Healthcare Costs: How much to budget?

[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]

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]

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]

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]

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]

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]

...<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.

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!

 

[Martha]

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?

In an emergency in the US a hospital has to treat you to the point of stabilization. You still owe the money and many hospitals are not shy about trying to collect--garnishing wages and the like. If the person has nothing, no job or any assets, they most often write it off as charity care.

If you die owing money the hospital has a claim against your estate and in most states, a claim against your spouse.

"Welfare" in the US is not available to people who are simply poor. Same with medical care. States administer these programs and set eligibility. Most often you have to be poor and disabled, or poor and aged, or poor with young children, to get any benefits and unless you are fully and completely disabled or aged you will be limited in the time period for which you can get benefits.

 

[RockOn]

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.

If you look at your high premiums (my insurance is around $15,000 a year including the employer share) as a tax, you are already at the 40% level I bet. I do not know that taxes would actually have to rise to pay Univ Care, we are already paying a fortune for health care. The money could possibly just change from a Ins Premium to a Tax. Those of us paying for healthcare are already paying for the needy "indirectly" so that doesn't change.

At least that is one possible view of this. It's not that my taxes will go up and I'll still be paying the high premiums. There are some scare tactics going on.

P.S. The real qestion is: can the government manage the healthcare system cheaper that a profit motivated private insurance system. That is a debate.

 

[chinaco]

...
Those of us paying for healthcare are already paying for the needy "indirectly" so that doesn't change.

This is the part that most people miss. We are paying anyway.

Might as well formalize it so working folks are not pushed into bankruptcy (working poor and people who lose their job).

 

[Midpack]

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!

I doubt anyone would disagree that it would be nice if no one had to worry about availability. But one (not the only) of the reasons health care costs have risen faster than inflation, is people don't take care of themselves and therefore have more health issues. Unless participants have to pay some significant portion themselves, universal health care alone will only make that worse, and therefore more costly. Maybe I'm uncaring, but I don't like the idea that we all pay more for those who don't even try.

 

[RockOn]

I doubt anyone would disagree that it would be nice if no one had to worry about availability. But one (not the only) of the reasons health care costs have risen faster than inflation, is people don't take care of themselves and therefore have more health issues. Unless participants have to pay some significant portion themselves, universal health care alone will only make that worse, and therefore more costly. Maybe I'm uncaring, but I don't like the idea that we all pay more for those who don't even try.

I could be corrected, but I think that is a small contributor to the health care costs in the US. Disease is usually going to happen or not. Much of it is beyond a persons control.

Maybe this is true: if you don't take care of yourself and die early, you don't need those expensive bypasses and knee and hip replacements. Maybe the healthy minded people end up costing more because they live longer and suck the last dime out of the system. At least that is a possibility of reality.

 

[eridanus]

Maybe this is true: if you don't take care of yourself and die early, you don't need those expensive bypasses and knee and hip replacements. Maybe the healthy minded people end up costing more because they live longer and suck the last dime out of the system. At least that is a possibility of reality.

Non-smokers use more health care than smokers. Smokers die earlier, avoiding the end-of-life care costs.

 

[REWahoo]

Smokers die earlier, avoiding the end-of-life care costs.

I'd argue that smokers also have end-of-life care costs, regardless of when they die...

 

[Midpack]

I could be corrected, but I think that is a small contributor to the health care costs in the US. Disease is usually going to happen or not. Much of it is beyond a persons control.

Maybe this is true: if you don't take care of yourself and die early, you don't need those expensive bypasses and knee and hip replacements. Maybe the healthy minded people end up costing more because they live longer and suck the last dime out of the system. At least that is a possibility of reality.

[FONT=Arial, Helvetica, sans-serif][SIZE=-1]Health Care Expenditures[/SIZE][/FONT]​

• [FONT=Arial, Helvetica, sans-serif][SIZE=-1]Preventable illness makes up approximately 80% of the burden of illness and 90% of all healthcare costs.[/SIZE][/FONT]

• [FONT=Arial, Helvetica, sans-serif][SIZE=-1]Preventable illnesses account for eight of the nine leading categories of death.[/SIZE][/FONT]

• [FONT=Arial, Helvetica, sans-serif][SIZE=-1]The United States spends more on health care than any other industrialized nation in the world and yet, in many respects, it's citizens are not the healthiest. (2)[/SIZE][/FONT]

Don't take my word for it, Google around for yourself...

 

[walkinwood]

Currently get 100% of Healthcare Insurance paid by my wifes employer, which is great. When I FIRE in 2 years, I will still be covered until she retires in 8 years. I am trying to budget what that expense will look like for us. Where can I see rates?

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?

Depends on which state you live in and your current health.
Try Health Insurance, Medical Insurance, Individual Health Insurance Quotes for a quote.

I'm reading a book "Get a Good Deal on Your Health Insurance without getting ripped off" So far, very sound advice. I got it from amazon.com and it had good reader reviews.

NJ, where I live, is a "community rating" state, so prices are high, but you can't be denied insurance and everyone pays the same rate. That works well when you are looking for insurance and have a pre-existing condition, but sucks for those of us who are healthy.

 

[RockOn]

[FONT=Arial, Helvetica, sans-serif][SIZE=-1]Health Care Expenditures[/SIZE][/FONT]​

• [FONT=Arial, Helvetica, sans-serif][SIZE=-1]Preventable illness makes up approximately 80% of the burden of illness and 90% of all healthcare costs.[/SIZE][/FONT]

• [FONT=Arial, Helvetica, sans-serif][SIZE=-1]Preventable illnesses account for eight of the nine leading categories of death.[/SIZE][/FONT]

• [FONT=Arial, Helvetica, sans-serif][SIZE=-1]The United States spends more on health care than any other industrialized nation in the world and yet, in many respects, it's citizens are not the healthiest. (2)[/SIZE][/FONT]

Don't take my word for it, Google around for yourself...

I have a hard time believing that. What is the source?

It also hugely depends on how preventable is defined. If someone chokes on a hot dog and has to go to any emergency room, was that preventable?

If someone is injured in a car accident was that preventable?

If someone gets diabetis or colon cancer? Was that preventable?

If a kid falls out of a tree and breaks his arm, Was that preventable?

Everything in life is preventable to some degree, I think one has to be careful.

Is being somewhat overweight preventable? Even that can be questioned.

Give me some examples of what those stats consider as preventable.

We could all sit in our houses, not eat meat, only eat veges, never smoke or drink, never do anything risky like driving or walking cross the street, execise every day, and not have any history of family disease. We don't, and I think that is normal.