Healthcare: The Final Frontier

The Final Frontier

The conversation came up again as we were idolly chatting after the podcast recording. But, what are you guys doing about healthcare? We all shook our heads knowingly. Because no one had a brilliant answer. There was the conversation regarding the usual suspects: health sharing ministries, expat insurance, The Affordable Care Act. So many possible answers, but most unsatisfying. Healthcare has become the final frontier.

It is the last, and most difficult puzzle that most early retirees face. No matter how much they have saved up, how closely the numbers have been mapped, it is the one unknown that makes us quake.

How do we manage this mess?

Settle For Imperfect

There are so many versions of imperfect. I am not an expert in any of them. But I know that they each have their own specific drawbacks. The benefit, of course, is obvious. They are low cost alternatives.

Health care ministries are great but because they are not actual insurance companies, they lack the governmental supervision that may be protective. They work wonderfully, until they don’t. Although quite cheap, there always is the worry that either they won’t pay or be accepted by providers. There is no simple answer.

The Affordable Care Act and exchanges are helpful if we qualify for subsidies and the offerings in your state are reasonable. Expat insurance may work if we spend a reasonable time out of the country each year. Geoarbitrage is a possibility if we are willing to pick up and pay for healthcare in cash in a different country.

Or maybe one can apply for citizenship or residency in a country that has some form of universal health.

All possible, but not necessary optimal. It’s the reason healthcare is the final frontier.

Forget FIRE

The most basic and obvious of answers. Let go of the early retirement dream. Continue to work in an optimized environment, maybe even part time, where insurance is covered by an employer.

While this sounds like the worst of all options, it is actually the one most often chosen. Especially for married couples. One spouse continues to work at a job that they don’t loathe. Maybe not love, but don’t loathe.

This is the lowest cost option that not only covers healthcare costs, but may also provide income lessening the amount necessary to withdraw from a portfolio.

Being the final frontier, the last hurdle, could be the game stopper. Early retirement may just not be possible or plausible for everybody. It’s like making it a few steps away from the finish line and then pulling up short.

Painful, but necessary.

Suck It Up, Sally

Or we can suck it up. We can budget in a huge amount towards healthcare (25K/year for a family of four) and not consider ourselves FIRE until we can work this into our yearly budget and SWR number. This is very unsatisfying for a hack rich community like ours.

Yet it is probably the most reasonable way to manage this final frontier. We are conservative people, and this is the conservative answer. If you happen to be lucky enough to have a health sharing ministry or the ACA work out for you, then you have a little extra money to play with.

This is what I am doing.

Final Thoughts

Healthcare is the final frontier. It is the last obstacle to a successful early retirement. We can try to find a hack that we find palatable, or we can suck it up and plan carefully. The answer is up to us.

There is no easy button here.