Individual Medical Insurance -- Thats the "BOOGEYMAN" under my bed.
In the two years Ive owned individual medical insurance, my premium has jumped an average of 18.88% per year. If this pace continues, prior to qualifying for Medicare, my PREMIUM will reach $52,817 PER YEAR. - 1stMill
What keeps you up at night?
For me, the fact that -- over the past two years -- my medical insurance has jumped nearly 38% tops the list. If you're planning for an early retirement, youll need to keep an eye out for a boogeyman under your bed too.
This is the first of what may become many missives looking at my medical insurance mess. I'll start by sharing the numbers...
"Premiums may change when a new rate table applies reflecting the rising cost of medical services and the increasing use of those services..." - Fortis Health (now Assurant)
This year I turn 50. Medicare kicks in at 65. So as an early retiree, when it comes to medical insurance, Im on my own for almost another 16 years. *
Currently, my individual health insurance premium runs $7,892 / year. While continued increases of nearly 19% a year seems unfathomable, as a cautious millionaire, I don't think it wise to count on anything less than 10%.
The following table demonstrates just how expensive my insurance could become in the future...
Premium Rate Increase Analysis (does not include up to $5,850 / yr. OOP) **
As noted before, this story is far from complete. Please check back for future updates -- where I plan to explore other facets of my medical insurance mess.
Note: Once you obtain coverage, you can not be singled out for rate increases. So the rate increase described above applies to everyone in my group.
* I do in fact work part-time. But, if I were to join my employer's plan -- because I already take several medications -- there is a significant risk that I could not qualify again for individual coverage in the future.
** This includes coverage for my wife; but does not include out-of-pocket expenses, which are capped at $5,850 / yr. ($5K deductible + $850 copays (50/50) once the deductible has been met).
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According to a snippet in Time magazine, Costco is pilot testing the sale of individual medical insurance. Coverage is provided in partnership with Pacific Care Health Systems. Costco states they hope to make coverage available at a cost 5% to 20% less than comparable policies ... Read
I've written of my medical insurance mess, where -- if premiums continue to rise as they have the past two years -- I'll be paying $53K/year before reaching Medicare in 2015. When it comes to rapidly rising costs, it appears that Im not alone. Over ... Read
Hi Jerry, thanks for your interest...
At least for the present, I know of Boomers who have no choice but working till age 65 simply to hang on to their insurance. 1stMill
Thank you, thank you, thank you for sharing this detailed information. It's exactly what I'm looking for. I'm close to my first mil. but am hesistant to retire based on health insurance expenses. Your annual rate increases are quite eye-opening.
You are welcome EF -- I am so glad you found this helpful.
One of the problems for early retirees (with individual health insurance) is that you are no longer in a "pool" with younger workers. I only hope that the worst is now behind us. Also, if you are lucky enough to have excellent health, your rates would be less than mine (naturally rates also vary by state and by the company you chose). - 1stMill
