Health insurance more than a mortgage

Investment Analysis Clubs Macro Economic Trends and Risks
1

Many METARs are retired and many own our homes. So we may be less aware of the Macroeconomic trends that impact working Americans who are the backbone of our economy.

https://www.wsj.com/health/healthcare/aca-health-insurance-cost-subsidies-expire-37a595a9?mod=hp_lead_pos2

Health Insurance Is Now More Expensive Than the Mortgage for These Americans

Monthly health-insurance bills are rocketing higher for middle-income earners who rely on Obamacare

By Rachel Louise Ensign, The Wall Street Journal, Jan. 26, 2026

Millions of Americans face rising health insurance costs as expanded Affordable Care Act subsidies expired on Dec. 31.

....

Millions of Americans are starting to see their monthly health-insurance bills rise, a new pressure point for a nation still frustrated with the high cost of living.

Many of those facing the most substantial dollar increases are middle-income Americans who buy health insurance through the marketplaces set up by the government’s Affordable Care Act, known as Obamacare.

Expanded subsidies for those insured under the ACA expired on Dec. 31—the central battle in last year’s record-long government shutdown. That shutdown ended with no resolution on the subsidies, and lawmakers haven’t passed legislation to revive them…

During the pandemic, Congress expanded subsidies for ACA plans to many households earning more than 400% of the poverty level—$62,600 for a single person or $128,600 for a family of four in the contiguous 48 states in 2025.

Middle-income earners without good options for workplace health insurance—like early retirees, independent contractors and small-business owners—were quick to sign up. Nonprofit KFF estimates that about 10% of ACA enrollees in 2025, or roughly 2.5 million people, have annual incomes above 400%.

Now, with their subsidies disappearing, they generally make far too much money to qualify for Medicaid and are too young to enroll in Medicare…[end quote]

This chart shows the stunning impact on people whose income is just over the cutoff point.

image
image1116Ă—884 32.6 KB

An early-retired couple below age 65 who were comfortable with an $85,000 per year income suddenly has a health insurance annual premium of $23,000!

Many people will drop their insurance. Others will have to drastically cut back on other spending. Others will have to look for jobs at a time when hiring is slowing. The economic impact won’t be felt for a few months.

Wendy

9 Likes
2

This is precisely the reason why I refuse to quit my paycheck. Our expenses in health care have been 150% of our mortgage for more than 15 years now.

We are an outlier as we typically hit our out of pocket maximum by June/July each year.

January is especially fun as the full brunt of deductibles, check ups and lab follow ups hits our expenses. Planning for these payments is essential in this period.

The chaos of recent policy changes and “life” events is simply too much risk to quantify in budgeting or planning purposes. It literally blows up any forecast unless the assets under management is grossly out of proportion with the annual expenses budget.

5 Likes
3

The so called Health Insurance isn’t insurance anymore, it’s PrePaid Medicine which is more expensive than Regular Medicine because of the extra cost added by the insurance industry.

You should only insure what you cannot cover and Regular Medicine should come out of your regular budget.

No matter how much you pay for Health Insurance it does not prevent you from getting sick, in other words it does not insure health. The only thing insurance can insure is WEALTH.

Misusing insurance is a waste of money.

The Captain

4 Likes
4

It’s true enough that medical insurance isn’t “insurance” per se. In spite of the name. It’s an individual’s contribution to the system that provides for medical care for Society…..however much Americans perceive it as a personal health umbrella policy. Every other developed country does the same by various means and under various names.

It’s the sort of collectivism (if that’s a word) that allows aging foreigners to descend on a country and take advantage of everything that a well developed healthcare system provides. Which amounts to a lot, regardless of health status.

2 Likes
5

Yes it is, a relative of Communism…

Google AI

While communism is a specific, extreme form of collectivism involving state ownership, other forms include social democracy, socialism, and tribalism

Charity? Anyone who voted for this charity shoud not complain.

The Captain

1 Like
6

I think that ignores the fundamental reason our health system looks the way it does:

Taxes.

Employer-paid premiums for health insurance are exempt from federal income tax and payroll taxes (FICA). That’s massive. The median U.S. household faces a marginal tax bracket of 22-24%. Payroll taxes at that level are 15.3%.

That’s a massive incentive to funnel as many health care dollars through your employer-paid health insurance policy as you possibly can. If you pick a plan that has you paying about $17K (a really maxed out deductible under a catastrophic plan for a family) vs. $2-4K for a low deductible, you’ll save some money on your premium. But now you have an extra $13K that’s subject to some 37% of taxes, or nearly $5K in extra tax liability.

3 Likes
7

Not a question of ignorance, just stating facts. Justification, history, and motivation don’t change facts.

The Captain

8

I wasn’t talking about justification or motivation. I was responding to your suggestion that the economically smart thing to do was to avoid running your Regular Medicine through your health insurance, and instead pay it out of your regular budget.

What that means in practice is that you’re paying your Regular Medicine with after-tax dollars instead of pre-tax dollars. Which carries a pretty hefty cost for anyone except those with virtually no tax liability. Most people are better off paying whatever efficiency losses come from running Regular Medicine through insurance in order to avoid the tax consequences.

6 Likes
9

You are talking about how America messed up insurance. The road to Hell is paved with good intentions.

As a former management consultant I know how corporate hiring policies led to this mess. IBM paid for my appendectomy in the early 60’s (around carnival time, a fun story that I’m sure you are not interested in :stethoscope:). It’s been building for a very long time. Corporations competing in ways to attract talent while saving money.

The Captain

:stethoscope: Hint, makeup makes women more beautiful that the best cosmetics can.

10

No, I’m talking about the current system. If you pay for “Regular Medicine” outside of your employer-sponsored health insurance, you pay for it with after tax dollars. If you pay for “Regular Medicine” within your employer sponsored health insurance, you pay for it with pre-tax dollars.

For most (nearly all?) people that have access to employer-sponsored health insurance, that difference in tax treatment will be more than enough to make it the better choice.

1 Like
11

It might be a better choice but it’s not insurance. It’s prepaid medicine and the reason it’s so expensive, the topic of this thread.

Why is Health insurance more than a mortgage? Because it is insurance in name only. It’s prepaid medicine.

Talking about insurance, do you know the origin of the term Underwriter?

Google AI

The term “underwriter” originated in the 17th-century London maritime insurance market, specifically at Edward Lloyd’s coffee house around the 1680s. Financial backers would literally write their names under the description of a shipping venture, accepting risks in exchange for a premium. This physical “writing under” the risk document signified their liability for potential losses.

The Captain

2 Likes
12

Sure. I wasn’t saying you were off-topic, or even that you were wrong in your assessment of prepaid medicine vs. insurance (though you are being overbroad with that). I was just responding to your comment that people would be better off paying their own Regular Medicine bills rather than using their insurance as pre-paid medicine. That’s probably not the case.

3 Likes
13

So is car insurance pre-paid collision repair?

1 Like
14

This was indeed true for us. In early 2024 when COBRA expired (COBRA was $3100/mo for a decent family policy), we had to get a marketplace plan, and it was $3850/mo (for a really cr@ppy policy with a $10+k deductible) for a couple of months. That was more than 3 times our mortgage payment. Very quickly my wife took a part time job with benefits solely for the health insurance part of it. Also, we never made a single claim on that expensive policy.

Under the current law, this is now impossible. There used to be what they called “major medical” policies, basically, you pay for everything out of pocket unless you have a major issue, like heart attack, cancer, etc. Then the policy takes over and covers everything above some level. Those policies used to cost a few hundred bucks because they were very rarely used, and you obviously couldn’t purchase them AFTER you suddenly had the major illness. Today no such policy exists, the typical high deductible policy has an extremely high monthly price tag without subsidies.

That’s exactly how the ACA was supposed to work, “the rich” pay full freight, and the poor get a subsidy. Someone with two million plus of assets and drawing $85k a year to retire early is included in “the rich” for the purposes of ACA law.

I mean seriously, would anyone sane suggest that early retirees should receive a handsome subsidy from the taxpayers for their health insurance so they can have 2 or 3 extra cruises ($23k worth) each year?

4 Likes
15

No. The only thing you can insure is wealth. There are lots of insurable risks, fire, theft, collision, etc. That does not prevent fire, theft, or collisions. What it does is to pay for these mishaps. They protect your wealth, your ability to overcome these mishaps. But you don’t insure oil changes, battery charging, car wash, ordinary expected expenses. They are part of your ordinary expenses.

All the above policies have deductibles, a part of the damage that one must cover oneself. In health insurance there exists a “Major Medical” policy.

Google AI

Major Medical health insurance is a type of comprehensive insurance policy designed to cover a wide range of medical expenses, ranging from routine preventive care to major, high-cost procedures. It serves as a financial safety net for individuals and families, protecting them from the high cost of significant illnesses, hospital stays, or unexpected injuries.

AI has one item wrong, it does not cover routine preventive care. Routine belong in the ordinary budget. Routine is something you can and do predict and can be budgeted, no reason to pay extra to the insurance company.

Depending on your financial situation you set the limit that you might have to spend on unpredictable medical procedures and that is what dictates the Major Medical policy you buy.

Getting back to cars, you insure only unpredictable expenses like collision and theft. But even in those cases you bear part of the cost via the deductible.

Prepaid medicine is when you tell the insurance company to take care of your health. You lose control over your health. You become a beggar to the insurance industry after paying hefty amounts of money to them to take care of you.

Socialized medicine is prepaid medicine paid via taxes. One for all and all for one. When you have a “mixed economy” like Venezuela had before Chavez, middle and upper classes use private practice while lower economic folks rely on socialized medicine paid by payroll taxes paid by everybody. Before getting a medical license, new doctors have to put in a certain amount of time in rural areas not covered by private practice. Universities also treat lower economic folks. Lots of private doctors do pro bono work. The problem that I see in America is that medicine has been socialized too much but is still run by private enterprise which is a clear conflict of interest.

Insurance only insures your wealth and should be used only to cover unexpected and expensive occurrences.

bjurasz, I hope this explains the difference between insured and prepaid.

The Captain

2 Likes
16

That was insurance as it should be! But American healthcare has been hijacked!

The Captain

1 Like
17

Give them what they voted for-- good and hard.

The countries that leave for-profit insurers in charge are paying a lot more for health care.

The 20% skim rate on Obamacare and 15% on Medicare Advantage, is the “stupid tax” you’re paying for not understanding the arithmetic.

intercst

5 Likes
18

That’s the bipartisan culture of corruption in Washington. The most corrupt insurance executives work closely with the most corrupt Members of Congress to stifle competition and price disclosure in exchange for large campaign contributions.

It’s the American Way

intercst

5 Likes
19

I would claim insurance executives have BOUGHT Members of Congress.
As have banking Phara, defense industry, etcetera etcetera

3 Likes
20

Quibble, it was supposed to work with a mandate that everyone is covered or pays a tax. When that mandate was struck down, prices increased an average of 6% directly tied to its removal. They have continued to increase as “adverse selection” continued to reduce the number of covered individuals.

https://www.commonwealthfund.org/blog/2026/putting-extraordinary-increase-aca-premiums-2026-perspective

Our colleagues have estimated that the expiration of premium tax credits will result in 7.3 million fewer marketplace enrollees and an increase of 4.8 million Americans without insurance. In addition, another study estimated that changes in regulations and in H.R. 1 would result in an overall decrease in marketplace enrollment of 5 million and an increase in the number of uninsured by 2.7 million. There will not only be a reduction in enrollees but most likely a less healthy population, meaning more risk for insurers…

ACA premiums grew more slowly (2.0% annually) than employer premiums (4.5%), national health expenditures (6.0%), and gross domestic product (6.7%) between 2020 and 2025. As we have shown, the level of ACA premiums prior to 2026 were lower than those in employer and small-group markets, by 15 percent and 23 percent, respectively.

As a reminder, the profit from such plans is capped so there is no incentive to charge more than you can keep - otherwise you have to mail out refund checks to your covered individuals.

7 Likes