What to do with health insurance if going fulltime?

Question

My wife has been quite successful as a realtor, and I am thinking to join her, but more from an investment perspective. Without a full-time regular job, we need to buy health/dental/vision insurance for ourselves.

I am sure a lot of guys here on BiggerPockets went through the same somewhere in the investment career. Anyone can share your experience in terms of what insurance we need to buy? Any recommendations on a good insurance policy?

I live in Fremont, CA, and my wife and I are in the late 30s and have two boys, 8 and 6.

Rob K. · Answer

Rocky Li I'm in the same boat - late 30's with wife and two children.

We pay $328 per month for health insurance through Health Plus. I'm able to get Dental through the Realtors association for $65 per month. We have no coverage for vision. Not sure if America's Best is in California, but they have an eye exam and two pairs of glasses for $69. Quite a bargain

There are also other ways to save money. For example, a few years ago I stepped on a nail and need a tetanus shot. Rather than pay $30 to go to the doctor, I called the health department and they said it would only be $8. I was afraid I would get cholera walking in there, but it was suprisingly clean. When my wife was pregnant with our first child, her doctor wanted to know what my blood type was. Instead of paying to go to the doctor, I went to the Red Cross and donated blood. They told me my blood type for free.

I also go to the chiropractor. My insurance doesn't cover it, but my guy only charges $120 per month for my wife and I to go each week. I used to think it was all nonsense, but not only is my back better, I haven't had a sinus infection since I've been going there and my wife's seasonal allergies went away.

The best way to keep costs down is to not smoke and stay healthy.

Ben Skove · Answer

Rocky, I'd suggest a high-deductible plan coupled with a HSA. Take the money you save from having a high-deductible plan, stash it in the HSA and leave it alone. I believe you can each contribute $3,250 a year, but that's off the top of my head. Watch also for total annual out of pocket costs - it's different from your deductible. Once your HSA exceeds the out of pocket, you know you can pay for anything...at least that year.

Dental is rarely worth it - look at what it covers (and at what percentage) and what it doesn't. You're paying many times the cost of the biannual clean and inspect, and the amount it pays towards actual dental work is a joke. If you don't have an employer footing part of that bill, it usually makes more sense to pay cash. Our dentist gives us a cash discount.

As far as plans go, shop around. I used an independent agent who found a good plan; he also shops me around again each time there's a threatened rate increase. His knowledge of the system saved me money over using some of the online insurance shopping sites.

Put another 5 to 10 years on you guys and see what your rates are like, healthy or not. :)

Ed L. · Answer

Hard to say  as the entire industry is about to turn inside out due to obamacare.

The healthcare industry is a joke.  The prices are ridiculously inflated due to over regulation, frivolous lawsuits, artificial demand due to government handouts, etc, etc......

Most people in America have been unknowingly trading pay increases in order to retain their beloved health benefits for the past couple decades.

My wife and I are 25 in great health, no tobacco, no alcohol, and our annual premium was running $1,800 for a bare bones catastrophe plan with a $10,000 deductible.

Like Rob K mentioned there are many ways to negotiate and work around healthcare cost.  Best way is to live a healthy lifestyle and don't get sick.

Unfortunately that will no longer be a option as we will all be required by law to have government approved minimum coverage...

A recent article I read suggested that the lowest tier "bronze Plan" under obamacare will cost a family of 4 $20,000 per year.

For the sake of politics the majority of Americans will not be paying that amount due to progressive subsidies up to %400 of the poverty level.

It works out so that a family of 4 making under $96,000 per year will receive some form of subsidy to offset this ridiculous expense.

Self employed people that make over %400 of the poverty level our going to get shafted hard..

Michael Wagner · Answer

Rocky Li, In addition to the above you might consider checking with your state agencies.  In New York, we have something called Healthy New York which is geared to providing affordable healthcare to low income folks.  And while I realize its probably not your plan to go full time in order to strive for low income, there are strategies that could come into play.  Speaking very generically, depending on how you and your wife structure your dealings you could very conceivably have your businesses do very well but pay you (or one of you depending on your state laws) a salary that is just below the threshold for a similar subsidized program in your state.  Combine this with the other tax benefits of REI (namely depreciation) and you might find that healthcare is not cost prohibitive.  Obviously there are tax implications and you need to make sure every thing is legal so an atty and cpa will be well worth their cost as you make the transition.  Hope that help a bit even if it just gives you one more consideration as you make your moves.  Structure will be of utmost importance.

Pat L. · Answer

My wife & I had separate single policies through our respective Corporations.

$281/mo $5,000 deductible with HSA's. Only ever exceeded it once in the last 10 yrs.

We have friends that have had their family coverage dropped by their employer so they get single as per their employment agreement (for now) but need to buy a family plan elsewhere.

When we talk to our agent he says he has no idea what is coming.

Subsidies or not it's going to be an absolute disaster for the majority.

Now when you calculate the 2%, 50% rules for REI you may have to add a %premium for Healthcare :)

Rob K. · Answer

Anyone who purchases their own health insurance will want to call your insurance company ASAP and see if it can be extended as-is. My company sent me a letter that they would extend until December 1, 2014. After that, it all changes. I talked to my agent and he said that Obamacare is a huge disaster. He said to plan on the price quadrupling next year. We will all have to have maternity coverage whether we need it or not.

If your current plan expires at the end of this December, plan on paying a lot more starting in January. If you can extend your current plan, do so immediately.

Rocky Li · Answer

First time posting here. You guys are really nice, and BiggerPockets is really an active place.

thanks

Rob K. · Answer

My insurance agent already warned me that prices will skyrocket as soon as obamacare kicks in. It's going to get scary in the next couple of years.

What to do with health insurance if going fulltime?

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