Health insurance seems to be one
of the biggest concerns when people are considering early retirement,
which is definitely understandable because it is very expensive in the United States.
I suppose the other major concern is having enough money to retire.
But today's video is the options for health insurance when you are
self-employed or are considering early retirement.
And I will also share with you my current preference.
I am Tiffany Thomas with Wealthy
Tiffany Dotcom, and I retired from my nine to five job at age thirty six.
So if you are looking to retire early as
well, hit that like button and hit the subscribe button to subscribe to my
YouTube channel and we're going to dive right in.
I'm excited to share a few different
options with you for health coverage if you are self-employed or an early retiree,
because I know in the United States that health care coverage is one
of the most expensive expenses that you can have.
So let's get into it.
The first option for health care coverage
is actually going to the health care dot gov website.
You can choose your own insurance plan through the health care marketplace.
They have numerous plans on there where
you can just pay a premium each month and receive health care coverage.
The better the plan, then, the more expensive it's going to be.
Which makes sense. The nice thing about going to the marketplace,
is if you do have a lower income, then they offer a tax credit.
So you would actually pay not quite as
much for your health care premium if you do have that lower income.
Another nice thing about the marketplace
is that if you are self-employed, then the premiums that you pay are tax deductible.
So you could write those off on your
taxes, at least for federal income tax purposes.
For me personally,
when I was looking for a plan on the marketplace,
I looked for a high deductible plan, which meant I would have about a seven
thousand dollar deductible for my insurance coverage.
But I looked for one that was also HSA qualified, health savings account
qualified, which means I could set up an HSA account on my own and put money
in there to pay for my medical expenses, or I could even invest my money in there.
And if you are wondering more about
HSA Health Savings Accounts, I did create a video about that recently.
So I will leave a link above and below
in the description and you can check that out after this video's over.
The reason I chose a high deductible plan was because I am a pretty healthy person.
I rarely go to the doctor.
But if you are the opposite,
if you have a lot of medical expenses and you need to be going to the doctor
often you may want to choose a plan with a lower deductible so you aren't
paying quite as much out of pocket for your health insurance.
But I would strongly suggest if you do end up going with a high deductible plan,
then choose one with that option for an HSA, because there are just so many
benefits of an HSA, which you can learn about in the other video created for you.
I want to share with you a quick example of how much health insurance could cost.
And I entered my own details.
But you can go to the health care dot gov website and I will leave a link below
in the description and you can check out the prices of plans at any time.
Currently it's closed.
But if you do have a major change in your life, which I'll talk about later,
then you could actually enroll during non-open enrollment.
The details that I input were a single
female who's 40 years old, lives in Utah and doesn't smoke.
And I ran a few different scenarios with different income levels.
So if I was making fifty five thousand or
more per year, then I would not receive a tax credit on my premiums.
Like I mentioned before, my income level would be too high.
So at fifty five thousand or more per year I would be paying three hundred and twenty
four dollars per month in my health care premium,
which would be three thousand eight hundred and eighty eight dollars per year,
and that would be for a seven thousand dollar deductible.
With hardly anything included in the plan.
I would be paying the full amount, whatever the doctor charges for a doctor's
visit or any prescriptions or anything like that, I would have to pay all
of that out-of-pocket up until seven thousand dollars.
So this is a very basic plan.
And I was curious.
So I entered a spouse for me and put his age at thirty seven.
And if that was the case,
we would be paying a total of six hundred and thirty one dollars per month,
which is just about double what I would be paying for myself.
And then I looked at a different income level.
If I was making fifty thousand dollars,
I would receive a thirty six dollar tax credit, which means I would be paying two
hundred and eighty eight dollars per month.
And then I dropped the income level down to forty thousand dollars,
which gave me one hundred and eighteen dollars tax credit, which means I would be
paying two hundred and five dollars per month for my health care premium.
And then I went even
further down, to twenty thousand dollars, and this gave me a three hundred
and seventy two dollars credit, so I wouldn't be paying anything
for the health care premium, which would be awesome.
But then again, I would be only making twenty thousand dollars.
But I know for early retirees, we try to write off as much as possible.
Or maybe you're pulling money out of your
Roth IRA, which wouldn't count toward your income.
So there's different things that you can do to have a lower income level.
And if you do have something around twenty
thousand dollars, then you would receive a full tax credit,
which means you wouldn't be paying anything for your insurance plan.
So that is the first option for health care.
Just going to the government's website
and looking at the marketplace and choosing which plan you want to go with.
The second option that I want to talk about
is Christian Healthcare Ministries, and these are not health insurance policies
in the traditional sense, like we talked about before.
But it's essentially pooling everyone's
money, everyone that belongs to this Christian ministry health care plan.
And then you are paying for everyone's medical expenses.
And these plans are a lot less expensive
than the traditional health care marketplace.
And I pulled up their website just to give you an idea on how much it would cost.
So if you had their gold program, it's one hundred and seventy two dollars
per month, or if you went with their silver program a little bit less coverage,
it would be one hundred and eighteen dollars per month.
And then their lowest plan,
the bronze program, is seventy eight dollars per month.
So you can see that it is a lot less.
But there are some pretty strict
restrictions on being able to join the Christian Health Care Ministry program.
They want you to be a serious Christian,
basically. I will leave a link to their
website below in the description and you can click on that link to get more details
about their requirements on being able to join their health care program.
And unlike with the traditional health
care dot gov programs, you're not able to set up a health savings
account with the Christian ministry programs, just a heads up there.
The third health care option that I want to talk about may not apply to everyone
and it may not be the best solution, but I want to talk about it nonetheless.
So if you were at a nine to five job and ended up quitting that to retire
early, then you could sign up for what's called COBRA.
And that would mean you could keep your
current health insurance plan from your nine to five job for 18 months,
but you would have to pay the premiums on your own.
So it would be a lot more expensive.
And I had actually looked into doing this when I had quit my nine to five job,
but it was way too expensive and not worth it.
So I did not end up going that route.
But it is an option.
And option number four for health care
coverage is actually getting a part time job.
And maybe you're saying to me,
I'm retired early, I don't want to be working for someone else.
But I'm just saying,
if you are looking for less expensive insurance, this could be a good route,
especially if you find a job that you really love and you can just work there
part time and they would offer you health care benefits.
I know a lot of banks or credit unions do this, so you don't have to be a full time
employee to still have health care coverage.
So just think about it.
You don't have to do it, but it could be an option for you.
And option number five is actually my current preference.
And this is not having a formal health insurance plan.
And I know I might be crazy and you might
be thinking what the risk is way too high and that's totally fine.
I know this option is not for everyone,
and I'm not saying everyone should do it, but it's just what I've chosen to do.
And I feel good about my decision.
And you can leave in the comments,
whatever you would like about me being crazy.
And if something goes wrong, I'm going to lose all my properties
and all my investments, and that's totally fine.
But here's a few reasons why I chose not to do a formal health care plan.
Number one, I am a relatively healthy person.
I rarely go to the doctor and I don't have
expensive prescriptions that I need filled all of the time.
I hardly ever get sick.
I don't even remember the last time I got sick.
And going along with this, I like to take preventative measures for my health.
And I feel like sometimes people are backwards about this.
They don't exercise or they don't eat right.
And they just think, oh, well,
I can just get some medicine later and have a prescription filled or whatever.
And I feel like we really need to take care of our bodies because if we don't
have our health, how are we going to enjoy the lives that we created?
We won't really be able to do that.
I enjoy going to my Zumba toning class.
I enjoy going for walks outside.
I eat fairly healthy and no, I'm not perfect.
I still like a sugar cookie every once in a while, but I'm not eating them every
day, all day with all of my meals. And I don't smoke.
I don't do drugs. I don't drink alcohol or coffee or tea.
My preferred drink is a water with lemon.
And not only on the health side of things,
I take preventative measures in what I am actually doing in my
activities. I'm not into extreme sports, or skydiving or crazy things like that.
So what if something does happen?
What if I do need to go to the doctor?
Well, since I have had a health care plan in the past, I've set up a health savings
account, my HSA, so I can take money out of there and pay for medical expenses if I
need to, or I can pay for them out of pocket.
I have some money in savings and I also
have a brokerage account that I could take from.
I'm fully aware that I could have medical
expenses and I do have a budget set up for those medical expenses.
And something that you may not know is that with a lot of medical companies or
hospitals or doctors, they actually charge less
if you do not have insurance, they tend to bill someone with insurance
a higher amount because they know insurance is covering that.
But if you go in saying you don't have insurance, they offer a huge discount.
And honestly, I found where they do forty five to eighty nine percent discount.
So you're not paying
as much for those medical expenses.
Plus everyone gets a free checkup every year with or without insurance.
And if I was to sign up for insurance,
I would go back to what I was doing before, the health care dot gov marketplace
and signing up for a high deductible plan with that HSA qualification.
And I would be paying over three hundred
dollars a month for insurance and still paying out of pocket
if I did go to the doctor or if I did need
a prescription up until I reached that seven thousand dollar deductible.
So instead I've chosen to invest
that three hundred dollars on my own and create my own insurance plan.
And yes, I do realize I can't help it if a freak accident happens or I do have some
sort of disease or cancer or something like that.
But I've made the choice to take that risk.
And I'm definitely not saying that everyone should be doing this.
It's just my preference.
And I said I would talk about this later
in the video if I had a major change in my life.
For example, if I was to get married or if
I was to have a child, then I could enroll in the health care dot
gov marketplace at any point, not just during open enrollment.
Comment below and tell me which health
care option you are going to go with once you are retired early.
And if you found this video helpful,
please hit that like button and share it with someone who would like to hear more
about health care options and also hit the subscribe button to subscribe to my
YouTube channel and hit the little bell to get notified on when I post new videos.
Thanks so much for watching.
I'll see you in the next video.