The cost of health insurance is a big one — perhaps the biggest — for FIRE folks in the U.S. We are too young (often by decades) to qualify for Medicare like traditionally retired people, and the Republicans have only sought to block, and subsequently undermine and destabilize, the ACA and state health insurance marketplaces since their inception. This creates rising costs for consumers.
Mr. Money Mustache put it best in his post titled When Your Shitty Health Insurance Doubles in Price, the difference being that he already has the provider we are switching to. Unfortunately, it’s the best we can do.
Every November, our health insurance renewal email comes from Blue Cross Blue Shield (BCBS) of California. And every November, our monthly premium rises by almost $200/month ($2,400 year), on top of a deductible that rises by $1-2,000/year, for a total annual price hike of $3-4,000.Every. Single. Year. For the foreseeable future.
And all of that still does not mean we’re 100% covered. Oh, no. Some things are covered at 40%, some at 60%, and the mental energy is ours to spend figuring that out.
This cannot go on forever, obviously. Eventually, it becomes pointless for everyone to pay for debt insurance (which is what health insurance really is) rather than save this money, get a credit card with a high limit, and declare bankruptcy in case of astronomically high medical bills.
When we achieved FIRE 3.5 years ago, our monthly premium was $635 for two of us, with a $9,000 deductible. Now, it is $1,085/month with a $12,000 deductible. There are other hidden, higher costs on top of those: reduced coverage when traveling, etc. Every year we get less, for more.
The only thing that keeps this barely tolerable is the fact that we can deduct our monthly premiums as a business expense, because we are technically self-employed. But it’s no panacea: We’re still out $12k/year in premiums that we’d rather allocate to other expenses.
Of all the infuriating things about the U.S. insurance (because one cannot correctly call it “health care”) system, though, two things make my blood boil more than others. First, none of it hangs together, logically speaking: Monthly premiums in no way reflect anything quantifiable and sensible, like our risk. They increase because they can.
Second, as high as the costs are, they do not reflect the extraordinary amount of free labor every American has to do in order to manage the relationship between their doctors, myriad third parties (labs, radiology providers, medical supply companies, pharmacies, etc.), and the insurance companies.
If people were to account for their time spent project managing this crap system at a fair wage (say $20/hour), especially for seriously and chronically ill selves or family members, it adds an additional $4-$5,000/year to the tab, minimum. Americans serve as unpaid middleware to hold the myriad parts of this inefficient, ineffective system together, and that is time that they cannot spend earning money in other ways.
All a long way of saying that it is both monetary cost (a savings of $3,000/year on our premiums alone) and efficiency (streamlined, less painful care) that drove our switch to Kaiser for 2019. As an American, I did hours of research before making this decision, speaking with friends who have had Kaiser for many years.
My friends and neighbors described things that would count as straight-up miraculous in BCBS PPO land: Complete records online. (Oh, the hours lost to chasing those down and waiting for them.) On-site pharmacies, saving a trip and a long wait time there. Specialists called in right away to look at something beyond a GP’s expertise, no waiting 1-3 months to see some sort of specialist elsewhere. No need to obtain referrals to see those other doctors, and chase the referral. Many types of doctors at a single location. And for $300/month less.
I don’t expect anything to be perfect, but we are willing to experiment with something new that may be better and cost less. If we don’t like it, we can change again during open enrollment next year.
And with that done, we can shop around for new homeowner’s insurance, joy of joys. Even though we do not live in a fire zone, fires elsewhere in our state have most insurers charging more, and valuing homes for less. Every year, like magic, AAA tells us that it would cost less to reconstruct our home than the year before. In their detailed breakdown of this thinking, they assume things like $600 to replace windows. Cute.
Onward in insurance shopping. How I wish Black Friday deals extended to this.