Nov 5, 2017 533 comments

When Your Shitty Health Insurance Doubles in Price

Well, despite Mr. Money Mustache’s outrageous optimism, I think we all saw this coming. I opened up my premium renewal email from Kaiser and saw this:

Figure 1: My new insane medical insurance premiums for the minimum available “Bronze” program, with a $6500 deductible.

My family’s monthly health insurance premium, which had already more than doubled in the last few years to $674 per month, was going up a further 44% for the coming year. For no good reason, other than perhaps the the current government’s attempts to kill off the Affordable Care Act. (By cutting various parts of the structure, the insurance market becomes less stable and predictable, and thus more expensive).

Now, before we go any further, I have to note that this is a situation that only affects high income earners. If we were really retired on a $30,000 passive income as we were for some of the decade before this blog started making significant money, our family’s monthly cost would be more like $128, due to tax credits and the Children’s Health Plus plan.:

Figure 2: Net insurance cost for a $30k per year family of three.

But in my email, I just saw the thousand bucks. And if you know how I feel about rules, unnecessary costs, and insurance in general, you can probably guess what my initial gut reaction was:

“Fuck. FUCK THAT! This is absolute bullshit. Fuck you, I quit, I’m not paying it.”

But, since I’m not sixteen years old anymore, I was eventually able to get past this first stage of the analysis and think about an actual course of action.

After all, all the power and freedom in the world is of no use at all, if you choose to wallow in your anger rather than taking steps to create the life you want. So I thought about why I was so angry. It boiled down to this:

The premiums are not an accurate representation of my risk.

The value of medical insurance is pretty easy to estimate: the National Institute of Health calculates that the average person consumes about $449,000* in health care spending over an 80-year lifetime, or $5600 per year. This is less than my plan’s deductible alone, which eliminates the value of insurance right off the bat. My plan really only covers catastrophically expensive events, which means it is unlikely that I will ever use it.

Plus, most medical spending is loaded towards the last decades of life, where the Medicare program already picks up the bulk of the costs. And, we are healthier than average – aside from one baby delivery about twelve years ago, none of us have ever actually benefited from health insurance in over nineteen years in the country.

When you add up these factors, it is obvious that the insurance is a bad deal. When presented with overpriced insurance, I always just choose not to buy it, which is also called “self-insuring”. But whenever I talk about self-insuring for medical expenses, everyone asks the same question:

“But what if you do get hit by a falling piano and have to spend months in the Intensive Care Unit?”

The answer is that I guess I’d receive some large medical bills!

I’m not denying that an expensive treatment absolutely can never happen to me. I’m just putting an estimate and a limit on how much I am willing to pay for insurance on it.

Remember, health insurance is not really health insurance. It’s just “large medical bill insurance” – a shaky precaution against having to pay for expensive procedures, so you can keep your investments instead of using them to pay the bills, perhaps eventually becoming poor enough that you are covered by public health insurance (Medicaid). A better name for it might be wealth insurance.

We have been trained to think that going without medical bill insurance is very risky. But that’s just because the subject appears frequently in the news. If it weren’t such a hot topic these days, the average person without a chronic illness would rarely think about it.

After all, by comparison, what precautions have you taken against being hit by a meteorite? There could be one streaking towards you right now. It could kill you, or your children, or it could leave you with a lifetime of chronic care costs. Are you telling me you don’t have separate meteor insurance? Why not?

In 2013 a 60-foot chunk of rock came from space and hit Russia with the force of 30 Hiroshimas. The human race escaped with just 1500 injuries, but only because the rock came in at a shallow angle and landed in a very remote area.

If space rocks are too far-fetched, how about motor vehicles? If you choose to drive a car, you are willingly throwing yourself into a far riskier situation than simply self-insuring for medical bills. Even more dangerous, statistically: being inactive and/overweight, a boat in which over 66% of us sail every day.

The point is that while huge, uncovered medical bills are inconvenient, they are rare. Therefore, my willingness to pay for insurance against them must have a limit. I’d definitely pay $50 per month for it, but should I be willing to pay $1000?

What about $2000? $4000? $12,000 or $1 million per month? I think that everyone would hit their “Fuck That” point somewhere in there.

And remember, this problem of expensive medical procedures is unique to the US. You can take your dollars almost anywhere else in the world and pay out-of-pocket to get the same (or better) quality care for a fraction of the cost. At some point, a rational person has to be willing to stop overpaying for this inefficient system.

After doing the math, I decided that my limit is definitely less than $1000, which means I should at least consider other options. So I looked into some of them:

Full Self Insurance
2.9 Months per year of Self Insurance (to avoid IRS penalty)
Medical Tourism
joining a “Healthshare Ministry” like Libertyshare
expat insurance like Cigna
Artificial poverty (reducing my income to a level where we’d qualify for subsidies)

Self Insuring is the easiest choice: you just don’t renew your insurance and start banking that sweet surplus right away. There is a tax penalty for that: $695 per adult, $347 per child, or 2.5 percent of your adjusted gross income – whichever is greater. Thus, a family with $100,000 of income would pay a $2500 fee. With my new premium at $11,500 per year, the penalty would still be cheaper all the way up to $461,000 in income. Plus, there are a surprising number of qualifying exemptions, including a death in the family within the last three years, a category which unfortunately includes me.

A 90 Day Insurance Vacation is the lightweight version of self-insurance. The penalty only applies if you were uninsured for three months or more. So if you start your insurance during the enrolment period but then cancel it on, say, October 2nd, you cut your premiums by about 25% in exchange for the reduced risk protection. Just be sure to postpone your Wingsuit Jumping vacation until at least the new year.

Medical Tourism is an important thing that every US resident should be aware of. After all, we live in the country with the most overpriced medical procedures in the world – why should we insist on doing 100% of our shopping here? This would be like insisting you buy only US-produced goods and services: no electronics, no shoes, no Amazon and no blueberries in winter. We should all read a book or two on the subject to understand just how easy it is, to free ourselves from the US-centric assumption that doctors are shockingly expensive.

There’s a lightweight version of medical tourism too: simply comparing insurance pricing from one state and city to another. From a quick search I see that Colorado is one of the more expensive states for health insurance, with New York being the worst, and the best three being California, Utah and New Mexico. As with everything, it’s good to shop around when choosing where to live, and regularly challenge yourself by asking, “Is this where I’d settle down if starting from scratch?”

Health Sharing Ministries like Liberty HealthShare looked like the most promising loophole. Due to the strong influence of organized religion in the US, if you can join one of these, you are exempt from the tax penalty. The downside is the same as the upside: these ministries are exempt from ACA rules, which means they can drop you for having a pre-existing condition. And they also want you to affirm their value system, which can range from agreeable stuff like “taking care of your health” to excluding coverage for things that violate religious taboos like abortion or attempted suicide.

Expat Insurance sounded promising when I first heard about it from some fellow Canadian early retirees who write the blog Millennial Revolution. Companies like Cigna will cover you for worldwide medical costs for a fraction of what we pay here in the US. But the hitch is it only applies if you are truly on the road and don’t actually reside here. So it’s not an option for now. But in the long run when I retire to an oceanfront compound (or commune?) in Costa Rica, yes.

Reduced Income is the last and least feasible option on the list for me right now, but it’s genuine and not even artificial in the case of the typical early retiree.

Suppose you are retired with, say, a mortgage-free home and $800,000 in index funds, and living on a plentiful $30,000 per year. Your income tax return will show only about $18,000 in dividends, some of them even tax-exempt. On top of that, you’ll sell just a few shares and pay taxes only on the capital gains. This taxable income in the mid-20s will keep you in a very low tax and health insurance bracket.

So What Path Did the Mustache Family Take?

I brought all this stuff up to Mrs. MM – the other, less morally-outraged, leader of our household. Our conversation brought up a few things:

Although a $12k insurance bill is insane, we would not even notice a $12,000 difference in income taxes if the brackets were to change. We currently have a high income, but this has not caused us to increase our family spending at all. This is because of the magic of living below your means: once you have enough money, the surplus is just that: a big, fat, awesome bonus. Since I want this enormous surplus to go back to society over my lifetime, why should I be upset about some of it paying for other peoples’ health insurance right now?
But, I countered, this doesn’t apply to everyone. The typical MMM reader earns enough money to be hit by these higher premiums, and many are raising families and running small businesses, thus purchasing health insurance on the open market. At the same time, they are trying to save as much money as possible to reach financial independence while they are still young enough to enjoy it. Burning $12,000 per year on mostly-useless insurance can wipe out 25% or more of the amount you could otherwise save for retirement.
Given this, the Healthshare ministry was one of the better compromises. However, she felt that pretending to agree with a religion (especially if it’s one that actively oppose some things we value like same-sex couple equality and women’s reproductive rights) wasn’t worth it for us.
In my own hypothetical pre-retirement situation (a self-employed couple making $200,000) I would probably go for full self-insurance, simply paying the tax penalty whenever necessary and using medical tourism for any expensive procedures.
But also remember that if you’re a high-income business owner, your business can pay for your health insurance with pre-tax money. This cuts your net cost after taxes by 30-40%, making it a subsidized program after all.

So in the end, we’re just letting the policy auto-renew for now, using that last bullet point as a consolation prize. And these premiums will probably remain outrageous, unless we fix the underlying problem in the US: it’s not the insurance, it’s how much money we waste on medical care. If the Medical system could grow a Money Mustache**, I am certain we could cut our costs down by at least 75%, just as the average consumer can cut their costs by a similar portion just by learning to life a joyful and efficient life.

Further Research:

After this article came out, a reader told me about the site “Health Care Bluebook“, which allows consumers to look up typical costs of various medical procedures. Many are less expensive than I had assumed.

Footnotes:

* I adjusted the NIH paper’s 2000 numbers to 2017 dollars.

** Ideas for making US healthcare less expensive – please critique and add your own in the comments!

Eliminate the 75% of healthcare spending we currently waste on self-imposed lifestyle diseases: eliminate subsidized urban car infrastructure in favor of muscle-powered transportation. Treat soda and products with added sugar in the same way we currently treat liquor. Treat health and fitness (rather than medical treatment) like a human right, instead of a vanity accessory just for rich mountain-dwellers and celebrities.
Make health care purchasing look more like Wal-Mart and Amazon, and less like the DMV. Every standard procedure needs to be listed on a menu with a price, and those need to be on the front door so they are subject to competition. By huge national or even international companies and co-ops.
Drastically increase the supply of doctors, and make the job more enjoyable: Cut mandatory work hours for residents from 80 to 40 per week. Modernize the medical school curriculum to eliminate pointless memorization, reflect current technology and reduce the cost of the degree. Open the borders to qualified doctors from other countries. Allow telemedicine – let doctors in other countries certify easily for US diagnostics and prescriptions.
Elevate nurses to do all the stuff they already do, but in their own clinics without working for a doctor and paying the money up the chains.
Start using search engines and artificial intelligence for diagnosis, rather than flawed and expensive humans.
Open state and national boundaries for insurance and hospital services with only the required regulations for safety as we do with other imports.
Eliminate the right for anybody to sue for medical malpractice, or indeed for pretty much anybody to sue anybody else for anything. Let’s make our professional reputation and our actions public and then just suck it up like adults, reinvesting the enormous proceeds currently wasted on litigation.
Figure out if we can make single-payer health insurance work for us as it already does for most countries. There are many benefits, but the biggest is probably just eliminating all the mental energy we each waste on thinking about this mundane topic. As an analogy, imagine if every citizen had to hire their own police force for personal security – just think of how much energy and fear would be wasted on this topic, which we barely have to think about right now. As it turns out, it works the same way with health insurance.

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Erik November 5, 2017, 10:29 am

Whew, glad I’m living in the Netherlands. We may be forced into €100 a month healthcare insurance packages but in our case you’re pretty well covered if shit does hit the fan.

Reply
- Tall November 5, 2017, 6:33 pm
  
  I was also super healthy my whole life. (I still almost never get sick, even as everyone around me gets the sniffles.)
  
  My first extremely expensive hospitalization happened in my young 20s, as an athletic person who had regular medical care, flossed, etc. It was a fluke thing.
  
  Even though I wasn’t on the hook for hundreds of thousands of dollars, the costs still made me stop retirement contributions (that was also when I learned that sometimes insurance says it won’t pay, for say an MRI, but a letter of necessity will make them pay. Wish I had learned that much earlier, before paying so much out of pocket!)
  
  I’m also one of the lucky women whose hormonal changes induced chronic fatigue. So now dealing with all those medical costs trying to pin it down.
  
  If you had asked me to estimate my risk, I’d have been dead wrong. I’d also have had to declare bankruptcy, like so many people who have sudden health crises.
  
  Which makes the casual destruction of our national health care so truly evil, so utterly careless of ordinary people by rich men of power.
  
  Reply
- Cubert November 5, 2017, 8:12 pm
  
  The shit doesn’t hit the fan in Holland, it hits the windmill!
  
  One other option from the olden days of MMM is to work a part time job that offers a health care plan. Pretty encouraged to see more and more restaurant receipts with that surcharge here in progressive Minneapolis.
  
  Reply
  - Kate November 5, 2017, 9:31 pm
    
    Address end of life care. We spend the vast majority of our healthcare dollars on futile treatments at the end of life. Stop paying for aggressive chemotherapy on the 90 year old women with dementia. It’s crazy. We would knock off a huge chunk of our medical costs with this one, simple intervention.
    
    Reply
    - Jason November 14, 2017, 1:35 pm
      
      Kate – That’s a tough one. From a logical perspective, it makes no sense to pay for expensive procedures on somebody who does not have much time left. In practice, if it was you or your loved one that was sick, wouldn’t you want everything possible to be done. Imagine you were sick and a $10M procedure had a 50% chance to cure you. You would want to try even if the expected cost of your life would be $20M. Remember you have paid into this system your whole life. The least they can do is try to extend your life. This topic, more than any other is so complicated because it’s literally life and death. We are not picking between driving or biking. I love the detail MMM shared in with the options he considered. Unfortunately, none of them are great.
      
      Reply
      - Courtney November 28, 2017, 7:05 am
        
        When considering value of medical procedures people should be considering quality of life over quantity of life. Will your demented grandmother appreciate living a few extra months or years with all of the negative side effects of chemotherapy, or will it be more beneficial to let the natural process of dying carry on without intervention. It’s a tough question. We should all take the decision out of a loved one’s hands and prepare an Advanced Directive before this type of situation arises.
        
        Reply
        
        Lisa December 6, 2017, 6:28 am
        
        So, Courtney and Kate, the way you use the word “demented” implies that their lives are somehow worth less than someone with a sharp mind. Do you extend thus logic to someone with, say Down’s Syndrome? After all, neither one of them did anything to “deserve” their reduced mental faculties. I think I can predict your answer as “of course not!” Well, if what you really mean is “someone nearing the end of their days,” say it. Don’t say “demented” any more than you would say “retarded” to indicate your lack of value in their life.
        
        Suzzz December 22, 2019, 3:33 pm
        
        The problem with end of life care is that the quality of life suffers from aggressive and painful treatments. Someone with no power to choose is subject to hideous torture because family members are either ignorant of their suffering, unable to let go, or want to keep collecting their social security checks for as long as possible. I have a friend who is a nurse, and she is relieved when people finally die.
      - Jen November 28, 2017, 10:10 am
        
        Actually, for many of us we’d choose not to have the procedure. One of the things the ACA tried to encourage (and was branded “Death Panels”) was having doctors discuss end of life directives with patients. Right now, absent any directive, doctors have to try to keep you alive at all costs – most people wouldn’t actually want that, so you can get savings and increased self-determination/quality-of-life all in one go if we could either (a) get more folks to sign directives or (b) change the defaults in the absence of a directive (make expensive end-of-life care opt-in rather than opt-out).
        
        Reply
        
        Mr. Money Mustache November 28, 2017, 4:20 pm
        
        Excellent point Jen – my Dad died of a rapid acting cancer early this year, and one of the few bits of relief in that ordeal (for both him and for his family), is that he had a well written directive that he had crafted years earlier.
        
        He basically said, “If I’m screwed or in a situation with limited life quality, just pull the plug AS SOON AS POSSIBLE. No prolonging of life, give me the best sleeping drugs you’ve got and let’s get it over with.”
        
        It was a wise choice. If he had not written that, there’s a high chance he would still be suffering in a hospital bed right now, ten months later.
        
        Bohemiana May 19, 2018, 5:46 pm
        
        My dad had Lewy Body Dementia, the same disease as Robin Williams.
        
        My dad declined over a period of about 7 years and as the Parkinson’s symptoms because worse he could no longer walk and ultimately fell and broke his hip. Of course he had to have the surgery because he was in great pain but the doctors didn’t tell us that the likelihood of his recovery was very slight.
        
        After surgery dad couldn’t walk or swallow. Again, the doctors didn’t tell us he would probably never recover the ability to walk or swallow. He was on a feeding tube for about a week and then the doctors started to hint to us that he would not get better.
        
        Dad had a health care directive written many years earlier that specified he didn’t want any artificial support including nutrition if the prognosis was less than 6 months to live confirmed by 2 doctors. It was gut wrenching to have the feeding tub disconnected but we followed my dad’s written wishes. The doctors said they were proud of us obeying our dad’s wishes because the entire palliative care floor at the hospital is full of family members who are not following the patients’ wishes and family members are prolonging life despite health care directives
      - Elenor December 10, 2017, 2:13 pm
        
        “In practice, if it was you or your loved one that was sick, wouldn’t you want everything possible to be done. Imagine you were sick and a $10M procedure had a 50% chance to cure you. ”
        
        Writes the man with no experience, educatio0n, or information ABOUT medical care! “Everything possible”? So, chemo and radiation for a 90-yr-old; which makes the extra month of a dying life HELL!? A beloved but demented mother having multiple pains and bodily invasions forced on her to see if it can keep her alive for an extra couple of months of …w hat? Just so you feel better — while SHE suffers the torments of the damned?!
        
        LIFE is a sexually transmitted terminal illness. LIFE is supposed to end in death!
        
        Your “$10M procedure had a 50% chance to cure you” could provide ongoing health for — HUGE numbers of people; for preventing diseases instead of providing an extra month or two life for some oldster (and I write that AS an oldster!)
        
        p.s., There is no way IN HELL “you have paid into this system your whole life” anything close to $10million!
        
        Please get educate: “The least they can do is try to extend your life.” This is SO wrong! Go read Atul Gawande’s book on medical care the end of life. Learn why most medical doctors carefully ‘hem in’ the care THEY will allow or accept at the end of THEIR lives! THEY know the false promises of medicine: there is no “extend your life” — there is only the “extension” of you tied to a bed in pain and plugged into machines!
        
        Reply
    - Jenny January 23, 2018, 9:10 pm
      
      They don’t even give MRIs or orthopedic visits to people with dementia. My mom is slowly losing her ability to use her hands and shows evidence of palmar wasting. They just ignore it.
      
      Reply
  - Ms. Frugal Asian Finance November 6, 2017, 5:59 am
    
    I think working part time to get health insurance sounds like a good idea. I work for a nonprofit, and we have excellent health care benefits. My husband works for a private company, and his health insurance plan is day and night compared to mine. He and our son stay in my plan instead.
    
    As I was reading this post and your comment, I think I might choose the part time route in the future to keep the health insurance plan. But that also goes against the early retirement mentality in the FIRE community, I think. It’s a tough battle to fight.
    
    Reply
    - Adam November 6, 2017, 8:09 am
      
      I’m inclined to agree — my wife’s small company, owned by a nonprofit, has outstanding benefits and 401(k) match… and would let her go half-time, keeping said benefits, if at any point that’s what she decides to do. Fortunately she enjoys her job, and would enjoy it even more if we could travel half of each month; with a dash of luck that’s how we’ll get through our late 40s and early 50s before going fully FIRE’d. It’s a pleasant thought.
      
      Reply
    - Lily He-Prudhomme November 15, 2017, 4:13 pm
      
      Not gonna lie, that’s what Jared or I will likely do after he FIRE. I know it defeats the point but health care is so expensive and he said that’s the biggest thing holding us back from fire is that hefty fees (more than our freakin’ mortgage too!)
      
      I don’t think alot of part-time positions have coverage anymore but non profit is the best way to go. Maybe a cushy government job.
      
      Reply
      - Mrs. Kiwi November 18, 2017, 12:01 pm
        
        Hey, government worker here! Not all jobs are cushy, but mine *mostly* is. But that’s a discussion for another day! I’m thinking (dreaming?) by the time I FIRE single payer will be a reality. And, I’m planning on the typical $30k/year spending, which will make even my current premiums reasonable. My husband has a chronic medical condition, so we have definitely used our medical insurance.
        
        Reply
    - Nancy January 17, 2020, 6:20 am
      
      Part-time with benefits is not so easy to find. I’m a highly-skilled, professional worker who has tried unsuccessfully for years to go this route. To most companies, headcount is headcount and a part-time employee counts the same to their budget as a full-time employee. If I’m a hiring manager, it doesn’t make sense to settle for half or two-thirds the amount of work for the same headcount as a full-time worker. I had hoped that my being a dedicated, highly-productive, high performing employee would sway the decision in my favor, but it was not to be. Business is business, after all.
      
      Yes, I can go to Wegmans or Starbucks or any of the other handful of companies that offer health insurance to their part-time staff. However, most of them require a minimum of 30 hours a week in order for the employee to qualify. This, to me, is just about FT and I might as well stay a FT worker given my skill set.
      
      Like MMM, we pay the high premiums and despise every second of it.
      
      Reply
- Steve November 19, 2017, 3:30 pm
  
  ARS blocked me from talking to the other Mustachians that I typically check in on. Not sure how to get in touch with anyone since I got blocked in the forum.
  
  Reply
- Lisa February 4, 2018, 7:06 pm
  
  I read through a lot of the comments, and some are very well taken. Having gotten down to about 50% mark, however, I don’t see any that address the 2 core problems:
  
  1. Lack of single payer means there is another layer of profit. Obamacare mandates no more than 20%, but that will go away once it is repealed.
  
  2. The costs are ridiculously high. Doctors are not paid too much (in my opinion) but hospitals and the corporations and consortiums roping in the doctors are crazy about profits.
  
  Blaming those with “bad lifestyles” is, in my opinion, a function of the steady brainwashing by the right-wing media over the last 20 years. I have a better lifestyle than probably many in this forum, but I also have a chronic disease. So, what result? If I have to buy insurance on the open market again, it will probably exclude my disease, or charge me so much that I cannot pay it. Plus, I will have a “life time” cap, so if I have another catastrophic result that is not excluded (like a heart attack or something else not unlikely given my age), I will be out of luck again.
  
  Check your paradigms, and put your anger where it belongs. We need both single payer and cost control. Pretending you are protected because you have a healthy lifestyle is magical thinking.
  
  Lisa
  
  Reply
  - Sam February 6, 2018, 10:19 am
    
    This times a million. I also used to be smug about my “lifestyle choices” and assured I would enjoy health for the rest of my life. Then I got a chronic illness and gained 100 pounds due to hormonal collapse. It can happen to anyone, especially with the environmental problems facing the planet and our unnatural lifestyles. People like me are the canaries in the coalmine.
    
    The solution to the US health care problem is single payer.
    
    Reply
  - Vicki May 22, 2018, 6:35 am
    
    I agree with you Lisa. It is ridiculous that they want to change the system and you will always have a pre-existing problem. That is crazy. I blame the Insurance companies and the Government for being so damn greedy that all they care about is making a profit for themselves at the expense of the lower/middle class. I pay $700 per month for a family of 4, but the deductible is outrageous. $6,000 per person and $12,000 per family, but if I want to get a lower deductible, then I pay a much higher premium. There is nothing in between. I thought too about self-insuring. This country is so bad, with greed. Something has got to be done. I recently had a situation with a hospital that my daughter (she is 16) went to the emergency room and I met her there to pick her up. I was never asked if I had insurance, they did not ask me to sign anything. Picked her up and brought her home. Then I get a bill for over $2,000 but they cut it down to $900 because there was no insurance on file. I received another bill a few months later for the doctor bill for $400 so my husband said put that through insurance, so when I did they automatically re-submitted the $2,000 bill and of course my insurance didn’t pay any of it because it went all towards my deductible. When I called the hospital, I said why did you put that bill through my insurance, I only discussed the $400 bill, anyways, she told me since we have insurance it is a CT state law to put it through, but now she charged me the full amount. I am NOW responsible for the full amount. I can’t even pay the $900, how can I pay the $2,000. I asked her to help me and let me pay just the $900 in payments, She said NO. But I can give a discount of 10% but has to be paid in full. I was like how can I pay that in full if I can’t afford any of it. I am totally screwed and I will be paying this off for years. Very sad. Do Not Move To CT!!!
    
    Reply
Dawood November 5, 2017, 10:31 am

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.
Niccolo Machiavelli
All great suggestions but I wish you luck, unfortunately those who benefit from this system are far to powerful.

Reply
- Nikki T November 5, 2017, 11:47 am
  
  “…unfortunately those who benefit from this system are far to powerful.” EXACTLY the problem.
  
  Reply
  - Mr. Money Mustache November 5, 2017, 12:02 pm
    
    I totally disagree with this sentiment. There are no powerful people, only powerful misconceptions that cause us to vote against our own best interests. Fight the incorrect information, help people make better decisions, and you can fix any problem.
    
    But if you insist on repeating the old give-up phrase about these mysterious “powerful people”, you have condemned yourself to lose every battle – forever.
    
    Reply
    - vjb November 5, 2017, 2:34 pm
      
      YES!
      
      Thank you MMM, you’ve articulated with perfect clarity an uneasiness I’ve felt every time I hear someone pontificate about “Them”.
      
      Bloody victim mindsets!
      
      Reply
    - Kevin November 5, 2017, 3:03 pm
      
      amen to that.
      
      “The world would be so much better if it weren’t for all those bad people messing it up” – said everyone, all the time, ever.
      
      Reply
    - snowcanyon November 6, 2017, 2:43 pm
      
      There’s also voter suppression, which has disenfranchised perhaps hundreds of thousands that would have voted for politicians that cared about healthcare.
      
      Reply
      - dandarc November 20, 2017, 8:21 am
        
        Might be more than hundreds of thousands. 1.6 million in Florida alone, at a minimum, unless we’re OK with “never voting again” being a punishment for all felonies. That’s not even getting into the more under-the-table voter suppression.
        
        Reply
    - Yukon November 7, 2017, 5:26 am
      
      Have you ever lobbied congress or tried to influence legislation?
      
      Reply
      - Mr. Money Mustache November 7, 2017, 9:44 am
        
        Yes! If sending letters, petitions and emails counts. I’ve done a few of the awkward but recommended “voicemail on the senator’s office answering system” projects, but those are painful for me as such an anti-telephone person.
        
        We do a lot more at the local level, however – on stuff relating city design and car clown reduction.
        
        Reply
        
        PHILIP CHANG November 9, 2017, 8:26 pm
        
        There were so many “new blood” candidates that won in Tuesday’s election…You are smart, articulate, and a perfect “new blood” politician for 2018!
        
        https://www.runforsomething.net/
    - Geek November 8, 2017, 8:41 am
      
      “There are no powerful people, only powerful misconceptions that cause us to vote against our own best interests.”
      
      I would say there are people with a lot of influence and money helping people to make worse decisions, and these are the mystery powerful people. But then, complaining about them helps nothing, whereas doing something might help.
      
      Reply
    - Esteban November 14, 2017, 8:26 am
      
      I think anyone who wants to discuss health (or wealth) insurance in the US needs to read the excellent new book “An American Sickness,” written by a physician and NY Times health care writer. If you think you understand how we got where we are without this book’s info, you have no idea.
      
      https://www.goodreads.com/book/show/31253737-an-american-sickness
      
      Reply
      - Cathie Watson Short June 26, 2019, 11:09 pm
        
        Excellent book Esteban. You are right on. Many on this blog are so excited about Single Payer, but in reality it may not be what those for it hope. We must also hope for it to be implemented appropriately and in a fiscally effective manner. With all of this power being tied into one centralized place at some point the power will be too great not to manipulate it for a person or group’s benefit and then we will be where many Single Payer system’s countries are in with healthcare they can’t afford. Putting more of the decision making in the hands of the people receiving the care i.e. everyone having some skin in the game with their own money or a pool of money to use if you do not have enough will cause all of us to use our money more wisely. The one area that I thin should be a part of our health insurance should be free preventative health exams and procedures as we will see the biggest health care savings costs from taking preventative care of our health and encouraging healthy life styles over all will save us a lot of money and leave more resources for those who need them. The biggest reason we have gotten into this mess is that other people are paying for our health care and we aren’t taking any responsibility for it yet we have the most to gain from it.
        
        Reply
- Andrew Mullen November 20, 2017, 1:40 pm
  
  Machiavelli didn’t have the internet. The world has changed and innovators can quickly gain tremendous support and defense.
  
  Reply
Katie November 5, 2017, 10:37 am

We’re in a similar predicament, with ever increasing health insurance costs for our family of 3. Our big difference is that our child was born with spina bifida so our chronic costs and looming potential expenses make self-insuring a mathematically and logistically foolish choice. One of the big issues in this debate is the societal cost when families as lucky as yours, who do not deal with ongoing health costs, choosing to opt out of the system.
You touch on this in your conversations with Mrs. MM (“why should I be upset at paying for other people’s healthcare”) but I think it bears some additional discussion. When healthy families can opt out, and unhealthy families cannot, the remaining “pool” of insured is higher risk and costs continue to go up. Of course, costs are high for MANY reasons (litigation, lifestyle, waste, etc, etc, etc) but this is particular reason remains even if the others are controlled for.
Single payer has my vote 100%, and I also appreciate many of your other suggestions for reducing cost.

Reply
- Gordo November 5, 2017, 2:02 pm
  
  Yes, but it’s not families like yours that are the real problem when it comes to the high cost of insurance, it’s the millions that refuse to live a healthy lifestyle. If you choose through your actions to screw up your body, why should everyone else pay your bills. The majority of Americans eat a disease promoting diet, are overweight, and heading towards diabetes if not already there and heart disease or cancer. My brother is self employed and paying $2k a month for ACA insurance – this is out of control.
  
  Reply
  - Lynne November 5, 2017, 8:31 pm
    
    Why should I, as someone who doesn’t even own a car, pay for all the injuries people suffer in personal motor vehicle accidents? It’s their lifestyle choice and their responsibility.
    
    You can make the “personal responsibility” argument, but somewhere along the line, you’re not going to like its logical conclusions.
    
    (And I’m not trying to be reductio ad absurdum here. I genuinely think the above is a stronger argument than yours. People with bad diets are at least only harming themselves, and potentially costing the health care system money. People who incorporate a lot of unnecessary driving into their lives are, in aggregate, doing those things AND causing a great deal of harm to the planet and to future generations. As far as I’m concerned, that second set of people are the ones less morally deserving of health care, if you’re going to insert a moral element at all*.)
    
    (*Doing that is something I don’t consider moral in itself, but that’s another argument.)
    
    Reply
    - Chrissy November 6, 2017, 8:18 pm
      
      Our monthly costs just of doubled to almost $1,600. for the crappiest bronze plan for myself and my husband. I am looking at the religious option even though I am a liberal atheist and feel that religion is holding back the progress of the world. I’ hoping they don’t make you sign some kind of religious statement where you have to lie because my husband would never agree to that.
      I agree you can’t put moral clauses into health care. Imagine if you did that with the Fire Department or Police. It’s no better than these health ministries I’m looking into not covering reproductive care, and of course, abortion.
      
      Reply
      - Josh November 7, 2017, 10:26 am
        
        Same for us. Just jumped to $1600 a month and I finally said WTF. Going to Liberty Healthshare this year, we will see. With the saving we can significantly sack back in our HSA, just can’t deduct it on the tax return. I feel this is the best financial move.
        
        Reply
        
        Scott H November 21, 2017, 8:57 am
        
        We need to be careful here. Our mustachian impulses can get us in trouble. I am all about being frugal, but health insurance is important. I would hate to see some folks on this blog opt not to pay for it, and then get sick. I know I’m only one example, but I got sick with a serious skin cancer when I was 25. My surgery, hospital stay, and chemo cost over $200,000. I was too cheap to buy insurance in my early 20s, but fortunately I had gotten on my employer’s plan a year before getting sick. I was otherwise super healthy. I ran a marathon a week before my surgery. But too much sun radiation got me. I was able to get the best surgeon within 5 hours of me. He dug through my neck for 8 hours, cut it all out, and probably saved my life. I don’t know if I could have had the same doctors if I didn’t have insurance, even if I had a pile of cash. It would just be such an odd situation. I know people who had lymphoma and blood clots in their early 20s. Shit can happen. Not having health insurance seems insane to me, especially for the savvy folks on this blog. I agree the system needs some serious reform, and I felt stupid paying for it when I was young and healthy. But I’m glad I did.
        
        The best hack I found for getting affordable insurance is buying it through a university. I take a one credit yoga class for a half a semester at my local university and it makes me eligible to buy insurance for the entire year for $2,000. It is decent coverage too. Copays and 20% coinsurance with a $5,000/year max out of pocket. I get two teeth cleanings and an eye exam each year. In MMM’s situation he could buy a plan with him and his son from my college for $3700 and Mr. MM could buy an individual plan for $2000. With the cost of the classes and fees, it would come to about $6000. Expensive yes, but much better than what he is paying on the marketplace.Plus you get the benefits of being a college student. You can use the library, fitness center, join ski clubs etc. You can even take an online class so you don’t have to go to campus. I’m gonna be selfish and not post a link to my university plan because if 1,000 people sign up it might get ruined. I would suggest checking with your local universities and seeing what is available.
        
        Suzzz December 22, 2019, 3:43 pm
        
        Liberty Healthshare scammed me. You will never see a check from them. They will just keep putting you off while your bills go to collections or you wind up paying them yourself. They have ruined a lot of people.
        
        Mr. Money Mustache December 28, 2019, 6:43 pm
        
        Lisa, this is a serious allegation – I will publish it by approving your comment, but readers should assume it is not true until you follow up with a website or youtube video or Facebook post of your own, with full documentation and links where people can verify the story for themselves.
        
        Nancy January 17, 2020, 6:36 am
        
        I agree, serious allegation. It is one I have read about repeatedly while researching it as an option though. Like the Mustache family, we could not swallow the idea of pretending to believe stuff that we actually vehemently oppose. In addition, there is the issue with the medical community, fairly, not accepting this as true insurance. It is cost-sharing. This means a patient will be billed the uninsured rate, which in our screwed up system, is generally the absolute highest cost. Insurance companies, with their large customer base and influence, are able to negotiate more competitive rates. Cost-sharing associations, to the best of my knowledge, have not been able to achieve this. Therefore, a member bears a higher burden and a non-qualifying expense could be a hardship. These combined factors assisted in our decision to pass on this option.
        
        Mr. Money Mustache January 17, 2020, 8:37 am
        
        A fine decision process Nancy, except I just wanted to chime in and point out that the self-pay option is usually the CHEAPEST, not the most expensive. If you present the hospital or practitioner with a credit card in advance, and assuming they are set up to deal with self-paid patients as many are today, they will only bill you what they would end up getting from insurance. And happily so, because they know they get the money immediately, with no back and forth bullshit with the insurance company.
        
        I have verified this both from my own limited experience in paying hospitals/doctors for some work, and more notably from a number of doctor friends who run clinics in various specialites.
      - Lynne November 7, 2017, 9:30 pm
        
        Yeah, and I mean, even setting aside whether it’s okay to punish people by denying them affordable medical coverage…that kind of policy isn’t going to be nearly as *effective* in encouraging healthy choices as lots of other, more proactive options. There are SO many things you could do on a society-wide policy level to improve the health of the population. That’s much more logical.
        
        The “punishment” approach reminds me of the people who think abstinence-only sex ed is best, even though it’s been proven in real life to be less effective. It’s all about punishing people for their choices instead of helping them make better ones.
        
        Reply
      - Flow focused November 9, 2017, 9:20 am
        
        Even without signing something you would still be lying though. One good thing those groups do is require a healthy lifestyle. Over weight people pay extra and are required to work with a “Health Coach”. No Smoking, Moderate or no Drinking are other guidelines they have. We looking into these plans once when I was looking to be self employed. As for covering abortions, That’s the same argument as a non driver not wanting to help pay to cover a driver in a car accident. MMM has a lot of great ideas to reduce the costs of “Heathcare”, even though we don’t usually get much care, we get band-aids and drugs to mask the underlying issues oftentimes such as diet and exercise. Of course there are many people as well who have ailments that are unrelated to those two things. They truly need assistance paying for the extremely high costs of medicine and treatment.
        
        Reply
      - Elenor December 10, 2017, 2:26 pm
        
        Well, at least your husband apparently has SOME morals. These religious group insurance outfits are a COMMUNITY — and you’re saying” yeah, I’m gonna just go be a freeloader on these folks who joined together to take care of EACH other out of community feelings for each other! Man, they must be dumb!” You insist they shouldn’t “put moral clauses into health care”; (and, apparently, you’re perfectly happy to LIE to do use their money). You feel entirely free to trespass on OTHER people’s morals/sense of community to your own benefit! Yup, you’re a liberal all right! (And no, I am 100% NOT religious — but I would NOT take advantage of a group of people who are.) (Besides, didn’t you liberals all vote wholeheartedly for Obammycare? YOU wanted it, why are you now objecting to what it requires of you?)
        
        Reply
  - MarciaB November 6, 2017, 11:51 am
    
    I used to try to make my employer put pressure on the insurance company to force smokers to pay more for their premiums and copays. Why should I subsidize a terrible lifestyle choice? On the other hand, smokers have a shorter lifespan which I suppose saves costs…
    
    Reply
    - Nice joy November 22, 2017, 6:42 am
      
      If we acan make these obese people pay more for insurance then that will be the best wt loss program….A lot of peple dont mind being sick but it will hurt if they have to pay extra. Dont forget about giving discounts for those who bike to work
      
      Reply
      - coco November 24, 2017, 3:39 pm
        
        I was looking for a way to help a friend get sober recently and came upon an interesting thing being done at the Betty Ford clinic. There is evidence rewarding people with money works for weight loss and diabetes. They have a program to pay people to stay sober. Pay in at the beginning, get rewarded for good behavior. What would it take to get people to acheive a normal BMI/build muscle/quit smoking? Nice joy: YOU ARE RIGHT!
        
        Reply
- Renee November 6, 2017, 3:48 pm
  
  Yes, this is where there is a big difference between many other kinds of insurance, and medical insurance. I’m a believer in medicare for all, and then pass a law on prescription drugs that benefits consumers. We’d see a 50% drop in costs right away, with less hassle and better outcomes. Medical bills should not be primary reason for bankruptcy in the US, but they are. Mr. Money Mustache, until you examine the social side of this issue, I can’t get on board. Healthier/younger folks will always want a break, until they get older/sicker.
  
  Reply
SocraticGadfly November 5, 2017, 10:42 am

Insurance is NOT “a tax on people who are bad at math.” At least not health insurance. (Collision insurance on a car, if you’ve paid off any loans? Different story.)

It’s a capitalist ripoff. One that shouldn’t exist in civilized society.

YOU had, and still have, the “teachable moment.” Move single-payer to the top of your to-do list rather than the bottom.

Even start a talk about a US version of an NHS. (We actually have a decent one in the VA system.)

Reply
- Matt Radcliffe November 5, 2017, 11:16 am
  
  Not all insurance is a tax on bad mathematicians but much of it is. Insurance has two major advantages beyond its obviously loosing expected return.
  
  1. Marginal utility of money. As all of us at MMM know, once you have enough money m more has a diminishing return of happiness. If you can use the second kind of money to protect the first kind with insurance then you maximize the odds of keeping the money that does keep you happy by paying money that wouldn’t help. This only makes sense if your excess money is big enough to pay for the insurance and too small to pay for the potential risk. This limitation is often why small insurances like dental, renter’s insurance or comprehensive coverage on cheap cars don’t make sense for people with enough savings.
  
  2. Expenses in excess of our net worth. This allows you to afford things that you have a moral obligation to pay such as liability resulting from a car crash, caring for family after a death or accident in a business and it also allows you to get treatment for a major medical problem beyond what your life savings would allow. This is the purpose for which health insurance and risk sharing pools were created. While it is difficult to dispassionately consider the value to something that could save your life it is worth comparing it to how much value you are willing to risk your life for. For those of us working jobs with an element of danger or operating vehicles like cars or motorcycles or bikes that have inherent risk we should contrast that with what insurance values really are.
  
  With all that said insurance is usually a bad idea and always a financially loosing bet but it still has value to those who are hedging primary bet and willing to pay for that.
  
  Reply
- Elenor December 10, 2017, 2:48 pm
  
  “a US version of an NHS.”
  hmmm, that would be the outfit that just OUTLAWED prescribing desiccated thyroid even though it’s a PROVEN treatment for hypothyroid disease? Even though it’s cheaper AND more effective than the synthetic T-4 only pills that Big Parma makes a mint on? That would be the outfit that makes older people wait months for surgery and medical care — often till they DIE — because htere’s just single-payer — and no, you’re NOT allowed to go to a doc and pay your own way? Yeah. Great choice.
  
  “We actually have a decent one in the VA system.”
  Riiiiight. So, you’re not IN the VA system, clearly!! I am. I’m extremely lucky in that, mostly I’m healthy. But God help me if I NEED care! I had been “insured by Master Card” for around 20 years — but never needed any expensive care. The year after my husband died, I had a kidney stone — and was damn near bankrupted. (They don’t TELL you that that MRI is going to cost $14,000! And when you’re throwing up and in agony, you’re NOT going be shopping around — or trying to drive two hours to a farther / cheaper hospital if there is one! They also don’t tell you that poor people on Medicaid or illegal aliens (who just never pay) can get all that care for free! |And if you own a HOUSE, they are going to threaten the hell out of you to force you to pay! So, I barely managed to survive the diagnosis — couldn’t AFFORD any treatment, just held on with the pain meds till the damned thing passed! (LUCKY for me!)
  
  So, I finally got my butt in gear and got into registered the VA system (could have — SHOULD have — gotten in back in the 80s when I got off active duty). Here’s the kicker — IF I have another stone, I have to drive (or ask a neighbor to drive me) the 50-some miles to the nearest (and thankfully, that’s actually pretty near!) VA Hospital for care! My closer VA clinic is “just” 30 miles away, but only open normal biz hours and can’t handle emergencies. Until you’ve been rolled over on and crushed by the medical system, you have NO idea! So making blithe suggestion about how ‘single-payer,’ or self-insuring will do fine is … less than optimal.
  
  Mu mom was just in an accident out in LA. Seven ‘non-displaced’ broken ribs and broke her sternum (the seatbelt did that — it often does). Because she was confused, the cops said she needed to be checked for brain injury. Thankfully, she didn’t have any but the medical bills — hospital and doctors — totaled more than $50,965 — and the bills aren’t done yet arriving. Any of y’all planning for that?
  
  Reply
Keenan November 5, 2017, 10:43 am

Hi MMM!

Glad to see another post. As a conservative, I agree with a whole lot you have to say, and think that if your ideas for making the US healthcare system more affordable were put in place it would have a huge effect.
Do you believe that suing for medical malpractice should be completely eliminated or just drastically limited? I ask because I could think of instances where doctors have had intentional malpractice and would have continued if they hadn’t been caught and thrown in jail. Not to derail the topic, but similar to my belief that there are some individuals who are the definition of evil (Ted Bundy) who deserve the death penalty for their actions.

Perhaps you want to severely limit the amount of lawsuits but think that a compromise leaves too much open ground – thus eliminate medical malpractice suits entirely?

Reply
- Matt Radcliffe November 5, 2017, 10:57 am
  
  There is a simple delineation between the malpractice of medical mistakes and the malfeasance of intentional harm. Usually the three relevant categories are honest mistakes or errors followed by reckless or negligent actions followed by intentional acts of harm.
  Unfortunately, while it is easy to define the difference in theory, it is difficult to prove the difference in intent as an outsider after the fact.
  If you barred malpractice suits from the courts what would that do to the care that doctors take? What would it do to the staffing and patient numbers per physician at for profit hospitals?
  
  Reply
  - Keenan November 5, 2017, 11:11 am
    
    Gotcha. I agree with you. Further, an inept doctor could still do a very large amount of damage especially if they don’t believe their actions are not qualified. So removing the impetus of a malpractice suit, there would have to be another level of governance assuring that medical procedures were appropriate. I’d assume this exists, but probably within the medical field. An outside influence could have a positive effect by reducing the chance of collaboration between inept doctors and their supervisors.
    
    This all doesn’t factor in expenses, which if only a few cases would have been altered if a malpractice suit was used – and billions of dollars wasted pursuing thousands others; it may be reasonable to eliminate malpractice suits for their cost savings.
    
    Reply
    - Chuck Tuna November 5, 2017, 2:51 pm
      
      But if the entire market was more transparent and free, then shitty doctors would be “outed” by their patients and no one would go to them any more.
      Do you hear about a crappy restaurant and go there?
      Are you forced by your car insurance company to buy repairs at a specific body shop? (news to many: You’re not).
      So, if everything was open like it is in our otherwise free economy, bad doctors would quickly lose business and go under (like a bad restaurant).
      The fact that I pay for insurance and then I’m actually LIMITED to only seeing certain doctors is crazy.
      
      Reply
      - Alison November 5, 2017, 3:14 pm
        
        We have learned from “patient satisfaction “surveys that this doesn’t really work in medicine. Patients are often unhappy with their physician because of advice given that they don’t like to hear, blaming doc for not curing an incurable condition, poor insight, etc. Some specialists, like psychiatrists, would almost never get good reviews, just negative ones, because patients who do well usually don’t want other people to know that they saw a psychiatrist. The list goes on.
        
        Reply
        
        Kiwimm November 5, 2017, 5:27 pm
        
        There are many countries outside the US with much better standards of care with little or no malpractice litigation. Processes exist and enforced to ensure patients receive the highest value of care.
        
        Take New Zealand for example where there is a national healthcare system and no right to sue anyone for personal injury (this is covered by the government’s Accident Compensation Commission who will support and rehabilitate you as necessary).
        https://www.ncbi.nlm.nih.gov/pubmed/19705644
        
        Kiwimm November 5, 2017, 5:33 pm
        
        To quantify the difference – NZ spends $4,896 per capita on health vs $9,403 in the US.
        
        https://data.worldbank.org/indicator/SH.XPD.PCAP?year_high_desc=true
        
        snowcanyon November 6, 2017, 2:46 pm
        
        How do you know their standard of care is better? You don’t. Try getting a living donor liver transplant in New Zealand, or even Herceptin for breast cancer, or finding a doctor that actually keeps a list of your medications. Right. Not a great standard of care.
        
        snowcanyon November 6, 2017, 4:05 pm
        
        OK, I guess they’ve been doing it for…a decade, which is insanely recent. Too bad for the kids born before then, I guess. Great system!
    - JPMD November 5, 2017, 2:59 pm
      
      Physicians do not need “the impetus of a malpractice suit” to avoid hurting patients or doing the wrong thing. Most physicians (of which I am one) did not sign up for a career in medicine to harm people or to be reckless or to get rich. In fact, the threat of malpractice suits harms patients because it makes doctors order MORE tests and do MORE procedures, which puts patients at risk of OVERtreatment, more side effects, higher costs, more emotional distress, etc. This is called defensive medicine, doing extra to try to prevent a possible lawsuit down the road. It is well proven that the current system makes costs higher for everyone, leads to physician burnout and eventually hurts the public. Physicians are self-governing, this is why they are a profession, there are many, many layers of check and balances that protect patients and ensure quality care for the public. Outside influences only stand between patients and their doctors, not healthy for anyone!
      
      Reply
      - CAS November 19, 2017, 5:56 pm
        
        I have reviewed medical charts from major medical systems to extract data and can tell you that although no one may be deliberately aiming to harm patients, there remains a VERY large grey area for medicine that does not help or does not help as much as it should or that is not held to a high enough standard to effectively treat some patients. I also analyze medical data for a living and I think that one of the benefits of universal healthcare (ideally paid by a single payer, the government) is that it instantly makes everyone have a vested interest in public health and in the delivery of optimal care. It’s expensive to treat people for post-op infections they shouldn’t get or for TIA’s they should have been treated for, etc. Single payer healthcare with national standards and quality checks on healthcare systems, with disincentives for non-compliance (e.g., for quality of care resulting in significantly worse outcomes), helps physicians focus on the reason they are in medicine in the first place, quality patient care that improves people’s lives.
        
        Reply
        
        Elenor December 10, 2017, 3:08 pm
        
        “I think that one of the benefits of universal healthcare (ideally paid by a single payer, the government) is that it instantly makes everyone have a vested interest in public health and in the delivery of optimal care. ”
        
        Like we have a vested interest in how the DMV operates? How the clerks in pretty much ANY govt office are good and attentive workers? Do “we” have a higher vested interest in the better qualified worker — or a racial, ability, or ‘country of origin’ numerical “diversity”? Is it a meritocracy; IF you pass the test without help you get hired, if you don’t pass the test you don’t get hired? Or will the tests be — as always “modified” to make the number come out right — regardless of QUALITY and ability!?
        
        And the biggest problem is: medical care is NOT a field most people have ANY interest (or ability) in learning about! My cul-de-sac neighbors tease me and call me Doctor E because it’s a hobby of mine: and I can tell them what’s actually going on — not just what the mainstream media tells them — or doesn’t tell them! (those articles in all the news about how ‘red meat’ was so unhealthy? They didn’t bother to mention that the STUDY includes in “red meat”: PIZZA (pizza = red meat?!), sub-sandwiches (with bread and ‘industrial seed oils’), fast-food hamburgers (with the bun and special sauce?), and the like. YOU thought they meant steaks? No, and when objectors redid the stats with a better ‘division’ of what is and is clearly NOT ‘red meat” — it turned out red meat was not a cause of harm. Funny, the MSM didn’t bother to announce THAT!)
        
        Go read the articles in “The Atlantic” by Dr John Ionnides — discover how horrifically many BAD medical articles/studies there are! https://www.theatlantic.com/magazine/archive/2010/11/lies-damned-lies-and-medical-science/308269/ and
        https://www.theatlantic.com/health/archive/2017/02/when-evidence-says-no-but-doctors-say-yes/517368/
        (And let me just point out; if you say, “nah, not interested enough to read” — then, you’re just another person with “a vested interest in public health” but NOT in your OWN health. OOPS. Not so good.)
        
        Then, realize that another study shows that it takes, on average, SEVENTEEN YEARS for the latest medical knowledge to reach, and get into practice, by your local G.P. (*Average* — which means a lot take longer still!)
        
        So, good luck to any who can’t be bothered to look into how THEIR health will be looked after by a doctor who gets paid $7 for an office visit by Medicare… hope you can FIND a doctor who will allow you into his or her practice!
  - Veritas Quaerite November 5, 2017, 2:39 pm
    
    One potential middle ground is what is done (at least in my state) when someone wants to bring an EEOC lawsuit. The case is reviewed by an organization with the ability to weed out the clearly stupid suits, and also those that may appear to a layperson as malpractice but isn’t. This would preserve an ability to seek justice and remove poor Drs. from the pool but reduce the costs.
    
    Another idea is that any damages or compensation that are requested are approved by that same organization which would allow potentially large settlements, but ones that are bounded by reasoning of an uninterested party.
    
    Reply
- dd36 November 15, 2017, 12:11 pm
  
  Malpractice suit damages are composed significantly of the cost of follow up health care. In a socialized system, there is no need to sue for that cost. It’s already built-in.
  
  Having socialized medical care would reduce a lot of administrative burden on businesses. So many lawsuits are a result of the cost of medical care. If that cost is already shared then there’s less need for recovery. It would reduce the price of liability insurance.
  
  As a business owner, I hate dealing with medical insurance. It has nothing to do with running my business. It is a burden placed upon me by our ass-backwards system. If basic healthcare were socialized, I could offer premium benefits if I so chose but I wouldn’t have to stress about whether the basic needs of my employees would be met by some esoteric health insurance contract.
  
  Judges and juries are excellent at sussing out garbage claims. If 1% of garbage claims get through, it’s not a good reason to punish the 99% of non-garbage claims. That’s what appeals are for.
  
  Reply
Matt Radcliffe November 5, 2017, 10:45 am

While it is an interesting list of options it seems to be making one very large assumption. The assumption is that the excess you are paying over and above the actual value of the insurance goes to other people in need of health care. What assurance do you have that isn’t going to increasing the administrative costs and lobbying for even more expensive manditory insurance and higher penalties. The insurance market paid for by employers was what drove health care costs in the US to such outrageous levels, I can only expect mandated insurance to make that problem worse. Just look at what insurance lobbying has done to vehicle design. Cars are approaching the point of being fully disposable when involved in an accident because it is in the best interests of the car insurance companies to increase the financial risk of driving as high as they can to maximize the market that they take a cut of.

Reply
- Corey November 6, 2017, 12:23 am
  
  A stipulation of the ACA was that insurance companies must spend 80% of their gross income for a given year on medical payments and reimbursements. Up to 20% can be spent on other costs and kept for profits.
  
  Reply
  - MrFrugalChicago November 8, 2017, 4:28 pm
    
    Right and if the average policy goes from 1k to 2k per month what happens to max legal profit?
    
    Reply
    - Corey November 8, 2017, 7:41 pm
      
      That’s a good point, but still they seem to fight paying providers as much as possible in practice. Competition for members among the companies keeps them from price gouging too much but it clearly isn’t working as intended. I believe that the vast majority of money insurance companies make is through investment of premiums each year prior to paying them out, which incentivizes them to get as many members as possible, but of course also to increase prices as high as they can get them while retaining members.
      
      The insurance companies are definitely a source of cost in the system but it’s capped. I think that a bigger problem is absurd drug prices resulting from the lack of motivation in congress to negotiate those prices down and financial institutions buying pharmaceutical companies then increasing prices purely for profit rather than development of new medications, along with the massive costs of direct to consumer advertising of drugs, and managerial costs at insurance companies and hospitals. As a doctor, I also recognize that physicians in the US are paid better than in most countries (although not me since I’m a resident), but I think that it would be unfair to change that until the unbelievable cost of medical school is reduced and medical malpractice is made less costly or less common.
      
      Of course all of these could be fixed with a bunch of different solutions ranging from single-payer to a more complete network of accountable care organizations, as long as we stop treating health care as a commodity, subject to classical economic pressures but rather something that we simply need, since we die without it, and design a system based on that assumption. Much of the current system is a remnant of one designed to increase profits as much as possible rather than increase health, and of course on a societal scale, one person’s profits are another person’s costs.
      
      Reply
Katie November 5, 2017, 10:48 am

This isn’t really something that would impact what you want health insurance for, but have you put any research into the Nextera model that we have on the Front Range now? Have any readers used this? It seems like a decent option for folks who actually do need to use their insurance regularly and includes a number of your ideas listed above. Our family has looked into it,but the instability of the market for catastrophic coverage to go along with it makes us a little wary of moving off our employer sponsored plan which is great coverage, but at $1k/month for a family of 4 it makes going down to a 1 income family pretty impossible (when the 1 income is a teacher at least).

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Joel November 5, 2017, 10:49 am

Another item for the list: Determine if all “recommended” procedures & imaging products are actually necessary. My dentist used to recommend X-rays every 6 months, even though I’ve never had any dental issues. I did some digging and discovered my dentist was charging my insurance hundreds of dollars per photograph. I decided to speak up, and reduced the X-rays to every other year. Now I enjoy smaller dental bills and less radiation exposure. Just a small example, but if everyone took similar interest, bills could drop substantially.

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- Andy November 5, 2017, 12:05 pm
  
  I had similar suspicions. I looked into it and discovered that the British Dental Assoc. or whatever recommends x-rays no more that every two years, unless special considerations warrant more frequent. Plenty of professionals today are only interested in profit$. Best to shop around.
  
  Reply
- iluvzbeach November 5, 2017, 12:17 pm
  
  Joel, you are spot on. A huge part of why costs are so high is because every person in a medical profession has to perform all the tests or risk being sued for malpractice. While an HMO in theory sounds good, when the patient’s only costs are co-pays they quickly lose sight of the fact that all the tests cost money and someone is paying that.
  
  I found that when I moved to a HDHP with an HSA, I suddenly cared a lot more about the costs and started making different decisions about what I was willing to do or not do.
  
  We all need to take a more active role in helping eliminate unnecessary tests and procedures, in addition to living healthy/active lives, to keep medical/dental expenses low.
  
  Reply
  - Flow focused November 9, 2017, 9:32 am
    
    This is so true!
    I also learned just yesterday that when you go in for an exam, make sure you specify that you are coming in for preventative check-up. (Even if you felt a lump or something) if you don’t classify it as needing a diagnostic, then the doctor cannot charge nearly as much money for the visit.
    
    On another Note, MMM, have you looked into or are you doing a HSA? My HSA allows me to invest it in Mutual Funds if I’m not using it at the moment for medical expenses. This would almost let your money do two things as once. You are saving for your “Self Insurance” with Pre-Tax dollars, and it’s growing in an S&P 500 mimicking mutual fund with 0.040% fees. This money can be accessed with no penalty or tax for all medical expenses and after age 65, it can be used for any purpose as long as you pay the tax on it.
    
    Reply
    - dpfromva November 13, 2017, 2:45 pm
      
      Oh yes. I told my Ob-Gyn, otherwise a rational, intelligent person, that I was only going to have mammograms every 2 years per current medical research recommendations. She said, “You might as well get one every year, insurance pays for it.” Um, no, we pay for it ultimately.
      
      Reply
      - coco November 24, 2017, 4:02 pm
        
        Wasy to go. More frequent tests for an unlikely finding increase disfiguring surgery for no increase in lifespan. Its way more expensive than the test. You can skip the Pap most years too!
        
        Reply
    - Samir November 28, 2017, 11:01 am
      
      Solid advice on the HSA, and you can do the same with a medical IRA. I looked into this until I realized I was spending less than $100/yr on medical expenses and didn’t even need insurance.
      
      Reply
John Dough November 5, 2017, 11:18 am

What is the price of the absolute cheapest, highest deductible, catastrophic insurance plan?
If it’s cheaper than the government fine, that coupled with what would essentially be self insurance might be a viable option.
Without wildcard health insurance costs, I have enough investment and rental income to retire tomorrow at age 54.
With insurance as unpredictable as it is, I’m saving for a couple more years.

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- Florida Mike November 19, 2017, 9:10 pm
  
  Its not…the fine for the wife and I is around $2600.00 but out policy is $12k per year. The system is broken and many of us are stuck in it.
  
  Reply
Dave November 5, 2017, 11:20 am

An old but goody: https://www.wsj.com/articles/how-telemedicine-is-transforming-health-care-1466993402

MMM, We traded an e-mail in June 2016 on the tele-medicine topic. Went something like this:
Came across above Wall Street Journal article on Telemedicine (video visits via your PC). Had a persistent cough so tried them out. $40 a visit vs. $150 for Urgent Care facilities, $500+ to stop into one of those Emergency rooms you see popping up everywhere. Real local Doctors. On-line medical records. Visit took 15 minutes, prescriptions sent electronically to local grocery pharmacy in 45 mins. Of course, they only treat the easy stuff but that is the majority of office visits, right?

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- Tim Stevens November 7, 2017, 6:59 am
  
  Except how does a physician preform a true exam to determine if you have a cold vs copd vs pneumonia vs pneumothorax via skype?
  
  The later two are potentially life threatening and I need to auscultate (listen) to your lungs to determine the difference and appropriate treatment.
  
  Reply
  - Dave November 8, 2017, 3:58 pm
    
    Correct you are Tim. Telemedicine is a low cost initial diagnosis meaning pretty quickly they realize they don’t have enough info and error on the side of referring you to the next level, actually seeing a doctor to get vital signs and a better picture of the situation (and more thorough diagnosis). Point is many times you spend $80 and the invested time making the appt and office visit only to get sent home with a prescription. Telemedicine is a cheaper entry point, not a replacement for more serious situations.
    
    Reply
    - Flow focused November 9, 2017, 9:36 am
      
      1-800 MD is a Telehealth provider. The fee for single or family is about $60 a year with ZERO cost per phone call. Each time they speak with you they are seeing the previous conversation and recommendations. They can even call in prescriptions for you in some cases (Allergies, Sore Throat, Pink Eye, Sinus Infections, etc.)
      
      I look at this like a way better version of Doctor Google, which usually makes me think I have some deadly disease that hasn’t been known to occur in the modern world. :)
      
      Reply
Jackie Christianson November 5, 2017, 11:24 am

We just found out our premium is doubling too, from $400/mo (which is also frankly not a representation of our risk for a catastrophic event costing greater than our $13000 deductible) to about $790/mo. We’re also choosing to drop coverage and go private pay only. There are an interesting number of concierge medical providers who will provide basic care and preventative measures for a very reasonable price. You may want to think about seeing one of them – they’re almost all private practice. As a medical provider myself I’ve thought about going into that business personally, it’s lucrative if you accept cash only and cut out the insurance and billing overhead, even if you charge only half of what a bigger clinic does.

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Carl November 5, 2017, 11:27 am

Another solution to our healthcare problem: replace the tax deduction with a coupon. The deduction is more valuable the more you make. It is also more valuable for high income earners if they overbuy insurance. This is back-asswards. I want the well off to shop for everything short of seriously catastrophic. This creates a market.

To get fancier, make the coupon phase downwards as your income goes up.

Details here.

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Ron Cameron November 5, 2017, 11:43 am

Health care/insurance is a toughie. I think either you’re going to have to let the government or the free market completely take care of it. Having a combination of both isn’t going to work well. At least, it hasn’t so far. And of course the finger pointing is always AT the government or the free market.

I think there is irony that this post is a rant about a government-mandated health insurance program, but most of your solutions involve even more government mandates! Despite many influences, the only entity forcing your hand on this IS the government. Again, either you’re going to give them all the control or not. I’m a big fan of not :) But I also acknowledge I don’t have all the answers.

“Treat health and fitness (rather than medical treatment) like a human right, instead of a vanity accessory just for rich mountain-dwellers and celebrities.” Nothing is stopping people from getting healthy except themselves. Yes, we can use the government to attempt to influence them. But if an adult wants to drink 2 liters of Pepsi a day, forcing Pepsi to put a bigger (and then even bigger!) nutritional label on the bottle isn’t going to help. If people are going to trample on themselves and their own rights, that’s part of freedom. Of course, that doesn’t mix well with the government forcing you to pay for their health care that poor choices requires.

Ultimately, most of us don’t have enough information that isn’t tainted to process this clearly. Too much finger pointing, too much emotion, too little Listening, Thinking, and THEN Talking. Thanks for clearly doing lots of those critical last three things. And kudos for NOT pretending to agree with a religion. You’d take a hit on your integrity if you did that, and why tarnish a stellar record? :)

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- JonathanApplebaum November 5, 2017, 4:13 pm
  
  Outside of the United Kingdom the vast majority of healthcare systems in the developed world utilize some combination of the government intervention and private market mechanisms. The idea that a working healthcare system can’t feature both is one that is wholly ignorant of the world outside the United States. Unfortunately, American conservatives absolutely refuse to accept the fact that there are literally dozens of systems that work better than ours and force an overly expensive, ineffective system on the rest of America.
  
  Reply
  - Ron Cameron November 5, 2017, 7:16 pm
    
    “And of course the finger pointing is always AT the government or the free market.” And conservatives. I forgot to add all those Conservatives to the short list. And Liberals. And everyone else. Their fault too. NOT ENOUGH FINGERS!!!
    
    Reply
  - JohnD November 7, 2017, 8:12 am
    
    “Unfortunately, American conservatives absolutely refuse to accept the fact that there are literally dozens of systems that work better than ours…”. You may have stumbled upon the answer here. Help me out, exactly where do these “dozens of systems” exist?
    
    Reply
    - Mr. Money Mustache November 7, 2017, 9:41 am
      
      If you look at this partial list of countries with universal health care, and cross-reference those with total medical spending per patient and metrics like longevity, infant mortality, and fitness of the population, you find this answer. We consistently spend THE MOST out of all these countries, yet we are near the bottom when you look at the outcomes.
      
      Australia
      Austria
      Bahrain
      Belgium
      Brunei
      Canada
      Cyprus
      Denmark
      Finland
      France
      Germany
      Greece
      Hong Kong
      Iceland
      Ireland
      Israel
      Italy
      Japan
      Kuwait
      Luxembourg
      Netherlands
      New Zealand
      Norway
      Portugal
      Singapore
      Solvenia
      South Korea
      Spain
      Sweden
      Switzerland
      United Arab Emirates
      United Kingdom
      
      Reply
      - WantNotToWantNot November 8, 2017, 6:57 am
        
        Thanks for this list, MMM, and for continuing a debate on this extremely important issue based on research and actual facts.
        
        Unfortunately, American Conservatism at the present moment is not open to anything but polemics and Faux News and measuring the bona-fides of fellow right-wingers who might be labelled RINO ( if you are not “right” enough, you are condemned to hell with all Liberals!). Thus the GOP has turned away from actual thinking and become the party of propaganda and demonization, rather than problem-solving and the compromises necessary for democracy to flourish.
        
        A sad state of affairs, because a healthy opposition (on left and right) is essential to a healthy democracy. What we see now are thinking conservatives (in Congress and elsewhere) beginning to abandon their party. The realignment will make for a lively election in 2018.
        
        Meanwhile, MMM, please continue your efforts to keep debate alive and fact-based. The list of countries where health care is less expensive and actually better is factual. Facts exist; facts matter.
        
        Reply
      - MelD November 11, 2017, 7:28 am
        
        Switzerland does not have a universal healthcare system. Private healthcare insurance is, however, obligatory at every level no matter what tax bracket you are in. Costs vary according to canton (state), whether you are restricted to certain drs or areas, how high your franchise (deductible) is and so on. Costs have been rising for years and can be controversial. For 2018 mine are going from 440/mth to 460/mth and my husband’s from 395/mth to 415/mth (2 different insurance companies, we are in our 50s, healthy, could reduce our costs if we wanted to…). We spend considerable amounts of time in the UK, Germany and France, which all have universal healthcare.
        I know where I would prefer to be ill… and that is right here in Switzerland where I am happy to know the level of care I will get in my later, potentially sicker, decades! I wouldn’t touch the US with a bargepole.
        
        Reply
      - Dan November 11, 2017, 3:12 pm
        
        I think this point should be amplified further. If more people knew about the difference per capita between what the US pays and persons in the rest of the world, they would be very angry. US pays about twice per capita as the next country. It should not be this way and can be changed with the proper political push.
        
        Reply
      - Married to a Swabian January 24, 2020, 6:28 am
        
        Having lived in Germany for four years (most recently from 2011 – 2013), I will say that their healthcare system is pretty good. My wife had to have a fairly major surgery in 2012, with one week hospital stay. Total out of pocket? 85 euros! Nursing care was a bit below the US standard, but surgeons, hospital facility and outcome were all excellent.
        
        Now my question for the MMM community: for a family of three, who have (until now) been light to moderate users of healthcare, which ACA plan would you recommend? To ring in 2020, I decided to start a new career chapter and am AFISRAGBTW (almost FI, semi-retired and going back to work)! Evaluating options, including consulting / contract work and working full time again for a couple of years (currently 54).
        
        I have the option of continuing excellent BCBS coverage under COBRA for up to 18 months at $1700 / month (including dental) or looking for an ACA (Shitty Bronze) Plan that would have premiums of around $900 – $1000 (depending on income) and rolling the dice with high deductibles.
        
        Thanks for your feedback!
        
        Reply
Joe November 5, 2017, 11:46 am

One other note, the tax “penalty” is not a “fine” – which means you don’t have to pay it. Fines you must pay, or Uncle Sam smacks you around, Penalties are not mandatory and the worst thing the gov can do is withhold any refund you might otherwise get the following year on a subsequent tax return – however, if you set up your W2s to ensure you get the most out of every paycheck with the minimum withheld, then the gov can’t take it away from you at the end of the year. Just sayin’

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- Mr. Money Mustache November 5, 2017, 12:04 pm
  
  Yeah, that seems to be another interesting loophole I found during research for this article. But you would need to be very careful if you chose to exploit it: as a self-employed person you must make estimated payments equal to your last year’s tax liability. If you end up underpaying and still earn the same amount of money, you do owe a fine. If you safely overpay a bit as most of us do, they’ve now collected your penalty and it comes straight out of your return.
  
  Reply
- Mike November 7, 2017, 9:41 am
  
  Self employed in software and residential rental. We are using the 8965 affordability exemption to avoid the penalty. We qualified last year. Will be even easier this year with bronze plan at 27K+. We are pay as you go cash. A little surprised no one else has mentioned form 8965.
  
  Reply
  - Samir November 28, 2017, 11:08 am
    
    Form 8965 is pretty awesome. I have to fully research it, but looks like there are various ways that if the insurance either costs too much or puts a big burden on you, you can be exempt.
    
    Reply
Steveark November 5, 2017, 11:51 am

Hey, don’t complain, you are lucky. My policy for just me and my wife was $1100 per month last year and is now going to be $1300! And my deductible is higher than yours. Your premiums are a cake walk! It is all relative. But it is also very small money for protecting millions in investments.

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- Stacey November 5, 2017, 6:27 pm
  
  Last year ours was $1,666 per month for a Silver plan to cover our family of 5 while my husband searched for a new job. Thankfully with my self-employment status, I could write-it off. Now full employment has been restored to our family and we have coverage under my husband’s employer–price tag is a “mere” $805. Fun to live in IL–high HC and lousy politicians to boot! :)
  
  Reply
Bruce November 5, 2017, 11:53 am

Crazy stuff right now. Heading back to US after living in EU for 2 years. Simvastatin 40mg $50 copay in US and $2.40in Spain without insurance. Cost in US are nuts!

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- Physician on FIRE November 5, 2017, 12:09 pm
  
  Part of the problem is we’re paying for most of the Research & Development that the rest of the world benefits from. Direct marketing to consumers by big pharma is also an issue.
  
  Reply
  - JPMD November 5, 2017, 3:02 pm
    
    Big Pharma spends more on physician and DTC marketing now than on R&D:
    
    https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/?utm_term=.2819f44999b7
    
    Reply
  - Chuck Tuna November 5, 2017, 3:03 pm
    
    Absolutely agree. I’m amazed by the ads here in magazines (I assume they’re on TV too? Don’t watch) telling readers to “ask their doctor for Magic Med X”. That’s like manufacturers of plumbing parts telling consumers to ask their plumber for a certain kind of pipe – I trust my plumber to know what’s best as he/she is a trained pro (just like a doctor).
    
    Reply
  - aperture November 5, 2017, 4:53 pm
    
    PoF, you are dead on with regard to direct-to-consumer advertising. All too often patients want the drug they saw on TV, or that had a glossy ad in their magazine. Those ads work – the consumer sees the couple walking on the beach with a Golden Retriever and pays no attention to the increased risk of death if combined with…
    I am a bit more skeptical with regard to your first point about the US funding R&D for the rest of the world. I believe my taxes and tuition dollars are funding more medical R&D then my health care dollars. Just my opinion, but much of the research that eventually comes to change health care happens on University campuses or through NIH research grants. Meanwhile Pharma is often repackaging an old drug (single enantiomers, ER versions of IR drug, enteric coatings etc.) and selling it through DTC advertising as the latest greatest.
    
    Reply
  - snowcanyon November 6, 2017, 2:47 pm
    
    POF thank you! So many comments from people who think they are experts on health care policy because they have been to the doctor once. Agreed- without the profit motive, most R and D would not occur. People really think new drugs grow on trees…
    
    Reply
- Tim Stevens November 7, 2017, 7:04 am
  
  Your simvastation generic is $6.40 cents a month at my local kroger in cash with no insurance
  
  I am a physician, and use an app called goodrx that actually lets me know cash prices for drugs at local pharmacies it helps me know actual cash drug costs. Install it on your phone.
  
  Reply
  - MKE November 7, 2017, 11:24 am
    
    What if I do not find death, drugs, and disease so fun and appealing that I want to spend time learning and researching about them? If I want to go buy a sandwich, I don’t need an app on my phone to be sure someone in the corrupt food industry is going to rip me off. Generally, most people in most businesses are not ripping people off. Generally, most people in the medical industry are ripping people off. Before long, just like the insurance companies and hospitals battle each other behind the scenes on costs and coding, the medical industry will start battling these apps so they can keep the cost of everything disgracefully high. Yours is a temporary “solution” to a shameful problem.
    
    Reply
    - Acastus November 10, 2017, 1:01 pm
      
      You are welcome pay too much, just like if you cannot be bothered to research car prices.
      
      Reply
      - MKE December 10, 2017, 3:48 pm
        
        Late reply here, but as much as I dislike framing everything in life in terms of cars, your comparison to car prices is somewhat apt.
        
        Buying a car, at least for most of the numbskulls out there, is a hyperemotional issue. People walk into a car dealership thinking that their life status is determined by this object. The dealers can prey on this foolishness by having crafted strategies for taking advantage of the purchaser.
        
        Medical care works the same way. People are not in a position, whether because of acute pain or fear of death, to make smart decisions. As another reader pointed out in these comments, hospital systems buy up all the providers in huge geographical regions and then essentially extort money from the patients. I have been a victim of the ritualized threats and choreographed routines that hospitals use to prey on the pain and fear of someone coming in the door.
        
        Historically, much of the medical care was overseen by nonprofit religious groups and charitable organizations to prevent providers from feeding on the sick and then injured. Those days are long over. That is where the comparison to buying a car falls apart. Car purchases are 100% optional and will be forever.
        
        You can’t count on being healthy forever.
        
        Some chump in a monster truck almost hit me on my bike yesterday. He was crossing the centerline, phone stuck to his ear, as he looked across the passenger seat out the window. I snuck between the parked cars on my right and him, and the car behind me blared a horn at the loser.
        
        But let’s say he hits me. I am lying on the ground with broken ribs, internal bleeding, maybe a broken pelvis. You say I am welcome to pay too much? Am I really in a condition to be lying half-dead in the street and researching prices so no one will take advantage of me?
        
        I had two relatives spend months in the hospital after being hit by crazy drivers (while they were driving, too). Not much time for your “research.”
        
        Do you also feel like a working couple with a sick child is also “welcome to pay too much?” Should desperate, grief-stricken people really be saddled with the responsibility of researching costs of care?
        
        I think if YOU were lying half-dead on the side of the road, or were suddenly diagnosed with a life-altering disease, you might feel differently. You might not think our predatory system is so cute anymore.
        
        Reply
Glorkvorn November 5, 2017, 12:05 pm

With your A 90 Day Insurance Vacation” plan, you’re getting insurance for one month, then cancelling it, 4 times a year? I respect the cleverness of that workaround, but that also sounds like a huge PITA. And wouldn’t the government or the health insurance companies eventually get wise to your shenanigans?

I’m afraid this might be one area where there’s just not much room to DIY. All things I’d like to do for myself have been made illegal! Can’t live without health insurance, can’t have my own local health insurance group, can’t go to a non-accredited doctor or hospital, can’t import foreign drugs.

This blog gets a fair amount of attention. What if we all worked together to push for these ideas? My sense is that both parties are aware that health insurance costs are way too high, and they’d like to do something about it, but they have no idea what to do. If enough people asked their congressmen to support some of these ideas, we might actually get something going. Maybe we could start by focusing on just one state (Colorado? California?) where a lot of readers live.

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- EMML November 10, 2017, 8:02 am
  
  “With your A 90 Day Insurance Vacation” plan, you’re getting insurance for one month, then cancelling it, 4 times a year?”
  
  Read it again. It was cancelling once, in October.
  
  Reply
Mighty Investor November 5, 2017, 12:08 pm

Yep, I’m in Colorado as well, have the KP bronze plan, and was equally shocked. I don’t just blame the current administration, however (though I’m no fan at all). The health insurance exchanges were already collapsing before Trump came in and threw fire on the whole matter. I also ended up just sucking it up for the same reasons–I, too, looked at the religious options and agree it isn’t cool to lie about your beliefs. I guess we have to just suck it up!

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- Tall November 5, 2017, 6:19 pm
  
  They really weren’t collapsing. That’s one of many outrageous lies being peddled these days. It doesn’t match the data.
  
  https://www.vox.com/policy-and-politics/2017/10/18/16458316/obamacare-premiums-trump
  
  Reply
Dawn November 5, 2017, 12:08 pm

Single-payer saves a lot of money, both for the individuals paying the premiums and for the system as a whole. As an American expat living in Slovenia for almost two decades, I must say that I really prefer the system we have in Slovenia, although it also has a few flaws. We do also have the option of private medical care, which works the way you described: a menu of options with clearly posted prices so the consumer knows upfront what to expect. One of the best (underappreciated) things about single-payer, though, is the time savings! We each have an insurance card with a chip, which is used to keep our personal data and also record electronic referrals and prescriptions. I never receive a bill for any healthcare service, never have to dispute charges, never have to fill out new paperwork, etc. It’s great. (We’ve been through hospitalizations, births, cancer diagnosis and treatment, surgeries, well-child care, orthodontics, dental care, glasses, etc., so we’ve given the system a real workout and we know it’s much cheaper and just as good in terms of quality as what we experienced in the U.S.)

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- Tom Johnston November 5, 2017, 12:12 pm
  
  Useful perspective, Dawn. Thanks for writing that up. I lived in Croatia for three years and saw something similar….
  
  Reply
- snowcanyon November 6, 2017, 2:49 pm
  
  I agree such a system is simpler. But Croatia is small and does not offer many advanced treatments available in the US. How would you propose that we fund drug R and D without American patients paying for it? Are you comfortable foregoing advanced treatment that is only available in the US? If the answer is yes, well, then you have certainly found the perfect system.
  
  Reply
  - engin November 8, 2017, 3:49 pm
    
    American patients/taxpayers don’t subsidize the world. This is a ridiculous talking point of the pharm companies. What they do is subsidize the CEOs of the pharm companies. Look up any high priced drug, and then look up how much the CEOs make. For example, gilead science which launched the Hep C drug a few years back. Their CEO has pocketed 100 of millions from them charging 80,000 a treatment for it.
    
    We need to have medicare be able to negotiate drug prices. The face that it can’t is a disgrace. The VA can and they usually pay an average of 25% less for their drug costs. This should be immediately implemented (but their lobby is very strong…)
    
    Reply
  - MKE November 9, 2017, 11:02 am
    
    Strike FEAR into our hearts! Make us scared? What if? What if? Isn’t that SCARY!!
    
    What if I just want simple, decent, compassionate care? I once had an minor infection that I rode out simply because I did not want some predatory medical professional milking me like a human ATM. I would wake up at night with my leg on fire, but it was preferable to dealing with the American medical system. It might have been cheaper to fly to Slovakia, where I could find a decent human being to help me. Hadn’t thought of that…
    
    Advanced treatment? That comes from researchers and scientists. I have had two relatives with cancer, one who survived and one who didn’t. The doctors were, by far, the worst part of the treatment. Nothing but self-righteous, entitled clowns with no communication skills at all. Absolute nightmare. The “treatment” you get from the doctors is worse than the cure or the disease.
    
    But they sure kept things SCARY, just like you. Fear was their weapon.
    
    Reply
Joe Kilinski November 5, 2017, 12:09 pm

In response to your healthcare article;

I’ve read every one of your articles and having your Mr. Money influence allowed my wife and me to retire early in Cuenca, Ecuador a couple of months ago. We went from paying $1450 per month for the two of us (59,54 years old) down to $145 per month. Our policy is a standard 80/20 and pays up to $50,000 per occurrence. Down here that $50,000 is way more than enough to pay for any major operation or injury. The healthcare cost was at the top of the list for deciding to retire abroad. In effect I am self insuring for 20% of a much smaller number. I can deal with that risk.

Reply
- MrFrugalChicago November 8, 2017, 4:43 pm
  
  This is a question not a critcism.
  
  Tomorrow you find out your wife has brain cancer. What do you do?
  
  80 percent survival rate in the US. Say $500k in treatment costs. Not available over there.
  
  Do you just die? Try to fly back and go bankrupt?
  
  Reply
  - EMML November 10, 2017, 8:06 am
    
    With brain cancer, chances are you’re going to die regardless. The one case I know of who survived, turned into a sort of catatonic vegetable after a few years, a result of the “cure”. Not really a good quality of life there.
    
    Reply
    - Adam November 10, 2017, 12:56 pm
      
      Conversely, a good friend of mine was diagnosed in 2006. Several operations and gamma knife sessions later, she’s been fine for the last decade — now with a husband and two young kids. It all depends.
      
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  - Jen November 10, 2017, 1:34 pm
    
    I live in Colombia, which has spectacular health care for those who can afford the secondary plans (mine is $1,000 a year in addition to the percentage I pay for the regular plan through my employer). But this is something my husband and I have talked about at length, especially now that we have kids. It boils down to two choices for expats. We can purchase special insurance with a very, very high deductible (like $20,000) that then allows us to get treated in the US up to a couple million dollars (this option is available to Colombians as well, would be around $3k a year for my family of 3, soon to be 4). However, under the current ACA rules, we can also wait for the catastrophic event i.e. brain cancer to occur, move back to the US, have the move be a qualifying event, and buy insurance through the marketplace. For now that’s what our plan is, and if rules around the ACA change we’ll look at buying the high-deductible coverage. That all being said, there are few things that could happen where I wouldn’t be just as comfortable being treated here. Hope that helps!
    
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- Chad Carson November 10, 2017, 9:33 pm
  
  Hey Joe. I am also in Cuenca. We pay $165/mo for a family if 4 and a similar insurance plan.
  
  As for the question below about brain cancer (which I assume was a general question about any big, expensive diagnosis that could require advanced care), couldn’t you always move back to the US if that made sense. With no prexisting condition limitation, even the expensive coverages would be a bargain compared with huge treatment costs.
  
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Mighty Investor November 5, 2017, 12:10 pm

Also, my sister is looking to follow me into the F.I.R.E. camp. The trickiest variable to deal with is health insurance. I haven’t yet found a good solution, though I agree that medical tourism is a good element to have in the back of your mind….

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Jon November 5, 2017, 12:12 pm

There’s a couple of things that are missing here – surprising, since MMM is usually on top of things.

1) The chances of needing that health insurance are more than you might thing. Something like 1/3 of us will get cancer – as I did. Or as my wife did. Medical tourism doesn’t work well for prolonged cancer treatment… All of those resources that you have spent a lifetime building up can vanish in an instant if you get sick.

2) There is a vast difference between the chargemaster price that a hospital will hit you with and what an insurance company negotiates. Like a factor of 2-10. Without an insurance company backing you up, you will be very badly ripped off by every medical provider you deal with.

The system sucks, but I would be most seriously cautious about deciding not to play the game.

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- Mr. Money Mustache November 5, 2017, 12:19 pm
  
  Hey Jon, very sorry to hear about those fights with cancer.
  
  Given a big financial incentive, I would indeed plan to relocate permanently in another country to pay for cancer treatment. A nice one.
  
  But I wanted to address the assumption that insurance companies get magical, better discounts from hospitals – it’s not necessarily true and in fact the opposite can be the reality. In my experience, hospitals and doctors I’ve asked have always offered a “cash / self-pay price” that is much lower than what they bill to insurance. After all, it’s easy mpney instead of a constantly-contested administrative hassle.
  
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  - Jon November 5, 2017, 12:26 pm
    
    You can sometimes get a reasonable price out of a hospital – *if* you can negotiate it ahead of time. Your negotiating position is far weaker afterward. There are, unfortunately, a lot of medical situations that are not amenable to extended price negotiations. And, in any case, such negotiations do not extend to facilities like labs, which are often the worst price gougers.
    
    Oh, and the cash price is certainly less than what they *bill* to insurance, but that’s different than what they *get*.
    
    Finally, I suppose I can read from your response that medical insurance can be also seen as a protection from having to abruptly relocate permanently to another country.
    
    Thanks, and greetings from a few minutes down the Diagonal…
    
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    - Fireby35 November 10, 2017, 12:30 pm
      
      It is possible to negotiate up front or do medical tourism for known future medical expenses.
      
      For unplanned, “emergency” situations that are catastrophic (in terms of money) you have not accurately described the negotiating leverage between the parties. I’m not saying this is ideal, but there are many options available. This is a part of my job as an attorney who regularly represents people with major injuries and major medical bills after an accident (personal injury attorney). Many of those people are uninsured.
      
      My point is that it is absolutely possible to take legal action to deal with large medical debt. We never pay the stated price (not reasonable, not disclosed prior to treatment or other argument). We might end up in a lawsuit demanding justification for the prices. I have seen massive levels of medical debt erased due to the threat of litigation and after litigation.
      
      It’s important to remember, the hospital can send a huge bill. But THEY have to file a lawsuit to ever be able to collect from personal assets. Until they do that, you have your money. If they sue, you can defend and win. For real.
      
      It will also take years. During those years, you possess and control your money. That mean YOU have the leverage.
      
      You can also work with bankruptcy attorneys. Again, not ideal but there are strategies that would allow a person to preserve their personal wealth and clear medical debt from a unplanned incident. For example, Florida and Texas have unlimited homestead exemptions and, if enough money is on the line, a person can move to those states purchase a house that corresponds to their personal wealth and avail themselves of the unlimited homestead exemption in those states.
      
      Lastly, paying for a lawyer is much cheaper than paying a doctor or the hospital full price. We also tell people how much we are going to charge up front. So quit it with the lawyer jokes and start telling doctor jokes :)
      
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  - JPMD November 5, 2017, 3:08 pm
    
    Yes, it is likely cheaper to pay out of pocket for basic medical services, even lab work, than to use insurance. And many doctor’s offices make more with a cash paying patient than from private insurance. Medicare pays the worst but a primary care visit with a Medicare patient often involves spending up to 45 minutes discussing multiple issues, reviewing a massive list of medications, doing a thorough exam, and coordinating specialty care. And most insurance companies set their rates based on what Medicare pays. Let’s not forget: insurance companies are actually in the business of providing profits to their shareholders, that is their #1 reason for existence. They are not in the business of providing health care!
    
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  - Dunny November 6, 2017, 1:24 am
    
    As a Canadian citizen you can move back to Canada, and get Canadian health insurance if anything really bad happens. There would be a 3 month waiting period for coverage in most provinces. Much easier than moving to a completely foreign country to get treatment and almost free (there is a small fee charged, in BC $156 per month for a family). If you could finance yourself through the 3 month waiting period, then you would be covered for anything.
    
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  - Liz November 6, 2017, 2:28 pm
    
    I think the problem is that you even have to be thinking about these contingencies.
    
    The ACA made some important steps in the right direction, but until the country buckles in and commits to a true overhaul, fixing bits and pieces in a broken system doesn’t do much.
    
    If we had no health insurance system and had to design one from scratch in modern-day 2017, there is no way it would look like the monstrosity we have today. Employer-sponsored insurance made sense when high-risk groups like railroad workers were making contracts with single hospitals to care for their employees. I’d argue that the current health insurance framework is a major barrier to the next major evolution and growth spurt of the US economy.
    
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    - Dave November 7, 2017, 11:38 am
      
      If our country could have a do-over regarding medical care I’d suggest a system similar to the banking system where hospitals join together to risk-share. Citizens would make regular deposits into the system. Some of them may never require withdrawals, but others would. The dollars could all be used either directly by the hospitals or research facilities. As it stands today, billions of dollars have funded the insurance industry that is not in business to care for ill citizens. Their incentive is shareholder dividends and retaining as much of the premiums as possible. Nearly every premium dollar that has ever been paid on my behalf the past 30 years went to insurance companies. In my mind, they paid salaries, bought furniture and built buildings with it. I would be happier thinking someone in need were benefiting from my deposits into the system instead of some insurance executive’s bonus for having met a low claim payout incentive through coverage denials.
      
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  - engin November 8, 2017, 3:51 pm
    
    Moving when one is hit with such emotionally charged diagnosis is likely not a great idea in practice. During tough times, one needs all their social support around them. Moving to a new country would rob someone of all that.
    
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- Carrie November 6, 2017, 6:42 am
  
  My husband has cancer. We have lived a healthy lifestyle since we’ve been adults. Despite taking precautions, the chemicals he worked with in his job for 30+ years have contributed to his illness. (lawyers tell us we can’t “prove it” to get help) He is 53 years old and his cancer treatments & surgeries over the last two years have totaled 2.9 MILLION dollars. His employer health insurance was horrible. They didn’t have contracts with any system. They finally settled with one hospital, but the other one has balance billed us for $876,000 dollars. YES, we will probably be required to pay at least some portion of that. I guess we could file for bankruptcy, but we would have to liquidate most of our assets & investments first. This year we got our own health insurance. It costs us $1100 a month (family) & the deductible is $6550 per person. I think that’s a bargain compared to $876,000. When we were healthy, we used to say the same things as most people: “Why should we pay for unhealthy people who do this to themselves??” Well, my husband didn’t do this to himself and now we feel much differently. You have no idea how fast your money can be wiped out until you get cancer or have just one life saving surgery. My husband is NOT 85 with dementia. He’s 53 and still works part time, even though he may never see retirement. He always said if he got cancer he would never have chemo or radiation because the cost doesn’t outweigh the benefits. He has a different outlook now… He’s had chemo ($50,000 a treatment x 12), radiation ($20,000 a treatment x 10), immunotherapy (ongoing forever, every two weeks @ $30,000 a treatment). You never know what you would do until it happens to you. If you were 53 what would you choose? My husband has chosen to fight for his life. We live in Cleveland, OH with the BEST cancer care in the world. We have he BEST doctors in our country here. I would NEVER dream of moving overseas or to another country for health care. If we had lived elsewhere, my husband would’ve been dead 2 years ago. His cancer is very rare. Because of his nutrition, exercise, and BEST care in the world, he has outlived all other documented cases in the world by a year so far… If you choose to gamble with your health insurance, do so at your own risk. Healthy people get cancer all the time. It’s way more common than you think. Something you were exposed to as a child can come back & give you cancer.
  
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  - Justin November 7, 2017, 8:43 am
    
    Carrie – Thank you for sharing your story. Sorry you and your husband are having to live this ordeal. I think your message is very important to the readers of this forum. I was diagnosed with cancer at age 35. I was a college athlete, grew up on a farm, lived a fairly healthy lifestyle, didn’t smoke, and wasn’t overweight. My cancer was completely random according to my oncologist, nothing to do with lifestyle or environmental factors. Fortunately, my cancer was treatable and I’ve be cancer free for almost five years. So, I will echo your point, insurance is “overpriced” in that it could and should be much cheaper, but it isn’t due to our convoluted system; however, when you consider the value of your life, it is not overpriced, and anyone who chooses to go without at least catastrophic coverage is not only playing with their life, but further burdening the system in the event they get seriously ill or injured. This is not the same as choosing not to insure an old car because it would just be cheaper to replace it out of pocket if the worse happens. A car is replaceable, a person is not. A car as a max value that makes the risk math easy. The same can not be said for unforeseen medical conditions and the resulting costs. I’m all for forgoing insurance and warranties in a lot of cases, health insurance is not one of those times.
    
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    - coco November 24, 2017, 4:43 pm
      
      I was contemplating MMM’s analogy to the meteor. Can any of you Math savants suss this out a little? I havr known a fair number of people in my personal circle who have developed cancer, MS, and other expensive illnesses. Healthy people. And no one hit by a meteor. I know this is anecdotal. What is the best and truest calculation for risk? It would sure be cool to put some good numbers to this.
      
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- Emma November 7, 2017, 8:46 am
  
  Admittedly I am biased since I’m a cancer survivor as well, but I was also surprised to see cancer missing from their considerations. I’ve already blown through half of that lifetime amount that was mentioned and I’m 28! I was a perfectly healthy 26-year-old until I was diagnosed with sporadic cancer– no known environmental or genetic cause! I’m endlessly thankful for the excellent insurance my employer provided at the time.
  
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  - Stephanie November 8, 2017, 9:22 am
    
    I went into organ failure at 36. Perfectly healthy before that and the doctors have no idea why this happened. So far my care has been nearly 2 million dollars. Without insurance l would be dead and my husband bankrupt.
    
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Alexandria November 5, 2017, 12:12 pm

Personally, I would shop around. Have you met with an insurance broker?

I am just wondering if you have no health problems if you can get same or cheaper for a better private plan with Kaiser. (Just talk to Kaiser. in this case).

For me personally, I grew up with Kaiser and the insurance I was offered at first job was insanely horrible bad insurance. So at that time in my life I chose to pay roughly the same for private insurance. With no pre-existings and a family we pay about $1100/month for only a $3k deductible (this is 20 years and 2 kids later). You can surely afford a much higher decuctible so makes me wonder if you could maybe save a few bucks by shopping the private insurance market, and would also shelter you if the ACA goes away and you develop health problems later. For us, my husband developed a random serious health problem in early 30s and then my dad was completely screwed by the employer system when he lost his job (and health insurance in the process). We pay a LOT, but always having been relatively Mustachian, good health insurance is a luxury we can afford. My husband has had seven figures in medical bills covered, and at least our health insurance won’t double (or quadruple) if we get sick, lose a job, or want to retire early. Not ideal, but this is our experience and how we handle it.

I haven’t touched the health exchange with a ten foot pole because A – it would cost us more, B – we can’t afford to lose our “bought with no pre-existing insurance” is the healthcare exchange goes away. To be fair, we are grandfathered into our plan so maybe I am overly idealistic that anyone could save a few bucks with good health.

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- Tessa H. November 5, 2017, 2:23 pm
  
  Great info! I was wondering exactly this myself. Could a family go directly to the Providers for better pricing, assuming no pre-existing conditions. Thanks for sharing your experience.
  
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- snowcanyon November 6, 2017, 2:51 pm
  
  Kaiser doesn’t have a single trauma center and their kidney transplant program was shut down due to the insane death rate. Sounds like great care.
  
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  - engin November 8, 2017, 3:56 pm
    
    Kaiser certainly has their issues. But you are scaremongering here. Kaiser will pay for one’s care until stabilized for trauma and then the patient is transfered back to Kaiser. Their model emphasizes preventive care as their are an insurance and they know it costs them less in the long term.
    
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- Dan May 12, 2018, 11:03 am
  
  No. This was outlawed by ACA. Only 6 month temp plans are available. They do not cover pre-existing conditions, kick you out after 6 months, and don’t exempt you from the penalty.
  
  One friend who recently went FIRE at age 50 is paying for COBRA. After 18 months I think he will go with his wife’s employer insurance or into the ACA “marketplace”.
  
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Jeff D November 5, 2017, 12:15 pm

I’ve always thought that health insurance was a misnomer. You aren’t insuring your health, it’s bankruptcy insurance. I work in health-care and we hear all the time *I’m just waiting on all my bills to come in so I can declare bankruptcy.* MMM as you put forth we are the ones who are each ultimately in charge of our own health-care. Grok on! JD

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Melissa Yatzeck November 5, 2017, 12:20 pm

I think health insurance should not be provided by your employer. Why should your place of work get to determine what plans you can choose from or what doctors you should see? Why should you have to switch doctors if you switch jobs? What about all the people without an employer (self-employed and retired folks, to name a couple of groups) who still want to buy health insurance? Health insurance should all be on the competitive open market so people can shop for it just like they shop for car insurance and homeowners insurance and life insurance. I also agree that pricing for all medical procedures should be way more transparent so consumers can more easily shop around.

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- JPMD November 5, 2017, 3:14 pm
  
  Private health insurance was virtually unknown prior to WWII. It was an incentive invented by some large companies to attract returning GIs to the many jobs created after the War. It was intended as a benefit so that employees could see the “company doctor” and also bring their families there for free. It spread from there. Medicare and Medicaid were created in 1965 to cover care for the elderly and for the poor, neither of whom was presumed to be able to afford it out of pocket, as people had paid for their health care for decades. Unfortunately the very structure of these programs favored procedures rather than primary care, which is how all the specialists got wealthy and the primary care docs got left in the dust. Today, 70% of physicians in America are specialists and 30% are in primary care, the REVERSE ratio is true in most other countries!
  
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- Emmy November 5, 2017, 4:06 pm
  
  ? To the best of my knowledge we don’t ‘have’ to see a particular doctor. We can go outside the plan if we feel strongly about a specific practitioner. Coverage will vary, but that’s just the way it is.
  
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- Beckett12 November 6, 2017, 8:36 am
  
  I am fortunate enough that my employer pays my health insurance premiums (thus my lower salary which is a compromise) but we have a great plan and are not restricted as to what doctor we can see. We also have each been given a small health savings account yearly to help with premiums until our deductable is met which in my case is $2,500 after that I have fell coverage and everything is covered.
  
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Hywelda November 5, 2017, 12:31 pm

I totally get this – and yet…. Coming from a long line of badasses, our health insurance bill always got me pissed. My family lives an entirely different lifestyle than the standard here – lots of exercise, healthy food, doing stuff ourselves, etc. For over 25 years, even with kids, we never had enough med bills to EVER have them pay.
Until, one day going to work, my train was hit head-on by another train – into the car I was sitting in. And the tests they did on me then showed that I had a brain tumor. (waiting for Twilight Zone music here) So I had to get all put back together from the train wreck injuries, get sent home, then go back for a craniotomy, then go to rehab for about a year to be able to walk and stuff again. So, shit really truly does happen. And it costs an astronomical amount of money. So I stopped complaining about never having to use my health insurance. So be careful about letting it lapse – this kind of stuff comes flying at you out of a clear blue sky, even when you are in excellent health and are still young (relatively). The good thing about going into it in a healthy state is that you get better a lot faster.

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- JohnD November 7, 2017, 8:37 am
  
  @Hywelda…thank God your recovery is going well, and you had some type of catostrophic health insurance. My family and I have had some minor catastrophes as well, but nothing like that. That’s why I have health insurance, and I’m blessed to have access to a very affordable plan through my service in the USAF Reserve. I think it’s useful in this context to point out that the ACA would call your situation a “pre-existing condition”, and allow a previously uninsured patient to obtain “insurance”. I’m having trouble wrapping my head around that particular provision of the ACA. Surely there must be a better way. Good luck to you and a speedy recovery.
  
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Tim Retzlaff November 5, 2017, 12:31 pm

Full disclosure: I’ve been mostly retired working part time for many years, have almost always been self-employed, have always paid for my own health insurance, & have been getting an income based subsidy since the ACA was enacted. Our premium for 2 adults (48 & 50 years old) prior to the ACA was $300/month with a $3000 deductible. Next year our premium before subsidy will be $1286/month with a $6500 deductible.

When the ACA was enacted it created a relatively small high risk pool of people that were mostly self-employed, couldn’t previously afford coverage, or had a pre-existing condition. The subsidies made this somewhat bearable for those that qualified & penalized those people that made “too much” money. The people I have talked with that have employer provided coverage believe they are directly paying for those subsides. What they don’t understand (or won’t admit) is that most people with employer provided coverage are in a lower risk pool that provides better coverage at lower rates…..and not paying tax on their health insurance benefit IS a subsidy. The real issues we face are the artificially high cost of health care and the way the insurance industry has fragmented the nation into smaller groups with varying degrees of risk.

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Kent Manning November 5, 2017, 12:42 pm

Funny you should mention Costa Rica. I’m here now for about 6 weeks and in talking to the expats who live here, many choose to go back to the U.S. for major medical procedures. Valve replacement surgery, for instance, according to one person here, is much preferred state-side than here. Another fellow is heading back to the U.S. for check ups next week. On the upside, monthly household expenses here are very low: electricity, TV, Internet and water totalled $100.00 last month. And taxes about $600.00 per year.

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Alexis November 5, 2017, 12:48 pm

Wow, that’s a lot of cash for a minimal plan. That would get you deluxe full coverage here in South Africa (which also has a pretty thriving healthcare tourism sector, mostly Europeans wanting elective surgery though, probably the flights are a bit pricey from the USA).

I’m curious as to what happens if you are in a car accident or some other horrific event in the States and you go to a hospital for care as an uninsured person. Do they treat you regardless of whether or not you will ever be able to pay? Even if it looks like you might die tomorrow? Turn you away? Send you to a cheaper facility? What about for something slower but equally life threatening, like cancer?

I guess I’m wondering if the lack of insurance might influence whether or not you get quality care in a dire situation. One of the reasons I’d never self insure in SA is that many private hospitals won’t treat you if you are uninsured, and if they will they want huge cash deposits up front. If not they will transfer you to a state facility (so no person is left without treatment) but the standard of care may be considerably lower in a state hospital (it varies, some are pretty good, others, not so much).

I also find it interesting that it is so damned hard to work in the US as a foreign trained doctor. As far as I can tell they require you to repeat your entire specialist training (residency) which is quite a high barrier. It would definitely be possible to do a shorter bridging process (perhaps a year of supervised work) or something to ensure that the doc is up to USA standards, without having to repeat the whole process (humans are humans everywhere in the world, the medicine is pretty similar, it’s mostly the systems of how things are achieved that differ).

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- Anne November 6, 2017, 12:47 pm
  
  You will be treated regardless of insurance status in case of an emergency – it simply isn’t a factor. Which is partly why costs, especially in emergency departments have been so high: your bill reflected the two non-insured patients who came in before you who couldn’t pay …
  
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Matt November 5, 2017, 12:48 pm

Let’s make medicine an undergraduate degree like accounting and engineering. Pretty much everywhere outside of the US makes medicine and law undergraduate degree programs and they’re no worse than the ones we have in the US.

Let’s cap salaries of executives, managers, and doctors at hospitals that claim to be non-profit.

Let’s put limits on the number of hours doctors can work per week, say 50-60, and increase the supply of doctors accordingly.

Let’s stop demanding fancy buildings and lobbies and excessively expensive equipment to measure height, weight, blood pressure, and body temperature. In fact, let’s stop measuring these things with every single visit and only do them when that data is needed. Do you really need my temperature when I’m in for a broken bone?

Let’s take the magazines and TVs out of waiting rooms. Seriously, nobody likes them and we can just waste time on our phones these days. I’d much rather have free wifi.

Let’s make all of our medical records reside in a central database maintained by the government that hospitals freely query for information whenever they need it instead of requiring mountains of paperwork to move the same damn tiny amount of information around with every single visit.

Let’s stop requiring doctors to justify their treatment decisions to bean counters with zero medical knowledge and instead treat them like professionals.

Let’s make lifting weights in a program similar to Starting Strength a part of the high school curriculum and a standard recommendation for the chronic metabolic diseases.

Let’s make vaccines free and mandatory without a medical exception and antibiotics hard to obtain.

Let’s make stem cell treatment standard care for orthopedic issues such as knee injuries and make it covered by insurance.

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- Jack November 6, 2017, 8:39 am
  
  > In fact, let’s stop measuring these things with every single visit and only do them when that data is needed. Do you really need my temperature when I’m in for a broken bone?
  
  Treatments (especially dosages) vary greatly based on a person’s size (vertical or horizontal), age, blood pressure, etc. These factors are also important to track over time to see if there are any abnormal drops/gains that may indicate a more serious problems than the symptoms indicate. Do doctors need to take your temperature when you come in witha broken bone? Absolutely! A fever is a huge indication of infection, well before any visual symptoms appear. If a doctor sets your bone without checking for infection, it could well become gangrenous and either cause you to lose the limb or have the infection spread to your organs.
  
  Now, do you need a $10,000 ride in an MRI when your arm is hanging at a 45 degree angle and the x-ray showed a clean break? No. But vitals are as important as their name indicates.
  
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- breadbiker November 6, 2017, 4:01 pm
  
  On limiting the hours that doctors work: I totally agree in theory (who wants to be treated by a sleep-deprived doctor? Not me…) but I also want to throw in the following thought. Many members of my family are in medicine, and they’ve explained that the reason for long shifts is not to torture doctors unnecessarily but to have continuity of care for a patient. Medical mistakes in hospitals often happen when there is handoff of information (due to shift change) and being able to observe the same patient over a 24-hour period allows you to catch significant details or changes in their condition, thus being able to provide better treatment.
  
  I feel like this reasoning is something not many outside the medical field think about. Doesn’t make me feel less squirrely about the number of exhausted doctors providing care out there, but it’s important to socialize a nuanced view of the argument.
  
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- Dirk November 7, 2017, 11:07 am
  
  Compared to Japan, American healthcare is rather plush, unnecessarily so.
  
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- EMML November 10, 2017, 8:22 am
  
  One thing–I think the fancy buildings and lobbies are there because there is so much money in medicine, and so-called non-profits justify what they charge my building these monuments in order to “compete” for customers. I have to admit, they are nice when you’re stuck waiting for a loved one, which I have personally done a lot.
  
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Ariana Brill November 5, 2017, 12:53 pm

I help people puzzle through this stuff all day every day – and I’m impressed with how well you’ve outlined the alternatives. Here’s where I’d recommend each of these options:

1. Self-Insuring – Not for the feint of heart (or light of wallet). Although it’s rare, things get expensive really quickly if you end up with an extended hospital stay. Most people need health insurance as a financial risk product.

2. 90-Day Insurance Vacation – Make sure you do this at the end of the year, when Open Enrollment is coming up. Otherwise, you’ll need a Qualifying Event for Special Enrollment in order to get back onto your health insurance plan.

3. Medical Tourism – This is a great option, but doesn’t work if you have a time-sensitive emergency (think appendicitis). You don’t want to be sitting on a plane hoping that your appendix doesn’t burst before you touch down in Thailand.

4. Health Sharing Ministries – Only recommended if you’re a true believer. There has to be a special sort of bad karma involved in lying about this type of thing.

5. Expat Insurance – An awesome option with some caveats. If you spend more than a month in the US within a calendar year, you’ll have to file US taxes and will still be subject to the penalty for not having health insurance (because expat insurance doesn’t count). Also, many plans limit domestic coverage to a few months out of the year – or they can limit domestic coverage to emergency-only. Make sure you work with a broker to understand the details of your plan.

6. Reduced Income – By far your best option if you can swing it. You’ll qualify for subsidies if you can get your income below $48k as an individual or $64k as a couple (limits are higher if you have kids). Remember that assets don’t count here, only income.

Another option is a stand-alone accident policy. These policies pay out a fixed amount for an injury. For instance, it would pay you $2000 if your leg was fractured by a falling piano – and $1000 per day if you end up in intensive care. Then it’s up to you how to spend that money. Policies like this typically cost around $20/month. They won’t cover you for illnesses like appendicitis, but they are much much more affordable than actual health insurance.

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- UnclOxidant November 6, 2017, 6:43 pm
  
  I agree that the reduced income route is probably the best bet. I too am self employed and planning to do this next year. My wife and I will need keep our income under 64k next year. We also get rental income, so it might be kind of tough. But I think that between IRA and HSA contributions we can probably swing it.
  
  There are other advantages as well like getting more free time. And contributing less tax $ to an increasingly corrupt system.
  
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  - Madeline Kasian November 8, 2017, 11:43 am
    
    My husband and I have kept our income on the low side since we retired.Even with rental income.. we were able to use many deductions related to the rental to reduce income even further and have been able to obtain subsidies so far. I am Medicare eligible halfway through next year.Husband has another year after that.Fingers crossed.As you mention, it’s not assets that are counted for ACA.. it is income.
    
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  - peoria November 9, 2017, 3:20 pm
    
    At least in Arizona, it is hard to be able to use HSA to lower your income for ACA. The marketplace plans available in Arizona have only had scarce HSA compatible offerings that were more expensive, and this year has none.
    
    If it is just you and your wife in the business, look into an individual 401k to be able to keep your MAGI low enough.
    
    After ACA caused my premiums and deductible to both triple a few years back I decided to self insure for a year. Then I realized what exactly could be excluded from my MAGI for ACA purposes and lowered my income instead.
    
    Between diverting money through profit sharing, 401k employee contributions, and ira contributions I am able to make $60000 income turn into $18500 MAGI so that my premiums on cheapest silver plan are $15 a month. By having my income that low it also allows me to have a $600 out of pocket limit a year and I can take advantage of the savers tax credit.
    
    Reply
booch221 November 5, 2017, 12:57 pm

MMM, on NPR today they were talking about this. They said insurers are loading all the increases on the ACA Silver Plan, and some people may pay less for a Gold Plan., than they would for a Silver.

It sounds like you have the Bronze Plan, so this is not going to work for you, but another thing you might consider is leaving the ACA exchanges altogether. and shop in the individual market, again because the bulk of the premium increases are being borne by the ACA Silver Plans.

Also, since you are making money off this blog, can’t you count yourself as a small business, and pay for your health insurance with pre-tax money?

Reply
Randy November 5, 2017, 1:07 pm

Good call in keeping the insurance. I’m in my early 60s. Premiums I’ve paid over the years far exceeded benefits received. Until recently. Got hit by a car going 85 in a 45 MPH zone. Lucky to survive. 13 hours in ER cost over $40,000. With three surgeries, etc., total cost likely will top $100,000. And, obviously, it could have been far worse. I view med insurance as protection against catastrophic loss. Costly but necessary.

Reply
nicoleandmaggie November 5, 2017, 1:11 pm

Thank you for renewing. Part of the Republican plan to destroy the ACA is to make healthy people such as yourself decide to go the self-insurance route, which causes the death spiral that Trump was bragging would happen.

Also: great time for everyone to call their congresspeople to ask them to stop trying to destroy the ACA! Also: it is well past time to renew SCHIP! 5calls has really helpful scripts.

Reply
- Anne November 6, 2017, 12:50 pm
  
  Thank you for this
  
  Reply
- ilovescotch December 7, 2017, 12:01 am
  
  Disagree. Not a republican here, but this is simply false. The higher premiums are a direct result of the AHA existing in the first place. I benefitted from it while I was building my business, and now that my business is doing well, I’m feeling the burn. I see both sides of the coin. But I happen to believe if we simply left things alone, premiums would be down for everyone. And we should have allowed each state to roll out its own version of Medicare (like CA did, called Medi-cal) and leave it at that. The ACA did much more harm than good and I’m deeply affected. As much as I don’t like him, sorry guys, can’t blame this one on Trump. Let’s try and be a little more honest about this.
  
  Reply
Judie Ashford November 5, 2017, 1:20 pm

My husband has Multiple Myeloma, which is a non-curable cancer of the blood and bone marrow, diagnosed in mid-2007 at age 62. He is still alive, and we have since moved into the realm of Medicare. His private insurance in the early days required untold thousands of dollars in co-pays, and payments to doctors who arbitrarily did not subscribe to our insurance plan (which was a common one, United Health Care).

Once on Medicare, the co-pay type costs have lessened. But this Medicare coverage, which is sometimes considered to be “free”, still costs us right at a thousand dollars a month in payments, plus whatever items are charged, but not covered. His very basic cancer medication is $13,000 A MONTH, most of which is covered by Part D of Medicare. We are so very thankful for this coverage.

So, not matter how you slice it, medical coverage is expensive in one form or another.

Reply
Deborah November 5, 2017, 1:21 pm

As a person who is not from the USA, I have heard many stories about the US health system from the point of view of people who HAVE travel insurance, but not US health insurance. One was from a person who had a heart attack while visiting New York, and was not admitted to hospital for almost a week because they didn’t have US health insurance (the $85,000 was all rebated by their travel insurance, but the 5 days of not being admitted to hospital really stunned me). If I lived there, the possible delays would be my chief reason for getting health insurance – not its cost.

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- Nakia November 5, 2017, 4:50 pm
  
  I’m curious about this story. My understanding is that no one is turned away from emergency departments. That’s actually one of the challenges of our system, people used the ED as their primary care, regardless of coverage.
  
  Reply
  - Rogue Dad, M.D. November 5, 2017, 9:56 pm
    
    It is illegal to turn someone away from an emergency department if they have an emergency medical condition. The rules governing this are called EMTALA. Someone with a heart attack who was denied treatment in an ED due to insurance should be able to get that hospital/doctor/whatever in MAJOR trouble (i.e. many millions in fines and perhaps more).
    
    As someone who works in a pediatric ED at a large/busy children’s hospital, I provide care to many patients who have complaints that could be cared for in a primary care setting. However many people, MMM included, overlook many of the issues that lead to this happening.
    
    It’s not just lack of insurance that drives people to the ED (where we’re always open and will basically always treat anyone if you are willing to wait for the high acuity/really sick people to go first). Many patients have limited access to transportation, or access to a clinic where sick visits aren’t easy to schedule, or a job that is going to fire them if they miss half a shift or an entire shift because their kid is sick and needs to see a doctor.
    
    Working in the ED setting it’s easy to become a cynic, because let’s be honest, while the actual healthcare we are able to provide is great, the SYSTEM is not. But this goes well beyond insurance — you can provide single payer, free, universal insurance to all, and it’s not going to change the # of people showing up in my ED for a runny nose. If anything it’ll increase it because they know it will be paid for and they can come when their family can get them here or when the bus is running or when their job won’t fire them.
    
    I could have an extensive and detailed conversation on this topic. MMM gets some of it right — there are many things we can do to improve the macro and micro levels of our system, and some of his ideas have merit — but his recommendations also gets some of it wrong.
    
    Reply
    - Kevin December 19, 2017, 6:35 am
      
      Very interesting points. Thank you for sharing.
      
      Reply
  - snowcanyon November 6, 2017, 2:52 pm
    
    Emergency departments see 50% of the patient visits in the US but account for only 2% of the costs. How is this a problem?
    
    Reply
    - Rogue Dad, M.D. November 8, 2017, 1:55 pm
      
      Snowcanyon — ED visits as a proportion of cost are not the problem. The general issue is “inappropriate” utilization of the ED. However until we have other forms of access that fit a very diverse set of circumstances we’re going to continue to be the source of “primary care” for many because it’s often going to be the best option.
      
      Telemedicine is part of that, but it’s not a panacea.
      
      Reply
      - snowcanyon November 8, 2017, 5:14 pm
        
        The marginal cost of seeing extra patients in the ED is very low. Even if you cut ER visits by 50%, you are only down 1% of health care costs. How is this something we should focus on?
        
        Reply
        
        Rogue Dad, M.D. November 22, 2017, 8:12 pm
        
        I’m not sure who you are arguing with here.
        
        But you are not seeing the entire picture. If ER visits were actually reduced, you also spend less money on buildings and equipment and people. It’s not just the cost of the visits themselves that go away, it’s the costs of maintaining the resources that go down.
        
        As an ER doctor, visits keep me in business. However if your goal is to actually utilize healthcare resources appropriately, then you have to actually try to help people use the appropriate resource.
Andy November 5, 2017, 1:22 pm

We just had open enrollment for this year’s health insurance at my company. There’s always a big meeting that involves first: an explanation of how much more expensive it is than the prior year and second: a run down of all the complicated rules for where you can and can’t get medical treatment and how much you will and won’t pay based on all sorts of other complicated rules. Every year I leave that meeting shaking my head at how stupidly complex this all is. I don’t know much about all the ins and outs of the problem, but the single payer systems in other countries just seem so beautifully simple and nice by comparison to ours. Hopefully one day we’ll get there…

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Mary November 5, 2017, 1:32 pm

I have to admit that I haven’t read through all the previous comments, but my family and I recently opted to join a health sharing ministry since it does agree with our value system. That aside, one of the things that I really like is that it is very transparent in its language of what will be reimbursed and what will not be reimbursed. It seems that with traditional employer based insurance no matter how many times you read through your policy you still end up walking into a doctor’s office not really knowing how much the visit costs until you receive a bill. For example, I saw a dermatologist in 2016 to have a mole removed. Basic procedure (if you can really call it that), took the doctor 1 minute, and it was on my own doing since it was simply just bothering me (vs. looked concerning to a doctor). This doctor, who I only met for the first time, sent it to pathology since that is “protocol” in the skin business. The pathologist cost $450 to do his part. I was terribly annoyed that the doctor never gave me the option to not send the specimen. I simply would have told him to throw it in the trash. I would be willing to take that risk. BUT I was never given that choice, and that is NOT okay. My hope is that health care practitioners will begin having these conversations with us; telling patients what our risks are, how much the cost will be, and let us make an medically informed and financially transparent decision.
I realize that I can’t change healthcare alone, but I don’t see why a group of like minded individuals simply couldn’t start a health sharing co-op. If you don’t agree in the value system of a christian ministry, is it allowed to start a sharing ministry of different values? In other words, why not a MMM co-op? Sounds ridiculous, but maybe not!

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- Call 911 November 6, 2017, 7:23 pm
  
  In our current system, you don’t get to “take that risk”. If something bad happens later, a cancer is discovered, any decent medical malpractice attorney will argue that mole was an early cancer and had it been treated appropriately, you’d be healthy today. That case is worth millions. And even if you lose, the insurance company is out $100,000 every time a suit is filed (expert opinions, depositions, attorney fees, etc.).
  
  Also, unless you’re a physician in that specific field, you can never really be “informed” of the risks. It’s done because it’s ethically correct, not because it offers meaningful legal cover.
  
  Reply
  - Mary November 6, 2017, 9:13 pm
    
    I would have signed a waiver saying that I would not file suit if something more serious were to arise, but that choice was not given to me. Do we really think as a society that a doctor is ethically obligated to run additional tests although the odds of developing a sickness are low?
    
    Reply
    - Call 911 November 7, 2017, 4:45 am
      
      I believe you. And you may even not try to sue later.
      
      But right now, in our system, you can’t give up the opportunity to sue later. All you need to say is “I didn’t know what I was signing. I’m not a lawyer.” And boom, you can sue the doctor. People have sued (successfully mind you) with less. It’s a symptom of our societal loss of personal responsibility.
      
      The doc can’t run this risk: personally, or on behalf of his/her malpractice company.
      
      As to your last question: yes. As a society, we expect every effort is taken to prolong life, regardless of the cost, situation, odds of success, or corollary damage (ie. Chemo to get 6 extra miserable months). This is why the last year of life is far and away the most expensive. And to have a person get sick when it could have been prevented by just one more test? Some among us think that should be criminal.
      
      Reply
      - Mary November 7, 2017, 9:22 pm
        
        I agree! And it’s pretty depressing! Thanks for your input.
        
        Reply
      - Rich November 21, 2017, 3:45 pm
        
        You can give up you right to sue. Those rights are being given up and contracted away all the time in all aspects of American life. The claim by corporate medicine that medical procedures are routinely done to prevent law suits masks the underlying reality that these tests are performed to make Big Medicine big money. That is how the medical industry grew from consuming 4% of GDP in 1970 to sucking up 18% today.
        
        Reply
      - ilovescotch December 7, 2017, 12:06 am
        
        Yes you speak truth. It’s one of the most fundamental, to-the-core issues we have to face in this country regarding medical care. This entire thing has gotten out of control.
        
        Reply
Traffic_Mac November 5, 2017, 1:37 pm

Thank you for writing this MMM- it’s similar to my experience this month. For my family of 5 we’re looking at $1700 per month with a $13,000 family deductible ($6500 individual deductible). I can put $6,900 maximum in an HSA account, which doesn’t even cover the full family deductible.

That’s $27,300 for the year just for basic coverage! It’s astonishing. That’s 50% more than our mortgage for the year. Going without is unacceptable for us- we have several friends our age fighting cancer right now. So the choice we have to make is: do I continue to run my small business or do I shut it down and go back to working for somebody else.

I blame almost all of this on the Republicans. They spent 7 years refusing to make things better, then spent this whole year trying to make things worse. And no, allowing insurance companies to refuse to serve some people won’t help us- two of us have minor “preexisting” conditions. A full $250 per month for us is directly attributable to Trump’s refusal to allow the risk-sharing agreements to continue.

My fullest anger is reserved for Paul Ryan. His press conference where he clearly had no idea how Obamacare works was infuriating. The problem with health insurance is not that healthy people have to pay more than they use- that’s what you want! If you’re receiving more than you pay it means you had a bad year.

No, the problem is the basic math formula:

Average Cost of Insurance = ( Total Cost of Service + Profit ) / (Number of Insured)

The two variables in the numerator are too high and getting higher, and the variable in the denominator is too low and getting lower. Their plan is just to say “F You” to anybody with any risk. And then go back to calling themselves the party of families, small businesses, and Jesus.

Reply
Bev November 5, 2017, 1:38 pm

For those of your readers too young to remember what “pre-existing conditions” entailed, it did not necessarily require a life-threatening illness. Anything that brought you to a doctor within 5-10 years of enrollment became a pre-existing condition. For example, my daughter was a 1 year old and had one prior ear infection. Her ears were specifically excluded from any coverage. My husband had sporadic, totally controlled mild asthma. His entire lungs were excluded from coverage – meaning if he caught pneumonia it would not be covered. He also had seen a chiropractor for tendinitis in his shoulder. The policy excluded his entire spine from any coverage. You get the idea.

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- Anne November 6, 2017, 12:54 pm
  
  Or even worse – prior to the ACA three of my four kids were denied coverage entirely. One because of acne (seriously!) and the other because of prior joint pain/swelling which had been thoroughly checked and determined to be benign, with no treatment needed.
  
  Reply
Dirk November 5, 2017, 1:48 pm

I lived in Japan for 15 years and took that country’s reasonably priced, reasonably efficient health care system for granted until I moved back to the States. Sure, there are things that industry and individuals can do to make health care more affordable for Americans but that is just icing on the cake. At some point, a single-payer system will have to come into existence. Even on a tourist visa in Australia, with no insurance, I walked into a local clinic, run by a single physician, and for AUD 20 got a prescription for antibiotics to treat a respiratory infection. Contrast that to the time I was visiting the USA from Japan with my young daughter who cut her toe which resulted in an infection: I could not find a local clinic in my parents town to treat her simple wound and give her an antibiotic because she wasn’t already a patient and no clinics were taking new patients so we were forced to go the emergency room and spend $700 (this was almost 20 years ago). In Japan, we could have walked into any local clinic and had reasonable co-pay of USD 5.

Reply
- snowcanyon November 6, 2017, 2:54 pm
  
  Did they do a chest xray? How did they know the infection was bacterial, not viral?
  
  Reply
  - Dirk November 7, 2017, 6:30 am
    
    Not sure what your point is … the antibiotic cleared it up in a day … I suspect the physician was a skilled diagnostician …
    
    Reply
    - MKE November 9, 2017, 11:14 am
      
      I think snowcanyon is a doctor. He is trying to scare the shit out of you. It’s what they do. Predation is a reflex.
      
      Reply
Peter Leuenberger November 5, 2017, 1:57 pm

Very timely topic, however I think you are erring on the way optimistic side of risks: there are way more people with chronic health issues than you imagine. Moreover, I think that with risk management, the way to do it is not to estimate how low the chances are that it will materialize, but evaluate that even if it does happen, you are ok with it. And in this case, you have to be ok to either file for bankruptcy, or deal with hundreds of thousands of insurance bills. Especially if you have children. I speak from this from experience, and reading the part about risks, the thing that came to my mind is: you don’t know what you are talking about (not in an emotional way, but coming from a place that took me at least a year to get to, of accepting the reality that I am in that bucket, someone that has a chronic health issue with no resolution in sight). Then a close friend’s daughter had cancer, yet. And the list goes on. So my advice, when assessing risk, don’t evaluate the chances that it’ll happen to you, because they are way too high (when I share with people about my digestion issue, at least 1 out of 4 will end up saying that they too have been having similar issues, just not yet that serious). Decide if you are ok with the consequences.

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- Mr. Money Mustache November 6, 2017, 11:43 am
  
  Good point Peter – I should make that more clear in the article: it’s important to understand the consequences rather than just assuming they are impossible. In our case, hundreds of thousands or even a larger amount would still not affect our financial future, so self-insurance is a less risky option than it sounds. But other people might wade into that pool too casually.
  
  Reply
Kyle November 5, 2017, 2:07 pm

It’s really sad that to even consider all of these alternative options for healthcare. Hopefully we can push for expanded Medicaid coverage for everyone. If everyone is covered by Medicaid then it grows the risk pool which reduces the cost. Also, having a single-payer health system run by the government cuts out the record-high profits that private health insurance companies are making in the U.S. It would also force drug companies and hospitals to negotiate better rates for procedures with the largest payer for healthcare…. the government.

I’m currently living in Australia (a U.S. citizen), and I pay $125/month to buy into their healthcare system and don’t have to pay a deductible. People can’t even wrap their heads around having to worry about healthcare. Makes it hard to think about moving home….

Reply
GE Miller November 5, 2017, 2:08 pm

I appreciate the scrappiness of finding different solutions to this challenge, but believe it’s short-sighted, and tend to agree with Mrs. MMM’s sentiment. Did you only look at your renewal email or did you log in to look at various options? Silver plans in particular are seeing most of the spike this year due to the CSR payments being cut – if that’s what you’d be renewing, you may find a cheaper plan by re-running the #’s.

You alluded to it, but almost all of the premium increases this year are due to Trump administration sabotage efforts (primarily ending CSR payments, but there’s a long list). Millions of healthy individuals choosing to drop out of the exchange is a clear win for the Trump administration, because it will result in an unhealthy risk pool, higher future premiums, less future signups, and a death spiral for the exchanges. The exchanges had stabilized this year, prior to the sabotage, and none of this HAD to happen – it was all for spite and political leverage. If you qualify for subsidies, you’re protected from the price increases. If you don’t, thank this administration for the unnecessary pain.

We should be encouraging MORE people to sign up for the ACA and pushing for bi-partisan solutions to lower premiums (re-instate CSR’s, a longer enrollment period, re-instate enrollment advertising funds, encourage state flexibility). Wealthy/healthy individuals can show their resistance to this administration by biting the bullet this year and staying in the exchanges, and everyone can show resistance by encouraging others to sign up (80% of Americans have a plan option of $75 or less per month with subsidies according to HHS), and voting Republicans out of office in 2018. The Republican alternative to the ACA is back to an unregulated marketplace (basically even shittier healthshare ministry plans for all), no consumer protections, no pre-existing condition protections, no essential benefit coverage, and no subsidies. If you want that, go ahead and drop off the exchanges, so their sabotage can work and they can say “see, told you so”.

Reply
- Jim November 5, 2017, 2:32 pm
  
  He’s on a Bronze plan (as he stated in the post). I believe I’m on his same plan and apparently we are in the 20% of people with no subsidy possibility. That does not mean we have money to burn. The news for the last couple of months was that premiums would increase about 26-27% on average here in CO if the cost sharing payments were not renewed. Then it ended up being more like 50%. Silver plans and Gold plans are significantly higher (like double or more) and completely unaffordable. I have no idea where the 26-27% estimate came from. Maybe it’s the average of 50% and being completely subsidized. Yes, I blame the current administration 100% for this instability. There is a level at which it is acceptable to subsidize others with my premiums but it’s not at the level where it becomes a significant burden and one needs to pull back and look out for themselves.
  
  Reply
  - Chrissy November 7, 2017, 10:50 am
    
    Ours went up practically 50% because our current insurance company quit the state because of uncertainty forcing us to go with the other overpriced very low benefit plans. I hope the religious plans are not a ripoff, I am willing to praise the mythical Jesus to save 14,000 a month.
    
    Reply
Jared November 5, 2017, 2:08 pm

MMM’s analysis about insurance before (that his home state of colorado had only gone up a tiny bit and therefore it seems ObamaCare is working) is now getting smacked with the reality most of us faced a year earlier. ObamaCare didn’t cover cost control. And the results are predictable. I saw my premiums skyrocket a year earlier, like a lot readers.. But welcome to the reality everyone else was talking about. You just ignored it because it didn’t apply to you yet. And confirmation bias.

Seriously explore alternative Christian based health insurance. Some churches are much more inclusive than others. It doesn’t have to be such a weak sauce analysis ( churches don’t like gays so we should not analyze this option more). Did you call and ask if attending a more liberal, inclusive God supporting church was ok? Doesn’t sound like it.

This option has saved many friends from having to self insure because ObamaCare had literally made it too cost prohibitive to have insurance.

Reply
- Mr. Money Mustache November 5, 2017, 6:05 pm
  
  Actually mine did skyrocket last year too – I was just too disorganized to write an article about it at the time. This year’s even bigger increase reminded me I’d best get back to the topic.
  
  And I did indeed recommend the ministry option in this article. Remember, the choice we made for ourselves is not necessarily the one I am recommending for others. If money is a factor, it’s worth fighting back on the insurance issue.
  
  Reply
  - Vince November 6, 2017, 10:07 am
    
    My wife and I did go with the ministry option when our health insurance was cancelled out from under us. We had been with Anthem a long time, but to keep premiums at an acceptable level, we kept changing the deductible amount and/or the particular insurance program. This meant we were not grandfathered in. Since we believe in the science of what defines a human–unique human DNA present in the fetus–we find the abortion coverage that is required of most insurance plans under ACA requirements to be morally unacceptable. We chose Samaritan Ministries and when I got a cancer diagnosis, the health sharing ministry covered everything. I was fortunate that the cancer tumor was removed with out-patient surgery, was caught very early, and was a non aggressive, slow growth type of cancer. So at present no chemo or radiation is needed, but I do have to get regular checkups to make sure it hasn’t com back.
    
    Mr. MM, I admire your honesty in not going with a religious based ministry that would have required you to either lie about your belief /values system or agree to a belief/values system that you truly would not believe in.
    
    Reply
- Live Free MD November 5, 2017, 8:22 pm
  
  With most forms of insurance (car, homeowner’s, life, disability, etc.), there is significant competition for your business, and your premium is based on your risk. This keeps premiums down and incentivizes people to reduce their risk in order to reduce their premiums. This is the way it should be.
  
  Unfortunately, health insurance has abandoned these fundamental concepts. It is no longer a competitive market and your premium is not at all based on your risk (the exception is smoking status).
  
  Health Care sharing programs are the only option that still operates as a competitive market and assesses your premium based on risk.
  
  I would also encourage Mr. Money Mustache and other healthy individuals to strongly consider a health care sharing program. If you explore these programs further, you will find that the definition of “God” is quite broad. For example, consider this definition of “shared beliefs” from Liberty Healthshare: https://www.libertyhealthshare.org/do-i-qualify.
  
  For those with chronic illnesses that are not amenable to lifestyle intervention, and who would otherwise be uninsurable in a competitive marketplace (for example, metastatic cancer, severe traumatic brain injury, spinal cord injury, stroke, and severe intellectual disability), Medicaid can act as an appropriate safety net.
  
  Reply
- Will Bloomfield November 6, 2017, 10:01 am
  
  I’m a fan of the Health Care Sharing model, and as a Catholic, there are good options that accord with my beliefs, such as this one: http://cmfcuro.com/web/
  
  But considering the beliefs requirements, these may not be a good option for others. Regardless, nice to see MMM include as a possibility.
  
  Reply
mike November 5, 2017, 2:09 pm

Eighty percent of all medical costs occur in the last year of life. Figure out when someone’s going to die and kill them a year earlier.

Reply
- Chuck Tuna November 5, 2017, 3:15 pm
  
  Better yet, support DNRs and discuss end-of-life WAY before it’s statistically going to happen. My Mom explained her desires when she hit 65 and then re-visited it with my siblings and I every 5 years until 80, now every year. She is also a member of the Final Exit Network and agrees 100% that dying should be graceful and CHEAP.
  Or just kill them. I’m planning to kill several sick people soon just since so many of you think I’m sick for saying that.
  And you have no senses of humor.
  
  Reply
- The Vigilante November 5, 2017, 5:13 pm
  
  Stop it, you’re solving all our problems and then we’ll have nothing to talk about!
  
  Reply
- Matt November 6, 2017, 5:35 pm
  
  Let’s just have a giant nuclear war. No more medical problems to worry about.
  
  Reply
- Samir November 28, 2017, 11:23 am
  
  While there’s humor in this post, it does shed some light on a fact that the healthcare industry doesn’t want you to think about–you will inevitably die. And the way everything is set up currently, you’ll be paying tremendous amounts of money as do die.
  
  My personal feeling towards this has been that if I’m going to die, it will be on my terms. If I have cancer, let me know the bill and let me decide if I want to spend $500k on treatment or $50k on something that will get me by for a few months and blow the rest on a Ferrari and living it up like I’m dying tomorrow.
  
  Reply
LuckyCanucky November 5, 2017, 2:17 pm

Hi MMM,

Have you considered moving back to Canada? I’m not joking.

LuckyCanucky

Reply
- Mr. Money Mustache November 5, 2017, 5:54 pm
  
  No, definitely not moving back to Canada!
  
  Remember, this premium is only a tiny percentage of our surplus income. And the high income itself (and early retirement) was made possible largely by the free-wheeling capitalist system that defines the USA.
  
  In my situation, I have absolutely nothing to complain about – there is pretty wide agreement that this is the best country in the world in which to be a rich person. It’s how we choose to set things up for the other 90-99% of our population that is up for debate.
  
  Reply
  - Live Free MD November 5, 2017, 8:28 pm
    
    Does the increase in your insurance premium now bring your yearly spending closer to $35,000 per year?
    
    Reply
  - Little Aussie Battler November 7, 2017, 2:07 am
    
    What makes the USA so much better for rich people than other places they might choose to live?
    
    Reply
    - Mr. Money Mustache November 7, 2017, 9:48 am
      
      For me, it’s the easy access to the wildest entrepreneurs (silicon valley especially), the extremely low cost of basics like food and manufactured products, the low tax rates on high incomes, and the fact that after 19 years here, nobody (government or public) has ever tried to mess with me, despite doing some relatively high-publicity stuff to change society in ways that would affect certain very established parts of the economy. Also, most of the newest technologies work here first.
      
      Also, it’s a big place with so many choices of culture and geography: you from Portlandia to Suburban Dallas, Tundra to Tropical islands – all from a single airport with a cheap flight and a single passport!
      
      Reply
    - Kevin November 7, 2017, 12:36 pm
      
      rich is only a component of it. if you are smart or capable, there is no place that offers you to the chance to succeed more than the US. it is literally a magnet for talented people, which is why it leads the world in virtually every creative/productive endeavor. and it’s a self-reinforcing monster, the more talented people it attracts, the more it attracts other talented people.
      
      it’s not as kind to those who dont get equal share of those characteristics, and that’s a problem, but it’s conceivable that it may just be the price of doing business. many of the things that make it amazingly productive, also make it terribly unequal.
      
      Reply
      - MKE November 9, 2017, 11:17 am
        
        All that, and the worst medical system in the world! WTF?
        
        Reply
        
        Mr. Money Mustache November 24, 2017, 7:39 am
        
        You may find this overly optimistic, but my theory for the shittiness of the medical system is that technology has not properly blown it up yet.
        
        In the US at least, as industries get old they seem to add on layers of inefficiency, corruption and resistance to change – just like the humans that staff them.
        
        But if you get younger, fresher, idealistic people who can start something from scratch without the assumptions of the old company, you get much better products (take a look at SpaceX launch schedule and costs compared to Boeing/Lockheed alliance for one example, or just compare your phone to the one on Grandma’s kitchen wall)
        
        So, in my optimistic world, if someone with actual brainpower and technical acumen figures out how to take care of people’s medical needs from the ground up, it should end up much cheaper.
        
        To me, this is a defining attribute of the US: our political system is somewhat dysfunctional (to put it lightly), so we have a harder time than other countries doing things from the top down. But in exchange, we get some awesome raw firepower that allows us to do things more quickly from the bottom up.
        
        This creates a lot of millionaires and billionaires who get to have a lot of fun, but leaves a lot of other people having less fun in their wake. Especially given the human habit of judging our own lives by comparing it to others – massive inequality, even if everyone ends up better off objectively, tends to create jealousy.
        
        MKE December 10, 2017, 4:03 pm
        
        Thank you for the “hope!” I, for one, am not in the slightest jealous of a guy who codes a silly game app and makes millions. Or of anyone else doing their own thing, though it would be nice if their own thing blew up American medicine. An employee doctor who is just punching the clock? Different story. I resent the waste of resources.
Paul November 5, 2017, 2:30 pm

I would really like to see a very high deductible plan (like 50k) with low insurance rates since I’m not comfortable self-insuring a catastrophic event which could total 100s of thousands of dollars. . It seems like there would be some demand for a plan like this and in my opinion this would really be insurance. Right now my family deductible is 6k and to date I’ve never hit it so I would welcome paying a fraction of my insurance premiums with the understanding that I’d be responsible for a significantly larger deductible.

Reply
- Glorkvorn November 5, 2017, 5:17 pm
  
  That would be great! Too bad for most people in our society 50k might as well be “infinity dollars”. I wonder if they’d let us get a plan like this if we would sign some sort of affidavit showing that we actually could pay 50k if we had to.
  
  Reply
  - EMML November 10, 2017, 8:43 am
    
    You know, I wonder if they could do this with an HSA–like, you have proof that you have $50k in an HSA ready to be used if needed, so you can sign up for this extra high deductible policy.
    
    Reply
FullTimeFinance November 5, 2017, 2:42 pm

I have employer subsidized insurance. It’s cheap in our case but covers almost nothing . It kicks in near the fed maximum. For 50 dollars a month it starts paying a dime after we’ve spent 7k out pocket. It definitely doesn’t seem worth it as in a decade they’ve paid out almost nothing. Not sure what the solution is but this isn’t it.

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- Vince November 6, 2017, 10:24 am
  
  You actually have insurance. What most of us expect is that health insurance pays for all of our medical expenses. Once you take out any personal risk and/or cost, the the insurance product ceases being insurance. I think that is what gets lost in the discussion of health insurance. We don’t expect house or car insurance to pay for routine maintenance, so why do we expect health insurance to do that?
  
  Reply
  - Kevin December 19, 2017, 6:59 am
    
    Exactly, completely agree. But a contributing factor to people thinking health insurance pays for all medical expenses is that it is so expensive. When you start paying more for health “insurance” than your mortgage payment, it becomes problematic.
    
    Reply
Dan November 5, 2017, 2:43 pm

My wife and I are both self-employed so this post resonates. We did some extensive research into Liberty Healthshare (liked they were the most flexible in terms of religious beliefs) last year but couldn’t quite pull the string. We are giving it another look this time around. For my wife and three kids in Ohio our bronze plan ($6,400 individual/$12,800 family) costs over $900 a month and will increase to over $1,100/month next year. Many of the ideas offered here are great steps in the right direction. I have friends working for large companies that don’t even know what they pay for health insurance a month let alone tell you what their deductible is. I suppose I was in the same boat at some point but despite the large premium I’m glad I’ve become much more educated and engaged in the debate given our self-employment.

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- Holly Johnson November 5, 2017, 7:15 pm
  
  My husband and I joined Liberty Healthshare three years ago in January. We faced really high premiums and outrageous deductibles we couldn’t quite justify. Each year, I check in with the ACA and off the exchanges where we live (in Indiana) and it only seems to get worse. So far, I have been really happy with Liberty. We had almost claims 2/3 years so there was nothing to report, but we had some medical bills last year that gave me a taste of how it all works. I found that Liberty paid all our bills as promised. They were just pretty slow about it and their process is slightly disorganized.
  
  With that being said, I was excited once again to check new health insurance options. Unfortunately, the cheapest plan in my state/county now is over $1,000 per month with a $14,500 family deductible. So we’re on Liberty for another year. I’m open to switching things up in the future if new options become available.
  
  Reply
- Rebecca November 7, 2017, 1:34 pm
  
  I’m also self-employed (and single), and this year my premium is going up to over $400 for a crazy high $7500 deductible. I’m highly considering going with Liberty Health Share in the coming year, even though I don’t consider myself a religious person or subscribe to any religion (though do consider myself spiritual). I quite like the concept, (but why does a model like this have to be religious?). Anyway, In looking further into their statement of beliefs, it basically says that you believe in God, that all people have a right to worship in their own way, and that people have the right to direct their own healthcare decisions free from government interference. Fairly simple, and not super restrictive. MMM, where does it say something about actively opposing some things like same-sex couple equality and women’s reproductive rights? I, like you, value those things immensely, however, I don’t feel that by putting money into a shared pool to help with health care is condemning those issues. Is it? I guess we have to pick where we put our money…because I’m sure by buying into traditional insurance, I’m also unknowingly contributing indirectly through those companies to something else I don’t agree with (oil and gas, guns, etc). It’s hard to know exactly where our money is going in the end. But, I do think I’ll give LHS a go! (PS, MMM, I met your wife at her little shop, yay fellow creatives!)
  
  Reply

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