Work Less, Live More: US Health Insurance?

[Sam]

Seems like this book is highly recommended by members of this forum.  I haven't read it.  I just browsed its website (http://www.nolo.com/guide/worklesslivemore.html) and noticed that the "health insurance" topic is not included in its table of contents.  Does this book offer a "health insurance" strategy for early retired people who plan to remain in the US?

Thanks,
Sam

 

[REWahoo]

Sam, in case you aren't aware of it, forum member ESRBob is the author of "Work Less, Live More". I'm guessing no one is responding to your question because they are expecting him to reply.

Nothing better than getting it directly from the source...

 

[Sam]

Thanks REWahoo. No, I'm not are of that.

Sam

 

[Nords]

I'm not Bob but you made me curious so I looked it up.

He talks health insurance on pages 98-99, 127, 130, 211, & 217. It's mainly in the chapter on LBYM and other changes to plan for when you stop working. It's more focused on the U.S. but other countries are mentioned as being about 25% of the U.S. cost of health insurance. He also mentions HSAs and refers readers to www.treas.gov & www.hsainsider.com.

The book doesn't appear to try to solve the healthcare problem but rather to make people aware of the issue as they plan their ER. Judging from other threads on this board, the subject is so complex in different employment situations and varies so considerably from state to state that it'd be a book in itself-- one that would have to be updated monthly. But I don't know if there's a current book on healthcare solutions.

 

[cute fuzzy bunny]

Turns out there are some interesting sources of healthcare. I found out that one of my old companies (who self insures for health) would extend to me what amounts to group coverage as a former employee. Trying to find someone to tell me how much it would cost was an extravaganza though. Not something I needed, so I just marked it off as "something interesting to know in case I need it later" and left at that.

 

[Sam]

Thank you all for your replies.  I suspect that there will never be a reasonable Health Insurance in the US.

I find it impossible to budget this item, given its out of control rise in the last ten years or so.  I wonder if health cost is included in the yearly calculation of inflation?

Sam

 

[cute fuzzy bunny]

http://www.bls.gov/cpi/cpifact4.htm

After reading the text twice, I'm no closer to explaining it, but I'll take a stab at saying that however they do it, the cost increases are minimized to the point where they're unrealistic. If they had any reasonable bearing or were measured properly and considered as part of a rational budget, CPI would be a little bit higher than 1-3% over the last few years.

 

[Sam]

http://www.bls.gov/cpi/cpifact4.htm

After reading the text twice, I'm no closer to explaining it, but I'll take a stab at saying that however they do it, the cost increases are minimized to the point where they're unrealistic.  If they had any reasonable bearing or were measured properly and considered as part of a rational budget, CPI would be a little bit higher than 1-3% over the last few years.

I was about to say the same thing, eventhough I have not completely read it.
Sam

 

[BigMoneyJim]

The Retire Early Home Page forum has a section dedicated to health care and prescription drugs:

http://www.retireearlyhomepage.com/cgi-bin/yabb2/YaBB.pl?board=HEALTH

It's not as busy as this board, but I've seen some good info. IIRC, intercst uses healthcare sector investments to hedge against healthcare cost increases.

Health insurance may well be the largest fiscal concern of all retirees these days. Scratch that; all retirees with no guaranteed coverage from previous employment or whatnot.

 

[Maximillion]

Canada a social experiment where Parents have One Year of paid leave and Health Care is considered a universal right, kinda like the right to an AK 47 ,South of the border.

GOD save our Land etc.

Glorious and Free.

 

[BigMoneyJim]

Canada a social experiment where Parents have One Year of paid leave and Health Care is considered a universal right, kinda like the right to an AK 47 ,South of the border.

GOD save our Land etc.

Glorious and Free.

Well, that was on-topic, helpful and not incendiary at all. : Where did that come from for this thread?

 

[brewer12345]

Sam, how close to ER are you? If you are pretty close (a few years or less), you can get a pretty good idea by going to www.healthinsurance.com and getting quotes. Won't be prefect, but should at least give you a starting point and an idea of what the trade-offs are (i.e. how much less would the premium be for varying levels of deductible and coverage limits).

If you are farther away (like me), I wouldn't get too twisted up about it. A lot will change in the next 10 years. It is possible by then that the US healthcare system will have had its crisis and gotten fixed. Or I might have become Emporer of Greenland and capable of granting you free healthcare.

 

[haha]

If you are farther away (like me), I wouldn't get too twisted up about it.  A lot will change in the next 10 years.  It is possible by then that the US healthcare system will have had its crisis and gotten fixed.  Or I might have become Emporer of Greenland and capable of granting you free healthcare.

For a little favor in return I would assume?

BTW, I saw a poll of the Yale Class of 1962. The question was-"Would you approve of a universal health care system in the USA?"

80% either approved or strongly approved. Fewer than 5% strongly disapproved. This comes from a traditionally affluent and somewhat conservative group of men.

Ha

 

[Sam]

Sam, how close to ER are you? 

I'm 5 to 7 years away.  My younger son should be done with college in 5 years.  Thanks for the free health care offer

I don't have a solution for the healthcare crisis in the US.  I do think that if one can not invent something great, why not just copy the existing best?  Serveral european countries, Japan, and even our neighbor Canada have a working system...

If the system is still out of control by the time I quit, I would simply move.

Sam

 

[LRS]

I'm 5 years away from retirement. I estimated increases of 10% per annum for health care, but I'm afraid that will end up being too low. Even at 10% annually my retirement plan's insurance premium will cost $12,000 5 years from now, and it will zoom up to over $25,000 well before I get to medicare age (assuming medicare survives the neocon revolution.)

OK, here's my newest conspiracy theory: Somewhere during Clinton, government economists, realizing that mass baby boomer retirements would break the economy, deliberately allowed the health care crises to spiral out of control. Bushie economists continued the plan, and also threatened to dismantle Social Security and gut Medicare. Voila, boomers can no longer afford to retire before age 65, and some will have to work into their 70s. Problem solved.

 

[Sam]

OK, here's my newest conspiracy theory: Somewhere during Clinton, government economists, realizing that mass baby boomer retirements would break the economy, deliberately allowed the health care crises to spiral out of control. Bushie economists continued the plan, and also threatened to dismantle Social Security and gut Medicare. Voila, boomers can no longer afford to retire before age 65, and some will have to work into their 70s. Problem solved.

Tawny,

That's amazing. You're speaking my mind! Ha ha.

Sam

 

[ESRBob]

Sam,
Sorry I didn't see this post till today, and thanks again Nords for bailing me out on a timely basis! Since Work Less Live More came out, I've read another book that has been discussed elsewhere on the forum and will highly recommend it in the health insurance area of the next edition of WLLM:

The New Health Insurance Solution: How to Get Cheaper, Better Coverage Without a Traditional Employer Plan" by Paul Zane Pilzer

Pilzer focusses on the Health Savings Account with High Deductible approach, and lists representative prices by state. If you don't live in NY or NJ you should be in pretty good shape. Mass used to be the third-worst, but it looks like they are tyring to fix that with a bold new plan.

If your health is poor, though, plenty of people feel stuck even with the HSA/High Deductible approach. One possibility there is to either start your own firm doing something home-based and modestly profitable, then get yourself a corporate plan where, (some will amazingly enough take on groups of a single employee), wherein, at least in some states, you are regulated with other corporate plans and/or pooled together so that you can get affordable insurance despite your condition. The health insurance will even be tax deductible to your company. Another approach is to get a congenial part time job with an employer and try to negotiate health insurance as part of that compensation plan. Many states also have high-risk-pools, like in auto insurance, which let people with health issues still get individual insurance albeit at a higher price.

Even though Medicare isn't a perfect solution, and will require some supplemental coverage for most people, at the end of the day, ERs' health insurance 'problem' is basically about finding a way to bridge the years until we are 65. It isn't forever.

What I most liked about Pilzer's book, btw, was his well-researched assertion that we are shifting from the old paradigm of employer-sponsored health insurance to a much richer blend of self-managed/purchased health insurance. As this opens up, all sorts of new products, legislation and innovation are ocurring which should bring prices of healthcare down, accessibility of affordable insurance options up, and be good news for ER, self-employed and others, whether healthy or with chronic conditions. It isn't all there yet, but we are making decent strides and they are all in the right direction.

 

[Sam]

Thank you ESRBob for your reply.

I ordered your WLLM book from Amazon (along with Annapolis Autumn) and it arrived a few days ago.  I'm half way through it now.

My retirement is still 5 to 7 years away.  I was very concerned about health insurance cost.  Now, I'm ok.  My thinking is that if the US health system is still a mess by that time, I would simply move.  In south east asia or central america, $1,000/person/year should be plenty to take care of health issue.  Heck, $1,000/year is about the same or more than the average income of the populace there.  No more worries for me 

Sam

 

[Sam]

ESRBob,

I forgot to mention one thing about your book, WLLM.  Somewhere in the first portion of the book, you mention "private schooling".  Sounds like you're saying that sending young kids to private schools is a waste of money, a way to keep up with the Joneses.

With due respect, I totally disagree with you on that logic.  When my kids were in elementary school, I made a promise to myself that I would work hard, save money, live below my mean, in order to be able to send them to reputable, challenging, demanding private schools before they reach the sixth grade.  I chose the school based on tangible data:  Average SAT score, graduation percentage, % going to college, and most importantly which colleges graduates end up going to.  The cost of sending my two kids to private school is about 25% of my gross annual income, and there is no tax advantage.  I have no regret yet.

So, your view on private school might be valid in some cases, but not in all cases.

Other than that, I like your book a lot.

Regards,

 

[ESRBob]

Sam,
I went around and around on the wording on private schools, because I agree with you -- it is a large, even avoidable expense for some, and the best investment ever made for others. Our family are lucky to be in a great public school system, but if the kids were flailing around and unhappy, we'd move them to a private school and just make the financial sacrifices to make it happen. Still, the cost of private school may just be the beginning of it --- our friends who have their kids there find that there is a whole lifestyle that they get tugged into, too, to keep up with a very wealthy crowd. The old minivan gets an upgrade to a Mercedes wagon, the club memberships become de rigeur, extra donations to the school's capital campaign are pledged, private tennis leagues, weekends in nicer places, maybe a new wardrobe... it all sort of goes together, at least for some of the people I've met. Still, from the p.o.v. of the kids and their future, it could be the best money ever spent. Personal choices and up to parents to steer through all the issues and skim the cream, I guess.

 

[Helen]

ESRBob,

I forgot to mention one thing about your book, WLLM.  Somewhere in the first portion of the book, you mention "private schooling".  Sounds like you're saying that sending young kids to private schools is a waste of money, a way to keep up with the Joneses.

With due respect, I totally disagree with you on that logic.  When my kids were in elementary school, I made a promise to myself that I would work hard, save money, live below my mean, in order to be able to send them to reputable, challenging, demanding private schools before they reach the sixth grade.  I chose the school based on tangible data:  Average SAT score, graduation percentage, % going to college, and most importantly which colleges graduates end up going to.  The cost of sending my two kids to private school is about 25% of my gross annual income, and there is no tax advantage.  I have no regret yet.

So, your view on private school might be valid in some cases, but not in all cases.

Other than that, I like your book a lot.

Regards,

OK, I don't have kids, but I am wondering if the pay off is really there.

My partner of 18 years went to private school her entire life - grade school through college.  I went to public school my entire life - grade school through college.  We both have four year degrees.  For the last 18 years, I have made at least 50% more money than she has.  She has a degree in English (thank God because I can't spell) and I have a degree in Business MIS (IT).

My parents were able to set up trust funds for my brother's kids' education at state colleges.  Her parents have not been able to fund any of their grand children's college.

In addition, by brother is 18 months older than I am.  We both work in the IT field.  He has a 2 year degree and I have a 4 year degree yet we have always been very close in salary.  My point is that the degree itself may help get the first job, but after that I'm not sure how much it matters.  I have always felt that he has a genius for figuring out how things work. He is also very introverted which lends itself well to computer programming and I am very extroverted.

The book, "Emotional Intelligence",  explains the theory that people skills are a better predicator for getting jobs and promotions than IQ and perhaps formal education.  There are also genetics and natural skills involved.

I spoke to a good friend at work who was sending his grade school children to private schools but couldn't afford to save for their college because of it.  I pointed out that a college degree might be more important and have a bigger impact then where they went from K - 12.  Maybe it would be better to send the kids to public schools and pay a tutor for the subjects the kids are having difficulty with ?  This might stretch the dollars farther than sending them to private schools.

I guess I would say, if you can afford private schools and still fund your own retirement then great.  But I think of our family doctor (and a few coworkers who are financially struggling to send the grade schoolers to private school), who put three kids through private school K - Ivy league college.  Two of the three kids decided to be stay at home parents.  Our family doctor is flat out broke (not just because of the private schools) and is retired for health reasons.

I guess my point is that there are many predicators for having a successful career and education and the money spent on it is only one of them.

It's an interesting debate.

Best regards,

-helen

 

[2B]

I don't have a solution for the healthcare crisis in the US.  I do think that if one can not invent something great, why not just copy the existing best?  Serveral european countries, Japan, and even our neighbor Canada have a working system...

I used to work for a European company. The "locals" would repeatedly point out how superior their heath care system was. I would ask how much are their taxes? I also noticed that when I heard about significant medical issues with their parents there was always a section about "waiting for something." I think that that is true for all "universal health insurance systems." There is an element of rationing going on. If you want to go outside the system, it costs a little more. I know that for about ten euros you can get right in to see a GP in Belgium. Without the little extra, it might take a week.

The US has insurance for those that pay. It's not cheap. There's a lot about the US system that runs the cost up and it would be nice to start fixing the items that do increase the costs. I think if we just implemented "free" heathcare we would see the same type of rationing occur. Then the evening news would be non-stop stories of poor, pathetic people not being able to get their heart-lung transplants because of government red tape. Of couse, that would only be when a Republican was in the White House. With a Democratic president, the evil doers would be the radical Republicans in the House refusing to be compassionate. The outcome would be the same. Rationing. Not spending "enough" on healthcare for the poor.

 

[youbet]

I guess my point is that there are many predicators for having a successful career and education and the money spent on it is only one of them.


-helen

Of course there are many predictors for having a successful career other than education.  And there are many examples of non-traditional educations preceding successful careers, financially successful and otherwise.  But, I don't feel out of line saying that the option of obtaining a quality education appropriate to the field you wish to pursue is a great thing to have.  And sometimes, at least here in the good ole U.S. of A.,  private schools are the only quality education in sight. 

Many of our public school systems are top-notch.  Many aren't.  Much inconsistency. We have a lot of work to do.

I attended the Chicago Public School System from k - 12.  I know of what I speak.

 

[Sam]

OK, I don't have kids, but I am wondering if the pay off is really there.

Helen,

Each family situation is different.  Private school is definitely not for everyone.  When I decided long ago to send my kids to a private school, it was not because the kids were doing bad in school.  It was because they're doing great.

However, I also knew that they were not "super self-motivated".  I was afraid that they would not be able to reach their full potential if they stayed in a medium in which they are consistently at the top.  By putting them in a proven more competitive environment, I simply raised the bar.  The kids subconciously moved along with the new bar.

Sam