Why Your Healthcare Costs Keep Rising with Dr. Jordan Grumet

Transcript:

Can you walk me through, say, like a normal ER visit and let's say, you know, a $15 bag of saline turns into being a $1500 bill. Why does that happen? So just walking in the door, you already have fallen into a trap of all these third parties that you don't even realize.

Now hospital is using that electronic medical record to up code. In other words, they're trying to gather as much information as they can to say that this is as complex a visit as possible so that they can charge the insurer. More money. So they stopped fighting hospitals and hospital systems and started paying more and more and more for care because 10% of a higher bill ends up being more money they can keep.

And then your knee hurts so they order you a Tylenol. Here's the thing. Tylenol should cost a few pennies, maybe a dollar or two. But then you get your bill and it's like 50 or $100 for each Tylenol. Even if you discount a 50% and you're real happy because you went to the registrar and they said fine, only pay US 50%, you're still paying way too much.

On this episode of the Personal Finance podcast, Why your healthcare costs keep rising with Doc G What's up everybody?

And welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of Master money.co. And today on the Personal Finance Podcast, we're going to be talking about why your healthcare costs. Keep. Rising with Doc G If you guys have any questions, make sure you join the Master Money newsletter by going to mastermoney.co/newsletter and don't forget to follow us on Apple Podcast, Spotify, YouTube, or whatever your favorite podcast player is.

And if you want to help out the show, consider leaving a five star rating and review on Apple Podcast, podcast, Spotify or your favorite podcast player. Can I thank you guys enough for leaving those five star ratings and reviews? They truly, truly mean the world to us. So. What if I told you one of the biggest threats to financial independence?

Has nothing to do with the stock market. It has everything to do with the healthcare system 1 unexpected diagnosis and all of a sudden your financial independence plan will drastically change. And on this episode of the Personal Finance podcast, we're pulling back the curtain on.

And why your healthcare costs keep? Climbing, and we're doing this with someone who has been a physician for decades now, and I could not think of a better person to help us walk through this. So Doc G, who has been on the show a number of different times, is a Hospice physician who has spent his career at the intersection of medicine, money and meaning.

And he has seen first hand where the dollars disappear. Who's really pocketing these dollars and what really matters when bills stop and life comes into focus. His work is all about building a regret free life. And we're going to use that same lens on one of the most stressful money topics that is out there.

We're going to break this down into three parts. 1st, I want to talk about why our cost keep rising from the $15 a bag of saline that turns into a $1500 medical bill. Why does that happen and why is this keep continuing to go on Two, I want to talk about how to protect yourself today.

And then finally we're going to go somewhere most money shows never do and we're going to talk about the end of life money lens as well. So this is a very important conversation. I think most of you need to understand how this works, why healthcare costs are rising at this rapid 7% increase over the course of the last couple of years.

So I am really, really excited to dive deeper into this. So let's welcome Doc G back to the Personal Finance podcast. So, Doc G, welcome back to the Personal Finance. Podcast. I think this is the third time if I'm not mistaken. It is and I've enjoyed every. Single one of them.

Well, I'm really excited to have you here. For listeners who haven't heard you yet, I want you to kind of talk through kind of who you are, what you do up front here, and then we'll dive into, I think, a really important topic. So the thumbnail sketch is I am a Hospice Doctor Who talks about finance and purpose.

The longer story is my father died when I was 7. He was a doctor. I decided to become a doctor like him. That was my sole version of purpose until I totally burnt out in the profession within the first few years. Realized becoming a doctor didn't bring him back. Started looking into finances.

Eventually found my way to financial independence. Left medicine and built a life doing things that I was much more passionate about like podcasting about personal finance. Eventually I wrote a book about purpose. What's interesting with this new book, The Healthcare Heist, is actually, I talk a lot about burning out from medicine and how it didn't fit me and maybe I should have done something different with my life, but I never go into the detail of why being a doctor was so frustrating.

What systemically is wrong with the profession in our healthcare system. So with this book and this story I've been telling, I've really been trying to go back and say, well, we kind of glossed over that before, but let me tell you some of the reasons I burnt out and walked away from actually what is a fantastic profession doing something that was really meaningful and yet I felt like I couldn't continue.

And I think that is. One of the most important conversations that we have to have today because the cost of Healthcare is rising at such a rapid rate that honestly, even over the course of the last couple of years, I've seen stats that we were talking about even of last year. In your book is is full of stats, which I think is really important. But I've seen stats even over the course of the last couple years that we're seeing like an inflation rate like 7% on just healthcare costs per year, which is just some of the wildest things we could, you know, ever even be talking about.

So we have a whole a whole system here that I think is backwards. I know you think the same thing. And so I want to walk through some of this stuff so people understand why this is happening. I want to kind of talk through, you know, some of the things we could consider doing and how we can kind of think about this when it comes to our own dollars as well as we go through this episode.

So can you walk me through, say, like a normal ER visit and let's say, you know, a $15 bag of saline turns into being a $1500 bill. Why does that happen? So first and foremost, let's think about all the systems that are happening in the background that you don't even realize, right?

So the ER is not the best place to get care. In fact, back in the old world, you'd call your primary care doctor. They'd even do things like stitches and all sorts of things in their office. But over the years, physicians have become more specialized and a lot of practices have now become owned by venture capital and private equity.

They're running businesses and they find that certain care is really good for them and makes lots of money and certain types of care doesn't. Doctors no longer owning their practice are much less likely to fit you in for an extra visit. They're much less likely to do something more complicated in the office that they used to do.

And so just by the fact that you're going to the emergency room, already there are these systems, there's these third parties that have changed our healthcare system and they're already leading to more expensive care because an emergency room is more expensive than going to your primary care doctor. There's more waiting, there's more problems in general. So just walking in the door or you already have fallen into a trap of all these third parties that you don't even realize.

Next thing you go in and what do you do? The first thing you go into emergency room, you sit down and someone's in front of a computer and they're taking all sorts of information and they're asking you about your ethnicity. They're asking you about all sorts of information. Well, they're putting it into an electronic medical record and the hospital is using that electronic medical record to up code.

In other words, they're trying to gather as much information as they can to say that this is as complex a visit as possible so that they can charge the insurer more money. But wait, I have an insurer, and that insurer doesn't want to pay out that much money, right?

Because they want to make as much money as possible. So the insurer is going to, of course, negotiate with the hospital systems so that all this up coding doesn't create a huge bill. Well, that's where you'd be wrong. Because since Obamacare, health insurers get to. Keep only 10% of the premiums they collect.

So they stopped fighting hospitals and hospital systems and started paying more and more and more for care because 10% of a higher bill ends up being more money they can keep. And then on the backside, they started basically charging people more for premiums because actually they could say, well, we're now paying out 2 billion a year instead of 1 billion.

So we need. To charge you more premiums. So they're taking the extra premiums and then they got to keep 10% of the 2 billion they're paying out a year as opposed to the 1 billion they used to be able to keep 10% of that. So already just even by the time you get behind the door and are walking towards your little room, in the ERA number of companies have made more money on you, physician comes to see you.

Physician just got sued because almost every ER doctor has been sued at some point. So the physician examines you and looks at your leg and says I can move that knee. You know, you fell and you hit your knee. I'm 100% sure you don't have a fracture, but they order an X-ray anyway.

Why do they order an X-ray? Because if they're wrong and they send you out, they can get sued. And a malpractice attorney can make a lot of money on that. And so that's defensive medicine. And so now your doctor's ordering tests. They would have never dreamed of ordering 10 or 15 years ago, but so many doctors have been sued that now they're practicing defensive medicine.

All all of this is costing you more money. And then your knee hurts, so they order you a Tylenol. Here's the thing. Tylenol should cost a few pennies, maybe a dollar or two. But then you get your bill and it's like 50 or $100 for each Tylenol. Well, why does that happen?

Well, why that happens is each hospital system and doctor actually makes contracts with the insurance companies. And some insurance companies pay more or less than others. But the problem is if you charge $10 and one insurance company would have paid you $50.00, but you only charge 10, they'll only pay 10.

So what the hospitals do, what the doctors do is they try to figure out the highest amount they possibly could charge to make sure that they get everyone under that umbrella. Because you can't go charging different insurance companies different things. You charge one thing, but then you make a contract for each insurance company to pay what they will.

And those are all separate contracts. But the problem with that is so then the hospital says, well, let's call that Tylenol $100, even though the insurance is going to pay too. But what happens if you don't have insurance? Then you get that bill as someone who is self insured for the whole $100. And then you've got to go and try to negotiate.

And even if you can negotiate 50% down so that your visit was $10,000 because you got the normal saline, because you got the Tylenol, because you got the X-ray. And each of those, each line item is double, triple or quadruple what it really should be because they want to make sure they get and capture all the other insurances and make sure they get as much money as possible out of it.

And so even if you discount a 50% and you're real happy because you went to the registrar and they said fine, only pay us 50%, you're still paying way too much. And these are just some of the inefficiencies and you haven't gotten any better care.

And possibly you've gotten worse care because you've got maybe some blood tests and some X-rays you didn't even need because some doctor was covering themselves in case there's malpractice. And so when you put this all together and this is just, you know, you going for one ER visit, imagine this happening hundreds of thousands of times a month across the United.

States. It is one of the the areas where where you're explaining this and it just to me seems like the incentives are misaligned. There's incentives all over the place that are misaligned in terms of the way that people are operating, the way that people are acting. Is this why, you know, in the book you call insurance a massive wealth transfer and you kind of talk through, you know, why that is And, and talking through adding insurance into the middle of this equation kind of causes care to cost more instead of less for a lot of folks.

Is it because of those incentives, or is this because of even deeper things? I think we have to go back to how Healthcare is practiced in America. So if you go back to colonial days, there are no doctors and there are no hospitals. Your neighbor was having a baby.

You or your wife or someone would go over there and help them, right? And so the idea was healthcare was from the people, for the people. And even as we go through American history, it kind of stays that way for a while. Like, why did we end up having hospitals? Why did we end up having antiseptic technique?

Why did we end up having pharmaceutical companies? Most of it was actually to pay for wartime injuries, right? We would go to war. There'd be wars within the United States or elsewhere, and we would need to create these methods of taking care of the wounded and getting them the right pain medicines and dealing with their issues.

It was only once we go into the, like, the, you know, the 20th century where all of a sudden you have these businesses that are popping up that aren't just providing a public good but are trying to profit. And that's where things really turn.

And so in the United States, we've really turned healthcare into a capitalistic money making field. And the problem was when you do that, I guess the real easy way to say it is this.

When a doctor sees a patient, they're bound by certain obligations. There is the Hippocratic Oath and the Oath of Geneva. Basically, they're ethical codes for doctors and how they treat patients. There's also the standard of care, which is a legal bar that we have to reach to make sure that we're doing what a reasonable physician would do in the same position.

But here's the problem. When you have corporations that are making major healthcare decisions and acting as if they're doctors, they don't have the Hippocratic Oath. They don't. Have the oath of Geneva. You know what? They have, you know, what if corporations have, they have a fiduciary responsibility to their shareholders.

You see corporations, they don't really have a responsibility to patients. They have a responsibility to their shareholders. And so corporations tend to make decisions that improve the bottom line. But you and I both know that what improves the? Bottom line doesn't necessarily improve medical outcomes and so we have this natural tension here and over the last bunch of decades we've really taken the power out of the healthcare providers hands and.

Put it into these third parties. So if you go back to before about 2019 / 50. Percent of the medical practices out there in the world were owned by the actual healthcare providers, but somewhere around 2019 it's switched and now over 50% are owned by private equity, venture capital or hospital systems.

And they've got bottom lines and fiduciary responsibilities and the kind of healthcare and the cost of healthcare we're getting is directly a result of this. And that is the thing that I have seen time and time again where I used to. So my first entry level job, I was a financial analyst at a very large in home healthcare company.

And at that company, what part of my job was to go and look at struggling other locations that were, you know, potentially either within our business and or other locations that we wanted to acquire. And I would go into those locations, kind of analyze their financials and figure out do we want to buy this business or not?

And we would do this over and over and over again. And you could see like the difference. And now, like even for me locally, now you could see my local urgent care just got bought out by private equity. It used to be owned by the specific hospital system. All of a sudden, private equity bought it out. The prices doubled just from that one acquisition alone.

And so I think this is what a lot of people are seeing currently is Healthcare is becoming, you know, private equity is becoming privatized. And I know how much those companies are making because I lived it. I was in there kind of seeing some of the, the background and, and how much profitability is truly there. It is unbelievable.

I have another friend who does stuff like this. He actually acquires struggling healthcare companies and he turns them around and he, he'll buy some of them for, you know, a few 1,000,000 bucks and turn them around and sell them for 50. I mean, private equity is paying huge multiples, which means our prices are going to be rising. And here's The funny thing about it is there's a whole playbook.

They don't even have to turn around. A lot of these companies, what they usually do, and it's been well documented, they usually come in and the first thing they do is sell the facilities out from the business. And so most facilities, I used to see this in nursing homes all the time. What would happen is private equity or venture capital would come in and buy a group of nursing homes and the nursing homes owned the building.

They would sell the building and then rent it out. And the reason they sold all of the buildings is it gave them a huge hit of cash and they could pay back their investors really quickly. And so they sell the building, they sell all the equipment.

They basically start implementing efficiencies to have less providers, less overhead and more care. They basically try to increase their high value tests, their high value services. None of that actually improves healthcare.

And what happens is they quickly pay off their investors, they quickly get off their profits, and a lot of these systems eventually end up in Chapter 11. A lot of them go bankrupt. But by that time, these private equity and venture capital have paid everyone back. They've taken their profits and they disappear or they sell at a loss.

And that is exactly why it's just so frustrating. And I think a lot of this is just one of those areas where you can see this something has to change. I don't we're going to talk about some of that stuff too. But I think it's just really, really interesting how we are seeing these prices just shift. And around the time that you said 2019 is when we saw healthcare begin to start inflate, really we started to see those numbers.

If you go back and look at the stats, you can see it start to rise in terms of every single year it's inflating at A at a higher percentage. And I think that's one of those things that we need to be aware of as consumers and folks who are looking at, you know, these different medical bills and understanding how this actually works. Now, you talk about in the book, too, that doctors are spending a lot of their times on the computer now, like they're spending a lot of time, you know, typing in the computer and doing a bunch of different things.

How does software end up inflating people's bills? Well, there are a few different problems with the electronic medical records industry. First and foremost, realize that a there was the VA system in America that's been using electronic medical records since the 1970s.

They used a government system called Vista. It was exceedingly cheap, exceedingly easy, and it functioned really well. But in the early 2000's the government really started pushing for making everything electronic.

But instead of doing using this day or. Doing it through the government, they allowed third party businesses to create these medical records systems. So first and foremost, they're exceedingly expensive, right? So it's increasing the overhead of hospitals, medical practices, which eventually trickles down into some version of providing more services or charging more for services, billing more to insurance companies, which causes premiums to go up.

But basically, it's all eventually trickling down to you and I. So first and foremost, it was just expensive to initiate. The next thing is these systems are actually built, and one of the ways that these private companies get by in is they build them so that you can upcode. So the idea is this system is going to allow you to Add all sorts of extra information.

And when you're coding as a doctor or hospital system, how much you can bill all depends on how complex the case is. And the complexity of the case is 100% based on what you put in the medical record. And so these systems prompt you to say the things that allow you to up code.

So immediately electronic medical records actually increased the cost of our healthcare system. Health insurance was paying out more. Medicare, Medicaid also paying out more. And I think that, yeah, it's, you can see that time and time again where it's kind of one of those things that, you know, the, the increase in costs surrounding every area of healthcare.

A lot of these companies, these software companies know, hey, I can charge a lot more for this because there's a lot more being billed here. And there's just this huge cycle that just got, it seems like the cycle just kind of keeps causing this to rise more and more and more, which is the the frustrating thing for us again that we need to kind of continue to think through.

And look at the fact that, so let's take Epic. Epic is a medical records company. That company has made billions, billions. So we had doctors, patients and our baseline cost of medical care.

A third party medical records system person comes in Epic. It cost the system billions over the next few decades. It would all be worth it if we got better care, like if a care was more efficient, if there were less mistakes, if survival any of this.

But most of the studies show that after all this implementation and after all everything that's gone on, medical care is no better. We make less of some mistakes, but more of others. The cost of care hasn't gone down at all. Basically, this has just been a big boondoggle for these companies.

They've made a huge amount of money. They've put their hand in the cookie jar, grabbed billions of dollars out of the system, but they haven't improved the system at all. In fact, I'd say in a lot of ways, they've worsened the system. You know, doctors now, instead of having eye contact with their patients, spend most of their time with their head buried into a medical system.

It just isn't good for patient care. It erodes patient doctor trust. None of it's good. And so much of this money is going to people, like you said, who are never even touching the patient. They're never even reaching the patient. They're not the professionals that are kind of helping the patient within their situation.

Do you think that administrative bloat is the the main reason why costs are rising? Is this one of those things that is just causing this to become just the the behemoth that it is becoming? I think administrative bloat is the tool to create these huge profits that third parties benefit from.

And I think administrative bloat also really puts a divide between doctor and patient, and it's kind of divide and conquer. Like if you are a third party and you're making billions and you're paying billions or millions to lobby Congress, the big thing for you is you just don't want anything to change.

And so a lot of these dollars in the administrative bloat divides doctors from patients, and therefore they're much less likely to come together and push for change. And so we see this over and over again, make the medical system difficult, make the providers unhappy and make the patients unhappy, but keep them separated, and nothing will ever change.

And we, as this third party will continue making more and more money. And that's exactly what's happening. If you stripped out everyone you know who is not giving care from profiting, how much cheaper could this actually be? And would this downgrade the care? Or would this just be one of those things where if you cut out all the excess, this would actually be cheaper for the consumer?

Well, you know, it's kind of clear because most countries in the world have universal healthcare that's somewhat government run or at least minimally privatized. And most systems around the world pay 6 to $7000 a year per patient, whereas in the US we're somewhere closer to 13 or $14,000 a year.

So my suspicion is about 50% of it comes from all of this bloat in these third parties. And the truth of the matter is. Mostly healthcare across the world in a lot of these universal healthcare systems is. Fairly similar to the US.

Canada is fairly similar to the US. The UK is fairly similar to the US. They both have their problems and don't get me wrong sometimes. You have to wait longer for services, but generally you do about the same. Now I will tell you there is a caveat. People do come to the US, people with lots of money, right?

The billionaires, the Princess, the leaders of state, a lot of those do come to the US for care. And the reason is we have very fantastic high level services, high level cancer service, high level transplant service. If you have a lot of money and can pay for it, you can get the best of the best.

Still in the USI don't know if that'll be forever, right? With our drain on, you know, with our doing much less research and are bringing in less immigrants who are experts in their to then come migrate to the US. That may not be forever, but as of today, you could still get some of the best care in the world in the US.

But that's really reserved for the wealthiest of people who are willing to pay out of pocket and have the connections. If you talk about the care of your average citizen here compared to the care of your average citizen in the UK or Canada, they're fairly similar, but just for a lot less. I think a lot of people believe that, hey, some of that the, the universal healthcare systems, maybe the care is not as good or it's not as as the same as the US, But you're saying it's basically, you know, pretty similar in terms of some of the stuff.

They obviously have their issues in place, but it's pretty similar in terms of thinking through that. Well, if we're dealing with these massive bills that are rising and if we're dealing with a lot of shifts in the healthcare system, this is something we a have to plan for when it comes to retirement, especially as we're starting to approach retirement, We got to start thinking about this and how we're going to handle healthcare, especially for everyone who wants to become financially independent or retire early.

If you want to retire early, you really have to think through healthcare before you get to Medicare range. Otherwise you are going to have this huge cost that you did not anticipate. And this is the number one reason why we've seen a lot of people go back to work when they, you know, retire early because they didn't realize how much healthcare cost.

For example, you know, when I, I run businesses, I don't have, you know, a, a company who is supplementing my health insurance. And it is a few $1000 per month for me to have healthcare coverage for my family of five. And so for many people out there not realizing what the cost is can be really, really important.

But Jordan, if someone gets a, a medical bill and it lands, you know, on the kitchen table, what is the first thing they should do before they pay that medical bill? Should they, you know, look at it, scan it? What are what are some of the things they should do in order to kind of save on costs here? Yeah, first and foremost, look at it right, because a lot of times you'll find things that weren't even done.

And so first and foremost, it's tracking down what the charges are and why. Next thing is, if you're paying out of pocket, a lot of times you can negotiate. You can call the doctor's office, you can call the hospital. You have nothing to lose. You can make payment plans, you can do all sorts of things.

If it's an insurance company, you could still try to negotiate with the insurance company for co-pays, premiums, those kind of things. You're going to be a little bit less successful there, but at least make sure you got the care that you were supposed to get. Make sure that your deductibles and everything after your deductible, they're covering what they're supposed to.

A lot of times what you'll find is that they either denied care or say you didn't get a preauthorization and therefore don't pay for something, which means that the doctor's office is eventually going to come after you. So you want to make sure you see those, and you want to make sure that if they deny care for something your doctor said you needed, you should fight it.

You should appeal it. You should at least go through the basic appeals and see if you can get it overturned. A lot of people don't, and that gives the insurance companies the ability to just keep on denying care. A great read, like a great example of this is I had somebody who just wrote in to us via e-mail that said, hey, I heard your your episode on negotiating your medical bills.

And we went and looked, they had, they just had recently had a baby. And when they went and looked, there were a couple of charges on their bill that ended up being care that they did not receive. And they had negotiated $6000 off of their bill of care that they never received. It was just a mistake on the coding and the billing.

And I think for many people out there, you'll be surprised at how many mistakes are out there when it comes to coding. There's almost always a mistake. Almost always. It's, it's unbelievable. And so like it's, it's one of those things that I think most people need to at least be very aware. Don't just grab your bill and pay it, you know, go through the, the process of understanding what you're paying for.

And then if there are things that are mistakes on there, go back and negotiate. Go back. And if it's a huge bill, you can work on payment plans. I've had people go back and negotiate ways where they said, Hey, I only have X amount of dollars. This is what I can pay. Will you accept that? And they've had people accept it before. And so again, it's one of those areas where if you are, if you did not receive service, you need to fight for that because I think it's really, really important to make sure that you are thinking through this.

Now another thing you talk about in the book is, is something that I absolutely love, which is the HSA. So I call the HSA the Super retirement account. It's got those triple tax advantages, which I think is is really, really important. But why do you think an HSA is one of the most underutilized or under rated accounts when it comes to personal finance?

I mean, first and foremost, a, most people just don't know they have access to an HSA, right? So if you have a high deductible plan, you can do HSA, but if you don't, you can't. So a lot of people start in a normal plan, but eventually life changes and they end up in a high deductible plan, don't even realize it's successful. That's number one.

Number two, a lot of people think the HSA works. Is it like an FSA where you lose your money at the end of the year? HSA, you never lose the money. Thirdly, most people don't realize once your money goes into the HSA you can actually invest it. So it's not just cash sitting in account, it's cash that can go into the stock market and grow.

Lastly, for most people, this idea of not using it immediately, letting it grow, keeping receipts and then taking it out as needed, just they don't understand the whole process, right? This idea that hey, I can pay out of pocket for all sorts of things, keep those receipts.

Meanwhile, my money is growing the HSA and 10 years later when I want to access that money in the HSA, I can grab those receipts out and start pulling the money out. And and as you said, the magic is it goes in before taxes. It grows tax free and if you use it for the right types of things for healthcare expenses, you take it out without taxes.

So it's incredibly powerful. I wouldn't say you want to put your whole retirement in it, but they're very few vehicles any of us have that are Tripoli tax free, almost nothing. So it's a wonderful way to beat the system and God knows you are going to need to pay for healthcare.

People think you turn 65, you get on Medicare and all of a sudden you don't have any healthcare costs. Nothing could be further from the truth. You still are means tested and have to pay a monthly fee to Medicare. There are secondaries. There are all sorts of things that you still have to pay for.

Healthcare is never free, not even after you're 65 S Having that HSA available can be exceedingly helpful. And the beautiful thing about it is once you turn age 65, if you over funded it, for some reason, it basically turns into similar rules as like a Traditional IRA or a four O 1K where you can pull that money out and and pay the taxes on those dollars.

But in addition, I think most people don't realize how many qualified medical expenses there really are tons an HSA. It's unbelievable. You can buy a Peloton now with an HSA. So there's just so many an aura ring I just saw the other day that you could buy and even Amazon has a whole section on, on Amazon's website that is all HSA eligible items.

And So what I like to do with, with my HSAS is I will save the receipts into like a, a Google Drive file. And then I just have a little spreadsheet. And now in the age of AI, if you can remove your personal information, there are ways that you can kind of come up and, and get that going where you can, you know, have it added to a spreadsheet pretty quickly.

Or you can just kind of recite the amounts and have those amounts kind of stuck into a spreadsheet pretty quickly. But again, your personal information needs to be off that if you're going to utilize AAI in any way, shape or form for something like that. But in reality, I have a spreadsheet that I just kind of keep and it's an ongoing spreadsheet that keeps going on how much I have in receipts just so I have the number so I can kind of track it as time goes on.

And you may realize, oh, I purchased some other items that I never realized were actually HSA eligible. And if you have those receipts somewhere, you would definitely, definitely keep and hang on to those. I think it's a such a powerful way to even bridge your account. I mean, even just thinking if you retire in your 50s, for example, and you have $100,000 HSA and you have $50,000 worth of medical receipts, you can utilize those in a way that you know helps, you know, fund your retirement until you get.

Yeah, or insurance premiums or Medicare premiums. People don't realize, like we talk about the fear of Irma, right? Irma is if you have a certain amount of income, you actually have to pay more for Medicare, which a lot of people don't realize. And people, sometimes you just can't get your income low enough to avoid Irma.

But if you have an HSA, you've got that money sitting there ready to pay those increased Irma premiums, and that can be really beneficial. If someone's trying to decide between, you know, going high deductible health plan or a, you know, a cheaper deductible health plan, can this backfire on them in any way, shape or form?

And how do they kind of think about that 'cause I know that's one of the questions that I get from a lot of people is, hey, should I go with a high deductible health plan so I can get an HSA? And it's going to depend, I think, on the situation. But how can that backfire? And when would it make a little more sense for people? So I'm by no means an expert in this, but it really depends on what you're spending is going to be.

I mean, if you know that you have a chronic disease, chronic illness and you're going to be meeting your deductible every single time, you know, a low deductible might be very reasonable. Where is if you rarely use the system, a high deductible with AHSA can be very beneficial.

And don't forget you can negotiate right up to the deductible, right? So when you haven't met your deductible, a lot of times you pay directly to the provider and that's when you can call the provider and say, hey, how about a 10% discount? How about a 20% discount?

So these are all your options to really, really kind of cut down on costs. And one of the things that I like to do is, you know, if you're healthy and, and you're kind of looking at some of this stuff is I will kind of shift depending on the years on what kind of health plan I have. So some years, for example, when I knew my wife and I were going to have a baby, I would shift the health plan over from a high deductible health plan to just a standard health plan and have that in place where I knew there's going to be a lot more medical costs in that given year.

And so I mapped it out and kind of figured out, OK, this makes a lot more sense to to shift it that year. Then I go back to the high deductible health plan when it's time again. And I know there's going to be possibly less medical costs, I mean, fingers crossed always, but that's just one of those areas where one of the ways that I think through it in a way that I kind of operate when it comes to some of that stuff, so.

A lot of our. Listeners are interested in retiring early and when they start to plan for healthcare and financial independence. I think this is something that is very, very important for anybody who retires early. I think this is just always forgotten for a lot of people when they don't plan this out so.

If they're going to lose. Coverage, but they don't have Medicare available to them yet. So let's say maybe they retire in their 40s or they retire in our 50s, which you and I know many people who have done. So we know people who retire in their 30s. And so if they are going to decide to do something like that, how should they start to think through this process?

I mean, how much should they budget for healthcare? Is there some sort of budget that you are kind of thinking through or ways that you think about that, you know, all those different types of things? How do you think about healthcare with with early retirees? So there are a number of different options and you really have to game it out, right. And so people who know that they're going to have a low income, so let's say you live off of 30 or $40,000 a year, you are an early your retiree.

Maybe the way you're paying for your lifestyle is through some mix of cash you had available. Maybe you're converting, you know, your traditional to a Roth and doing a Roth ladder and pulling some out of that. You're going to have an exceedingly low income.

So the good news there is you will qualify for subsidies and healthcare probably just won't be that expensive for you. So if you were in a low income state, healthcare.gov use the subsidies. It's very good insurance. That's number one. Number two is to do what I and my wife did.

We have a very high income, even though we don't make much money anymore because we are, you know, selling off equities to pay for our lifestyle and we're more of the high spending bracket. So we're never going to qualify for subsidies. So what I did is I kind of looked at our budget and I assumed, which for a family of four that in where we live in Illinois, it's going to be $3000 a month.

So that was actually part of my, you know, quote, UN quote FIRE budget. I looked at how much do I need? Now, one thing you have to remember is it's a short term problem. If you retire at 55, you're really talking about 10 years. When we look at FIRE budgets, financial independence, retire early budgets, we're usually looking at 30 years or more.

This is a little different because you're only talking about maybe 10 years, maybe 20 years only if you retire. If you retire at 35, you're finally looking at a 30 year, you know, problem. So one way is just to say I'm going to include this in my expenses. You make a rough estimate, of course, you can't see the future so you don't know what it's going to be.

But for me it was $3000 and I just added into my budget. Other people do other things. There are some easier, cheaper ways to get insurance if you are willing. So alternate versions of insurance. There are health savings ministries.

So that's usually a religious organization. You have to follow certain ethical, moral, or religious dictates, but if you do, you can sign up with them. Everyone puts their money in and then there's administrator that disperses it to people who need it. It is technically not health insurance, so it doesn't have the protections from the government that, for instance, Blue Cross Blue Shield has.

But a lot of people I know have been very happy with it, and it's usually 1/3 or 1/4 the premium costs. There's also something called farm insurance if you are lucky enough to live in a city that has a Farm Bureau occasionally. No, we're not talking about everywhere in the US, but in a few different places you can join the Farm Bureau and they actually give out really cheap insurance.

And then if you're adventurous, there's stuff like expat insurance. So there's some ways to play the game. If you live outside of the US more than six months a year, there's some versions of expat insurance you can use. Those are difficult, but if you really want to game the system, there's some hacks you can use.

Unfortunately, it's a lot harder than it should be. Like think about it. If you're from Canada, this is not even a consideration. If you're from the UK, this is not a consideration. If you're from most of South and Central America and from most of Europe, this is not a consideration. This is mostly AUS problem.

So whenever I talk about this and I give advice and talk about the different ways of dealing with it, I want to be clear in saying it's a broken system that has LED here. So yes, we can piece meal and answer. But what I really want to push with this book is let's fix this system so we don't need to piece, meal and answer.

Like you pay enough taxes as an American citizen that you probably should get universal healthcare anyway. Exactly. I think that's the, and that's the key component. Like you're in a location where you're saying, Hey, I got this income coming in and I'm paying, you know, $3000 per month. I'm paying about, I'm doing the same about about 2500 bucks every single month.

And I think it's just, it's surprising to people if they don't realize, hey, your location does matter and, and some of that as well and your income is going to matter. But in the long run, this can get very expensive depending on where you currently stand. And if you don't budget for that, it could be a bigger deal. One other thing though, is like long term care, do you look into long term care at all?

Or is this just something that hey, it's part of My Portfolio, I built up this, you know, large portfolio and so I don't have to really worry as much about long term care anymore. Or do you recommend that people kind of plan that out? So just like we're talking about paying for healthcare before 65, long term care also.

Is something you have to gamify and try to figure it out again, because our system is broken. Our system should pay for it. It doesn't. So let's talk about some things to think about first and foremost. We used to talk about this idea of a retirement smile, right? So at the beginning of the smile, you retire, you're spending a lot because you're in your go go years, you're traveling, you're doing all sorts of things as you go to your slow go years, right?

You're getting 70s and 80s. You don't want to travel as much, you're not doing as much as you spent spending less. And then the idea was the smile. You start spending more again towards the end when you have to pay for long term care. Interestingly enough, a lot of the newer studies are showing that that smile is probably not as advanced of a smile as we think.

We're actually not paying nearly as much in long term care as most people fear. Like 70 to 80% of people will pay a very small amount for long term care and nothing and only about 20% are going to pay a number that would be onerous. So first and foremost, most people aren't going to deal with this.

Issue. But because we are people who like safety and because we are early planners, we want to figure out a way to manage this long term care so it doesn't bankrupt us. So first of all, let me tell you what I did. I am in a position where I had a high income and when I was really in the midst of my accumulation years, we started looking at long term care policies when I turned 40.

So we are really ahead of the game. And remember when you're young, it's cheapest. So when I turned 40, we looked at the premiums. It was extremely expensive to pay monthly for a premium. And so we started looking at insurance policies that had long term care riders.

And so I never advocate whole life insurance. I almost always advocate term insurance. But both my wife and I plunk a bunch of money down and bought basically long term care wrapped in a whole life insurance policy. And so for us, I'll give you the actual numbers, I think it was 80,000 each for us, but that gave us a huge amount of long term care coverage and we never had to pay another premium again.

So instead of paying monthly premiums, what happens when you become disabled and need long term care? Well, you tend to forget things like the bills. And if you've been paying your long term care premium forever and then forget a month or two, you might lose it. And once you lose it, it's gone. And so that is one way. It's probably more for the wealthy, but it is something you can do.

Another way is exactly what you said is you could say, well, long term care insurance is too expensive, but we can backtrack and say, well, your average person at the end of life spent somewhere around 150 to $250,000 of care in those last few years. So if that's in 30 years, how much money do I need to start investing and putting away in a separate account to cover that today?

And what you realize is it's just not nearly as much as you think. So you know, you put ten $20,000 today and you're thinking about 30 years down the road and you put it in aggressive equities, et cetera. At some point it's going to get towards that 15250.

And so you can plan in advance and you can basically do what we do in Coast FI, right? In Coast FI, you basically figure out how much you need invested to eventually become enough for retirement. Well, it's the same thing for long term care. You figure out how much you need to put in today so that it will coast to being long term care.

You can do the traditional, which is get insurance and pay your monthly premiums. It tends to be exceedingly expensive, so most people don't. And believe it or not, there's some other interesting ways around long term care which most people don't know of. So if you have ever worked as a social worker or dealt with people at the end of life, you know there's something called continuity of care facilities.

So continuity of care facility is usually when you get older you can move into a community where you live independently. Some places you actually have to buy an apartment. So let's say you put 250 or $500,000 down for apartment, you sell your house, you buy the apartment.

Other places you just pay rent and you live there independently. But once you're there independently, let's say you get sick and need assisted living. They actually have an attached assisted living and a lot of them have an attached skilled or nursing home. And once you're in the system, you maybe pay an extra $100 a month to move up in levels of care.

So continuity of care is something that even non and wealthy people can do and it's like a long term care insurance policy, but instead you move into a continuity of care facility. That's actually what my parents did because they didn't have long term care insurance. Lastly, the other thing is you can just move into a community of older people and agree that we're all going to help take care of each other.

And you see this in some places where people live in a building and they all know their neighbors and when so and so breaks their hip, one of the neighbors will come in and they'll provide some care and they'll cook meals for them and etcetera. So all of those are possibilities, and none of them is perfect. It's a solvable problem.

We shouldn't have to work so hard to solve it. But unfortunately the way our system is today is that you do have to work to solve the problem, but there are solutions. You know, throughout this conversation, we're seeing problems left and right with the healthcare system in the way that we're even kind of, you know, thinking about some of this stuff. If someone's listening right now, they're like, hey, how, how can we help fix this?

Or what are some of the things that we can do in order to to try to make a difference? Is there anything that you think people should be doing or considering right now to, to try to help make a change? Or is this something that really just has to happen when it comes to policies across, you know, politics and in Washington, DC and, and some of those things there?

So here's the problem. There are things we could do as individuals, and there's things we have to do as a community. Let me start with the hard ones, what we have to do as a community, and then we'll talk about some things each individual can do as a community. I believe the only way we get change is never going to be through basic legislation because these third parties are so entrenched, they pay so much money in lobbying that things just aren't going to change, right?

That's why. That's why we have gridlock in Congress for all these years. Even Obamacare, with everything they tried to do, it didn't really fix the grand majority of problems. So I feel like we need revolution. Now, I'm not talking about revolution like bayonets or guns or those kind of things or pitchforks. What I'm talking about is what a revolution is, is when the main stakeholders come together and speak as one voice to push for change and they convince the political parties and they convince the governing structure that they have to change.

And we've seen this throughout the United States. A great example is civil rights, right? Civil rights basically in the 19 60s, we finally had such a large push by so many stakeholders that the Civil Rights Act had to happen because there was enough people, enough citizens pushing for change that it caused a revolution.

We need the same thing in healthcare. Unfortunately, right now you have patients and physicians and healthcare providers are all fairly divided, right? The system is pushing us apart. It's blaming each other. The main stakeholders, those who need care and those who provide care are not speaking as one voice.

So from a. Pie in the sky level we need to come. Together as one voice and push for grassroots change. I argue in the book that way we get there storytelling. How do people become allies? How do the doctors and the patients become allies? How do we become intimate with each other?

In a way that we trust each other. It's when each side tells stories. Now. Patients have been telling their stories forever. They come in the exam room. They bare their. Souls, and then they. Bare their bodies to the healthcare practitioners. But it's unilateral intimacy. Healthcare providers don't tell people their stories, which mostly makes sense because when you come to the emergency room with chest pain, you don't want your doctor to, you know, sit your side, say, well, I hear what your problem is, but listen to my day.

But outside of the exam room, we do a great job of telling people what we know, how to avoid health, you know, heart disease and how to get your cholesterol better and how to exercise. But we do a horrible job of telling people who we are. In other words, explaining the systems that don't work for us either and what it feels like to be a doctor.

So I think the answer is we need to become better allies through shared storytelling. If you go back to civil rights, the story of Rosa Parks was the perfect example of how stakeholders can gather around a story and push for change. I think the same thing has to happen in the US. So that's like the big story.

The other question is how we as individuals can change things. Well, as individuals, the best thing we can do is not put our dollars in the pockets of these third parties. Well, how do you do that? Well, first and foremost, if your insurance denies you something, fight it. Go to the mat and fight it.

Every healthcare company has appeals. Go appeal it. If you go to your doctor's office and you need a new blood pressure Med, Blood pressure's something we've been treating for centuries. You don't need the newest patented medication unless you have very severe blood pressure.

Most likely you can get a generic that costs pennies and doesn't go into the hands of these big pharmaceutical companies. Find doctors who aren't owned by private equity and venture capital. I know it's hard, but there still are some doctors out there who own their own private practices or who do concierge medicine or direct primary care.

Both of those are complicated systems, but basically they elect to not be part of the health insurance system. So there are some things you can do above and beyond this bigger idea of coming together, stakeholders. You can do some really basic things, fight your bills and negotiate your bills.

All of this takes money out of these big systems and puts it back in your pocket, which means the money is staying either in the hands of the patients or it's staying in the hands of the actual healthcare providers who are doing the work. That's what we want. If you had sitting here like a crystal ball and you were, you know, looking ahead and trying to predict what would happen in the future, do you see change happening here?

Or do you think this is something that's going to have to burn? The system is so broken, revolution sometimes have to happen, and they will. That might look like universal health care. It might look like some common sense regulations. We're already starting to see it in our political system, right?

So when you look at the different political parties, and I don't want to get too overtly political here, but when you look at the left, the left is pushing towards things like democratic socialists. And a lot of that will affect what happens with our healthcare policy in the future. Like we tend to react as a community and we swing left or swing right depending on what atrocities are happening in our world right now.

And it is atrocity that healthcare premiums are going up. I mean, if you look at healthcare premiums from like 2000 to now, they just keep on going up double digits. The cost of meds is going up double digits. Everything is costing more. There's a reason why people are saying that the economy is such a problem.

Healthcare is a big piece of this. I feel confident one way or another we will push as a community for change and we will eventually get it. It might be hard, it might be difficult. I even think Obamacare was the beginning. But just like anything in the US, there's lots of ups and downs.

You know, you push the limits, there's a little pullback, then you push the limits more, there's a little pullback. But eventually we get to where we need to go. So I feel like there is definite optimism there. And This is why I think for most people out there, we need to make sure that you're building wealth and you need to make sure that you're doing the right things for your financial future because having this in place is going to be one of those things.

If we see this rising cost over the course of the next couple of years and the change doesn't happen rapidly enough, it is really important to focus on those things that you can control. What are the things that you can control? You can control what your savings rate is. You can control how much income you're earning. You can try to negotiate your salary, increase that income to put those dollars towards wealth building for your financial future.

So you can plan this stuff out so that you can use money as a tool so you don't have to stress and worry as much about some of these different areas. And so that's why we talked about what we talked about here. We talked about this so that you can also make a change in your life, do the things that you need to be doing in order to help with this change.

And I think this is really, really important. George, thank you so much for coming on here. Where can people find more about the book You and everything else? Thank you so much for having me and I just want to remind people you do have some control. Even in a broken system, you do have some control. If you want to learn about the book, go to Jordan Grumet That's Jordan Grumet There you can learn about all three of my books, take Taking Stock, The Purpose Code and The Healthcare Heist, as well as the different places where I create content They earn and invest podcast, as well as the Purpose Code Substack Check me out Jordan Grumet Awesome.

And we will link all of that down below in the show notes. Thank you so much for coming on here. This has been great. Thank you so much for having me.