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Old 06-24-2009, 04:07 PM   #41
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Here's a thought start, a company or non-profit set up solely to provide group health insurance. We had one that provided health insurance to small cities at my last agency. The cost was a bit high, but we had a very good policy.
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Old 06-24-2009, 07:34 PM   #42
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I understand your point, but I just can't let it go that the part that is subsidized is not a "cost". That "subsidy" gets paid out of our taxes (or our kids/grandkids taxes plus interest).

Since most of the people on this forum are taxpayers, those subsidies will likely "cost" us the most.

-ERD50

Yeah, yeah, yeah . . . I get it, no such thing as a free lunch. But from a personal perspective its probably more appropriate to look at it as two separate things 1) an individual's direct cost of health insurance and 2) an individual's direct cost of government. The two may vary widely depending on who you are.

But I wouldn't jump to the conclusion that retirees are necessarily the ones who are going to be shouldering most of the tax burden. The current tax code grossly favors wealth over labor. Consider two married couples: Couple A works and earns $80K per year. Couple B has a portfolio that generates $40K in normal interest and $40K in qualified dividends. Couple A will pay $7,560 in federal income taxes and an additional $6,120 in payroll taxes, for a total of $13,680. Couple B pays only $2,360 in federal income taxes (and has the luxury of moving to a state with no income tax). So the working couple pays nearly six times as much in taxes as the couple resting on their wallets.
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Old 06-24-2009, 07:46 PM   #43
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Here's a thought start, a company or non-profit set up solely to provide group health insurance. We had one that provided health insurance to small cities at my last agency. The cost was a bit high, but we had a very good policy.
I've pondered that too. Kind of like a Credit Union, or a food co-op. They don't have to make a profit, just pool and spread the risk. I suspect that there are so many complex regulations that the "barriers to entry" are too high?

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Originally Posted by . . . Yrs to Go View Post
Yeah, yeah, yeah . . . I get it, no such thing as a free lunch. But from a personal perspective its probably more appropriate to look at it as two separate things 1) an individual's direct cost of health insurance and 2) an individual's direct cost of government. The two may vary widely depending on who you are.

But I wouldn't jump to the conclusion that retirees are necessarily the ones who are going to be shouldering most of the tax burden. The current tax code grossly favors wealth over labor. Consider two married couples: Couple A works and earns $80K per year. Couple B has a portfolio that generates $40K in normal interest and $40K in qualified dividends. Couple A will pay $7,560 in federal income taxes and an additional $6,120 in payroll taxes, for a total of $13,680. Couple B pays only $2,360 in federal income taxes (and has the luxury of moving to a state with no income tax). So the working couple pays nearly six times as much in taxes as the couple resting on their wallets.
I wonder how many on the forum get half their income stream in qualified dividends? I sure don't. Isn't 80K = 80K tax-wise if it isn't in munis or other specially treated classes? And not being "earned income" shuts the door on other benefits (IRAs).

And that is today - I'm not so sure that wealth isn't going to be taxed more and more (let's not forget the 55% 'Estate Tax' that is triggered at death). I'd need to check the decoder ring, but I think FAFSA values "net worth" at more than the equivalent income it produces (in addition to counting the income it produces! Double Whammy!).

-ERD50
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Old 06-24-2009, 08:38 PM   #44
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I wonder how many on the forum get half their income stream in qualified dividends?
Probably more than you think. At current yields a 60/40 asset allocation can very easily generate 4% in income with nearly half coming from dividends. Without even trying to juice yield the SPX & Bond Index gets you to about 3.4%. I'd argue that all of us who don't have a pension will be in this category. We'll also have a large portion of that normal interest income shielded by tax advantaged accounts.

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(let's not forget the 55% 'Estate Tax' that is triggered at death). I'd need to check the decoder ring, but I think FAFSA values "net worth" at more than the equivalent income it produces (in addition to counting the income it produces! Double Whammy!).
In the list of things that concern me, student loan subsidies and IRA access once I'm retired ranks only marginally higher than things that happen once I'm dead.
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Old 06-24-2009, 10:33 PM   #45
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There *is* a reason, and it is far more than the bulk quantity deal. It has been discussed on the forum before - the total pool, versus a self-selected group...

This is why many of us see that any govt ins system will need to have everyone in the system and spread the risk, or prices will stay high for those who want ins...

I know that ins cos seem to pull dirty tricks from time to time, but this isn't one of them - they have to charge that way.

-ERD50
There is lots of support for your self-selection points in this article (editorial?) in the New England Journal of Medicine, which makes a strong case for an "everyone must be insured" mandate:

http://content.nejm.org/cgi/reprint/NEJMp0904729v1.pdf
The Individual Mandate An Affordable and Fair Approach
to Achieving Universal Coverage


"Some of the most prominent shortcomings of the U.S. health insurance market are rooted in the fact that the system is a voluntary one. Outside the state of Massachusetts, which recently instituted broad-based health care reform, no one under the age of 65 years is required to obtain health insurance coverage of any kind. Voluntary insurance markets have led to a system centered on segmenting health risk instead of one whose primary mission is ensuring affordable access to necessary and efficiently provided high-quality medical services.

But the past need not be prologue. The orientation of our system and the distorted incentives that it creates can be changed. A vital component of such a change would be bringing all U.S. residents into our health insurance system through an individual mandate..."
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Old 06-27-2009, 12:45 AM   #46
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We had dinner with a couple in Merida, Mexico in December. They retired there about 5 years ago. They said that to maintain their insurance in Colorado would have cost them about $12,000 a year. They were paying $3,000 a year for an international policy. He just turned 60, she is a a few years younger.

That is more than chump change.
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Old 06-27-2009, 11:01 AM   #47
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We had dinner with a couple in Merida, Mexico in December. They retired there about 5 years ago. They said that to maintain their insurance in Colorado would have cost them about $12,000 a year. They were paying $3,000 a year for an international policy. He just turned 60, she is a a few years younger.

That is more than chump change.
Did either or both have a chronic condition?
If not 6K or 500/mo for one person - my guess it is for a policy with a very low deductible; and might include eye and dental. Possibly, the cost of continuing their corp ins. Check out Colorado BCBS.for a 60 y/o person
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Old 06-27-2009, 12:10 PM   #48
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Did either or both have a chronic condition?
If not 6K or 500/mo for one person - my guess it is for a policy with a very low deductible; and might include eye and dental. Possibly, the cost of continuing their corp ins. Check out Colorado BCBS.for a 60 y/o person
No chronic conditions - but let me be a bit more clear - these are not USA insurance policies they have. They are international policies. With many of these, if you get sick in the US, you get 30 days of treatment to get well enough to get back to Mexico.

I took their word for it that it would cost that much to replace their work-based insurance policy in the US - perhaps that was the COBRA amount.
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Old 06-27-2009, 01:50 PM   #49
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No chronic conditions - but let me be a bit more clear - these are not USA insurance policies they have. They are international policies. With many of these, if you get sick in the US, you get 30 days of treatment to get well enough to get back to Mexico.

I took their word for it that it would cost that much to replace their work-based insurance policy in the US - perhaps that was the COBRA amount.
Hi, Ron. 12K/year sounds about right for continuing a work plan (low deductible) for a couple through COBRA. My COBRA for a family (3 of us) is 1164/month, and includes dental and vision plans. Yeah, ouch. We're in good health, so I've applied to switch to a high deductible individual/family plan with Health Savings Account, which will cut the cost significantly.
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Old 06-27-2009, 04:18 PM   #50
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Hi, Ron. 12K/year sounds about right for continuing a work plan (low deductible) for a couple through COBRA. My COBRA for a family (3 of us) is 1164/month, and includes dental and vision plans. Yeah, ouch. We're in good health, so I've applied to switch to a high deductible individual/family plan with Health Savings Account, which will cut the cost significantly.
I think that is the key many corp. plans have a low deductible and include dental and eye ins also. Or, could be Cobra. Either way when healthy people quote such high health ins. premiums you have to question if they did their homework and their assumptions.

Generally speaking, this is the same issue in the health ins debate - consumer knowledge and understanding of the objective of health ins.

I (54 y/o) have a BCBS - I choose my doctors - plan that is $150/mo (5K deductible?) 3 dr visits w/$40 co pay.
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Old 06-27-2009, 05:52 PM   #51
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Hi, Ron. 12K/year sounds about right for continuing a work plan (low deductible) for a couple through COBRA. My COBRA for a family (3 of us) is 1164/month, and includes dental and vision plans. Yeah, ouch. We're in good health, so I've applied to switch to a high deductible individual/family plan with Health Savings Account, which will cut the cost significantly.
Thanks M

Significant cost reductions are good !
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Old 07-02-2009, 06:12 PM   #52
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I've pondered that too. Kind of like a Credit Union, or a food co-op. They don't have to make a profit, just pool and spread the risk. I suspect that there are so many complex regulations that the "barriers to entry" are too high?
Many professional societies such as IEEE used to offer group health insurance to their members. I say "used to", because adverse selection has caused many of those plans to disband and/or convert to traditional underwriting.
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