Hi,

I recently left the corporate world to become a full time real estate investor. I've been doing it a bit over a decade. My strategy is pretty simple; purchase, rehab, rent. Rinse and repeat. Tenants pay for my mortgages and I have a little bit of cash flow left.

When I was working for corporations, they paid for most of my health care expense. Now I'm on my own and wonder how other investors (self employed) handle the health care issue. I'm a healthy single who hardly see the doctor (except for annual check up). Therefore I had the high deductible plan with HSA (Health Saving Account) when I was employed. It was a great way to save money funding my own HSA account instead of paying pricey premium. Amount contributing to HSA also reduced taxable income. It was a great setup. I wonder whether this option is available for self employed like us. I did some google search and it seemed available. However when I discussed this with my current health care provider (blue cross), they didn't know what to say. I wonder if I have to find the health care provides that have this option.

What kind of health care do you have as a full time real estate investor? Please share your experience.

Thank you,

Pat,

I'm glad you're thinking about this since medical bills are the # 1 cause of bankruptcy in America today. I'm a little surprised this wasn't addressed prior to leaping off the dock of the corporate world to set sail on the ship of free enterprise.

I recommend you buy something immediately, even if it's a bit costly to start out, on the off chance you get into a car accident today. Then do your due diligence and find something cheaper that meets your needs. Even a "bronze" policy from Heathcare.gov might work for a short time period while you get this sorted out. If you're healthy and diligent, you should be able to replace it in less than a month's time and cancel the unaffordable healthcare policy.

Just to note it, while medical bills are the #1 cause of personal bankruptcy in this country -- 78% of the people that file bankruptcy for that reason actually HAD health insurance!

In other words, there is much more to it than just "make sure you have health insurance." Unfortunately, the vast majority of people that go bankrupt because of medical bills actually had insurance.

- John...

I've been self-insured through BCBSTX since 2009 (catastrophic coverage only), when I left my W2 job. DH's former employer didn't offer healthcare, but he switched jobs at the end of 2014. Now he has coverage through his employer, but it's too expensive to get the kids and myself onto it.

Thank you to John for the clarification. Yes, I was aware of that, and the point I was making above is that having a basic med policy simply limits your loss to say, $10,000 or whatever the yearly out of pocket is. I am operating under the assumption that Patrick as a real estate investor who felt comfortable leaving the corporate world behind and striking out as an investor has at least $10K put aside in case he ends up in the ER for a month.

Hey Sid,

Yep, you know me. I didn't plan this before taking a leap because it was sudden; my company had a downsize. The HR person came to my desk to give me some paper and I was gone the next couple hours. It was involuntary.

Thanks for reminding to get health insurance. Yes I have had it (even after leaving the corporate world). It's not expensive for a healthy single like me.

John[Mi], are you talking about people who couldn't even afford deductible and had to file bankruptcy?

John[Mi]/Sid, How do you handle your health care plan? Do you do HSA with High deductible plan? I'm curious how other LL handle their health plan.

Thank you everyone for your reply.

Deanna[TX], I also had a catastrophic coverage only plan when I was in my early twenties many years ago. It was nice. Back then, there was no HSA. Now we could take advantage of it and I wonder if any LL is doing it and how?

S i d [MO], hmm... did John clarify why some people with health insurance still file bankruptcy? I guess the deductible was still too high for them. Yes, I have way more than $10K emergency money. I think most LL like us always prepare for the worst. :-)

Ah, now that you've clarified it, Pat, I see why you're in the situation. I'm still working for the Man (i.e. Corp USA) but my healthcare is actually via the National Guard / military. It's a pretty sweet deal, so not sure my personal example will help you.

There are some medical cost sharing groups you might look into. Some are faith-affiliated, so one must belong to a certain religion. Others are not. I don't have any personal experience with either, but I did look into one called Christian Healthcare Ministries that advertises on the Dave Ramsey show. Looks pretty good and the reviews are generally positive. They are ACA compliant, which is another consideration as you shop for a new plan. Why pay the fine PLUS the premiums?

I have a policy that is non-conforming to ACA requirements. Since I have had this policy pre- ACA, is is grandfathered and is tolerated by the IRS.

$10,000 annual deductible for me & the Mrs. combined.

I have several friends who have switched to mutual aid plans, and are very happy with them.

Our main concern regarding our health should be to stay healthy, and not get so sick as to require medical treatment. The medical community has ways that seem counter productive when it comes to meds prescribed for blood pressure and for diabetes. Diet is a better method of dealing with these issues.

I am self employed. I have a HSA but remember, that is your money and not in any way an insurance replacement.

The sad reality lies in the fact you will never find a comparable Health Insurance policy offered through the exchanges then what your corp, union, government job offered

Most of the plans offered through the exchanges are Medicaid Plus at best. For example in NY if I wanted to purchase a plan through the ACA that had Solon Kettering in network , not possible

While the ACA is a blessing for those with pre-existing, the notion you could bring all those people into the pool and simply offset the cost by forcing healthy young people to buy plans they do not need is and was always Flawed

So what we are witnessing: increase premiums every year, insurance companies shrinking in network providers, or simply getting out of the state , some estimate 1/3 of Americans in 2017 will only have s single insurance provider

Sid: I wasn't disagreeing with you at all. I was just adding to the picture for those that might be reading. I think a LOT of people think that people that file bankruptcy because of medical bills are people that don't have insurance. The reality is that most of them DO have some form of insurance.

Pacman: I'm not a good one to ask because I'm currently covered under my wife's work policy. (And, I also still work a full time day job.) So, I'm not a good one to ask for buying insurance on your own, sorry.

- John...

Thank you everyone for your reply.

S i d [MO], ah I see. Yes $30K is a lot of money. If any tenants have that kind of saving, they wouldn't be renting. I'm surprised that you're still working for corporation. I thought you became full time early this year. Yeah, reliable income from the job is nice.

Nicole [PA], thanks for the info!

phil [NY], wouldn't it be nice if we LL could inflate rent like the way health care system inflates the cost.

Actually what wipes out most estates is lack of long term care, an accident, certain diseases, a stroke etc and if you have to go to a nursing facility (and no, sometime care givers cannot provide care for you.) which averages 50K a year and rapidly rising. and that is the price now.IF you don't need extra care.

How many years can your estate handle that? You will have to start selling your assets until you have very little and medicare takes over for basic care.

John, I wasn't aware there was any disagreement, so we're cool.

HSA allow you to triple dip. The money comes out pre-tax, so it reduces your taxable income. It grows tax free and when you take it out of the account, providing you follow HSA guidance, it comes out tax free.