By Jeff Paul
Why do car insurance companies charge more for teenage boy drivers? Because they pose a higher risk of filing an insurance claim from accidents, mud bogging, speeding tickets, etc. Insurance companies must manage a pool of risk against potential expenses. Riskier participants pay a higher premium. This is not rocket science.
Yet health insurance companies are now prevented by the Obamacare law from charging a higher premium to “riskier” clients. Thus the cost of insurance premiums and copays had to be raised on healthy people to absorb this perversion.
Peter Schiff stated it perfectly in a recent tweet:
Today, health insurance costs about the same for a family of four as a mortgage payment for the typical single family home. If, God forbid, you actually need care, the yearly deductible is usually equal to yet another annual mortgage payment. And if you fail to purchase this overpriced garbage, you get fined by the government. Can you say mafia racket?
Shortly into his Administration, Donald Trump signed an Executive Order (Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal) instructing the IRS and other agencies to ignore penalties under Obamacare.
The Executive Order directs agency heads to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
This set the tone for what many hoped would be a complete repeal of Obamacare. However, it looks like politics as usual is taking over and Trumpcare looks a lot like Obamacare Light with very few changes. Luckily there are a few options for you to save money on health care no matter what bill gets passed.
For now it appears the IRS has backed off from pursuing fines if you fail to carry health insurance. This frees you up to seek more affordable options. However, no matter what route you decide to take, there’s only one way to make sure your medical costs are as low as possible: GET HEALTHIER!
You cannot control the laws. You cannot control the costs. You cannot control the system. What you can control is how you take care of yourself. The less medical attention you need, the less you’ll pay.
You don’t need an elaborate plan to be healthy. Being healthy is super simple. It’s discipline that’s difficult.
Here’s a simple daily health checklist:
- Eat real food
- Drink clean water
- Move your body
- Get enough sleep
- Meditate, pray, or journal
Touch those bases each day. Make a list of real foods and stick to them. Get a water filter that removed chlorine, lead, and fluoride. Start exercising, and make sure you get a good nights sleep every night. Learn about what goes into a high quality mattress at the sleep judge. Build habits around these points and you will drastically reduce your chances of needing medical attention.
Four Free Market Alternatives to Obamacare
Tax-Free Health Savings Accounts
Whether you have a normal job or you’re self-employed, opening a Health Savings Account (HSA) or Flexible Spending Account (FSA) is a must. The accounts allow you to save and grow pre-tax income to pay out-of-pocket medical expenses. These are the most tax-friendly accounts you can open.
To qualify for a Health Savings Account, you must be enrolled in a high-deductible health plan that doesn’t cover all your medical expenses. Most plans qualify these days.
HSAs have triple tax advantages: 1) You fund them with pre-tax income, 2) account value grows tax-free, and 3) you can spend funds tax-free if used for qualified medical expenses.
Funds in an HSA can be invested similar to an individual retirement account (IRA). Just as with a self-directed IRAs, health savings accounts can also be self-directed into CDs, stocks, bonds, mutual funds, real estate, precious metals, public and private stock, notes, and more. Plus, once you reach age 65, all non-medical withdrawals are taxed at your current tax rate, just like a traditional IRA.
Also like some retirement accounts, there are contribution limits. For 2017, the deposit limit is $3,400 for singles and $6,750 for families. In 2018, those amounts increase slightly to $3,450 and $6,900, respectively.
Check with your local bank to see if they offer HSAs. Or go to Vanguard which has a great HSA portal with options for Individual or Business health savings accounts. They allow you to invest into their funds and other financial products through your HSA.
Flexible Spending Accounts are very similar to HSAs in that you save pre-tax dollars, except FSA funds must be spent in the same year. And FSA funds can be spent on a broader spectrum of out-of-pocket medical expenses.
According to Healthcare.gov, you can spend FSA funds to pay deductibles and copayments, but not for insurance premiums. You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor’s prescription. FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.
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FSAs are limited to $2,600 per year, per employer. If you’re married, your spouse can also put up to $2,600 in an FSA with their employer.
Health Sharing Ministries (Cooperatives)
A health care sharing ministry is an organization that facilitates sharing of medical costs among individual members who have common ethical or religious beliefs. These cooperatives were grandfathered into the ACA (Obamacare) law. They can be much less expensive than insurance, but they typically have stricter health standards for participants.
Health share ministries exclude some pre-existing conditions which affect around 5% of applicants. Most conditions can be corrected or managed by lifestyle choices. That’s why these cooperatives offer affordable options for wellness coaches to reduce the medical costs of participants. The “ounce of prevention” approach helps allow them to keep prices so low.
The flowchart below by Altrua gives you a general sense of how it works.
Forbes claimed last year that health sharing ministries could save a family of four around $20,000 per year.
Even with the richest offering from Liberty, a family of four saves over $20,000 per year while providing far superior primary care. Traditional health insurance has turned primary care into a milk-in-the-back-of-the-store referral machine.
Here’s the cost breakdown of Liberty’s premium plan.
See the rest of Liberty’s prices here.
With concierge medicine you pay a monthly or annual retainer directly to your doctor, practice, or a facility. They become your personal health team. Concierge services limit the number of patients they see. This gives them the time to develop a comprehensive prevention and personal treatment plans.
There are also various app services vying to become the “Uber for doctors” where they deliver a reviewed primary care physician, on demand, right to your door. Check out Heal for doctors and Honor for nurses and home health aides.
You may have heard of some doctors ditching insurance altogether. But surgeons? The Surgery Center of Oklahoma describes itself as a “free-market loving, price-displaying, state-of-the-art, AAAHC accredited, doctor owned, multispecialty surgical facility.”
By publicly displaying their prices, the Surgery Center shamed local area hospitals into having to show prices, too. This showed potential patients the vast price difference between “free-market” care versus bureaucratic medicine.
Watch the video report below by Reason TV for more background:
For certain procedures you can save a lot of money by traveling to a foreign country for medical treatment. This is commonly called medical tourism. Often procedures can be thousands of dollars cheaper overseas. Popular regions for high-quality medical care for Americans are Mexico, Costa Rica, India, and Thailand.
You can find nearly any type of procedure in these countries. You’ll even encounter some that you can’t get in the United States. However, due to cost spreads and other factors, the most popular treatments are cosmetic surgery, dentistry, cardiovascular, orthopedics, and fertility.
Make sure your savings are more than travel costs. For instance, if you can get $15,000 worth of dental work done in Costa Rica for $5,000, that’s a no-brainer. Your travel and lodging will cost much less than the $10,000 saved.
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