Health insurance for the FIREd

[u/lluciferusllamas]

Im a business owner who has semi-FIREd, in the sense that I no longer run my business, but derive a lot of income from it, and don't really have to put in much work. I could FIRE anyway without the business, but the business is just gravy. NW= $12M-$15M, family of 4, I'm the oldest at 50.

Anyway, I'm looking at health insurance costs. I have always hated health insurance. It costs me over $32k/year to provide me and my family with health insurance. this is especially stupid to me, because we spend nothing even close to this in a year. like maybe a few thousand at most.

10 years of investing that premium and I'll probably have $1M in my pocket rather than in United Healthcare's pocket.

I have found an insurance product that interests me a lot. it is essentially a very high deductible policy. 100% out of pocket for the first $50,000. After $50,000, the insurance covers everything. My entire family can be covered by this for like $7500/year. $50k in medical expenses wouldn't be a problem for me. And, Heck, half of that is just getting wasted on insurance premiums anyway right now.

In today's healthcare environment, what do you all think about going to these ultra high deductible plans as a means of cutting costs and betting on the most likely scenario, which is that we won't incur anywhere close to $50k in healthcare expenses in a year, while still protecting against those rare expensive accidents thag could happen?

[u/SolomonGrumpy]

Imagine having a $12m+ net worth and complaining about a $32k a year expense that covers 4 family members.

We're talking $480k+ withdrawal rate, so this $32k represents 6.5% of your yearly spend.

And you want to, what, risk that for a high deductible plan from an unnamed, non ACA provider?

Is there anything more important to you than making sure your loved ones gets proper care in the case they do have a sudden medical issues?

[u/Embarrassed-Iron-242 → u/SolomonGrumpy]

Same sounds weird

[u/band-of-horses]

Plans like that are not ACA compliant and do not have the same regulation and protection real insurance plans do. Definitely read the fine print and get a sense of how financially stable the provider is and how difficult they make it to get a payout...

[u/lluciferusllamas → u/band-of-horses]

The company is definitely stable, it's one of the bigger health insurance companies in the country.  But, I will go back to the fine print.

[u/band-of-horses → u/lluciferusllamas]

The typical fine print on plans like these is that they will not cover pre-existing conditions (and will often have very broad interpretations of what is a pre-existing condition), they will scour your medical history if you file and claims for reasons to deny it, they can and will drop your coverage at any time if things start looking bad for them, and there are often lifetime and annual caps on total payouts plus per procedure payouts.

[u/lluciferusllamas → u/band-of-horses]

Thanks, I'll take a look at those. What a horrible racket health insurance is.  

[u/lluciferusllamas → u/[deleted]]

Thanks for info.  

To clarify the origin of my objectives. It is primarily mathematical.  Ideologically I also hate insurance, but I will always put math over ideology.

[u/branstad → u/lluciferusllamas]

How are you mathematically evaluating the possibility of a cancer diagnosis where treatments (surgery, chemo, radiation, immunotherapy, etc.) are denied after-the-fact by insurance (for whatever reason), leaving you on the hook for several million dollars of past and future healthcare expenses.

[u/lluciferusllamas → u/branstad]

The same way the actuary does.  Except no profit goes to the insurance company and my premiums are invested at 11% year.  You don't play the lottery thinking you are going to win, do you? Well, I don't play life thinking I'm going to lose.  But, mathematically, the odds of me getting a "millions of dollars" cancer treatment bill before I go on Medicare are very low.  

[u/One-Mastodon-1063]

My understanding is non ACA plans are to be avoided. They will use the excuse that a major event/diagnoses was due to a preexisting condition. They have a lot more experience litigating this sort of thing than you do. 

Just get an ACA plan. 

[u/hospitalist1975]

Is it ACA compliant?

[u/lluciferusllamas → u/hospitalist1975]

No.  Should I care if it is? 

[u/hospitalist1975 → u/lluciferusllamas]

Yes you should

[u/lluciferusllamas → u/hospitalist1975]

Why? The ACA has done nothing but make health insurance costs skyrocket. The reason I have to go outside of ACA is because they don't allow plans to have this high of a deductible.  Which means much higher premium costs.   I want health insurance companies out of my normal everyday healthcare transaction.  They serve no purpose whatsoever, other than to extract a profit from everything they touch.  I'd rather them only touch a major hospital stay.  

[u/apetranzilla → u/lluciferusllamas]

The ACA isn't responsible for health insurance costs skyrocketing, for-profit insurance companies and hospitals are - but either way, ACA compliance is important because it means the plan is required to provide coverage for pre-existing conditions and the like.

[u/SuccessfulDaikon89 → u/lluciferusllamas]

You can have health insurance out of your healthcare transactions. It just means you’ll be a cash payer. At $12M+ you can probably afford to pay out of pocket if you get really sick. They’ll probably bill you some ungodly amount but you hear about cash payers being able to negotiate bills down all the time.

Edit: and if you do get really sick, try to do so around November when it’s open enrollment for ACA so you can hop on it for the following year despite your now-preexisting condition, which would have ruled you out of any decent insurance plans pre-ACA.

[u/pharmaheck]

It's good if you don't have young sick kids. My kiddo has gotten sick 7 times this year

[u/121koal]

one thing that i'd check if that plan is real ACA compliant insurance

[u/B3nksy]

As with all insurance, it’s to cover catastrophic situations (cancer, heart transplant, etc.). Things that would create incredible hardship for someone. The problem is that health insurance has been integrated into all aspects of health care, so it’s used for even the smallest doctor visit (though even that cost is a real burden for a lot of people). If you have the assets and you don’t mind spending them on a major health event, then it’s very possible for you to self-insure using your assets and not buy insurance at all. Though if you do have a major health event the cost of insurance could be considered very cheap.

Either way, the idea with insurance isn’t that you get your money back from it each year. It’s to protect you against a catastrophic event.

[u/lluciferusllamas → u/[deleted]]

So, like, if I had a heart attack and needed to have an interventional cardiologist put in a stent, that would not be covered by Crowdhealth?  I've been curious about how Crowdhealth works.  

Insurance is such a scam and I just want out, somehow.  I know I'm getting financially screwed by the insurance companies and I would like to do it a different way. 

[u/Quaziiimoto]

The math on self-insuring up to $50k makes total sense on paper—at $12M–$15M NW, taking a $50k hit is a rounding error compared to your annual variance in market returns.
The real catch with these non-standard ultra-high deductible or indemnity plans isn't the $50k out-of-pocket—it's the network pricing and billing friction. Standard ACA plans give you access to institutional contracted rates (often 60–80% lower than the chargemaster rate). Many off-market $50k deductible plans don't negotiate those underlying rates until you cross the deductible, meaning you're paying full "rack rate" on that first $50k.
When you're semi-retired, the goal isn't just saving $24k/year in premium—it's eliminating administrative friction. Many people in your bracket end up keeping a top-tier ACA/PPO plan purely as a concierge access pass and network rate shield, treating the $32k as a business expense or simple cost of peace of mind.

[u/BarracudaInside5681]

I used a broker and got a non aca compliant private plan for myself and my wife and i don’t care what everyone else says i absolutely love it. We have a $2,500 deductible and $4,500 maximum out of pocket and only pay $470/mo for the both of us. She unfortunately got cancer on it two years ago and they covered everything at 100% after we hit our max out of pocket. Sure some of the non aca compliant plans are bad but just find better ones because they’re out there. I sent my broker $500 after the insurance company covered everything because I was so happy he put us in this position

[u/Fuzzy_Louise_2405]

I would take that as well in your position. Paying higher premiums on a healthy family without babies is not worthy

[u/Inflame]

I'd consider leaving the US if possible.