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October 17, 2013

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The only caution I would provide is regarding what you said about health insurance. Under the ACA, you in fact could not simply "apply for health insurance the next month". You can actually only sign up during the enrollment period. For 2014, that happens to be until March 31. If you miss the deadline, you can get insurance for the NEXT year, but you won't be eligible for an exchange policy or subsidy, although you could try for an individual policy, assuming they would now take on someone with a now pre-existing condition.

So you buy your own insurance and the company reimburses you? Thats odd. If the company has >50 people employed in the US then I expect that will change soon enough.

CoveredCA website shows 11 Bronze plans under $300 for a 25 year old male in S.F.

Going without health insurance is not a smart move at all.

Especially for someone who can easily afford it. The risks of a very large healthcare bill are far too high to just risk it. The penalty for not having insurance is 1% now but goes up in 2015 and 2016. When the full penalty is in effect you'd be paying 2.5% of income or about $3k for you which is more than a cheapo insurance plan.

As Jabar pointed out you can't simply sign up for insurance on a whim, thats a common misunderstanding.

I am one of 3 people in the US employed at the company (my employee ID# is 1!) and one of my co-workers gets insurance through his wife. It just makes sense for the company to reimburse individual plans at this time.

You can buy individual health plans at _any_ time, but they don't go into effect until the next monthly cycle (not sure if it is the very next calender month or if there has to be some minimum number of days also). It's law now that pre-existing conditions have no factor in your eligibility for health insurance, yeah?

The penalty is also capped out at the national avg. of bronze's premium. I wonder if that means annual or monthly? I guess the annual cost.. No argument here that as I age health insurance makes more sense under ACA.

I re-checked the CoveredCA and indeed some numbers have changed since last time. I definitely need to research more, and not sure which plans may be HSA compatible, but there's no question that they are not competitive to what I have now (but that is well known and beating a dead horse). Here is what I have now, if anyone is curious:
1900 deductible
2500 max out-of-pocket
30% co-pays
210 premium (+$30 for dental)

Of course I will get health insurance if my company is paying for it, but like I said, there is a reason, statistically, that my premiums are so low now: I'm not high risk. Probably I just need insurance for emergencies. And my out-of-pocket for probable emergencies (sports injuries) will be 100% until the deductible, so with/without insurance is a push in this case (well, it does make the no-deductible plans slightly more appealing). So the only case it makes sense to go bronze at $220/mo is healthcare expenses >$8000, or plat at $410/mo if it will cost roughly >$6000.

I appreciate the concern, but this is probably only a theoretical issue we are talking about now. But it is an issue that a lot of younger workers in America will also be considering.

I know the math seems to make sense regarding a debate between getting health insurance and paying the penalty. However, I will give you an example of why you should reconsider even though you are 25 and are in good health. My BF was diagnosed with leukemia at 27 and is now going through his second round of chemotherapy. He was in great health before the diagnosis, but thought he was just tired more than usual. Shit happens. If you really don't want to pay for extra coverage, at least purchase a catastrophic plan.

Open Enrollment Info for ACA -
https://www.healthcare.gov/glossary/open-enrollment-period/

To answer your question on pre-existing conditions- yes and no. Yes, health insurers cannot deny you coverage or charge you more for a pre-existing condition. EXCEPT for "grandfathered" individual health insurance plans (which it sounds like yours might be, since you pay for it and your employer reimburses you for it?). They don't have to cover pre-existing conditions. Now, if you do have a plan like this, you can switch to a marketplace plan, but again, only during open enrollment.

Welcome to the neighborhood, I'm twice your age and arrived from the midwest a quarter century ago. It may not work for you but I can tell you what I did with income and expenses over this time.

First I'd say most engineers come here with dreams of striking it rich in a startup or stock options, and I found it to be rarer than I hoped/expected. My brother and also one of my former managers hit mid 7-figure payouts at different companies, but that's about it. My own company stock option winnings total barely broke 5 figures, but fortunately I'm not much of a spender and with a steady income over the years, I was able to accumulate my way to early retirement. The key was not getting caught up in the urban lifestyle, most of my free time is at work either going beyond my job description or handling personal business, stock shopping mostly. My biggest mistake financially was never buying a home, but I don't really regret it because I'm not into the headaches that come with. I definitely don't regret not getting into landlording even though many of my colleagues make a good second income this way (local cap rates look pretty dismal to me). Instead I lived in low rent places (hint illegal garage conversions also exist in nicer neighborhoods) and put the savings into the stock market. My investment returns have been mediocre but I put in enough to make up for it, so after a quarter century my annual spend is less than 3% of my portfolio. I'm now planning on retiring to a beach where costs and congestion are less than here, although I'm still loving the California climate even after all these years.

Anyway I hope it all works out well for you, I'd say aim for the best but take the opportunity to save aggressively in case things don't pan out.

Sounds like you are doing great financially. If you would like to keep your girlfriend I would suggest not publishing personal insults about her on the internet. ;)

Your employer pays your insurance so this is a moot point that you made for no good reason. But arguing that its a good idea for anyone to go without health insurance is not a good point.

NO, you can not just sign up for insurance in the exchange at any time and wait a month. If you miss the open enrollment period you'd have to wait till 2015.

It is true that the penalty can not be higher than the national average premium for bronze level in the exchange. That would be around $250 a month or about $3000.

Health insurance makes sense for everyone young and old. Young people voluntarily opting out of insurance are taking an unnecessary and foolish risk.

You're calculating that the insurance is a 'push' but you are ignoring the real risks here. The risk is not that you sprain an ankle playing football or break an arm on your bike. The risk is that you get cancer, kidney failure, a pinched nerve in spine, fall off a ladder and break your neck, etc. All stuff that can and does happen to young and healthy people in their 20's. Any of these would potentially bankrupt you without insurance. Thats not worth the risk to save a few hundred especially if you make 6 figure income. Is it likely? Well no thankfully, but its not likely hour house will burn down but you wouldn't go without fire insurance would you?? Its not likely you'll have a catastrophic car accident yet you don't drive without car insurance.


Forgot to mention, I occasionally dumpster dive. Last month I re-claimed about $70 worth of good food.

Nice tip about some alternative living arrangements.

I looked a little more and it's as you all mentioned about applying for health insurance with a pre-existing condition. Though it is still possible to get insurance with a pre-existing condition from the exchanges (by having a life-event, like moving across a state line, getting married, change in employment, etc.). Why must things become so complex (insurance, taxes).

A person's risk-tolerance and mitigation (for all facets, not just insurance) is their own. Sometimes insurance costs too much money and is not a good value.

My apologies to my girlfriend if you read this and become upset. Come talk to me if you are upset, please.

Thanks for the advice everyone!

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