060R Healthcare vs Health Insurance

060R | HealthCare Vs Health Insurance

FI Chautauqua in Greece Tickets just went live!! We roundup Monday’s episode about medical tourism with a discussion on more hacks, having more power over your job and the importance of the talent stack.

On today’s show we cover:

  • Jonathan’s new morning routine
  • The Skinny Waist Fat Wallet Challenge

FI Chautauqua

  • Tickets for FI Chautauqua went live this week and will not last long.
  • Although this is our first time going, the feedback on this event has always been amazing. These 2 Epic weekends in Greece are the only Chautauqua events for 2018. Come join us in a small intimate 30 person setting where we get a chance to build our FI Tribe
  • For ticket Information click here or go to chooseFI.com/Greece

Other articles to check out for more information on Chautauqua

Review of Monday’s episode

  • How medical tourism changes the way you think
  • The importance of intellectual honesty
  • Email from Deanna about the different self pay medical options in the US
  • Ideas on creating a FI Health share
  • How the talent stack opens up new opportunities
  • How you can reach happiness before FI
  • Voicemail from Stephanie on how her life has changed through learning about FI
  • Voicemail from Jessie on being indispensable at your job
  • Voicemail from Millionaire Educator on teacher plans
  • Apple Podcasts reviews and book giveaways


Links from the show:



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6 thoughts on “060R | HealthCare Vs Health Insurance”

  1. Thank you. The podcasts have kept me motivated on the path of Financial Independence. I love the Friday roundup which clarifies any questions I had about Monday’s episode. I am an immigrant, and I also go and see my dentist back in my home country whenever I travel there as the facility is cheap, but in no way inferior to the services I have seen in the US. Over the years it has saved my family thousands of US dollars. I have watched all the episodes of “Choose FI” and use it as my reference material whenever I need any clarifications or motivation. I can see my life gradually changing for the better.

  2. In response to Kimberly’s voice mail, my wife and I are both educators and got involved with the annuity early in our careers. They later opened up options to invest in Vanguard which we did. Like Kimberly the fees in our annuity plan were a mystery. There were no options with the variable annuity, I couldn’t even sign it over to my wife’s account which I thought was ridiculous. I found my best strategy was to stop investing in the annuity but leave the balance in that 403b account I invest my funds in Personal Capital and Vanguard now.

  3. Loved this podcast & the previous one.

    Two thoughts: I don’t understand how shared workespaces are even a viable business model when there is a perfectly good free substitute available in public libraries. Thank you for convincing me that I’m not crazy in this regard.

    Second thought: Love the thoughts on medical tourism. A few years ago I was obsessed with this idea to the point that I envisioned starting a business. Here’s my business idea. Healthcare costs are out of control. Many employers are combating these escalating costs with high deductible plans, which place much of the burden of health care on the individuals. Until someone hits a deductible, each and every dollar of healthcare expenses they consume is a dollar coming out of their wallets (or HSA). What this means is that high deductible plans make consumers very price conscious, perhaps for the first time in the history of US health care.

    What I envisioned was a crowdsourced database similar to what you described which gathers the cost for each procedure. Need a root canal done? Doctor AAAA is located 50 miles away and charges an average of $$$$ for the procedure. Need a MRI done? Doctors BBB and CCC charge $$$$ for the procedure.

    With the above knowledge available, individuals will then be able to make informed procedures on their health care. I know there are many holes in the above business idea (pricing for same procedure can vary depending on complexity, no doctor would willingly share pricing info, hard to get people to voluntarily share pricing info (provided they can even decipher this on their insurance statement after the insurance negotiates to a lower rate)), but I think it is an important step in fixing healthcare in the US.

    I’m curious to see what JP Morgan, Berkshire, and Amazon come up with to fix healthcare: https://www.wsj.com/articles/triple-threat-amazon-berkshire-jpmorgan-rattle-health-care-firm-1517359502

  4. Brad and Jonathan,

    Thanks so much for reading my email in the podcast. I’m even more passionate now about starting a new health insurance company that uses FI principles, and I have been doing a lot of additional research. Everything I am finding just reinforces my ideas and beliefs that there is a better way to manage health insurance and health care.

    Frugal Professor,

    I agree with your thoughts. A database would be nice, and there are some efforts in the industry to offer transparent pricing. Unfortunately, those tend to be in narrow areas like imaging or certain common procedures, so they don’t really help with mitigating the more expensive parts of care. As you mentioned, nobody likes to share pricing, but there is one situation where they have to: insurance claims. Insurance companies have the best data on how much procedures cost (and how much they are willing to pay), so we need to come up with a way to gain that same level of knowledge.

    I expect Amazon, Berkshire Hathaway, and J.P. Morgan together will be able to win a number of victories over the cost of healthcare, and I’m looking forward to more details. Their size will let them dictate a number of conditions that we are not in a position to do as individuals or even small companies. Unless the joint venture is open for others to join, I’m worried that healthcare companies will agree to the venture’s terms, but try to raise prices for everyone else to make up the lost revenue.

    I believe there is a way to get the security that insurance offers, reduce the costs by FI principles, and as the FI community collectively benefit by supporting each other. I will be registering a benefit corporation soon to pursue this, with a goal to start accepting members within a year, and expand nationwide within five years.

    I’ll send more information to Brad and Jonathan once I have more details.

  5. The elephant in the room for the FI community right now is Health Care insurance as most aspiring FIers are optimizing at the margins, making elegant hacks that squeeze out another 1-2% from spending , and meanwhile there is this gigantic, scary unknown factor that may represent 30-50% of the financial pie that most everyone says “we’ll get to that later when things settle down politically and there’s more certainty.” MMM did a very useful overview on 11/5/17. Unfortunately he addresses it mostly from the perspective of FatFi, which is where he is at.

    However, I have what I hope is good news about AACA for anyone in the more traditional Fi bucket (200-300% of poverty level). I played around with dozens of scenarios on the Kaiser Foundation Health Insurance Calculator: https://www.kff.org/health-reform/ and its clear to me that all LeanFi and most MidrangeFi families will do very well in getting outstanding affordable health care insurance.

    The key reason that things are way better than many FIers fear is what I believe is a blind spot we all have. We tend to think in terms of our retirement spending will be far more than we think of what our retirement income is going to be. When the government engages with you it is far more interested in what you have coming in than what you have going out.

    Without getting into detailed numbers, here’s a greatly simplified but illustrative scenario. You are in your last year of w2 employment and earn $100,000/yr. You save 50% of it or $50,000. Now you retire with $1 M in index funds and set out to live on $40,000/yr. Assuming a dividend yield of 2% you’ll be realizing ordinary income of $20,000/yr and need to generate another $20,000 to spend.

    To generate that $20,000 you sell $20,000 of your index funds. Assume the $50,000 you invested in your last year of w2 employment increased 10% in gains so you have $55,000, 10% of which is capital gains. When you sell the $20,000 only approx $2,000 (actually slightly less) of it will be capital gains and count as income toward determining AACA subsidies. Therefore your total income will be $20,000 dividends plus approx $2,000 capital gains realized. The other $18,000 sold out of your index fund is not income and wont count against your ability to reap huge subsidies.

    Clearly your entire nest egg is going to carry with it capital gains that are on average much higher than a 10% portion of your net worth. But if you read through your index fund statements you are most likely going to see that even if youve been riding this bull market for a decade or so, its unlikely that the capital gains portion of your entire portfolio is anywhere close to 50%. The example I provided was a bit extreme because I assumed you would sell shares that had only been invested 1 yr and had little gains, but you will have the ability in FI to design your sales of index fund assets to minimize the realized cap gains portion of your spending and fairly easily stay within the 200-300% of poverty level of income, even though your spending may be $40,000 or even much, much higher than $40,000.

    The one caveat is that if the stock market goes on an absolute rampage and your portfolio blows up such that you eventually cannot find any tranches of shares that have a low fraction of capital gains relative to the amounts invested in those shares. But in that case, just consider it a good problem to have as the health insurance premiums wont even make a dent even though you wont get subsidies.

  6. Any good hacks for Braces? Getting my third option this week for 2 kids needing them, the first two costs are about the same. Want to go back and see if they will negotiate the price and payment structure any. But it would be great to get a reliable orthodontist that does it way less than everybody else.

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