How would national health plan affect ER?

[David1961]

I’d like to throw a question out to the members here, particularly those planning for ER who have not ER’d yet. If and when the US goes to some sort of national health-care system, how will it affect your retirement planning? Would you be more likely to ER early? I know the devil is in the details, but in general how would such a plan affect your planning?

I read a lot about the cost of medical coverage being one reason why people need to work longer. How many folks here have intentionally delayed ER because of the inability to obtain affordable medical insurance?

 

[Rich_by_the_Bay]

Depends on the solution. It is hard to imagine a scenario where things would get worse than now. but at the least you should be able to purchase the insurance on a competitive basis. Currently, even getting access to insurance is problematic in ER, and if you do the cost can be prohibitive.

Under almost any current proposal, universal care is likely and costs will be averaged to some extent.

 

[Martha]

I am already retired. What it would do for me is give me flexibility in where I live. Now when you are on an individual health plan and you have existing conditions it is about impossible to move to another state and another plan.

 

[Trek]

I’d like to throw a question out to the members here, particularly those planning for ER who have not ER’d yet. If and when the US goes to some sort of national health-care system, how will it affect your retirement planning? Would you be more likely to ER early?

I retired very early, but I had to leave the States to do so. There is no way I could have ER'd and paid for private coverage until I was 65.

Having said that, even if there was some type of affordable / universal coverage, I likely would have moved to Europe anyway for a plethora of other reasons. But if I did ever want to move back someday, I wouldn't be able to do so (before Medicare age anyway), primarily because of the cost of having to pay private medical insurance for me and my family.

 

[DallasGuy]

A national health care system in whatever form would hopefully make the availability of a health care insurance plan better (i.e. remove the pre-existing requirements, etc.) and make the cost a little more predictable. Right now health insurance coverage seems like "the great unknown" as it relates to ER. It would be nice to have a little more certainty about the availability and costs from my current age of 51 until age 65. I'll probably ER anyway, but the decision would be much easier with a national health care system. NOTE: For me a national health care system could be as simple as having health insurance companies mandated to accept everyone for insurance coverage and not throw them into a high risk, high cost plan just because they're in their 50's or 60's. Also, I understand that older people have more health care expenses so I'm not against paying a little more , within reason, as I get older.

 

[armor99]

Interesting question David1961. First off let me start by saying that nationalized health care would be the worst thing that could possibly happen. Now before I get flammed into next week.... listen to some well thought out reasons why I believe this is true.
Any business from selling hot-dogs to practicing medicine works on the same concepts of supply and demand, quality vs. availability, etc. Competition is the only force that drives a product to get cheaper, or better. If a hot dog vendor wants to lure your business away from the guy up the block, he can lower his prices, or maybe give you free pickles (making the product better).
I believe that exactly the same principle works in medicine. Not all doctors are created equal. Some are better than others, and those that do better work, typically charge higher prices. People go to places like the Mayo Clinic because there are superior doctors there for things they might need treatment on.
So now let's say that the govt now runs health care. There is no competition, as they now control the price of medicine, services, salaries, etc. This will have some very dramatic effects immediately.
Very few doctors that I have ever met were completely altruistic. Now certainly doctors got into their profession because they want to help people. But most want to be well compansated for their time spent in medical school (8 years +), and for their personal skill as a doctor. (And I have no problem with that. Most people want to be compensated well). If doctors can no longer set their own rates, and their salaries are now set by the govt, then you will see lots of doctors fleeing the medical profession, and many fewer doctors entering medical school.
So.... when I now need a doctor, are the best and brightest doctors the ones that are going to see me? No.... the doctors left will be the most unambitious of the lot, and probably not the best in their field. That concept frightens me greatly. Now some might say that this system will yield the BEST doctors, because only the least money motivated (most altruistic) will be left. Might be right.... but I do not believe there are very many completely selfless people out there. (No one that I know likes to work for less than they can earn). And finally... I would love to hear what the medical profession folks think about nationlized heathcare. Funny that you never see interviews with the actual doctors or hospitals that will be affected by this, and hear what they think about it. I would wager that you will not be able to find many doctors that would be in favor of this at all. I doubt that lawyers would like nationalized "law services" for the same reasons.
So what would I do Not sure..... if the govt takes away my choices, then there is not much that I can do about it.
But I will also wager that if the govt does get this one to happen, you will see many of the best and brightest doctors getting together and forming their own networks that do not accept insurance at all. They will work outside the govt system entirely. They will probably charge more, but the service would be much better. If something like this came about, I would put off retirement for a while so I could afford this route instead. I hope this made sense, and that I have presented my thoughts in a clear and logical manner.

 

[REWahoo]

First off let me start by saying that nationalized health care would be the worst thing that could possibly happen.

Let me venture a wild guess here: You are young (under 40), healthy, and have health insurance through your employer. You have never had to look for individual health coverage on the open market, nor have you had a loved one encounter serious health problems and difficulty getting health insurance.

Not trying to be critical, just pointing out the likely frame of reference for your opinions.

And one more thing: I'm not a fan of "government health care", but I do believe we need a national health policy that grants everyone an opportunity to get health insurance, especially catastrophic coverage.

 

[retire@40]

...First off let me start by saying that nationalized health care would be the worst thing that could possibly happen...

Very good points, but the bottom line is that competition has not stopped my health insurance rates from rising double digits every year for the past few years. This year they went up 18%, last year they went up 15%.

We will end up in a nationalized healthcare system by default since the current system is collapsing on itself.

We need a combination of more people paying into the system and more spending controls. No more free rides and no more overcharging.

 

[Rich_by_the_Bay]

Yes - let's not confuse "national health care" along the lines of "socialized medicine" with universal health care. The latter implies (to me) guaranteed access to health insurance, elimination of most underwriting so that those who need it the most are not shut out, and a certain amount of risk sharing at a national level.

Yes, the devil is in the details, but those basic principles are what I was referring to. BTW, free market capitalism and health care make uneasy bedfellows for reasons discussed here and everywhere many times. I suggest a search on national health care or universal health care in this forum if anyone is interested.

 

[FUEGO]

Depending on increases in tax burden that I would have to pay, it would probably allow me to retire a little earlier with a feeling of more certainty in my ER plan. The fact that future costs are unknown in the current system requires me to be conservative and estimate very high future payments. And the fact that insurance at any reasonable price may become unavailable or riddled with exclusions worries me, and might cause me to keep my skills a little sharp in case I had to jump back in the labor market.

 

[Martha]

I'd like to hear more from the medical profession, too. Also, it be nice to hear more from people like Trek who have lived in a country where they have national health care.

It would also be nice to hear from the 46 million uninsured. I know a number of uninsured people. One is young and employed in a borderline job with no benefits. Because she has no children and is not disabled (according to the SSA), she is not eligible for medical assistance. She can't afford medical insurance and is not insurable anyway. She is in a very tough position. She needs medication and a lot of time is spent trying to find ways to get her drugs at a reasonable cost. Her medications alone would use up her entire income if she had to pay full price.

 

[armor99]

Let me venture a wild guess here: You are young (under 40), healthy, and have health insurance through your employer. You have never had to look for individual health coverage on the open market, nor have you had a loved one encounter serious health problems and difficulty getting health insurance.

Not trying to be critical, just pointing out the likely frame of reference for your opinions.

And one more thing: I'm not a fan of "government health care", but I do believe we need a national health policy that grants everyone an opportunity to get health insurance, especially catastrophic coverage.

Yes... I am guilty as charged.
But in my opionion the idea of universal healthcare for everyone falls under the same heading as eliminating poverty in america. While a noble ideal, it is not really possible, and attempting to do so will wind up bankrupting everyone. But to be fair... I really need to look up more information. How many people are NOT convered in America. What are the circumstances involved? What percentage of people in America not being covered by heathcare is considered acceptable (zero is just not reality).

 

[Martha]

I don't see why it would bankruptcy everybody. Countries with national health care spend less than we do already.

If you want to know more about the uninsured in the US (about 46 million) here is a link which shows some of the demographics:
Facts and Research on the Uninsured: Fact Sheets

There are a number of disturbing trends. For example, nearly all large employers offer health insurance to full time workers. But the number of small employers offering health insurance has been on the decline for a while.

 

[maddythebeagle]

Interesting question David1961. First off let me start by saying that nationalized health care would be the worst thing that could possibly happen. Now before I get flammed into next week.... listen to some well thought out reasons why I believe this is true.
Any business from selling hot-dogs to practicing medicine works on the same concepts of supply and demand, quality vs. availability, etc. Competition is the only force that drives a product to get cheaper, or better. If a hot dog vendor wants to lure your business away from the guy up the block, he can lower his prices, or maybe give you free pickles (making the product better).
I believe that exactly the same principle works in medicine. Not all doctors are created equal. Some are better than others, and those that do better work, typically charge higher prices. People go to places like the Mayo Clinic because there are superior doctors there for things they might need treatment on.
So now let's say that the govt now runs health care. There is no competition, as they now control the price of medicine, services, salaries, etc. This will have some very dramatic effects immediately.
Very few doctors that I have ever met were completely altruistic. Now certainly doctors got into their profession because they want to help people. But most want to be well compansated for their time spent in medical school (8 years +), and for their personal skill as a doctor. (And I have no problem with that. Most people want to be compensated well). If doctors can no longer set their own rates, and their salaries are now set by the govt, then you will see lots of doctors fleeing the medical profession, and many fewer doctors entering medical school.
So.... when I now need a doctor, are the best and brightest doctors the ones that are going to see me? No.... the doctors left will be the most unambitious of the lot, and probably not the best in their field. That concept frightens me greatly. Now some might say that this system will yield the BEST doctors, because only the least money motivated (most altruistic) will be left. Might be right.... but I do not believe there are very many completely selfless people out there. (No one that I know likes to work for less than they can earn). And finally... I would love to hear what the medical profession folks think about nationlized heathcare. Funny that you never see interviews with the actual doctors or hospitals that will be affected by this, and hear what they think about it. I would wager that you will not be able to find many doctors that would be in favor of this at all. I doubt that lawyers would like nationalized "law services" for the same reasons.
So what would I do Not sure..... if the govt takes away my choices, then there is not much that I can do about it.
But I will also wager that if the govt does get this one to happen, you will see many of the best and brightest doctors getting together and forming their own networks that do not accept insurance at all. They will work outside the govt system entirely. They will probably charge more, but the service would be much better. If something like this came about, I would put off retirement for a while so I could afford this route instead. I hope this made sense, and that I have presented my thoughts in a clear and logical manner.

The space bar is the longer key towards bottom middle of your keyboard Mayo Clinic is "a place of last resort" for most people currently and probably wouldnt change under any health care reform...

 

[Rich_by_the_Bay]

Armor, if you are open-minded on the issue you might find the link in this recent post to be helpful. It's a pretty complex issue and even many conservatives now recognize what a mess we are in with our health care system, and spiraling down every year.

FWIW, I am a practicing physician and assure you that few of my colleagues oppose a major overhaul. But if you are young, healthy, and employed with good benefits, the current system may work well for you for now, so it is easy to understand why you might not have much exposure to the catastrophic problems in the larger scheme of things.

 

[W2R]

I’d like to throw a question out to the members here, particularly those planning for ER who have not ER’d yet. If and when the US goes to some sort of national health-care system, how will it affect your retirement planning? Would you be more likely to ER early? I know the devil is in the details, but in general how would such a plan affect your planning?

I read a lot about the cost of medical coverage being one reason why people need to work longer. How many folks here have intentionally delayed ER because of the inability to obtain affordable medical insurance?

In answer to your questions, this will not affect my ER planning. I have been delaying ER until I qualify for lifetime medical as a federal employee. Since ER will be in about 22 months, I don't think things will progress fast enough to personally help me to retire sooner. Since I will already have lifetime medical, it won't help my situation in retirement, either.

On the other hand, increased taxes would hit me hard after ER! I will have to manage with less than I had planned.

I earned (and I am still earning) a lower salary as a federal worker than I could have in industry, for many years. I deliberately chose to do so, because I felt that this job offered the greater total compensation package when considering the small pension and lifetime medical offered to federal employees.

If I now have to pay for lifetime medical for everybody else through my taxes as a retiree, that would NOT make me happy. I have no idea what taxes would increase or how much in order to pay for all this, but I am thinking it can't be good for my personal financial position after ER.

 

[Notmuchlonger]

I will already have lifetime medical since I am a federal employee, so I don't think it will personally help my situation in retirement.

On the other hand, increased taxes would hit me hard after ER!

I earned (and I am still earning) a lower salary as a federal worker than I could have in industry, for many years. I deliberately chose to do so, because I felt that this job offered the greater total compensation package when considering the small pension and lifetime medical offered to federal employees.

If I now have to pay for lifetime medical for everybody else through my taxes as a retiree, that would NOT make me happy. I have no idea what taxes would increase or how much in order to pay for all this, but I am thinking it can't be good for my personal financial position after ER.

Maybe you would get a reimbursement or tax credit. Or be excluded. Im sure something would be worked out for people in your situation.

 

[template]

.... First off let me start by saying that nationalized health care would be the worst thing that could possibly happen....

Competition is the only force that drives a product to get cheaper, or better. ....

There is no competition in medical care in the sense you mean. When you're sick, you usually don't have the time or presence of mind to "shop" for treatment among vendors.

Did you ever try to get an "estimate" of fees ahead of time from physicians, hospitals, etc.?

 

[Rustic23]

Martha,
The 47 Million number is often tossed out. However, a 2003 article How Many People Lack Health Insurance and For How Long? states that between 21M and 31M don't have insurance for the entire year. It also Stated that 240M Americans do have health insurance. Another thing, as pointed out in discussions on this before, what percentage choose not to have insurance, what percentage are non us citizens?

So what's my point? Many discussions on this board start out with a statement i.e. Health care is in such dire straits it can not continue like it is. No foundation, No background, No proof, No discussion, just and accepted fact. Is it? I don't know. Is it the Big Lie? If we had the best full paid for health care plan would there still be sad stories out there?

Over 80% of the population have health insurance. I don't want to see the quality/quantity of US health care destroyed based on anecdotal sad stories.

Rich, "It is hard to imagine a scenario where things would get worse than now. " Look how well big government manages systems. It is not hard for me to imagine a scenario where things are worse.

I don't know the answers to Health Care. Heck, I don't even know the questions. I have never seen a well thought out discussion of plans and their benifits and potential consequences. If 80% of the population have health insurance, is the problem portability or is it how to insure the rest?

 

[donheff]

I earned (and I am still earning) a lower salary as a federal worker than I could have in industry, for many years. I deliberately chose to do so, because I felt that this job offered the greater total compensation package when considering the small pension and lifetime medical offered to federal employees.

If I now have to pay for lifetime medical for everybody else through my taxes as a retiree, that would NOT make me happy. I have no idea what taxes would increase or how much in order to pay for all this, but I am thinking it can't be good for my personal financial position after ER.

I am in the same boat as you but I think a sensible universal program is needed for the US. It might well be a net negative for me but it would be a positive for the country as a whole including my children and their children.

We got a good COLA'd pension - something people here would trade a lot for - so lets be generous.

 

[FIRE'd@51]

In answer to your questions, this will not affect my ER planning. I have been delaying ER until I qualify for lifetime medical as a federal employee. Since ER will be in about 22 months, I don't think things will progress fast enough to personally help me to retire sooner. Since I will already have lifetime medical, it won't help my situation in retirement, either.

On the other hand, increased taxes would hit me hard after ER! I will have to manage with less than I had planned.

I earned (and I am still earning) a lower salary as a federal worker than I could have in industry, for many years. I deliberately chose to do so, because I felt that this job offered the greater total compensation package when considering the small pension and lifetime medical offered to federal employees.

If I now have to pay for lifetime medical for everybody else through my taxes as a retiree, that would NOT make me happy. I have no idea what taxes would increase or how much in order to pay for all this, but I am thinking it can't be good for my personal financial position after ER.

I am not criticizing your position, but I think your post illustrates why health care reform is so difficult. I am disappointed that none of the major candidates for President (especially the Dems) are actively promoting the idea of ending employer-based health insurance, along the lines of Ron Wyden's plan. Until we tie the insurance to the individual, there will always be people who will lose their insurance when they are laid off, switch employers, forced into early retirement, etc. If those persons have pre-existing conditions, they will not be able to buy affordable insurance in the private market, assuming they can buy it at all.

Of course, anyone who has "cadillac" insurance provided by an employer doesn't want to give it up for something less (which is what any government provided health care will likely be), and the candidates know this.

 

[W2R]

Oh, I'm not necessarily AGAINST something being done about health care. Something needs to be done. But I thought the question was how this would impact the timing of exactly when we ER, and our personal situation once we are in ER, wasn't it?

I looked back on what I wrote, and I don't see anywhere where I say that I think nothing should be done. It's not always a good assumption that when someone feels their personal best interest isn't going to be met by a certain change in government or piece of legislation, and that this does not make them happy, that they would make their decision on being for or against it based only on their own self-interest.

Guess I wasn't clear.

 

[Grizz]

I’d like to throw a question out to the members here, particularly those planning for ER who have not ER’d yet. If and when the US goes to some sort of national health-care system, how will it affect your retirement planning? Would you be more likely to ER early? I know the devil is in the details, but in general how would such a plan affect your planning?

I'm Canadian, and we have a universal gov't health plan for everyone. It's an unruly system that is not efficient in many ways, but from my observation, those who are planning retirement are much more concerned with their proximity to the nearest hospital than personal funding of any sort. That said, during our working lives we pay taxes at a rate that if implemented in the U.S. would cause some serious civil unrest. I guess the idea is that we are pre-paying for our old age health care when we are working. I am absolutely not a socialist by any stretch of the imagination, but after reading of all of the people who can't seem to fund their own insurance for health care in the U.S. I actually (shudder at the thought) feel pretty good about our system.

 

[Martha]

Martha,
The 47 Million number is often tossed out. However, a 2003 article How Many People Lack Health Insurance and For How Long? states that between 21M and 31M don't have insurance for the entire year. It also Stated that 240M Americans do have health insurance. Another thing, as pointed out in discussions on this before, what percentage choose not to have insurance, what percentage are non us citizens?

For some reason, I can't make your link work. However, the 46 million number is from Census figures from 2006 (revised down now to about 45 million) and is for people uninsured for at least an entire year. The 2004 Census showed 45.8 million uninsured. I previously linked to a breakdown of the demographics of the uninsured. Yes, you are right, a portion of the uninsured are not US citizens. "The vast majority (79%) of the uninsured are citizens. However, a disproportionate percentage of the uninsured are non-citizens. While non-citizens are 7% of the population, they are 21% of the uninsured." Inotherwords, about 9 million of the uninsured, leaving about 35 million citizens uninsured. Overview of the Uninsured in the United States: An analysis of the 2005 Current Population Survey: Issue Brief IIRC, the census figures do not count illegal aliens in its count of the uninsured, only legal residents.

Let me give you some more numbers:

The Commonwealth Fund has estimated that 16 million Americans are underinsured and in a 2005 study found 71 million non-elderly Americans had trouble paying their medical expenses in 2003, with 27 million working adults carrying medical debt.

83% of the uninsured are in working families (Employee Benefit Research Institute).

The Kaiser Foundation's 2005 Employee benefits survey has found that employers providing insurance to their workers declined steadily in the prior five year period. In 2000, 69% of companies offered health insurance. In 2005 it was 60%. This may explain in part the fact that the fastest growing group of uninsured Americans are those in families earning between $50,000 and $75,000. (2006 Census).

I don't disagree that a portion of the uninsured in the US are not citizens. I also don't disagree that some of the uninsured could buy insurance. But doesn't that make the problem easier to solve? Because there is a problem as there are plenty of people who can't buy insurance either because of cost or because they are not insurable.

One group that tends to have "voluntarily" uninsured are young people between 18 and 25. They feel invulnerable and sometimes also work in jobs that don't provide benefits or the benefits require an extensive waiting period. Bringing them into the system will be good for everyone as it levels out cost and protects them from catastrophe.

EDIT: Hey Rustic, you and I have done this before. More facts in this thread: http://www.early-retirement.org/forums/f38/sicko-27494-3.html#post541820

 

[Rich_by_the_Bay]

The uninsured numbers are felt by many to be understated because they require a full year of no insurance. The sequence seems to be: have a job and be insured; get sick; become unable to work; lose insurance. Then comes the sell-off of personal savings or possessions, and finally (in some cases) personal bankruptcy.

That individual would not be considered uninsured in the year in which the job ended. I have personally seen numerous variations of the above.