Will Healthcare Always Be the Retirement Spoiler?

I don’t care what side of the political spectrum you are on, you’d have to be completely under a rock and out of touch with the world not to realize we have some serious issues with our healthcare system. I find myself wondering what it’s going to take to make some forward progress on this issue.

From my point of view, I’m a financially savvy, solidly middle class household with a net worth higher than 90+ percent of people my age. In this situation you would think that would give me some level of peace of mind when it comes to finances. Frankly, I don’t have much.

If I was to get very sick and need significant medical attention, I could be faced with huge medical bills. Yes, my health insurance (that I have through my employer) would cover the majority of the costs after a deductible but only up to a maximum amount. What if I was in bad enough shape that I couldn’t work for an extended period of time and ultimately lost my status as an employee? I could lose the health insurance that my employer offers me and then burn through the assets that I do have.

What if everything goes peachy until I’m 55 and want to retire? I would be faced with a LARGE cost to insure myself until I hit medicare age and even then, benefits could be reduced so much that medicare doesn’t really cover all of my health costs. Then what? How long could I sustain myself on the assets that I’ve saved over my working career?

My point here is that you can do everything right. Save 20% of your income, invest aggressively, amass a sizable retirement, only to have it crushed by medical bills. Is this a good system? Isn’t there a better way? Would I rather be taxed heavily throughout my life to give me peace of mind later? I’m not sure. All I know is that unless you are a multimillionaire, your prospects for a relatively risk free retirement are not so good.

At age 36, by the time I get to retirement age I may very well not get the chance to receive social security because of the massive hole in the social security funds. It’s the same story with medicare. After having paid in to these programs all these years, I may get nothing in return. It’s like buying insurance only to be told when you need to make a claim that, “Sorry, we’ve decided we can’t afford to pay out your claim”. Frankly that kind of sucks.

So what can I do as a 36 year old, reasonably financially intelligent individual? Well, for starters, save like hell. That may be the answer for me since we are living comfortably below our income level and have a pretty high income level relative to a lot of people in the country, but for others that may not be enough. If you are making $30,000 a year, I don’t care what level of income you save, it’s probably not going to be high enough to “save” your way out of these risks unless you live in your parent’s basement and mooch off of them until you are 50. That doesn’t sound like a very rewarding life and I KNOW the ladies don’t dig a basement “playa”.

In the system we have today, it seems the only real option for people is to earn more money so that they can save more money. Unless we have a major overhaul of our health care system, government and economy, that really seems like the only option for people. That being said, there will always be a significant percentage of workers in our economy that won’t rise above the $30,000 a year hamster wheel. As a society, what do we do about those people? Should we just throw up our hands and say, “Wow. It sucks to be you!”? Is that okay morally?

I don’t pretend to even begin to have an answer for any of the questions I’ve asked here. I’m simply trying to point out that the system just doesn’t seem to be working very well. I hope I’ve conveyed that without any emotion or bias but I’m sure a bit leaked in to the keyboard.

And while we’re on the subject, Lazyman has a couple posts that talk about unhealthy people paying more for their insurance. Does this help the overall long term situation, or just make it worse for some?