Host: Does health insurance become more expensive as we age, even if we are healthy?
Bob Hurley: Health insurance does get more expensive as you age. The older you are typically, the more health conditions that you may encounter and so your health insurance premiums are typically higher and it's simply a matter of fact that there is going to be more cost associated with keeping you healthy and so health insurance is going to be more expensive. There are some states that have community rating where the health insurance is basically rated or priced at the same amount whether you are young or old and those are typically in the north east New York, New Jersey. Some of those states have what's called community rating and in that case, it may not be significant for the issue as you get older the price goes up, may not be as significant in those states. But in most states in the U.
S. a health insurance is going to be more expensive as you get older.
Some of the things that you can do to help mitigate that issue is again, to buy a higher deductible health insurance plan. By doing that, buy $2,500 deductible plan and what that means is simply that for the first $2,500 of care that you encounter for that period of time the year, typically that a policy is in place, you are going to be paying for that out of your own pocket. Now one of the advantages of having a health insurance program though is that by having a card in your pocket you are going to be paying the what they call the 'Negotiated Rates' or the 'Discounted Rates' that the health insurance company has negotiated with your doctor and your pharmacy and the hospitals that maybe in your community and so you get the advantage of that but meanwhile, by buying the higher deductible plan you are holding down your monthly premiums as much as you possibly can.
So I would encourage you that as you look at your health insurance options as an early retiree don't immediately discount that idea of a higher deductible plan because you maybe coming off an employer that offered maybe a no deductible or $250 deductible or $500 deductible plan and now that you are getting out on your own you see these higher deductibles of $2,000 and $2,500. You have set yourself up financially well so that you can do an early retirement or shift your career to something else. You can probably afford that $2,500 deductible and it's a great way to hold down your monthly premium. So I would encourage you to look at that.