The Wednesday Wellness threads are meant to encourage users to ask for and provide advice and motivation to improve their lives. It isn't intended as a 'containment thread' and any content which could go here could instead be posted in its own thread. You could post:
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Requests for advice and / or encouragement. On basically any topic and for any scale of problem.
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Advice. This can be in response to a request for advice or just something that you think could be generally useful for many people here.
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Encouragement. Probably best directed at specific users, but if you feel like just encouraging people in general I don't think anyone is going to object. I don't think I really need to say this, but just to be clear; encouragement should have a generally positive tone and not shame people (if people feel that shame might be an effective tool for motivating people, please discuss this so we can form a group consensus on how to use it rather than just trying it).
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I've been passively thinking about this for a few years now after a conversation with my parents. They actually kept the receipts and did the math - they would've been better off paying out of pocket for the last 40 years of medical expenses than having insurance (which they did have for everyday of their working lives without exception). At ours was not a family of indestructables; a sibling had four major surgeries over about an 8 year span, and both Mom and Dad have been on a variety of not-so-cheap prescriptions for 20+ years.
Especially considering the surgeries (which had approx 10 day hospital stays after, each time), I was totally blown away that the numbers still came out against the insurance. As a side note: To note let the insurance companies weasel out of some of the major costs for the surgeries, my Mom was spending up to 20 hours a week painstakingly collecting documentation from all necessary parties.
That's some background. Here are some numbers. This is better than back of envelope, but not perfect and, as usual, normal caveats; what's your risk tolerance? What's your family medical history etc.
Liquid assets: You should have $1m in liquid assets beyond your home. Income: 250-300k for an individual, 500k+ for a family of the usual size (1-3 kids)
With some smart negotiating, you can survive even the most catastrophic events so long as they don't cluster in an insanely unlikely scenario (i.e. you get into a car wreck driving home from your chemo appointment and the ambulance taking you to the hospital T-bones your poor spouse who is speeding to meet you there).
But, take a look at those numbers again. With that kind of wealth and income, you can afford to pay for a "cadillac" insurance plan. So, why not?
And here we confront the real decision about healthcare. It isn't so much about the cost - if you're rich, you don't need it and if you're rich you can pay for it. If you're not rich, you basically throw your money away for multiple decades a little bit at a time so that in the low probability change you need it, you do have it.
The real decision is; how do you feel about subsidizing a system that works BEST for people with horrible habits and defectors in the system? We've created a situation in which doing the "right thing" with health insurance and personal health habits makes you the sucker. The game theoretic optimal path of behavior is to smoke, drink, never workout, and then walkout on all of your medical bills.
Short of the Government mandating we inject ourselves with an untested substance lest we lose our basic rights (WAIT WHAT?!), I don't see how you could make a worse healthcare scenario.
To make sure I understand this, you're saying if you make less (say, 100k/year), in the US, you should be putting your income into health insurance?
If you're full time employed by a single employer at a company over 50 people, by law they are required to provide some level of health insurance. You might still have to pay some level of premiums out of pocket (in fact, most people do) but the cost is heavily deferred by the employer.
If you're making 100k or so per year on your own (self employed) you will have to pay out of pocket one way or another. I believe there are some small biz health insurance co-ops but it's still going to be painful.
To answer your question directly - I am not saying you should do anything. Personal choice is important! I'm say that, from a median financial expected return and risk perspective, at about 100k / year, yes, you should be buying health insurance.
Returning to the conclusion of my original post; Health Insurance in America is fucked up. Its cost only becomes reasonable once you're already a top 20% earner or if you have an generous employer who can afford to cover most of your premiums for you (and, perhaps, provides some sort of HSA for deductibles). But, by definition, this means that the big majority of Americans aren't in this position. So, the bottom 30% or so just defect. They don't buy insurance and when they need medical treatment they either skip out on the bill or (kind of) use government subsidies to get in the door...and then skip out on the bill anyway. For the middle ~30% percent, they pay crazy premiums, still get hit with deductibles that don't square with their savings capability, and receive substandard care. They lose in nearly all cases except for that rare medical emergency that happens in just the right way so that insurance does, in fact, pick it all up.
In this system, the people who "win" are those who don't need the system in the first place (the wealthy) or those who actively corrupt it (the non-insurance-having non-payers).
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How's American insurance complex so fucked up. India isn't good but you can get antibiotics after paying a decent enough doctor 4 dollars for your same day consultation.
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Just an aside, how can people have a million in liquid assets and an income of half a million? A 0% savings rate?
That's $300k after tax. Put 180k of that into PITI and you're on your way to not saving much.
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Sorry, I realize I made a very unclear presentation there.
It's either/or. You have $1m in liquid assets at an income of any level. Well, probably not poverty wages. Let's say any income at or above median household for your local area.
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You have approx $500k in annual income for your household. And it's a reliable and consistent income - betting big on a commission only sales role, or your crypto day trading does not count.
As an aside to your aside: You'd be surprised how many people in super high COL areas (NYC, SF, LA) have > $500k annual incomes with low single digit savings. Private schools and even modest "keeping up with the joneses" are wild.
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