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I'm in my thirties and have a wife and a newborn. I want to invest in health insurance from now on so that I can use the policy after I retire. Right now I have employer provided insurance. But, going by the costs of health insurance I want to get started early to save on insurance premiums.

Any pointers, popular investment instruments, advise?

Thanks K

  • I thought Medicare pays for you after 65? Are you planning to retire before 60? – f1StudentInUS Nov 22 '11 at 5:38
  • As far as I know (I maybe wrong here) medicare doesn't cover everything and there are holes which need coverage. Also, I'm hoping to retire before 60. – user5149 Nov 22 '11 at 6:34
  • Not only does Medicare not cover everything after age 65, but the holes are large enough that many people buy a supplementary medical insurance policy to cover the gaps. Also, many people don't know that high-income people (dual-income couples who maxed out their IRAs and 401ks fall into this category) have to pay monthly premiums (income related Medicare Adjustment Amount or IRMAA) ranging from $139 to $319 per person for Medicare Part B coverage. The premium is based on Modified AGI (MAGI) which adds tax-free income such as from municipal bonds etc to AGI. – Dilip Sarwate Jun 16 '12 at 1:26
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I like Health Savings Accounts. If you don't spend all the money, it rolls over, and you can withdraw from it tax free after retirement.

  • This was what I was thinking. Can you have a personal HSA at the same time as an employer provided plan? – MrChrister Nov 22 '11 at 18:54
  • I don't know. :( – Scott Nov 22 '11 at 22:16
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    @MrChrister: (US ONLY) You must be in a High Deductible Health Plan in order to open/contribute to the HSA. (see IRS Pub 969 for details) – yhw42 Nov 23 '11 at 3:47
  • The OP is asking about health insurance policies which are quite different from Health Savings Accounts. A policy will cover costs of certain medical procedures (as specified in the policy) up to a certain amount ($1 million is often used). The total of all premiums paid is much smaller. A Health Savings Account can be used to pay for medical expenses but only up to the amount in the account (contributions + earnings - previously paid expenses) which is usually a far smaller amount since the maximum annual contribution is less than $7K. – Dilip Sarwate Jun 16 '12 at 22:16
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I don't know what the OP means when he says

I want to invest in health insurance from now on so that I can use the policy after I retire.

Generally, a health insurance policy covers costs incurred during the current calendar year (or specific period such as July 1 of one year through June 30 of the next year) and does not cover future periods. Indeed, many policies do not guarantee renewal when the current period ends (with exceptions for employer-provided coverage through COBRA in case employment ends). So investing in a health insurance policy meaning that you pay the premiums now, and the insurance company provides the policy in the distant future is something that is new to me. Besides, what will the policy include? If someone had bought such a policy many years ago, say, before CAT scans and MRI were developed, would the policy cover such new developments? Or the policy would cover only those procedures, tests, and medications that are available when the policy is written and the insurance premiums start to be paid? The long-term health of the insurance company is also of some concern. When something is offered to me with a lifetime guarantee, I skeptically ask, "My lifetime or the device's life time or the company's lifetime?"

protected by Chris W. Rea Jun 16 '12 at 0:58

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