Healthcare Costs: How much to budget?

[M Paquette]

Quote:

Originally Posted by chinaco (off the cuff) I would assume something like $12k/yr (today's cost) in premium for 2 adults.

Accurate cuff. That's what I'm looking at for my first year, and I'm allowing for a 7% annual increase (ouch!) up til age 65, where most plans I've seen throw you to Medicare + a supplement plan.

[CuppaJoe]

Quote:

Originally Posted by M Paquette Accurate cuff. That's what I'm looking at for my first year, and I'm allowing for a 7% annual increase (ouch!) up til age 65, where most plans I've seen throw you to Medicare + a supplement plan.

This is where I scratch my head: Medicare/"Kaiser Advantage" plan; what would the cost be: maybe 1/3 or less than the 60-65 age monthly premium?

[Midpack]

You MUST go get your own numbers!!! DW and I are in very good health and I intend to get a high deductible plan, well below $1,000 per month. However, I have an employee who is 58, has already bought (mortgage) a retirement home near Phoenix and has a net worth of just over $1 million. A few months ago he went to his financial advisor (Prudential) to put together numbers with every intention of retiring then and there. He and his wife are both in poor physical condition (overweight, high cholesterol, heart problems, etc.) and the estimate for them (he didn't tell me what the coverage was) was $3,600 per month. Needless to say, he's still working and probably will be for years to come...

[chinaco]

Quote:

Originally Posted by Midpack You MUST go get your own numbers!!!

Yep! YMMV

[unclemick]

Hmmm-don't anyone be a knothead like me. Do the right thing!

I went 12 yrs without insurance in LA cause I couldn't afford it 1993 to 2005.

$158/mo BC/BS for 10k deduct in MO - age 64. $450 per month for 5k deduct was the cheapest I remember in 93. Cobra was 728/mo.

Huge variation by State it would seem.

heh heh heh - note the SO had full coverage through her union (UAW). I had a valid Passport and a bad attitude toward getting sick. .

[lazygood4nothinbum]

at 51, my single-person insurance premiums just increased to $350 from $300/month with no claims and a $2,800+ deduct. my only other recurring costs are noninsured (but counting towards deduct) $70/month glaucoma meds, and--i'd have to check but--about $250-400/year for eye exam/contacts; as well as bi/tri-monthly dental cleanings at $99/pop. in the nonrecurring column, i just put out $2k today for uninsured periodontal work so i guess that does not come off my deductible either.

my plan is to vagabond as an expat and while adventuring into the world, take advantage of international health care and lowered insurance rates starting within a few years and lasting at least until medicare.

[Donzo]

I don't know what the future holds, but......I have been free for 20 months and have had 2 premium increases that total about 25% - there have been no claims or health issues. I went and checked ehealthinsurance.com and got the same quote as I am paying now - so this increase for the $5000. deductable plan is reflected for new "members". This really motivates me to take care of myself - so going to a $10,000 deductable would not seem like a bad choice if health care inflation continues to be excessive. How high can it go before many families are forced to "self insure" (read...no insurance). Medical travel to countries that have realistic medical costs will increase...it is sad we have this issue. There is a great deal of greed and fear - high costs for simple procedures and high malpractice costs for all the potential lawsuits.

[Shabber2]

OK, so if I boil this down, since we are in great shape now, I am ok putting in 1k/month for healthcare insurance in my budget. And with my 4%SWR portfolio, it should keep up with inflation on that as well as my other expenses? Sound good?

BTW, I am getting real close to publishing my line by line retirement budget for everyone to comment on. Geesh health insurance is a whopper.

[RockOn]

I don't use more than that ($1k in current dollars in mine) but after looking at the likely premiums, deductibles, copays, dental costs, and eye care, last week, it is a scary number. At 10% health inflation (if it doesn't slow down) those costs double in 7 years. That is an area where it might be very easy to get in trouble with a tight budget if you have 10 years or so until Medicare as I will. You can get cheaper plans but the out-of-pockets are the risk. Even after Medicare, when I checked into supplemental plans, the costs only go down about 30-40% at age 65. Might have to get a job with health benefits, if things go to hell. Stay healthy or it could really be a problem even getting a plan. Sorry for that news, this country needs to do something about health care.

P.S. I saw in your profile you are only 40, I do not know when you plan to ER but you need to use inflation adjusted costs in your plan. If you are retiring now, you really need to be setting aside much more for this item IMHO. If you are single $1k/month should be ok. I'd like to see your plan, I'll compare it against mine to see if we agree on the line items.

[retiringby50]

Quote:

Originally Posted by megacorp-firee The 1st time through, she was denied for some BS reason. Will be working on that. If you are not in good health and have existing conditions, you may not be able to get a policy from anyone except a state pool if that exists.

I'm in CA. I don't know if there is a state pool or not. I was denied once because I have sleep apnea, considered a pre-existing condition, but it's not like it's going to go away! So I'm worried. I hope that doesn't mean I have to work until I die... cuz ya know, I won't be much good at work when I'm around 97! But I'm still going to need healthcare benefits!

When I was denied last time, I went on my husband's COBRA plan ($892/month for myself only), while he and my daughter went on an individual plan with $40 doctor visits (you know we kept those to a minimum that year!), and the premium increased two times during that 1 year, one for husband turning 40 and again at renewal!

[chinaco]

Quote:

Originally Posted by unclemick Hmmm-don't anyone be a knothead like me. Do the right thing! I went 12 yrs without insurance in LA cause I couldn't afford it 1993 to 2005. $158/mo BC/BS for 10k deduct in MO - age 64. $450 per month for 5k deduct was the cheapest I remember in 93. Cobra was 728/mo. Huge variation by State it would seem. heh heh heh - note the SO had full coverage through her union (UAW). I had a valid Passport and a bad attitude toward getting sick. .

High deductible makes sense. Of course, assuming you plan to potentially spend that deductible (which could be likely), you are around $12k/year.

But you do have a point... if you do not use it, you get to keep it. I like that much better. If one is healthy, the high deductible route would seem to be the way to go.

Good call UnkaMick

[Purron]

Quote:

Originally Posted by Kronk Isn't there a limit that we'll hit? I mean, say you've got an $80,000 income and pay $10,000 in health insurance premiums ($830+ per month). If wage growth is around 4%, but health insurance grows at 10% per year, then... ...that 12.5% of gross income going to health insurance increases to: 20% of gross income in 10 years 30% in 17 years 50% in 26 years 100% in 39 years I mean, these gains aren't sustainable. Something will have to flatten out eventually. Maybe it is sustainable for 10 years, but not for the duration of many retirements. I certainly don't know where it'll flatten out, though...

Geez, this sounds like a "bubble" to me. Maybe the price of health insurance will go down like the price of real estate. Yeah, like that's gonna happen

[retiringby50]

Saw this on another board: Retiree couple needs $225K for medical - Yahoo! News

It says we need to have $225K earmarked for a couple for healthcare based on retirement at 65. I'm working till 97!

[Shabber2]

Thanks Rockon, I will get this budget out for all to comment on this weekend. I have spent a ton of time on it, researching, soul searching, etc. to get a very realistic number. Oh, and with current plans, ER should be in 2-3 years depending on what comments I get from the board. I wouldn't call my budget "tight" although I have 2 versions depending on how large I want to live (aka how long I want to continue working)

[chinaco]

Quote:

Originally Posted by Shabber2 Thanks Rockon, I will get this budget out for all to comment on this weekend. I have spent a ton of time on it, researching, soul searching, etc. to get a very realistic number. Oh, and with current plans, ER should be in 2-3 years depending on what comments I get from the board. I wouldn't call my budget "tight" although I have 2 versions depending on how large I want to live (aka how long I want to continue working)

Best to have two scenarios:

1. Pessimistic but workable (don't need to go back to work). Know the threshold that you would need/want to go back to work.
2. Optimistic

[Grizz]

I'm on the outside looking in. I'm Canadian, but I watch a ton of American TV and they always go on about the cost of insurance being a major stumbling block for many people. I've become quite interested in the discussions in the U.S. going on since our system could use some reforms as well and it is interesting to hear your politicians and citizens float ideas that might ultimately get adopted here as medical costs rise.

My health care costs are largely hidden in incredibly high (by American standards) income and hidden taxes rates. Gas is about $4 per U.S. gal. cigs are $10/pk. I pay 39% tax on a good chunk of my income. I could go on. Apart from that, in my province we pay $264 every 3 months for a family of 4 with no deductable. Thankfully due to provincial oil revenues there is serious talk now of scrapping the $264 payments altogether.

On the upside, as we age the cost stays the same regardless of ailments, and the amount that you pay actually decreases after retirement because you generally earn less so you pay less. So the way I look at it, although the taxes are downright ugly I consider it pre-paying my old age health care.

I hear so much about people going without insurance or at least being underinsured in the states but I've never heard what happens when an American who has no insurance desperately needs medical attention. I doubt that they throw you out onto the sidewalk. Do you get the necessary care and then have debt collectors calling? Do they make you sign away your material assets before treatment? What if you have no insurance and you die after being in the hospital for a couple of months? Do your kids pay?

[RockOn]

Grizz, good questions, hopefully someone who knows what actually happens, will answer you. We all have our ideas about this. I suspect each situation is different so the answer may not be easy. My feeling is that they try to take care of you and go after whatever they can get. I have heard stories of debt being forgiven if you can't pay. Those of us who have insurance pay for that. A typical family pays about $1200 or so a month here for full coverage, your $264 a quarter would be a steal.

On Federal taxes I pay 20% overall on all of my income. I also pay 8% for Social Security and Medicare and 5% state tax. We also have a 8% sales tax where I live. My health insurance premiums amount to another 10% (or so) tax if one looks at it like it was a tax. I think that is roughly 50% total for those items.

I bet that's about as bad as yours, is it? Maybe we can afford a national health plan? Was the Michael Moore documentary correct?

[Grizz]

Quote:

Originally Posted by RockOn Grizz, good questions, hopefully someone who knows what actually happens, will answer you. We all have our ideas about this. I suspect each situation is different so the answer may not be easy. My feeling is that they try to take care of you and go after whatever they can get. I have heard stories of debt being forgiven if you can't pay. Those of us who have insurance pay for that. A typical family pays about $1200 or so a month here for full coverage, your $264 a quarter would be a steal. On Federal taxes I pay 20% overall on all of my income. I also pay 8% for Social Security and Medicare and 5% state tax. We also have a 8% sales tax where I live. My health insurance premiums amount to another 10% (or so) tax if one looks at it like it was a tax. I think that is roughly 50% total for those items. I bet that's about as bad as yours, is it? Maybe we can afford a national health plan? Was the Michael Moore documentary correct?

Since it would seem that we exist with a similar standard of living to Americans, I expect that all of the taxation vs insurance paid all works out about even in the end. We just have a socialist type forced payment plan. I suppose the big plus is that we never need to worry about a claim being denied, or having premiums or deductibles go up because we've had a stroke or heart attack.

Michael Moore's "Sicko" was factual, but glamorized somewhat. There are sometimes multi-hour long line-ups in emergency wards here, we are short of nurses because they can make more $ in the U.S., there are waiting lists for some procedures, and many people of means who don't want to wait go pay cash in the States. Funny, but one of the things that seemed so odd to me in Sicko was that Americans have to pay to have a baby, or at least to leave the hospital with it. I can't explain clearly why that seems morally wrong to me, but on some core level it does.

Something else that you may not know is that the reason that those old Canadians in motorhomes come back here after winter is that they can only be gone 6 months before our gov't cuts their health care. They can get it back, but there is a waiting period.

Still curious regarding my original question about what happens to an American when he desperately requires emergency medical care but lacks insurance coverage. BTW, is health care free for those on welfare? Do Native American Indians or military vets or any other group get free or deeply gov't subsidized health care?

[Shabber2]

I was just in a big argument with my friend who was pro universal healthcare. His point was free insurance for everyone seems like the "right" thing to do. My point was, you will pay for it somehow and nothing is free. I went on a tirade about universal gas seems nifty too. Matter of fact how about we say anything free is always a plus. Problem is, there are no free lunches. To make a real decision people need to see it in black and white. I know that Canada's 40% tax rate is going to cost me a helluva lot more than the best healthcare plan in the US system.

[lucija]

Quote:

Originally Posted by Shabber2 ...<snip>... We will be paying our own healthcare from age 50 forward. This is one expense I have absolutly no clue about how to budget. Is it $500 a month or $1000?

We still have quite a few working years ahead of us, and I have no idea what type of health care situation we'll be facing in 10+ years.
In the mean time, I am keeping an eye on my state's high risk plan. I view those figures as a pretty good educated guess of how much we may end up paying.

Quote:

Originally Posted by Shabber2 I was just in a big argument with my friend who was pro universal healthcare. His point was free insurance for everyone seems like the "right" thing to do. My point was, you will pay for it somehow and nothing is free. I went on a tirade about universal gas seems nifty too. Matter of fact how about we say anything free is always a plus. Problem is, there are no free lunches. To make a real decision people need to see it in black and white. I know that Canada's 40% tax rate is going to cost me a helluva lot more than the best healthcare plan in the US system.

I agree nothing is free, BUT universal healthcare would solve the issue of availability. I do not believe one should (ever) be denied coverage due to their health status, nor I believe that one should be paying $20k/month to get the coverage!