Host: Do you have any tips on how to find affordable coverage?
Bob Hurley: I often get asked by people that want to retire early, "How can I get coverage that is affordable for me?
" They have done their homework, they have prepared for early retirement, they have financially planned, but all they hear in the media is how bad the cost of health insurance is and again, they have never had to go shopping on their own and so I want to give them some encouragement that I want to give you some encouragement that there are good products out there that will protect you from major losses. It's important to have that coverage especially since you have done all that work to financially plan for early retirement. You don't want to go one day without coverage and put all that hard work at risk because of some health condition that comes up and you don't have coverage.
So I encourage you there are good products out there from some of the leading companies in the nation, Aetna, Humana, Anthem, United. So there are good named products out there that can be very affordable. How do you make it affordable? The more you can raise your deductible on your health insurance, the more you can lower your monthly premium and keep it affordable for you. So if you are comfortable with $5,000 deductible health insurance plan and what that means is, you are going to come out of your own pocket for most of your routine care. So when you are go to your doctor and you have to get maybe a pharmacy drug as a result of the visit to your doctor, what that means is most of that routine care you are probably going to come out of your own pocket for that. Now, one of the advantages though, you might sit there and ask, "Well, what's the advantage of having the health insurance?
" Well, by having that health insurance card in your pocket when you go to that doctor or you go to the Pharmacist now you are going to get the discounts that the health insurance company has negotiated with those providers, doctors or pharmacists.
So it's going to save you money from that perspective when you are coming out of pocket for those expenses. Now once you, if you have something catastrophic happen to you, you get in a car wreck or you develop some health condition, you have got that $5,000 deductible so once you hit that $5,000, in most cases, the insurance company then is going to pick up all of those additional expenses over that $5,000 out of pocket maximum. So you have got a good health insurance plan. It's affordable on a month to month basis and yet, you have protected yourself from that major financial catastrophic type of occurrence.
So that's one way to save money on your health insurance. Another way and this is really very important, is if you are in that situation where you are looking to financially manage your healthcare, you really need to learn about Health Savings Accounts. What these are? They are like 401 (k) or an IRA on steroids. They are totally dedicated to healthcare. The idea is that you can put money into a Health Savings Account, tax-free. The money in the Health Savings Account can grow tax-free and you can pull it out of the account and use it for healthcare related expenses, tax-free. So it's a very powerful account. This savings account basically rides in tandem with your high deductible health insurance plan that is an eligible plan for an HSA. So you almost have two products, you have a savings plan and you have a health insurance plan and the idea being that the higher deductible plan is much less expensive on a monthly basis to pay into your health insurance plan and then in the meanwhile, you are putting some money away into a tax advantaged savings account to help you pay for those items under the deductible. It's a very powerful way to manage your healthcare cost especially as an early retiree, very powerful because you can take that savings account into your post Medicare eligible age and actually use it for your health and continue to use it for your healthcare expenses and if you need it too, you can actually pull it out of that account after you retire and after your on Medicare and use it for other reasons but you will have to pay a penalty if you do that, but very powerful account. I encourage you to go out and learn about it. You can do so on our website, if fact, you can go out to most of the search engines and simply type in 'Health Savings Account' and it will bring up a number of websites that will teach you about that vehicle for managing your healthcare.