

Thought experiment: slap some number on the value of your time, and then calculate the upfront & ongoing costs associated with your plan. It may appear less attractive than at first sight.
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Old 03-12-2017, 06:52 PM   #16
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Right how DH and I have an average Silver Plan through the ACA costing us $22,740/year, no subsidies.... Assume a 5% inflation rate per year, including next year. Assume we get ACA insurance next year but the program phases out....

Between us we have had less than 10 visits for anything other than routine health maintenance over the past 17 years. My husband is on a statin and I’m not on any meds, losing weight to my ideal weight in about a year. No big family history risk. We don’t smoke and we barely drink.
In most states, individual plans are age-rated and have an annual age adjustment of about 3% in addition to the annual inflation adjustment.

Since you are healthy, have you considered at least one, if not both, of you opting for Short-Term Medical (STM) plans? They are not ACA compliant and use medical underwriting to keep premiums lower. The STMs from large insurers such as UHC and National General have broad, national PPO provider networks. They would not qualify as continuous major medical coverage under the proposed bill. A rule will be implemented on 4/1/17 that restricts enrollment to 90 days with each insurer but it is expected to be recinded by 2019 allowing STMs to go back to 11-12 month enrollment periods.
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Old 03-12-2017, 07:19 PM   #17
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If you are healthy what about buying catastrophic coverage only?
Prior to ACA, we paid about $500-600/month (not remembering exactly as my memory is getting poor) for a policy with $10K deductible. Nothing was covered until that $10K was exceeded. I called it "catastrophic insurance", but the insurer simply called it high-deductible.

My bronze ACA plan now has $13K deductible, with a premium of $1520, and the term "catastrophic insurance" meant something else after ACA. I just look and it is said it is only for people under 30 years of age. What is going on?

Will this kind of plan be available again? If it is, the premium will be a lot higher then earlier because of the preexisting condition clause, plus the unlimited lifetime coverage. The last time I had that pre-ACA insurance was in 2014, and I am older now too.
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Old 03-12-2017, 07:49 PM   #18
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It sounds like a great plan B option.

My plan B is to establish our primary residence in Europe (instead of Mexico), but the same principle applies.
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Old 03-12-2017, 07:55 PM   #19
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Look at Costa Rica whose hospitals do a lot of medical tourism. If concerned about medical conditions stay near the capitol, because that is likey where the best medical care is. (This is in general true in third world countries because the elite tend to live near the Capitol)
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Old 03-12-2017, 08:10 PM   #20
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Since you are healthy, have you considered at least one, if not both, of you opting for Short-Term Medical (STM) plans?
If I were the OP, I'd be thinking about self-insurance. One concern the self-insured have is not having access to negotiated rates for medical care (i.e., paying the 'rack rate'). What's interesting about the STM plan I purchased for 2017 is that the underwriter (National General) and the network provider (Aetna) are different companies. Why couldn't a person interested in self-insuring become the underwriter and pay Aetna a fee to access its network (not necessarily 'as needed', could be a monthly or annual fee)? This access fee should be relatively small: you're paying Aetna for the administrative costs associated with establishing and maintaining its network of medical providers, and that's all. I like this! Of course, the gov't may be displeased.
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