No Politics, HC big issue for FIRE

[Rianne]

We cannot ignore the elephant in the room. Setting aside saving $, investing wisely, living within your means, budgeting for FIRE, making good decisions...we are faced with a huge roadblock with HC.

It just cannot be "stay healthy" or "go broke." Health is out of our control. Yes, smart diet, exercise and keeping a healthy attitude towards life is essential. One major illness can put any American in the homeless category.

An example I have personal knowledge of:

-Married couple, husband MD, wife MD, PHD professor at Med school.
-4 children, upper middle class
-4th child born with rare disease and family racing all over the country for specialists to cure child. The child passes away at 5 yrs. old.
-Community creates fund raiser to keep family from bankruptcy
-DW, MD, PHD resigns position because of depression
-DH practice as MD suffers

I have a feeling this is not an isolated case, but happens with different circumstances all over the country.

 

[frayne]

About 15 years ago a good friend and I were talking about this very subject and the conclusion we came to is, most any family is just one major illness or health crisis away from bankruptcy. I, as many people here would spend our last dimes to help a child or grandchild fight a horrible illness. I think once one gets older say in their sixties you come to a realization that you aren't going to live forever and the question comes down to how much you want to spend in order to extend your life and what quality of life one would have. Remember reading about physicians being diagnosed with terminal diseases and their decisions were not to get treatment. HC is a tough nut to crack and no easy answers. After seeing my own mother and mother in law get a raw end of life deal from the medical profession both DW and I have an agreement not to break the bank trying to hold on to something that we know the logical conclusion. I know it is easy to say now but when that moment comes, I hope we can stick to our guns.

 

[ShokWaveRider]

My plan is to return (Home) to Canada or the UK, for the final stages of retirement, when weather does not really matter anymore.

 

[Jerry1]

I think most people on the site have budgeted funds for healthcare. In most cases, it will probably be enough. However, there will be cases where it's not. Similar to most things like this, one can only do so much. Those that do a reasonable amount of due diligence, will be better off than those that don't. However, in some cases, one may end up devastated physically and financially despite doing everything right. You can only do so much. Personally, because I'm past the children phase and was blessed to not have a situation like your example, my biggest concern and gamble is long term care - which is not even technically healthcare.

The interesting thing is that even in the situation you sited, it happened to working, presumably well paid individuals. Imagine the suffering that goes on at the lower economic end of the spectrum.

Either way, all I can do is buy the best insurance I can afford, do my best to stay healthy and hope/pray (whatever your persuasion) that the lighting bolt doesn't hit me or my family. If it does, do what everyone else in that situation tries to do - the best I can.

In terms of this board, either way, I don't see how working any longer in my life significantly changes the odds or dynamic of that type of event.

 

[RetireAge50]

Definitely real but not in my control so not an issue I think (worry) about.

 

[Senator]

If you have insurance, most of your problems are resolved. Stay in network (do not travel the world for the 'best' healthcare). Stay as healthy as possible.

Worse case, there is bankruptcy.

 

[easysurfer]

I'm trying make it til medicare age, then get a nice supplemental plan paired with medicare.

Of course, then in the future there is LTC of how not to go bankrupt, but that's a whole other discussion.

 

[Pilot2013]

The Mods seem awfully touchy, but I will ask a question hoping it hasn't crossed the invisible line:

Is there really a case where someone is absolutely refused lifesaving care due to no insurance? I have always been under the impression that part of the reason our HC insurance and medical costs are so high is that they have to cover the uninsured through the insured and paying?

I have an employee ($15/hour laborer) who has a granddaughter born with congenital heart defect. The granddaughter was born to a single mom, with no job/income. The child still went through multiple life saving surgeries and I am happy to say is alive and recovering. I am pretty sure there will be bankruptcy, and a tough road ahead, but care was provided in this case. I assumed this is the norm (although a part of the reason for spiraling costs)?

 

[CaptTom]

Here's the dirty little secret that no-one on either side of the debate wants to talk about:

We ALL pay to provide free health care to those in need. Not necessarily good care, not necessarily the most efficient care, but our society has decided that we won't let people just die on the doorstep of the hospital because they can't pay.

The question is, how do the rest of us pay the bill for those people?

Currently, it's added to the bills of those who CAN pay. I think we can all agree that this is not the best system.

I still remember when everyone had Blue Cross insurance through work. We all paid, but we paid a lot less because back then Blue Cross was a non-profit. In fact, it was so cheap that most of our employers offered it for free.

It was not a perfect system. There were complaints that a committee (we'd call it a "death panel" nowadays) decided which treatments were and weren't covered. But everyone got a base level of care, at a far lower cost than today.

To my way of thinking, the problem started when health insurance went to a for-profit model.

 

[Pilot2013]

Here's the dirty little secret that no-one on either side of the debate wants to talk about:

We ALL pay to provide free health care to those in need. Not necessarily good care, not necessarily the most efficient care, but our society has decided that we won't let people just die on the doorstep of the hospital because they can't pay.

The question is, how do the rest of us pay the bill for those people?

Currently, it's added to the bills of those who CAN pay. I think we can all agree that this is not the best system.

Through telepathy, you answered my question while I was still typing...

 

[Senator]

I have an employee ($15/hour laborer) who has a granddaughter born with congenital heart defect. The granddaughter was born to a single mom, with no job/income. The child still went through multiple life saving surgeries and I am happy to say is alive and recovering. I am pretty sure there will be bankruptcy, and a tough road ahead, but care was provided in this case. I assumed this is the norm (although a part of the reason for spiraling costs)?

I doubt that any medical bills will/were even be sent. There will be no reason to declare bankruptcy over this event.

 

[pb4uski]

.... To my way of thinking, the problem started when health insurance went to a for-profit model.

I think you are wrong. Here's why.

Since ACA, health insurers must spend at least 80% of premiums on claims in any given policy year. As a result, the maximum that they have available for taxes, overhead and profit after paying for claims is 20% of premiums. If they do not spend at least 80% on claims then they need to refund any excess premiums until the claim ratio is 80%.

So if they collect $100 in premiums and only spend $75 on claims then they would need to refund $6.25 in premiums to policyholders.

The recent escalation of health insurance premiums is not greed on the part of the health insurers since their margins are limited by law.... but rather is the escalating cost of health care (docs, hosptals, meds, etc).

The 80% was typical even before the law required it... we know this because in the year that the MLR requirements went into effect there were some minor refunds but not a lot in the whole scheme of things.

The Affordable Care Act requires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement, also known as the Medical Loss Ratio (MLR). It also requires them to issue rebates to enrollees if this percentage does not meet minimum standards. The Affordable Care Act requires insurance companies to spend at least 80% or 85% of premium dollars on medical care, with the rate review provisions imposing tighter limits on health insurance rate increases. If an issuer fails to meet the applicable MLR standard in any given year, as of 2012, the issuer is required to provide a rebate to its customers.

 

[Senator]

To my way of thinking, the problem started when health insurance went to a for-profit model.

I would say that is incorrect too. There is no restriction on any non-profits starting up.

I think the problem started by making only a few people pay for everyone else. If it was a VAT or sales tax, like Europe has, everyone that spends money pays, working or not.

 

[scrabbler1]

Here's the dirty little secret that no-one on either side of the debate wants to talk about:

We ALL pay to provide free health care to those in need. Not necessarily good care, not necessarily the most efficient care, but our society has decided that we won't let people just die on the doorstep of the hospital because they can't pay.

The question is, how do the rest of us pay the bill for those people?

Currently, it's added to the bills of those who CAN pay. I think we can all agree that this is not the best system.

I still remember when everyone had Blue Cross insurance through work. We all paid, but we paid a lot less because back then Blue Cross was a non-profit. In fact, it was so cheap that most of our employers offered it for free.

It was not a perfect system. There were complaints that a committee (we'd call it a "death panel" nowadays) decided which treatments were and weren't covered. But everyone got a base level of care, at a far lower cost than today.

To my way of thinking, the problem started when health insurance went to a for-profit model.

I can tell you how much I pay, here in New York. We have a HCRA (Health Care Reform Act, https://www.health.ny.gov/regulations/hcra/rates/2009-04_thru_2020-12_payor_rates.htm ) surcharge attached to hospital bills. It's 9.63%. After my hospital stay in 2015, when I got the bill for my share of the cost, I had to pay about $289 for this surcharge ($3,000 was my copay).

 

[Montecfo]

I agree the problem is not profit, it is structure. Name another product or service routinely bought and sold with neither provider not recipient knowing the price.

Can't expect good value without price transparency.

 

[Sunset]

I think you are wrong. Here's why.

Since ACA, health insurers must spend at least 80% of premiums on claims in any given policy year. As a result, the maximum that they have available for taxes, overhead and profit after paying for claims is 20% of premiums. If they do not spend at least 80% on claims then they need to refund any excess premiums until the claim ratio is 80%.

So if they collect $100 in premiums and only spend $75 on claims then they would need to refund $6.25 in premiums to policyholders.

The recent escalation of health insurance premiums is not greed on the part of the health insurers since their margins are limited by law.... but rather is the escalating cost of health care (docs, hosptals, meds, etc).

The 80% was typical even before the law required it... we know this because in the year that the MLR requirements went into effect there were some minor refunds but not a lot in the whole scheme of things.

So if I ran a health insurance company, I'd buy some hospitals (different company registration) and have my hospitals charge the health ins company a high rate to ensure the 80% is met, then pay out dividends to the company owner (which is the health ins company).
I'd probably add some pharmacies/drug companies in the mix to make sure all my customers spent the full amount as many each year would not go to hospitals.

A nice vertically integrated system of companies would assure removal of pesky refunds.

 

[Senator]

I agree the problem is not profit, it is structure. Name another product or service routinely bought and sold with neither provider not recipient knowing the price.

Can't expect good value without price transparency.

Very few products are given to everyone, yet paid for by few.

 

[CaptTom]

I would say that is incorrect too. There is no restriction on any non-profits starting up.

I think the problem started by making only a few people pay for everyone else. If it was a VAT or sales tax, like Europe has, everyone that spends money pays, working or not.

OK, I haven't personally run the numbers, so I can't back up my theory.

Still, in my own life experience, the problem seemed to start when for-profit insurance companies started cherry-picking young, healthy workers away from the non-profits who previously covered everyone.

I will agree that *IF* there's a fair system of taxation, a single-payer government plan is a reasonable solution. That idea isn't very popular in the US right now, so I'd love to hear a better idea.

 

[Senator]

OK, I haven't personally run the numbers, so I can't back up my theory.

Still, in my own life experience, the problem seemed to start when for-profit insurance companies started cherry-picking young, healthy workers away from the non-profits who previously covered everyone.

I will agree that *IF* there's a fair system of taxation, a single-payer government plan is a reasonable solution. That idea isn't very popular in the US right now, so I'd love to hear a better idea.

Healthy people are charged quite a bit these days. I do not think your problem association is true.

Is Medicare considered a single payer?

 

[youbet]

The recent escalation of health insurance premiums is not greed on the part of the health insurers since their margins are limited by law.... but rather is the escalating cost of health care (docs, hosptals, meds, etc).

Yep. The profits insurers are making are transparent and easily monitored. We know what they are.

The costs insurers are paying on our behalf are not so transparent. And insurance customers are part of the problem screaming bloody murder when their choice of providers (based on cost to the insurance companies) is limited by networks, etc. We all want to go where we want to go with cost as a secondary consideration and have insurance pick up the bill. Then we gasp when we find out what was paid and when premiums go up.

Before I'd worry about insurance company profits, I'd worry about what tests, procedures and hospitalizations doc's are ordering and what providers are charging for those services due to the relative lack of competition in the industry.

 

[MRG]

The Mods seem awfully touchy, but I will ask a question hoping it hasn't crossed the invisible line:

Is there really a case where someone is absolutely refused lifesaving care due to no insurance? I have always been under the impression that part of the reason our HC insurance and medical costs are so high is that they have to cover the uninsured through the insured and paying?

I have an employee ($15/hour laborer) who has a granddaughter born with congenital heart defect. The granddaughter was born to a single mom, with no job/income. The child still went through multiple life saving surgeries and I am happy to say is alive and recovering. I am pretty sure there will be bankruptcy, and a tough road ahead, but care was provided in this case. I assumed this is the norm (although a part of the reason for spiraling costs)?

Are people refused? Probably a small minority. Do people who have assets chose to die without treatment? Yes!

My FIL was diagnosed with a treatable cancer, kept it a secret and died from it. He was also a bi-polar person and when depression hit him it was severe. He never told the family what he was doing. He told his neighbor who mentioned it after the event. It did make sense in that a normally active person started hurting too badly to go for his normal walk. We watched him go down hill for two years.

It's hard to understand how a sick person's mind works. He had assets and Medicare, he just didn't believe they would pay his bills.

 

[Amethyst]

I don't think the issue is "lifesaving care" so much as it is long-term care for those with dementia, etc.

Also, I'd be willing to bet that the HC system, being made up of people, is far more interested in preserving a child's life than in keeping a demented old person comfortable for years and years.

Is there really a case where someone is absolutely refused lifesaving care due to no insurance? ?

 

[zack59]

If a person has Medicare and all the supplements available to purchase, would there be an out of pocket maximum for even the most serious illness?

 

[Winemaker]

I have written about this beforehand, my old megacorp, like other megacorps, have a bulk of their employees go to certain hospitals in a certain geographical area. My megacorp would pay, say 10 hospitals, $1 million a piece, guaranteeing them a certain amount of patients and assuring them that they could "keep the lights on". This stipend would allow for so many births, this many heart attacks, that many broken bones etc. We, the employee, in turn, got a better rate for whatever procedure, that the "insurance" would cover. I never paid a co-pay, but I paid $10 for an office visit. I paid about $125 every two weeks for my premium, for a family of 4.

However, since I retired, they dropped me like a hot potato and threw me to the perils of the open market. Which DW and I have somewhat planned for, including the loss of SS and our pensions.

 

[LARS]

Well we have, and don't see any reason in the future we won't continue to have, health insurance. So I cannot imagine an issue that would sink us.

That said I have to wonder if I'd being willing to spend personally (on myself) beyond a $1 million in the event of a specific medical crisis. Sitting here today, I cannot imagine that that $ amount and my desired future ongoing physical quality of life are compatible.

But this is one of those situations you hope to the Gods you never get tested on...