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The cost of health insurance
Old 07-03-2002, 11:26 AM   #1
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The cost of health insurance

One of the terms of my early retirement is that I am able to buy health insurance under my ex-company's group plan. Additionally, the company pays part of the monthly premium. For this I am thankful.

However, my cost for the monthly premiums has doubled in the past two years, far exceeding inflation. As we all know, this could be considered a financial crisis if the trend continues unabated.

I am interested how other E-R members are dealing with the dramatic rise in health care costs, especially those that may have another 10 years or more until eligible for Medicare coverage.

So tell me, how are each of you dealing with the situation?

Red
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Re: The cost of health insurance
Old 07-03-2002, 05:29 PM   #2
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Re: The cost of health insurance

My health insurance premiums have also skyrocketed since I retired in 1994. They've gone from $1,800/year in 1994 to $4,800 per year in 2002.

I keep about 15% of my portfolio in pharmaceutical stocks as a hedge against rising medical costs.

intercst
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Re: The cost of health insurance
Old 07-03-2002, 07:04 PM   #3
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Re: The cost of health insurance

Quote:
I keep about 15% of my portfolio in pharmaceutical stocks as a hedge against rising medical costs.

intercst
Sounds a little as if you're fighting fire with fire. One can only wonder how this battle will play out over time.

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Re: The cost of health insurance
Old 07-12-2002, 08:12 AM   #4
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Re: The cost of health insurance

Last fall, after running out our COBRA benefits, my husband and I signed up with CareFirst, which is a Blue Cross/Blue Shield company. They are also the ones that have to take you no matter what under the HIPAA Act (may have gotten the acronymn wrong). I did a LOT of research on this stuff - probably bored the pants off the RE crowd on TMF. FInally, I narrowed it down to about 4 companies and took the list into the insurance person who worked for my allergist. She is very sharp, and I wanted an informed opinion from inside the medical community. The only thing about CareFirst that makes me a little queasy is a cap on drug expenses. For normal situations, it's no problem, but if you need cancer drugs at $5K a hit, it would be a problem. Very little cancer in the family, so we took a chance. It was better all the way around in other instances.

Our costs for 2 people, premiums plus deductibles is $8480 - premiums alone are 7380. They treat us separately, and I go out of network for my allergist! so my deductible is twice my husband's. So far no trouble and my husband mangled his back and had an MRI and physical therapy. For the record, we're about 8 years older than intercst, so I think we're doing OK.

I also have drug stocks, as does my husband. Between us, I think we have all the big ones, though they aren't looking so hot right now, what with the HRT thing - so maybe a good time to buy?

So that's my story. I'm sure September, though, we'll get a nice rate increase.

arrete
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Re: The cost of health insurance
Old 07-13-2002, 10:46 AM   #5
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Re: The cost of health insurance

Yikes! Mine went from $306/mo to $479/mo for a high deductible plan two - that's after only a year, and no claims!

At this rate . . . Well, I won't venture there.

Dory36
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Re: The cost of health insurance
Old 07-13-2002, 10:48 AM   #6
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Re: The cost of health insurance

Quote:
Our costs for 2 people, premiums plus deductibles is $8480 - premiums alone are 7380.
arrete
Yikes, $7400 for a family of two! Obviously I need to count my blessings. At this time I'm able to get family coverage for $5500/year, and that was after a pretty big jump in January.

Still, it is the trend that is a little unnerving. Today, I can better appreciate why so many people today have to choose between eating or paying for health care. It's not a pretty sight, is it?
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Insurance plans?
Old 07-17-2002, 02:42 AM   #7
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Insurance plans?

One strange thing about health insurance -- it seems hard to find info on the plans.

You'd think it would be marketed like cell phone plans, since pretty much everyone needs it, but getting reliable info on what's available, for how much, and other details seems harder than getting tomorrow's stock market information!

Why is this?

Dory36
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Re: The cost of health insurance
Old 07-17-2002, 06:04 AM   #8
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Re: The cost of health insurance

You know, Dory36, that is a pretty good question.

Perhaps it has something to do with the idea that the big healthcare insurers would rather sell group policies to large corporations than to individuals. That probably helps to reduce their risk somewhat.

Perhaps is has a lot to do with the issues around pre-existing conditions (car insurance doesn't cover poor repair and service histories - but they do bang you for a bad driving record).

Perhaps the profits are not as significant as with life insurance products (I would think that mortality information is very well known and the real risk to the insurers is quite low).

Anyone from the insurance industry (early-retired of course) have a better handle on Dory's question?
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Re: The cost of health insurance
Old 07-17-2002, 10:28 AM   #9
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Re: The cost of health insurance

dory36 asks,

One strange thing about health insurance -- it seems hard to find info on the plans.

You'd think it would be marketed like cell phone plans, since pretty much everyone needs it, but getting reliable info on what's available, for how much, and other details seems harder than getting tomorrow's stock market information!

------------------------------------

It's simple really.

Lack of information and the resulting inefficient market for individiual health insurance plans allows insurers to charge higher prices.

I don't look for this to improve anytime soon. Insurers are one of the top political campaign contributors at both the state and Federal level. I'd be astonished if there was any regulation to correct the situation.

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Re: The cost of health insurance
Old 08-01-2002, 10:39 AM   #10
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Re: The cost of health insurance

The latest issue (Sept 2002) of Consumer Reports includes coverage about the issues and problems centered around the purchase of health insurance by individuals.

It is worthwhile reading by anyone contemplating early retirement without the benefit of group plan coverage.

Check it out.

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Re: The cost of health insurance
Old 08-02-2002, 10:11 AM   #11
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Re: The cost of health insurance

I have Blue Cross Basic PPO. It has a high deductable and doesn't cover certain costs like prescriptions, pregnencies, etc. I use it more as an emergency hospitalzation, accident, or serious illness plan than a standard medical plan as I only go to the Dr. once a year for a check up & have no medical issues currently. It cost $45/month and went up to $60/month once I turned 45. Health care cost is my only major concern and I'm looking into other options (like being an expat in a foreign country) to try to off set or eliminate future costs.
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Re: The cost of health insurance
Old 08-24-2002, 02:32 PM   #12
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Re: The cost of health insurance

I posted earlier that we were expecting our health care premiums to go up by at least 20%. Well, here's what actually happened.

The Washington Post said the following on August 9th:

CareFirst BlueCross BlueShield, the Washington area's largest health
insurer, is likely to raise premiums next year by about 20 percent, on
average, because of higher medical and prescription-drug costs,
…..
The survey cited by Day of CareFirst said HMOs predict that nationally they
will raise rates by an average of 17 percent next year -- 2 percentage points
lower than in the Washington area. The survey by benefits consultant
Milliman USA Inc. did not cover less restrictive preferred provider
organization (PPO) plans.


Well, we have an independent PPO contract with CareFirst, so from the tone in the WP article, I though all bets were off. DH and I were waiting for a 20+% increase or maybe 30% since we were independent and PPO and because DH had moved into a new "band" - 55, i.e. "old".

So we finally got the dreaded premium increase, and it is

7%

I am confused. Relieved, but confused. I am waiting for some other horrible thing to happen instead (OK property tax was up over 20%), but still…

arrete - feeling paranoid
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Re: The cost of health insurance
Old 08-25-2002, 03:53 PM   #13
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Re: The cost of health insurance

Congrats, Arrete! You dodged a big one!

I've got to say, health insurance is the only downside I've seen yet to retiring before the company offers such benefits. (But it's still well worth it!)

Dory36
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Re: The cost of health insurance
Old 09-07-2002, 06:26 AM   #14
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Re: The cost of health insurance

After years of planning, saving and investing for ER, health insurance is the last remaining issue standing between me and the outprocessing office at work. With no work related options other than COBRA, I've looked at individual policies and don't like what I see. I've come to the conclusion that I'm not going to be able to totally give up some form of employment until I can qualify for Medicare.

That said, I've been looking at part-time job opportunities that provide health insurance benefits. One possibility is working as a school bus driver for a local school district. Although I am concerned about the "D" word (discipline), the hours don't bother me since I'm an early riser. Add in the benefit of no night, weekend, or holiday hours and a couple of months off during the summer, and it sounds reasonable.

Anyone have any bus experience or suggested other options for P/T work with health benefits?

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Re: The cost of health insurance
Old 09-07-2002, 09:09 AM   #15
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Re: The cost of health insurance

Some suggestions....

1) Don't know what line of work you're in but joining a "professional association" that has insurance plan would get you group rates.

2) Work part time at a job that doesn't have medcial insurance but use the take-home pay to defray the costs of a personal policy. (Sucks pretty bad when the totality of a working person' s wages goes JUST for medical insurance)

3) Don't laugh: I found out recently that the Airport screeners the Fed's are hiring include full-timers AND PART-timers.

Good government job.... ya know they got good bennies. Indoor work, The only catch might be the opposite of the bus driver. As a part timer you'd almost certainly be working weekends and holidays to meet "surge" requirements on the travel schedule. But then again you'll make beaucoup more money have almost invulnerable job security and get those medical bennies. I doubt the part timers would be excluded.

Just some thoughts

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Re: The cost of health insurance
Old 11-07-2002, 09:55 AM   #16
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Re: The cost of health insurance

Hi.

I just joined this board. I'm 32 and doing a lot of life planning right now. A book I recently read called "Unjobbing" suggested an interesting approach to health insurance (although I am uncertain how I feel about it).

The author recommends paying yourself the monthly premium and using the money (in your account that you pay yourself) when you need health care. He also says you can shop around for the best price this way (as the difference between having a cast put on your arm in one place could be much less/more than another place).

As a healthy person, this makes sense. But it's risky. Has anyone considered this approach?
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Re: The cost of health insurance
Old 11-07-2002, 12:29 PM   #17
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Re: The cost of health insurance

I would say, not wise. You don't need insurance for the things you CAN afford . You need it for the things you CAN'T afford. As a normal regular person you can never save enough money to pay for the truly expensive medical intevention you might need.

Being healthy and young NOW is beside the point and meaningless anyway when talking insurance. Young healthy people get cancer. They fall, they get hit by cars while minding their own business. In my case, taking a drug the doctor prescribed caused a side effect that left me partially crippled and has cost a lot of money the past few yrs. So how the hell would anyone know it would have that affect on them?

Risky strategies? Hey man, the name of the game for early retirement, and in business of any kind is to MINIMIZE risk. Not eliminate it. Minimize it.

When you're talking insurance, the whole reason FOR insurance is to cover RISK.

The best mid-point measure between funding things yourself and rolling the dice and over-insuring up to the eyeballs is to get a policy with a high deductable. Maybe 5,000 or 10,000 bucks.

That way you're self-insured for just about anything that can happen to you and you get insurance company negotiated rates (shopping for "deals" on medical care is largely a myth but not impossible. You really need the "buying power' of an insurance company)...

.... then for the big ticket items you're covered for the over-10 grand bills.

That's how I'd do it

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Re: The cost of health insurance
Old 11-07-2002, 05:32 PM   #18
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Re: The cost of health insurance

For now, I go the high-deductible route and my premium is $114 per month. I realize that there are some risk in this approach. To mitigate it somewhat, I did a "worst-case" scernario analysis to figure out what was the highest deductible that I could feel comfortable with. I picked one that even if I met or exceeded the deductible every year, I would still be able to have a fairly safe withdrawal rate.

I, too am worried about the rising price of health insurance. I had a 17.5% increase this year and a 14.5% the year before. And I have 17.5 years to cover until eligible for Medicare. I have come with three alternatives that I may turn to if my current insurance gets too high:

1) Just before I am eligible, return to work for a former employer who provides low cost health insurance as a benefit to retirees.

2) Go the ex-pat route

3) If my portfolio is big enough, self insure.

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Re: The cost of health insurance
Old 11-07-2002, 05:37 PM   #19
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Re: The cost of health insurance

Cody girl writes,

I have Blue Cross Basic PPO. It has a high deductable and doesn't cover certain costs like prescriptions, pregnencies, etc. I use it more as an emergency hospitalzation, accident, or serious illness plan than a standard medical plan as I only go to the Dr. once a year for a check up & have no medical issues currently. $45/month and went up to $60/month once I turned 45.


That sounds like a great premium--would you mind sharing what state you live in and deductible amount?

Thanks
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Re: The cost of health insurance
Old 11-15-2002, 08:35 AM   #20
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Re: The cost of health insurance

A book I recently read called "Unjobbing" suggested an interesting approach to health insurance (although I am uncertain how I feel about it).

The author recommends paying yourself the monthly premium and using the money (in your account that you pay yourself) when you need health care.


I read that book - twice. Though a lot of what he said made sense, I thought this part was crazy. He basically said he couldn't afford health insurance, so he was work on staying healthy. It's like having blinders on - "It'll never happen to me". You never know what's going to happen and you can't prevent some idiot hitting your car, or whatever. Some kind of insurance is necessary, even if you just go with catastrophic.

I sold the book on half.com - maybe you bought it

arrete
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