Jamila Souffrant 0:00
You're listening to the Journey to Launch podcast Healthcare Options for Financial Independence, Early Retirement Seekers and Entrepreneurs with Lynn Frair.
Welcome to the Journey to Launch podcast with your host Jamila Souffrant as a money expert who walks her talk she helps brave journeyers like you get out of debt, save, invest, and build real wealth. Join her on the Journey to Launch to financial freedom.
Jamila Souffrant 0:37
Hey, hey journeyers Welcome to another insightful, educational, hopefully motivating episode for you. If you are brand new to this podcast, sit back, relax, buckle up, we are launching to financial independence and financial freedom. See what I did there? I did that launch into you get it? I like to like just, you know, put the rocket with a launch. It's something with rockets. I don't know. Anyway, back to the topic. Okay, listen, this conversation, I knew I had to have it. I'm so glad I connected with Lynn freer to have this conversation because I get asked a lot of questions. You know, there are a million topics within the realm of personal finance, like a million budgeting and investing, even now, when you break it down, right? I always say like personal finance, General personal finance, you can have a million topics. And then when you go to the next level, which is kind of like what we talked about here, reaching financial independence, there are different types of strategies and things you need to know different things you need to have in your toolkit and be aware of So one of the questions that people always ask is What do I do about healthcare, right? And this even just not only for people who are on the journey to try to retire early from the corporate jobs, or reach financial independence, but entrepreneurs, right, if you do not have a spouse, if you're not as lucky as I was, and am to have a spouse that currently still has a full time job so I can go on his health care. What are you to do about your health care? Right. And so I get this question asked a lot, you know, how do you even factor in your health care cost for your financial independence goal? How do you figure that out? Right. And so I'm so glad that connected with Lynn because she is going to help us at least answer these questions and think more about what we can do what we need to look into to figure out our own situation and what's best for us as it pertains to health care.
Okay, so a little bit more about Lynn and what we're going to talk about. So Lynn is a nurse and self proclaimed money geek and founder of fihealthcare.com. She after a brain tumor in her 20s wiped out her savings, but we built her investments to where her passive income overtook her nursing wages. And she was able to make work optional at age 39. Listen, that is the goal guys to make work optional. So Lynn started FI Healthcare, which is a crowdsource knowledge base for healthcare options for early retirees and she pulls together information in the community. So from the FIRE space, will FIRE stands for financial independence, retire early from the community, have the questions and resources so that everyone can get access to understand their health care options, because Lord knows, it is confusing. And the fact that our current system has us tied to jobs, we hate people or you know, situations that are not healthy, you know, marriage, whatever that is potentially for someone just for the sake of healthcare is really, I think, a tragedy. And it really holds so many people back, right. Like how many of you listening right now, if it weren't for maybe healthcare, you would have jumped ship and took a risk a long time ago. So Lynn helps to break that down and make it easier for all of us to understand that. In the conversation with Lynn, we're going to talk about what do most people do when it comes to health care if they're trying to reach early retirement or entrepreneurship? What are the options? How can they compare the options? What impacts the plans that you qualify for, you know, we're going to get a little bit into the administration and policies that impact this. There's no way that we couldn't talk about this part, and Obamacare and all the things so this is gonna be a really insightful, hopefully educational episode for you.
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Hey, journeyers. So I get so many questions and you know, requests about this topic, healthcare. I know like, Whoa, jameelah, that doesn't sound exciting. But when it comes to planning out our financial independence journey, this is an important part of it. Because it's one of like the most, it's a block for a lot of people in terms of like preparing for how they're gonna prepare for health care if they leave their stable job early, or just like general retirement. And may I say to for entrepreneurs, that health care, but being able to afford it and you know, knowing all your options are key. So I get questions about this. And I'm really excited to bring on Lynn Frair, from EFI healthcare, to talk more about this topic. So welcome to the podcast. Lynn.
Lynn Frair 6:10
Thank you, Jamila. I'm so excited to be here. And I first have to ask you a question. How does it feel to win podcast of the year? That just happened?
Jamila Souffrant 6:19
Oh, my gosh. Yeah. So it feels a little surreal. because ever since I came into this space, it's like, you know, from the beginning, I listened to all their podcasts. And it's kind of cool to be like, nominated with the other people that you started to listen to before you even had a podcast. So it's it's an honor. And I'm just I'm really glad that this is resonating with people. And my goal is for more people to hear the message. Hopefully that helps.
Lynn Frair 6:44
Yeah, I'm so happy for you. I saw that I was there live when it was was presented. And I'm thrilled for you. I know, you're also close to 2 million downloads. So this has been a big year for you.
Jamila Souffrant 6:54
Yeah, and I love it. So depending on so depending on when this is released. So journeyers will you'll probably maybe some of this news will be not old news, but it'd be like happened last month, we'll see. So working out the schedule. But yes, the podcast is doing amazing in terms of growth, and it wouldn't be possible without people listening like you so journeyers. So you admitted that you're a journeyer
Lynn Frair 7:17
Yes, I am. I love it.
Jamila Souffrant 7:19
I love that you get the vibe. And now you're talking to fellow journeyers about this important topic?
Lynn Frair 7:24
Jamila Souffrant 7:26
Okay, first, healthcare. It's a barrier for a lot of people or a block in terms of how they are thinking about their, like their future. Because, you know, for me, at least I am lucky and have the privilege where you know, even as an entrepreneur, I'm on my husband's off health care. So I didn't have to really worry about like factoring that in, in my cost of like leaving my job. But not everyone has that as an option. What if you have both partners who wants you know, to be entrepreneurs and or reach early financial independence or retire early? Right. So I want to really just dive in. Why does it have to be so complicated? And why are we so restricted in terms of how we make money and live in, like, based on just like having health care?
Lynn Frair 8:07
Yes, oh, gosh, I just want to write I, I first want to tell you guys why I got into this, and it'll give good context. And then to dive right in. So I'm a nurse, and I reached financial independence, I was 38. In spite of losing everything that I had, I started investing when I was 12 years old in the stock market with my babysitting money. I lost it all in my late 20s due to a brain tumor. Due to the cost of health care, health insurance, mostly the health care costs that was before out of pocket maxes, I believe, and had to rebuild from there. So I rebuilt got to the point where I was approaching financial independence. And for our family of four, I was trying to figure out what we do about health care. So I got familiar with the fire movement. And I talked to over 100 people from the fire movement, I researched 1000 or more publications on the topic, and I compiled them into a database, and I went to something called Camp mustache. Everybody wanted to have access to this database. And so I went to fin con to see who is working on this. So I could give them all my information. And nobody was, but they wanted me to make it public. And so BiggerPockets heard about it, they announced the name of the website, and it went live from there. And so the reason I created the site was because it was a real big problem for me, trying to look at healthcare options, and also for any folks who are interested in fire and for any entrepreneurs. It's really for anybody who's outside of the traditional employer plan.
So to answer your question, why is it so complicated? It is so complicated, but I want to make it easier to be a lot less complicated for folks and it is complicated. There's a lot of different reasons and it's because we have different motivations from different parties. The health insurance industry wants to make a profit here. We've got some government involvement there. We have a lot of different incentives lined up all over the place. And we have it growing the cost growing at over twice inflation, all sorts of reasons that it's complicated. But on my site, what I do is I take a look at what are the different options for folks. And I found about 22 major options, I compare the pros and cons, eligibility criteria, and my favorite links to help people sort of figure out what is out there. Right,
Jamila Souffrant 10:31
right now, so I want to the site that Linda's referring to is fihealthcare.com.
Lynn Frair 10:37
Jamila Souffrant 10:38
And, you know, I love that you threw in like a little bit of your backstory. And there's like me being the interviewer and the nosy person I am. I'm like, Okay, I have to have you back to just to talk about your whole financial independence journey. Because, you know, it sounds fascinating the fact that you want to reach financial independence. So hopefully, we'll be able to learn a little bit more, as we like, just unfold these questions and answers about health care. But what do most people do like, what's your healthcare setup like?
Lynn Frair 11:04
So I'm going to look at the exchange, I'm this is open enrollment period right now runs November 1 to December 15, for most people, and we look at what's called the exchange, or the Affordable Care Act, or Obamacare, it's all basically what anybody outside of a government or outside of employer based health care would look at. And for our family we're looking at, we have been looking at high deductible health plans. But we are kind of high utilizers of health care historically. So I'm, I've read data that folks with high deductible health plans, and that's a big popular item in the fire community, but they actually delay care. So for our personal family, we're going to be looking at sort of higher premium, lower deductible. The problem I'm seeing when I'm comparing plans, is that the deductibles are still really high and the out of pocket maximums are still really high. So let me dig into that. I'm going to give you guys some actionable nuggets here. So the the main costs, and we'll talk about other things, but for most folks in the fire movement, what I see is they first go to what's available in their area. So they would go to healthcare.gov. It will direct you to your state specific area. To see what plans are available, it will give you recommendations. And you'll enter a few items I recommend first trying in incognito mode and not entering personal information. Otherwise, you'll get a slew of contact information alerts. So that's how I recommend looking to see what do you have on your state's benefit exchange to see what's available. What I've seen lately is that the premiums seem a little seem lower over time, but the deductibles and out of pocket maxes are high. So at first blush, it looks like a very reasonably priced plan. But those three things are really the elements of what it's going to cost. So Oh, go ahead,
Jamila Souffrant 13:06
I just wanted to jump in and just define some terms just like just a really basic for people. So premium is what the deductible and out of pocket
Lynn Frair 13:14
Jamila, you read my mind, that's exactly what I was just gonna do. So premiums are what you'll pay every month that is a given cost. A fixed cost, whether you use health healthcare or not. A deductible is the amount of money that you have to pay, before your insurance basically will start to cover anything. So if you have a deductible of say, 4500, you have to pay the first $4,500 of your care before your insurance will start to share the cost with you. So once you meet your deductible, so you got your premiums going every month, once you need to care, you will meet your deductible and have to pay that whole amount before you get insurance. And then the maximum you can expect to pay is what's called the out of pocket max. And that can be anywhere there's a huge range of this. It could be anywhere from sometimes it's zero if you have a fantastic plan through an employer, but we're talking about the exchange here. So it could be as low as a few $100. very unlikely 1000 2000 up to the federal maximum. And the federally defined maximum is for 2021 is going to be $17,100 is what I hear.
Jamila Souffrant 14:31
So that's the most that you would pay out of pocket for any if you have insurance.
Lynn Frair 14:36
If you saw I'll give you yet in a way. So I'll explain you'll always have your premium. So you pay that every month that does not count toward your out of pocket max. So your premium your monthly premium plus your out of pocket max if you have lots of health care needs. But there are exclusions to the out of pocket maximum. So I have a list What those are usually. And they are, if anything is out of network. So insurance companies will say always not a guarantee of payment, because they're not really incentivized to take good care of you. I mean, that's the reality. They're, they're incentivized to keep you going for as long as they have you. And that's the sad truth. Any amounts that are billed, that are beyond what the insurance company's allowed amount is, could be considered an exclusion. And sometimes medication costs are outside of there, it's going to be pretty rare that folks are going to need to go beyond their out of pocket Max, and their premium into this world beyond combined multiple years in a row. But I do want folks to know that that's possible.
Jamila Souffrant 15:52
Yeah. Okay. And that's just a good point. I'm glad we like kind of took it back and explained all that. And so as you were saying, in terms of when you're like looking on the exchange, and you brought up something you said, you know, open enrollment. So it's the same thing for someone who is an entrepreneur or just retired, let's say early, that they have to make a decision between that timeframe. What if you What if you make a decision or you quit your job in March? How does that work?
Lynn Frair 16:18
Yeah. Such great questions. Jamila. So I should say there are some states that extend the open enrollment period. So that's the federal guideline. But there's a few states who go beyond this. So if you're listening outside of that, check to see what your state allows. But if you've left your job, or you've lost health care, you've lost health insurance, I should say, you may qualify for what's considered outside of the normal open enrollment period. So you would have what's called a qualifying event. So if you lost healthcare, it's considered a qualifying event. That's under the rules that exists now. So you may be able to and I would encourage folks if they're not sure to see if they qualify for a qualifying event in order to get health, health insurance, even outside of open enrollment.
Jamila Souffrant 17:06
Right, right. So you were talking about like comparing plans and like, so for most people who are looking on the exchange, these are, you know, if you're not covered through an employer, they're going to this exchange also, that's, that's basically Obamacare. Right?
Lynn Frair 17:20
Jamila Souffrant 17:20
And they have to compare now all these different plans. But what are those plans? Like, because I hear a lot of people talk about how expensive, you know it is, and they can't really afford the cost of it.
Lynn Frair 17:31
Yeah. So I want to say it's really interesting, when you, I take a look at sometimes the the polls that go out about health insurance, and people have a misunderstanding, they'll say that they don't like Obamacare, but they like the ACA, the Affordable Care Act, and they're really the same thing. So when they go on the exchange, you'll see a variety of things, you'll probably see it state specific, so they're all slightly different. But you'll see what sort of proposed to you likely. And you can filter and adjust for if you want a higher deductible or a lower deductible plan. But the reality is, health care is extremely expensive. So for an average family of four, depending on the data, you look at the cost of providing health care for a family for somewhere in the neighborhood on average of 24 to $28,000 a year. And folks who are employed, don't see most of that, because employers pay on average 82 to 84%, of the cost of health care. And so some people think, well, then it's not affecting me because I have my own private insurance through my employer. Well, no, the high costs of healthcare are probably affecting most of us in the form of wage stagnation. You know, the costs are just, they're just really out of control, to be honest, they're, you know, twice inflation at least. And that's just not a sustainable level. But So the reality is, what they're seeing is expensive, because it is expensive. But there are a few different things we can look at is Does it make sense to have a higher premium, lower deductible, lower premium, higher deductible? And there's a tool that I like, that's from Wex health, and I'll get the link to you for this show notes that
Jamila Souffrant 19:19
you i W.
Lynn Frair 19:20
I think it's w e x
Jamila Souffrant 19:23
e x. Okay, we'll get that in the show notes for everyone.
Lynn Frair 19:25
Yes, where you can take a look at what what sort of plan may make sense to you. And so, at some point, we should also talk so that's the the ACA, but there's all these other options, too. I don't know that we want to go through all of them. But I did want to pull them into that database, because there's a lot of folks who want to look at health care and health insurance, you know, traveling or who want to look at health sharing ministries, and compare the pros and cons of those. So I loaded those in there and looked at the pros and cons. And, and other folks from the fire community entrepreneur community, what they like, favorite articles and such. So that is also covered there. And I
Jamila Souffrant 20:08
we'll link that. And you know, one of the other things is, as you're looking, let's just say, you know, you're going out to see, because some people are actually doing this, maybe they already have a job. But they're preparing, like, they kind of want to bake in what, okay, if I do choose to leave my job, I want to understand what this is going to how this is going to impact my budget. Right? So are you also looking at plans or plans dependent on your income and dependence? So like, if you're more or lower income, does that help in terms of you have, you can get better affordable plans?
Lynn Frair 20:38
Yeah. So the on the exchange, the Affordable Care Act, the way that it is, now, that amount that you pay for your premium is adjusted based on the number of people in the household and your, your income. I think it's your magic, your modified adjusted gross did gross income. And so you'll see that and I think one of the reasons that we're seeing the deductibles and out of pocket maxes adjust is because at first blush, the premium looks low for folks who have a lower adjusted gross income, but the out of pocket and the deductible are quite high. So you really want to make sure to see that. And I don't know that there's limitations on those for those plans. And I think that's how they're sort of compensating for these lower premiums.
Jamila Souffrant 21:24
And you know, and you have to be careful, because then you know, you're thinking you're paying less monthly, but if something does and should happen, then you get caught up in having higher out of pocket costs.
Lynn Frair 21:36
Yeah, yes. So I really recommend to folks that they have their deductible, set aside ready to pay at the very minimum, and planning at least the year ahead. If we're talking about fire for multiple years and multiple decades, I have separate recommendations for that. But for folks who are currently working, at least have I meet, because you really can expect to pay the deductible. If you have any sort of care, at least a portion of it. And the deductible if we remember, it's it's that portion that you pay before your health care, or your health insurance kicks in. So it's the part that you're responsible for. Unfortunately, there's an individual and a family deductible often. So you have, and I'll tell you what those are. So the federal maximum will allow in 2021, up to an $8,550 deductible is what it's going to look like. What it means is you have to meet a separate deductible for separate individuals, and then they sort of cap it usually at around two. It's a it's quite a cost. And I tell folks, when they're thinking about health insurance, to think of it more in terms of a house payment, rather than a car payment, in terms of amount. Yeah. And I know that's not very reassuring. And my goal with the site is to talk about what is and to come together for resources, clarity. But yeah, I'm the bearer of bad news here.
Jamila Souffrant 23:09
Yeah. Okay. So and that's fine. I get, you know, reality, I don't mind like the reality of it all. So people can understand, like, what it is they're going to be facing. And so, you know, just to give an example, if you're someone who is, you know, the different types of people listening to this right now, there are people who eventually one day want to quit their job, something else while they're on the journey to financial independence. There are some people who are like, I'll keep working, you know, for in my job for 1015 years with the idea that I'll you know, retire early. So for the people who are looking to make a you know, a leap to entrepreneurship don't have the benefit of a partner whose insurance they can go on, go to the exchange. And if they're like trying to budget out a in advance to help cover these expenses, they can go to the exchange, go incognito, a little bit in like numbers and say, Okay, if I'm not going to be working, maybe I'm taking a break, what is my income going to be and then see what those premiums are, but then also what the deductible is, so that they can save up for the deductible in advance, hopefully, you know, to help cover that if something happens.
Lynn Frair 24:12
Yes. So that's exactly what I would do. If you're thinking about making the jump into entrepreneurship, the best information we have is what we have. Now. We can there's all sorts of extrapolations, we can do about the cost of health care, and we can expect that the cost is going to increase more than inflation, and perhaps much more. But what we can do is start with where we are now. It's going incognito mode, check it out, see what it is now see what the options are now, and then extrapolate for the number of years you're wanting to cover and go from there and at a very minimum. So the deductible really is the minimum that I think folks should be prepared for. But there is an out of pocket maximum possibility and so for folks who are planning to fire, I recommend looking at the out of pocket maximum for a decade. That's kind of a bad scenario look sorry.
Jamila Souffrant 25:09
So per year, so if you're out of Max is like 4000, out of pocket is 4000, you do like 4000 times 10 years.
Lynn Frair 25:17
And if you have an out of pocket max of 4000, that's pretty low. The Federal that federal amount is 18,000.
Jamila Souffrant 25:24
Oh, the limit?
Lynn Frair 25:25
Yeah, 17,100, there abouts. And move that for a decade, you know, you could calculate it out your entire early retirement. But the safest way, or one of the ways you could consider it is to look at what it might be for a decade plan for that. And if you're willing to work again, in the worst case scenario, where you're meeting your out of pocket max for a decade, which is really, really extreme, then you have a decade to figure out another plan. And, you know, I think that if you're really risk averse, you could plan for an out of pocket max until your early retirement until your earth until standard retirement. But most people are going to not hit that. And certainly not for a decade, even me with my brain tumor, it was really difficult. And it was about three years where I had really, really high and I had to learn how to walk again, and everything, it was bad. So I certainly recovered within a decade. In fact, they reached financial independence within a decade. So I think that that's pretty extreme example, and allows you a decade to kind of figure out a new plan,
Jamila Souffrant 26:29
right. And that part is like the lump sum that you need, but then you still need to figure out that monthly premium that you're going to cover,
Lynn Frair 26:36
right, Yep. So I would take a look at what is and sort of extrapolate that out. And kind of go from there, I have a great site that I love. And I'll also link this in the show notes about an algorithm of how to choose your plan. And it's the best one that I found. And I recently found it, what's great about having this site is I get all the best material on the subject. And so I get to filter through and, and post the things that I think are the best. And so I have a great algorithm I'll give you in the show notes.
Jamila Souffrant 27:09
Awesome. Okay. And so when it comes to, you know, one of these the thing, the thing is that we can't ignore the, like, the political things involved with healthcare, like, especially now, I mean, you know, we're recording this right now in November, I'm not sure when this will be released. But you know, we're in the middle of or just outside of this, you know, this last election, you know, we're still waiting for like it to be officially just like put to rest. But you know, who's in power also determines, like, you know, like what happens, right? And I wonder if you can just like talk through like the, like, the current administration, so like a Trump administration, like, what is it that they wanted to change about? Or that they didn't like about the obama care or things now? And then what does like the incoming administration? What are they? What are their thoughts, you know, their position on it?
Lynn Frair 27:59
Yeah, I can speak to some parts of that really, quite well, I've been watching it. And so I'm going to try to stay as objective as I can my higher level thinking here, because this is a very charged issue for a lot of folks, understandably, including myself as a nurse. And I don't think you knew this Jamila, but our area was the first epicenter of Coronavirus. So that's been really interesting. And I'm a hospice nurse, actually, and so been deeply impacted. But so I'm going to stick to my higher level thinking on this. And what we see generally, what we're seeing with the what's happening right now is the Affordable Care Act is in right now at the supreme court level. So back in, I think it's 2017. So there's something called the individual mandate. And you guys may remember that because if you didn't have a health insurance plan, you had a fee a tax basically, for not having health insurance. And the intention behind that was to encourage folks to have health insurance. Yeah, it wasn't really to charge this fee, it was to encourage financially, folks to elect a plan. And that was not a popular section of the ACA. So basically, it wasn't removed from the ACA, but it was reduced down to zero. So it still exists there. And right now, it's at the Supreme Court, because the it's coming under question. Several attorneys general from various states are saying because this part has been adjusted, the whole law should be removed. And so that's being heard right now, are awaiting the findings there. And so if that law is if the ACA is thrown out it, it throws out a lot of various protections. And so that will really impact folks a lot. While it will impact I think, at least 100 million people so What the ACA does is it looks at pre existing conditions. And what we see is bipartisan support for, for protecting those with pre existing conditions. I think it's about 70% of Republicans support, giving folks with pre existing conditions a chance to get health care. I think it's about 70%. And that's, that's close to the, where they feel about like gun ownership. This is like a pretty popular thing bipartisan, it's even higher on the Democratic side. So I think what would be unfortunate about it is that if we throw this out at a bipartisan consumer level, Democrat, Republican, most folks support a lot of the provisions within that. So it has 10 major protections, and I'll include that in the show notes as well. Things like pregnancy care, preventative care. So there's a lot of things lumped in with that act. Now, not everything in that is very popular, and certainly a lot of insurance companies don't love it, it also limits their profit. And that has been a really big problem for them, as you can imagine. So I think there's a lot of folks who'd like it thrown out and and a lot of industry who might like it thrown out. But at a consumer level, there's a lot of bipartisan support for a good portion of it. And not not everything, certainly. So if the administration changes, we could see, we could see a difference in the amount of support for that. But we also we have the Supreme Court right now, who it's really a lot of the upholding of it is going to land in their hands. So it's really tends to have more democratic support, certainly, the ACA, and I think that that could certainly change things.
Jamila Souffrant 31:52
Right. Right and, again, I don't know it's hard not to get political, or to talk to talk political when it comes to money and health care when we realize that, you know, certain communities are more impacted, right than others. And these protections and the lack of affordability and health care like that. And then now you you know, don't want a pandemic and even just exaserbates everything more.
Lynn Frair 32:15
Yes, Jamila, like I don't even know that this is under question that communities of color and have worse access to health care period. And I don't even know that it's under question that the cases in communities of color of Coronavirus is larger, more impacted and more morbidity. And I think of my friends like Nasima, Mackleroy and Ashley Evans, doing work around this disparity of care, this unintentional bias and health care. And you're right, that this just exacerbates it. This is very politically charged, and can be very emotional, but I think we should talk about it. There's some facts here that are really undeniable. And I think some people, I think you take a look at what the opinions are. And some people believe that it it may not matter, because it doesn't affect them directly. It really To be honest, it blows my mind. But I think that it could be so much better. And my philosophy is are you familiar with Maslow's hierarchy of needs.
Jamila Souffrant 33:20
Lynn Frair 33:21
Okay. So in the bottom, you have your basic provisions, you have water, food, shelter, those are the things you really need before you can really consider anything else. somewhere above that is sort of self actualization. And we might put education there, and we might put access to health, basic health care, somewhere up there. And because if we don't have a basic access to health care, what we see is a population sort of running to the ER for extreme circumstances, which number one is very expensive to the system, and is suboptimal, in my opinion, to care. So now we're getting into Lynn's personal beliefs about how a healthcare system could run. If we look at education, we have our education system, we have public health, or we have public education. And then we also have a private option. So if people want to do private school, if they want to buy ABC mouse, because they have the resources to do that, if they want to add in a tutor, because they have the resources, but every kiddo pretty much has access to a private education or public education. I apologize. Yeah. Because it's sort of seen as a societal benefit that we get to educate. We educate our population, then we have more people like nurses, we have more engineers, we which is good for a population. I have a similar personal philosophy about health care that a basic access to health care, allows people to self actualize in a way that helps. And I think that there is a way to do that where people have their own sort of individual accountability and buy in, and it doesn't have to be what I hear is that Well, it's going to be extreme, it's going to be like Venezuela. But when I talk to people about that, I asked, Are you familiar with the four major different types of structure that this could be? It doesn't have to be like the Venezuela plan.
Jamila Souffrant 35:13
So what is the Venezuela plan? And what are the four? Yeah,
Lynn Frair 35:16
so Venezuela, for those who aren't familiar, and I'm not gonna, I'm not sure that I can talk deeply about Venezuela.
Jamila Souffrant 35:25
And if anyone needs, wants to, like, go research it more they can.
Lynn Frair 35:28
Yeah. So Venezuela has sort of out of control inflation hyperinflation, and they also have a healthcare system that is provided generally by the government, and they're really having, basically, economic collapse. So there's a lot of ways that we, we can structure health care, that doesn't look exactly like, you know, heading toward an economic collapse. And I think we saw some of that with the ACA. And if we start to sort of peel that back again, what we're gonna see is what I think we're going to see is increased overall health care costs, because we are not going to have people who are incentivized to have better care. It's short term provisions, like what we were talking about, if folks keep their health insurance for a year or two years, the insurance companies are their motivation is to keep people healthy, or keep costs low for a year or two years. And so what I think could happen is that people are incentivized to sort of have a maintenance program, where costs are reasonable. And one of those possibilities that I've seen and recently, and I talked with Pete, a couple years ago, Mr. You guys might know mister money mustache. And so he's doing a model called direct primary care DPC. And that's a model I've been looking at for a while. And it's also on the the knowledge base, the pros and cons with that. But the idea is that you pay a monthly premium, it's usually cash, so that they don't have to fuss with going through insurance companies, and they keep you healthy
Jamila Souffrant 37:10
to a doctor directly.
Lynn Frair 37:13
Yeah, to a doctor's office, directly direct primary care, you're taking out all this administrative burden that has overburdened in my opinion overburdened our system. So direct primary care, they are getting a monthly premium to kind of keep you healthy. And so their incentive is to keep you healthy, long term to keep you as a long term client. There are some limits, which I cover on the site as well. But the limits are, you know, catastrophic type care. And hospitalizations are usually not covered. But a lot of the day to day, you know, like I have a cold or I think I might have bronchitis or I got a cut or screening for cholesterol a lot of the day to day stuff that would be preventative, and just sort of basic primary care can run through that. And so sometimes folks will pair that the DPC direct primary care with like a higher deductible plan so that if something does happen, they have that to fall back on. Right. So that's a model that I that I really like I've been watching closely. A lot of providers like it because they don't have to fuss with insurance. And a lot of our costs in health care are this administrative burden that's gotten out of control. Right.
Jamila Souffrant 38:26
And I'm glad you like we're like now kind of turning to or at least presenting other ways to be creative about looking into healthcare. So that's good. The other thing you briefly mentioned was like these faith based providers, Do you want to just touch upon that briefly. So this is in place of going through the Affordable Care route?
Lynn Frair 38:45
Mm hmm. Yeah. So that is probably one of the most common options that I hear from the fire community and entrepreneur community is that they elect a health sharing ministry, instead of a plan through a typical insurance provider. The benefits of that is the costs for the premiums are much lower. But there are a lot of potential downsides. And I also have that so for folks who are listening in the car, you know, you don't have to memorize this. But the downsides are that it's essentially not insurance. It's considered a donation. These are faith based. And so they have the ability to exclude you, if you have pre existing conditions, they have the ability to deny payment. Another downside is they can exclude anything that's considered sinful, which could be getting pregnant outside of marriage, it could be all sorts of things that another typical plan would cover. They can exclude if you were in the car with a drunk driver, but you didn't know they were drunk like an Uber driver, because that is sort of to drink while driving is considered sinful. There's all sorts of exclusions. The other downside to that is that It's not considered health insurance. And so before the Affordable Care Act, if you had a gap in coverage, you couldn't get coverage again. And so for those who have health sharing ministries, if we lose those provisions, they may be able to be denied coverage, like indefinitely. I don't mean to worry people, but I, before they elect that plan, I want folks to know about these potential downsides of those.
Jamila Souffrant 40:24
Lynn Frair 40:24
Of those plans, we don't know, we don't know the future. But I really want folks to think about that before they they kind of elect those plans. And there's, there's a few other things that I covered on the site that are going to be so really the the Affordable Care Act through the healthcare.gov is going to be the most common, health sharing ministries are the most common alternative I see. And then I go through sort of what are the travel options like, you know, living somewhere in another country for health insurance, and you know, basically everything everybody has sent me about what they do for their solution. And those are going to apply to a lot fewer people, but they they are included, one of them, one of the options is going off your spouse's plan. That's what a lot of folks do. They they quote, fire and then or they become an entrepreneur, and then they're able to get on their spouses plan. That's very, very common.
Jamila Souffrant 41:18
Right So I mean, this is all great information. And it's a lot to digest. I think, you know, I wanted the this goal for the podcast, this episode specifically to be is just that for those of you who are thinking about, you know, becoming an entrepreneur, maybe taking a break you if you you know, you do have like a partner find that maybe more direct way in which you get the health insurance, but like, how do you plan for that, right, and you gave some great tips, talk to at least figure out the number doesn't mean like you'll have the number, you know, but at least you can bake that into your planning for leaving a corporate job and or just early retirement. And so I think it's really helpful just to at least get the numbers down instead of like, I have no clue like, and then you're you're blindsided by the cost of this all.
Lynn Frair 42:02
Yeah, yeah, I think that's exactly it. And that's why I include those resources. So just to be honest, my website is the worst business plan ever because I totally self funded I bootstrap it and I charge nothing. So it's, it's really is a passion project. So in case people are like, what's the catch? Well, it's my husband's like, what are you doing spending? This is the worst business plan, because it's not a business plan. That's the reality of it. I hire people to help me too
Jamila Souffrant 42:32
it sounds like it's really a nonprofit, then that you can get funding.
Lynn Frair 42:35
I may actually now we're at our it's grown. It's got 10s of 1000s of visits. So I'm at the point where it's hard to keep up. And so I'm looking at I'm I've been really intentional, I think I'm going to be looking at affiliate relationships in 2021. Where can I add value to folks? Or where can I make this more sustainable and still not detract from the value for folks? So in case you guys are wondering what the catch is, there isn't one my husband's like, I spend more and more time on it. And I'm hiring people and I, I'm just very passionate about it, I get frustrated. And I want people who they have great potential in this world, they, they want to become entrepreneurs, they want to fire and do something good in the world. And healthcare is their barrier. So I want to help eliminate that, or at least clarify it, or at least get them passionate about helping make it better and reducing this administrative burden that hurts all of us. Yeah,
Jamila Souffrant 43:32
I mean, I love I love your mission. I love what you're doing. And you know, it's it's like it's so multi dimensional. because on one hand, we're talking about healthcare, and providing this information and access and resources for people so that they at least have a starting point. And then when we kind of dig into your story just even now, right? Like as a business model, I'm like what you're doing because that's the other end of it, too, that people you have a gift to share. And you're trying to figure out how to make a sustainable, right. So that's what you're doing right now. And a lot of people are think are at that point where they're like, Well, I have all this information, I have like a gift for maybe pulling information together and making it making it easier for people to consume. Whether people choose to make that free for everyone and or not like it's still cost money to run anything on the internet, it does.
Lynn Frair 44:16
Especially if you're like me, and you're fussy about what you want to do and what you don't want to do. And, you know, life is so so short.
Jamila Souffrant 44:24
But I think part of your story, what hopefully you can also like spark on thought or just inspire people is, and I would love to keep up with you to see what you do, maybe next year to make this a sustainable business because it's like another case study on you reached financial independence, but it sounds like you're still working out a choice.
Lynn Frair 44:42
So yeah, so what happened was I had to decide if I was going to keep my nursing license. And so I was going to take a travel assignment this was in December 2019. So I gave my notice in mid 2018. So in this I had to start deciding do I want to end and it made me feel kind of Sick to think about leaving it. So I was going to take a travel assignment. So I called called my old job for a recommendation. And they said, We will let you do when I left, I told them, I would like to have a position where I can work as much as or as little as I want, whenever I want from wherever I want, what do you what do you think about that? And they said, No. So I left. And when I called them back for reference, a year and a half later, they said, you know, that position you? Would you like to do that. So that's what I did. And little did I know that the epicenter of the pandemic would start here, and that I would help with remote operations for hospice, and figuring out how to do a lot of, you know, move virtually. And so that's what I've been doing. And I do that per diem, which is the requirement is five days per month, I get to keep my license, I get to have flexibility. It's really a sweet spot for me, but there's no health insurance through that, you know, I don't work enough hours for that. And my husband doesn't he, he works because we got a kindergarten and a first grader in virtual school. So we got 54 zoom meetings a week, but not in a paid way. So that's what we're up to now.
Jamila Souffrant 46:08
And so you're on this exchange, you have it through the health exchange yourself, you and your family.
Lynn Frair 46:13
Yeah. And that's what we're gonna be doing probably next year, there's a position that's coming up that would have healthcare for me, you know, that I could take, but I still love that flexibility.
Jamila Souffrant 46:23
But that's the thing, right? Like you're deciding between like the flexibility and healthcare like basically that's it like and that's a lot of people's choice right now. It's just like, do I keep this job just for the healthcare or do I have enough money to pay this $400 Premium $800 Premium depending on you know, how many people are in the family? So I think again, I hope if you're listening to this like I don't know we didn't provide all the answers but hopefully it was a good place for you guys to start. Where are you located by the way?
Lynn Frair 46:52
I am near the Seattle Washington area Bothell if you guys look I Market Watch did a video about us during the pandemic so you can see my house we had to self film it because it was in the middle. I remember Market Watch. They saw me speak in Cincinnati right before everything shut down at a conference called economy. And they said we'd like to come you know your story is inspiring. We'd like to come and I said this Coronavirus thing, this might be a thing. You know, I don't know if your film crew can come here. And sure enough, so we self recorded on iPhone and uploaded it virtually. And at that time, that was a really innovative idea that Yeah, so you can see more than you want to know about our family. If you look at one of the Firestarter videos.
Jamila Souffrant 47:36
So yeah, we have a lot to like link in the show notes for everyone. So please let everyone know more about your site and where they can really support you. If you need like a Patreon or some kind of Donate button. Do you have that on your site?
Lynn Frair 47:47
I don't yet, but I think I should. So maybe
Jamila Souffrant 47:50
You need one. Yeah.
Lynn Frair 47:52
For the time, I've had even people say that they wanted to donate, they wanted to give a big gift. And I just don't I'm not set up for that yet. But I have people helping me now. So maybe we'll get that started. And that would be really, really awesome. I want to make it more sustainable but not compromise the integrity of the site. So it's fihealthcare.com for financial independence healthcare.com
Jamila Souffrant 48:16
healthcare.com are you on social at all or it's really just a website?
Lynn Frair 48:19
Not that much. You can Instagram a little bit and LinkedIn a little bit.
Jamila Souffrant 48:26
Okay, it's totally fine. It's totally fine. I will link your the website and then the market watch video so people can see that and thank you so much for coming on and really giving us this information. It was great talking to you.
Lynn Frair 48:37
Oh, it's so nice to talk to you. Jamila
Jamila Souffrant 48:43
Okay, I hope you enjoyed and got a lot from that conversation with Lynn make sure you go out and check out fihealthcare.com. Share this with someone you know that would benefit from this who has questions maybe you have some people who do question your your mission to retire early or reach financial independence and their first thing is, what are you going to do about health care? Maybe that's what they want to do. Right? So share this knowledge with someone else this podcast episode, and let me know what you thought of it. You can always tag me @journeytolaunch and let me know your thoughts.
Okay, now it's time for DC use money Tip of the Week. This is where I share a quick win a resource or money tip that can help you with your money goals. Now, this is going to be all about your credit, limits your credit rating and how to improve it and keep it at a great score. So I'm going to give you three tips here. One, keep your balances on your credit cards low compared to the limits. A big factor in your credit rating is how much of your credit limit you've actually use what you're currently using. So maintaining balances close to your credit limit counts against you. So try to get that to a fraction of your total limit and will be in your favor for your credit rating. Number two, avoid applying for new loans while you're rebuilding your credit. So especially avoid applying for credit cards, including Store and gas company cards and other unsecured loans unless you are certain you can transfer a balance or reduce your interest rate. Tip three on that is avoid closing open credit card accounts. So pay down or pay off your balances but keep your accounts open, having available unused credit signals that you can manage your credit wisely. Okay, so for more helpful tips and resources to help you with your money goals, check out dcu.org
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(This post may include some affiliate links)I'm listening to Episode 195 of the #journeytolaunch podcast, Healthcare Options for Financial Independence, Early Retirement Seekers and Entrepreneurs w/ Lynn Frair Click To Tweet
Other related blog posts/links mentioned in this episode:
- How to enroll in the “marketplace” plan
- The 10 essential health benefits that are covered under the ACA
- My favorite algorithm for deciding if you should buy health insurance through the “marketplace”
- Wex Health HSA vs. traditional health plan
- Marketwatch video of our family FIREstarters documentary (6 mins)
- And the Marketwatch features about fihealthcare.com: https://www.marketwatch.com/story/this-early-retiree-has-a-unique-glimpse-into-the-covid-19-pandemic-and-her-side-hustle-helps-people-sidestep-financial-ruin-2020-06-08
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