As bad as the above cartoon is, I would be happy if it depicted our Obamacare situation. Our health insurance reality is worse. I’m offering this analysis as background which lead our decision to use the Obamacare exemption which requires us to be on foreign soil for a period of 330 days. Yes, we are Obamacare Escapees, Bon Voyage……..
1) “I got a cancelled insurance health insurance policy.” Yes, the company I retired from, BB&T Bank, the 10th largest in the nation, cancelled our health insurance policy effective midnight December 31, 2015. This forced me onto the Obamacare exchange to find insurance for myself.
2) “I got doubled health insurance rates.” Our premiums have gone up over 250% since 2011. When I retired four years ago, my company-provided retirement health insurance premiums were $425. After five years of The Affordable Care Act, (ACA) my monthly premium escalated to $1,500 a month. This would be like the price of gasoline increasing from $2.50 to $8.75 and calling this government benefit the “Affordable Petroleum Act.”
3) “I got a $6,500 deductible.” In 2011 our deductible was $10,000 for a family of two and that was increased in 2016 to $12,000.
It is indeed bad when the reality of Obamacare is worse than what the cartoon exaggerated for the sake of humor.
We therefore recently made the possibly unwise financial decision to opt out of Obamacare, self insure and not contribute $18,000 for a $12,000 deductible policy. While I certainly am not advocating this choice for others, here is my analysis of the financial position in which Obamacare has placed the two of us.
The Affordable Care Act (ACA) considers insurance to be unaffordable and provides an exemption from the tax penalty if your bronze plan insurance costs more than 8% of your annual income. Dividing our $18,000 bronze plan annual insurance premium by 8% means our South Dakota policy is unaffordable for all who make less than $225,000. By IRS rules, my insurance is legally unaffordable for the vast majority of all Americans. Clearly the system is flawed. Wait, it gets worse…
Because we travel, any medical care we were to require would be treated as ‘out of network’ and would only be covered 70%. So if I were to incur a $100,000 medical expense, I would need to pay the $18,000 annual premium + $12,000 deductible policy + $30,000 the insurance would not cover, or $60,000. I would have to pay this $60,000 for $70,000 worth of coverage. Is this really insurance? How many families can afford to pay $60,000 out of pocket?
If we were to incur a $100,000 medical incident while not having Obamacare, we are only increasing our financial risk $40,000 vs. having insurance. Statistically, the largest health risk we face would be from an accident, so we have obtained a $100,000 accident policy per person for only $2,100, that will cover us in the USA, as long as we are over 100 miles from our home town, as well as overseas.
Keep in mind that Obamacare would not cover us while traveling abroad. Any emergency costs we were to incur overseas would not be covered anyway. Further, we would need to be in good enough physical shape to fly back to our home town for treatment should we prefer to be treated in the US.
Something we cannot quantify is the cheaper cost of medical care overseas. Obamacare did everything to include coverage for all, but little or nothing to limit costs. My personal experience is care overseas is materially cheaper. For a time I was on cholesterol medicine which can only be obtained by prescription in the States. After spending few hundred dollars on a doctor visit and blood tests, I could then obtain my medicine for an additional $10.50 a pill. My total all-in cost per pill was close to $14.00. In France and Mexico I was able to obtain this same cholesterol medicine, from the same manufacturer, with no doctor visit for about $1.25 a pill, a 91% discount.
We do not perceive us as risking our health, only our financial assets should we suddenly require medical treatment not due to an accident. We have had physicals and all necessary preventative tests. Until Medicare kicks in, we are self insuring. Statistically, it seems the odds are in our favor. It just seems so very wrong for us to be charged $18,000 for a $12,000 deductible policy. We do not wish to be a part of this flawed program. We are instead choosing to vote with our wallets and our feet. Obamacare misses out on our $18,000 contribution to subsidize others and the US merchants lose our thousands of dollars spent on goods and services annually while we are overseas.
We have found that if we resided in a different state, such as Utah, a very similar high deductible insurance plan would only cost around $12,000. Here is an example of how the ‘Affordable Care Act’ could have brought costs down but chose not to. Simply allowing health insurance to be sold across state lines would have materially increased competition and brought down costs. The founders of the ACA succumbed to the insurance lobbyists and allowed the current, less competitive insurance system to remain in place.
It has been fun for us to discover through Facebook and travel web sites so many other US citizens making similar health care choices. We are certainly not the only Obamacare Escapees. One of the rewards of a frugal lifestyle and saving during our entire working careers is that we are finally rewarded with the ability and freedom to make our own financial choices. We have chosen to not participate in the Obamacare, not to spend our savings on supporting such a flawed system.
Regarding Obamacare, the IRS states if a taxpayer is “present in a foreign country or countries for at least 330 full days during any period of 12-consecutive months” they are exempt from Obamacare and the associated penalty. We will therefore leave the United States for a period of 330 days and travel Europe and the world. This adventure will be partially funded with our Obamacare savings. Stay tuned for travel updates.
To provide some level of documentation of the health premiums charged to me by Wellmark in South Dakota, below is the Wellmark document outlining the costs of my Affordable Care Act for 2016. (HSA stands for Health Savings Account)