Healthcare Costs: The Wild Card

Healthcare Costs: The Wild Card

I know you’ve probably read a million posts on this topic lately since the future of healthcare in the United States is so uncertain, but healthcare is a big topic in the preparation for retirement, so let’s look at our situation:

Retirement Healthcare Cost Estimates

A recent Fidelity analysis estimates that healthcare will cost $275,000 per couple. This estimate only includes ages 65-88 at the latest. That averages out to $11,957 a year! Say you retire at 40 and live until 100 and spend the same amount of money annually, you’re looking at a whopping estimate of $717,420! Do I think this is reality? No idea. The answer is that we have LITERALLY NO IDEA what healthcare will look like in the United States until we die. That makes planning for it in calculations really, really hard.

Healthcare Matters

It’s my theory that by 35 or 40 everyone has some weird health thing they have to deal with. Health is up there with money in the “Don’t Talk About in Public” list of topics in our society. We need to talk about it. In our house, I’m the sick one. In February, doctors finally figured out that I have Supercolon (pretty cool diagnosis, amiright?). Basically, this means that I have one of the longest, twistiest colons of all time. Food gets caught in the folds and ferments and that leads to bloating. Painful, “are you pregnant?,” can’t stand up or walk type of bloating. I am lucky that I don’t have to put on work clothes and sit at a desk every day pretending I’m fine when I’m not. In fact, on one work trip, I couldn’t even make it 3 days sitting at a desk. I had to duck out early and go work from my hotel bed. Many, many people don’t have that option. They are stuck at work with any number of terrible symptoms and have to pretend they are fine.

When we talk about health insurance, sure we’re talking about the people that “did this to themselves,” but more importantly (and WAY more abundantly), we’re talking about your friends and relatives and co-workers that are struggling with IBS, fibromyalgia, cancer, supercolon, etc. When we talk about healthcare, we’re also talking about the family that just lost their daughter to juvenile cancer and now are faced with hundreds of thousands of dollars of healthcare bills. Instead of having time to grieve, they have to buck up and figure out how to bail themselves out financially from their daughter’s death.

Estimating Our Family’s Healthcare Costs

If Mr. T leaves his job (or gets laid-off), we would be out of his sweet, sweet employer-based healthcare plan and be left to fend for ourselves out in the uncertain healthcare world. Alaska is one of the 5 states that only has one insurer on the health insurance exchange. We also have 3 kids to cover. According to the Kaiser Family Foundation’s insurance marketplace calculator, in the current Obamacare environment, we’re looking at $36,584 for a silver plan without subsidies. If the subsidies also remain, that plan would cost us $3,000-$11,000 per year for our family depending on income ($11,000 with current income, $3,000 if we cut our income in half). Also, keep in mind these are just insurance costs. Actual out-of-pocket healthcare costs will be added on top of this!

Now, if Obamacare goes away, we could be on the hook for that full $36,584. Even worse, we could have to start worrying about whether or not we could get insurance at all depending on what pre-existing conditions we have by then (supercolon? check. Others? undetermined).

Healthcare in Later Years

Now, adding to all that uncertainty is the uncertainty of healthcare as old people. Sure, the kids will be on their own for healthcare by that point, but Mr. T and I will be aging and that raises costs significantly. The future is so uncertain!

Honestly, healthcare is one of the main reasons Mr. T is sticking with his job. Leaving with 3 kids and having to navigate the uncertain healthcare waters with dependent children scares us. If this was no longer a fear, I think we would be working toward him leaving his job a whole lot sooner!

Coming Wednesday: Ways to Save Money on Healthcare now.

What are your healthcare calculations for the future?


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  1. Steveark

    It’s definitely a pain to pay for insurance. In my slightly early retirement it is costing me and my awesome spouse about $13,000 per year for insurance that pays nothing. No prescription help, no wellness checkups unless we manage to exceed the $12,000 annual deductible. That’s for just us two people, both trim distance runners and competitive tennis players. And no subsidy because even with just one or two days a week of side gigging I make too much to qualify. Fortunately we can afford it, and budgeted in more than that so it qualifies as a first world nuisance rather than a real problem. But for the majority of people who might like to retire early it can be a deal breaker. I think uncertainty will never go away since each administration and each congress can make 180 degree turns without warning.

    • MaggieBanks

      Agreed that there will always be uncertainty. What we haven’t figured out is how much of savings we need *JUST* for healthcare to feel safe leaving the employer sponsored plan!

  2. TheRetirementManifesto

    Maggie, I can SO relate. I’m 9 months from FIRE at age 55, and will have to fund 10 years of private insurance. I’m looking at options. None attractive, and all expensive. Scary stuff, but not reason enough to snuff our FIRE.

    • MaggieBanks

      At some point, we will be confident enough in some level of savings that we will make the leap now… but not yet.

  3. Chris @ Keep Thrifty

    We’re in the midst of this right now with our mini-retirement. We’re without a cushy corporate healthcare plan for the first time in our adult lives and will be enrolling in the marketplace for 2018. I’ll be really interested to see what our costs are. Given that our income for next year is highly uncertain, we’ve got a potentially big swing in what we could be paying.

    Throw in all the questions (still?!) about whether or not ACA will be repealed/replaced/mangled/left alone and we’re in for an interesting ride next year!

    • MaggieBanks

      I know! HOW is this still a debate? STOP IT ALREADY! Good luck to you. I’ve written my senators… AGAIN!

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