Healthcare IV

Well, as you remember from my last healthcare post, I checked out potential healthcare costs at the places we were thinking of moving to, once we hit our FIRE goal. We were lucky in that the healthcare was available, at roughly the same price we would pay if we stayed where we were. So much for Geoarbitrage in terms of healthcare!

I wanted to start exploring some other options for folks beyond the standard healthcare options.  As some of you may know, in the US there is an exemption to some of the requirements of the ACA medical act (Obamacare) due to religious exemption. “Members of recognized health care sharing ministries are exempt from the mandate to purchase health insurance by 2014 or face financial penalties. Enrollment with a recognized health care sharing ministry REMOVES your requirement under the healthcare mandate to purchase health insurance.” This enables the Health share organizations to provide an alternative to traditional medical insurance.

The general concept is that the individuals signing up form a “pool of funds” with their contributions, and share them with each other to cover medical expenses. You pay in money up front and monthly, and then the program compensates your doctor, pharmacy, etc. When asked by the doctor, you explain that you will “self-pay” but that you belong to a group that will compensate them with directly. You even get a medical card, etc. For existing conditions, they typically are not covered the first year, are partially covered in year 2, and fully covered in year 3+. When I checked for the two of us, our costs were coming in between $350 – $500/month.

 Part of the issue you may have with this form of health sharing system is the ethics that you are expected to adhere to in order to stay in the system. Some of the strictures could include:

  • Abstain from tobacco use in any form.
  • Follow biblical teachings on the use or abuse of alcohol.
  • Avoid abuse of prescription drugs, which means consuming prescription medications in a manner not intended by the prescriber that would likely result in bodily harm or dependency.
  • Abstain from the use of illegal drugs. Illegal drugs include, but are not limited to, any hallucinogenic substance, barbiturates, amphetamines, cocaine, heroin, marijuana, illegal intravenous drugs, or narcotics.
  • Exercise regularly and eat healthy foods that do not harm the body.
  • Some individuals who qualify for our medical cost sharing program but have certain pre-existing health conditions that can be improved through lifestyle changes will be enrolled in HealthTrac℠. This required program is in place for Sharing Members to improve their health while reducing the risk of developing or exacerbating serious diseases.
  • If a condition is accepted as pre-existing, that member will be accepted with that limitation (see question about Pre-Existing Conditions).
  • All decisions for membership approval are made in consultation with the prospective member and with the most complete information available.

A key point is the one below – membership must be approved by the program administrators – you don’t just get to enroll automatically.  In order to qualify for the exemption from ACA, the programs have to have ‘(II) members of which share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs and without regard to the State in which a member resides or is employed. Thus, it is similar to belonging to a specific sect of a church in order to qualify. If you do not meet up with that program’s guidelines, they will not cover you – because to do so will put their program in jeopardy. Denial of pre-existing conditions seems to be another issue with this format. This may rub you the wrong way if you don’t follow that particular denomination, but you may be able to seek out one for your personally religious calling.  

These healthcare ministries are still very new, and the legal ramifications are still being worked out on them. They may be a compelling option in the future, but make sure you go in with your eyes wide open. I intend to keep this as one of my options as we get closer to FIRE.

Additional articles on the subject:

If this interests you, here are some Specific programs to investigate:

Anyone have further information, or things you want me to look into for Healthcare?

 

Mr. 39 Months

 

Healthcare III

Well, as you remember from my last healthcare post, I was looking into the internet and healthsherpa.com to identify potential healthcare costs for the period between 56 and 65 (when Medicare is supposed to kick in). I started out with my current area in southern NJ, and came up with a list of 7 different plans. Healthsherpa also gives you estimated total annual costs, based on light, moderate or heavy usage. We were coming in around $12K a year for insurance, co-pays, prescriptions, etc.

I next wanted to see costs for healthcare in states we were considering moving to once we hit FI – Delaware or North Carolina (near Asheville). Delaware would enable us to keep close to where we currently are, and Mrs. 39 Months family. North Carolina would be closer to my family, and would have the benefit of being in the mountains (something both Mrs. 39 Months and I grew up with, and miss since we moved to Southern NJ).

First I checked out North Carolina, using the same steps that we followed in Healthcare II posting. Mrs. 39 Months really liked Black Mountain NC when we visited last year, so I’m going to use that. After researching, it looked like we could get $580/month back in reimbursement.

After going through the other parts (it started with 7 plans, I put in that we wanted a PPO and Silver) it came up with 3 plans to compare, all coming in similar to the monthly cost that we were looking at for NJ. The expected spend still ends up being around $12K a year.

For Delaware, we did the same thing and came away with:

  • Monthly reimbursement of $1,489/month (wow!)
  • Overall annual costs of around $12K/year

So it appears that, as of right now, we can budget about $12K/year for medical, based on what HealthSherpa is telling us. I will continue to do research on this in future postings, and I’ll let you know what I can find out.

 

Anyone have further information, or things you want me to look into for Healthcare?

 

Mr. 39 Months

Healthcare II

Well, as you remember from my last healthcare post, I wanted to look into using the internet to research potential  health care costs for myself and Mrs. 39 Months when we retire early. I thought it might be of interest to folks to see what I found, and what questions this raised.

After looking through some of the sites that I discussed on my last post, I chose to go with Healthsherpa.com as my source for finding information. The steps I followed are:

  • Go to HealthSherpa.com
    • You can setup account if you want, and then log in to keep your stuff
  • Type in zip code . Very important. Some places have Healthcare exchanges, some don’t. I will cover some of those areas that don’t in another post.

  • Who needs coverage (me & spouse)
  • Put in ages, answer questions on disability, smoking, etc.

  • Put in number of people in household (2) and estimated income (I went with $60K)

  • Sherpa says that I can save $892/month on healthcare by reimbursement by government in my zip code (in southern NJ)
  • It asks for the qualifying event, and gives me a list. I chose losing coverage (since I’d be retiring)

  • Asks you to rate how often you use healthcare (low, medium, heavy) based on doctor’s visits, prescriptions, hospital visits, etc. Not perfect, but it will get you in the ballpark. I chose heavy use, because as we get older, we’d go more often

  • Let’s you go into detail on the plan (visits, prescriptions, etc.)
  • Also let’s you compare other plans & costs by clicking “view all 18 plans”

  • This sorts by lowest cost to highest cost, and has a screen on the left side that lets you filter your search. Since I wanted an EPO and Silver plan, I typed those in.
  • The result was a series of seven (7) different plans, ranging in price from $489/month to $2,076/month. Wow. The screen also lets you select up to three different plans to compare.

  • The three plans ranged from $489 to $589 per month. Some of the areas they compare are:
    • Deductible
    • Max Out-of-Pocket (OOP)
    • Primary Care co-pay
    • Prescriptions
  • This should help you get an idea of potential costs. Again, these costs reflect a reimbursement from the government of $892/month. If my income went above the 400% poverty level (around $64K right now), I would be adding about $900/month onto my healthcare bill.

Well, at least I’ve got a starting point for budgeting.

Next healthcare post, we’ll go over what to do when you have a state that doesn’t have a healthcare exchange.

 

Mr. 39 Months

 

Health Care – Post 1

Like many FIRE folks in the United States, the topic of health care takes a major part of our planning as we look to exit the rat race early. The current plan, as reader’s know, is to retire in 30 months, when Mr. 39 Months will be 56 and Mrs. 39 Months will be 58. Since Medicare doesn’t kick in till age 65, and we aren’t the kind of idiots who try to “chance it” by going without medical during the gap, we need to look for medical coverage to cover us for 7-9 years. Even though the healthcare issue continues to be a political football, we need to start planning. I won’t get into the politics here (thank god) other than to say that, as a “libertarian leaning” individual, I find it distasteful that politics enters into it at all.

Now that that is out-of-the-way, I wanted to go through my initial research on this, and what I found. I expect this will be an ongoing topic, as I update you on my findings and go through my logic as I approach FI and potential early retirement.

First some basic info:

  • Mr. 39 Months is 53, and Mrs.39 Months is 55
  • Overall health is good, though not as good as 20 years ago (i.e. no chronic illnesses, diabetes, injuries, etc.)
  • We have typically had a PPO plan (i.e. it allows us to go outside of our network fairly easy). An HMO plan is typically less expensive, but it is more difficult to seek doctors outside of a prescribed network. We both felt the additional expense was worth it for the flexibility
  • Mr. 39 Months job has typically been the one which has provided our health care (like so many folks in the US). The co-pay cost has gone up a lot over the last ten years, as health care costs and regulations have increased. At this point,  we are currently paying $9,835/year out of our paycheck (not counting co-pays and deductibles).
  • We currently have  a “Silver PPO” plan, which
  • As most folks know, you can’t easily deduct your medical expenses from you income taxes in the US (for 2016’s taxes, you could only deduct anything over 10% of your income – very difficult to hit).

Even though the healthcare issue is a moving target right now, here is what I’ve done.

  1. Figured out generally what we are looking for. The plan is to try to get a similar Silver PPO plan. While I’d like to look into an HSA type, I’m not dedicated to it. We will have to see.
  2. The plan is to live on around $72,000 per year. That is pretty generous (our current base expenditures are around $30,000 year + taxes). The extra is to provide $12K to each of us for an allowance ($1,000/month) for our expenses, $12K for medical, and $6K (just in case). This gets us to $72K. We are thinking of some “geo-arbitrage” in the US to potentially reduce the spending.
  3. With the new US tax law, we can deduct a base $24K from our income as a deductible. This puts us at $48K per year in income – well within the confines of the current US healthcare “assistance” level, based on being under  400% of the US Poverty level (which for 2016 was around $64,080 for 2 people)
  4. Looked for various sites on line to assist. Some of those I found include:
  • Healthcare.gov
  • Ehealthinsurance.com
  • healthsherpa.com

I’ll share what I found in my next healthcare posting.

Some other FIRE blog posts that I have found on the topic that folks might want to look into include:

  1. Our Next Life
  2. Root of Good

Mr. 39 Months