E10: The Health Care Scare

Holly: Welcome to Dollars and Nonsense. In this episode, we will discuss the rising costs of healthcare and present some alternatives that can help you save money and bring wealth back to your family. He’s Nate, and he makes sense out of money.

Nate: She’s Holly, and she helps people find financial freedom. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered. Episode 10.

Holly: Well, Nate, I know that all of us have growing concerns of the rise in costs of what it entails to provide healthcare or health insurance for our family or even individually. And the costs of what you have to have even just to start a family maybe. Or to have a baby. What do you have to have in place? And I know personally I’ve seen numerous families feel like their only option is what the government is telling us. Or what healthcare plans are out there. And Obamacare was supposed to relieve some of that tension and stress, and actually what they’ve shown is it’s going to rise by double- digit increases; [it’s] what they’ve predicted for 2017 for those of us who have been affording healthcare. I’ll give a personal example for me: prior to Obamacare, with my health insurance, my family and I paid about $300 out-of-pocket a month for it. After Obamacare, and with the insurance companies—same company, same plan, same option—it rose to $700 a month. Just in the difference—it was a 100% increase, if you want to [call it that]. Just to provide the same type of care and coverage, and we ended up having a higher deductible to have the care. So not only did we have to increase what we have to pay out of pocket, but we had to also increase what we were spending monthly. And there’s health insurance companies even today that if you’re a single business owner or self-employed and you want to look for healthcare, they’re not offering those plans anymore because it’s not beneficial to them. It’s so cost heavy that they can’t offer a reasonable plan to those individuals that would want to buy individual healthcare.

Nate: That’s the thing we’re seeing with everyone’s healthcare premiums skyrocketing for the most part. A lot of people don’t see how it can go down. That’s the problem with the way the healthcare is built here, especially as it gets more and more socialistic in nature, whereas it used to be, as we know, health insurance coverage could not insure for preexisting conditions. That was allowed. Now it’s not. Whether or not you believe, as far as on the political line, whether or not we should be forcing insurance companies to insure preexisting conditions, whatever line you’re on politically is fine, but the truth of the matter is if you start insuring preexisting conditions, guess what happens to the cost of everything. It’s going to go up. Because now as soon as somebody wants health insurance who has cancer, they automatically hop in, and they’re pulling out so much more in insurance and benefits than they’re little premium is going to be. So it guarantees, as you start adding more of that universal type healthcare, that the costs do have to go up to cover it.

Holly: What you need to realize is CNN Money came out in September of 2016 and said that healthcare costs [rose] by the most in 32 years—so we had the biggest increase in 32 years of healthcare. Also on that same line that healthcare cost, employers are shifting that to workers, and it’s going to rise as much as 6.5%.

Nate: And they have to because they can’t afford to offer it. As we know, Holly, as far as the businesses are concerned, if healthcare keeps getting even more expensive for them to provide, they’re either going to have to stop providing it or they’re going to have to increase the cost of their goods or services, which means the rest of the population continually has to pay more and more for everything. It doesn’t just impact healthcare. The cost associated with healthcare increases the cost for everything, despite nature.

Holly: Also what it does, too, is, yes, they may have to pay a worker more money, but the company itself that’s providing the healthcare for the workers is paying thousands of dollars a month just to provide this healthcare, and as it rises, they can’t keep the employees and the benefits without transferring that shift over to the worker.

Nate: Yeah. And with this, what I’m a little worried about—and this is potential, possible for the future—that healthcare could end up being one of the biggest if not the biggest expense for a family at this pace. Maybe taxes may continue to be the highest expense for a family for the most part. Other than taxes, many peoples’ number one expense is their mortgage. Healthcare is climbing and climbing and could very well become a family’s biggest expense, which really should not be the case.

Holly: And if you look at, I’m going to say, our parents or the generations before us, when they had this, they actually spent less on healthcare. They spent about 6% of their income on healthcare. And 20% of their income was on food, on the purchase of groceries and stuff like that. In the U.S. we’ve switched that now. We’re spending about 20% of our income on healthcare and having to reduce about 6% to food. Hence, the reason why there’s so much processed food. Because it’s cheaper and that’s what people can afford. So really what we’re combating is the fact that because of that shift, people have developed more healthcare problems related directly to food, and even doctors are saying it’s not going to be convincing somebody to eat healthy. It’s going to be literally convincing them to change their lifestyle of eating in order to lower the cost of healthcare.

Nate: It’s amazing food has gone down in expense, but anytime the government gets involved in anything, the expenses tend to rise. As we get better as a country at producing food and producing various things with technology, it normally drops the price of a certain good or service. Healthcare is not the same way many times because of the immense amount of regulation involved in the healthcare world. Now, of course, the fact that it’s practically a government-ran healthcare, we know the cost has to go up. Never have they got their hands on anything and had it become more valuable or less expensive. It just doesn’t happen.

Holly: Yeah. And most of us don’t know there are other alternatives out there, which is one of the reasons we’re talking about this today. You don’t have to be forced to have health insurance or healthcare as we view it. There are options, even with Obamacare, that still allow you to have a reasonable or affordable, what I call, premium, but it actually goes into a healthcare co- op.

Nate: So we wanted to get into options outside of what you’d normally traditionally think of in the healthcare world that may help you save money. Right before we get into that, let’s go ahead and jump to a quick message from our sponsor.

Nate: Alright, where we ended off a little bit ago before the message was we wanted to present a few ideas for other options in the healthcare world that may help you save money, and, thus, hopefully be able to build more wealth with it. Holly had mentioned kind of a healthcare sharing co-op or there’s also healthcare sharing ministries, of which I’m actually a part. I’m part of a healthcare sharing ministry known as Samaritan Ministries. It’s a pretty interesting thing. It’s not a health insurance company. They don’t insure you; it’s called a healthcare sharing, which they’re not actually an insurance company, but they qualify as insurance under the Obamacare regulations. So, Holly, have you had any experience with this type of program as well?

Holly: Yes. Prior to me qualifying for health insurance through the company I worked for, we belonged to Samaritan Ministries as well. So for us it was $300 a month, and we got to send it to (the beauty of it is) we sent it to individuals who were in need. Medical expenses that needed to be covered or paid for. I have a daughter that had eye problems, and people sent money to us, but they also sent encouraging letters or “Hey, we’re praying for you.” Just cards that you got that were a blessing in all honesty when you’re going through something and you feel like “Am I going to be able to afford this?” And what I was amazed with is even stuff that was technically —maybe it’s a preexisting condition, and I’m going to say for myself I had a shoulder problem that had to have an MRI done—and I got all the money through the co-op even though my shoulder was preexisting, people still sent money to me to help cover that cost. So not only did we never have to pay out-of-pocket for our kids’ insurance or their medical visits or MRI’s, even mine personally we didn’t have to pay for. And it was amazing to see that my $300 helped another family in need or other individuals in need to help them with their medical expenses. I’m sure, Nate, you’ve probably had a similar experience.

Nate: Yeah, that’s what really is interesting about those types of companies is that a few of them are more of an insurance-type-base; I know there’s a few of them out there. The one we’re with, as Holly had said, you actually get to send what you would call a premium (it’s not called a premium; it’s called a share in Samaritan) . . . it gets sent to real-life people. So it’s not like there’s this big organization that you send your money to and they pick and choose who to send and how to send. Whenever you submit a need, instead of submitting a “claim” (a claim in the insurance world, it’s called a need in Samaritan), and then their software system essentially tells all the members where to send their share for the month. If there is not enough needs, to where—they have a certain amount of shares coming in every month from what people would call a premium—they reduce the share amount if there’s not enough needs for it to go to, which is amazing.

Holly: It is amazing.

Nate: It’s an interesting concept. And many times it’s far cheaper to do it that way than it is to go into the health insurance market place and things like that, especially with the deductibles . . . the copays, deductibles, and cost of premiums—health insurance is just becoming way too expensive to warrant purchasing in the traditional way.

Holly: I’m going to be honest. It was actually cheaper for us to not have health insurance and go to the doctor and pay cash than it was when we had health insurance because of the deductibles, because of all these expenses, [and] because of the requirements on the doctor’s office to code correctly and have someone that is submitting all this insurance stuff to the insurance company. It’s like a business. So you pay $90 for an immunization when you have health insurance, or that’s the cost that’s submitted to them, and if you don’t, it’s like $10.

Nate: A cash price is normally way lower than the insurance price anyway.

Holly: And our doctor said it was a lot easier. It’s a lot easier to have cash patients. They didn’t have near the amount of work that had to be submitted for insurance and collections and stuff like that and paperwork. And that’s why she said there was such a deduction. Even for my daughter with her eye specialist, it was $80 out-of-pocket a year that we paid. It went from $80 to $800 when we had health insurance. So I’m just amazed.

Nate: There are other options out there, as we said Samaritan and there are a couple of others ones like Medi-Share or something like that. There are a few other organizations that are of a similar vein where they’re not actually insurance companies. There’s not a true transfer of risk, either, so that’s kind of the double-edge sword there. It is possible that there won’t be enough shares submitted to meet all the needs fully. So they can pro-rate the needs, and they may only get 95% paid or 90%. But that’s what Holly said as well is that many times, especially in Samaritan Ministries, where it is a Christian organization, if they do have a month that is lower, they’ll ask their members, “Hey, if you feel the need to share a little extra so we can meet all the needs, then that would be great.” And many times that is the case, and every need is met 100% just because people are generous.

Holly: And for me, Nate, I don’t have a problem writing that check (I’m going to be honest) or paying that payment because number one: it is less than what I pay for health insurance, and number two: there’s normally a story behind it. I understand and know the need. And maybe it’s that empathy level, but to me, really it’s this person or family in need. And so many of us, even though we can’t afford the health insurance, we get penalized because we can’t afford it, at least this is an option that is affordable, in my viewpoint, to be able to help other people, and should a need arise, you get helped in the process as well. Versus being penalized because you can’t afford the health insurance premiums, and then you get penalized by the government for not having health insurance.

Nate: Yeah, that’s the ongoing joke is “Hey, before Obamacare I couldn’t afford health insurance, after Obamacare I still can’t afford health insurance but now have to pay a fine.” Which is actually kind of true for most people. A lot of people chose not to have health insurance before Obamacare because they didn’t think they’d get sick, they didn’t think they needed it, and they’d rather keep the money. And they live a healthy lifestyle. We’ve been talking a lot about this whole premium thing and how much it’s costing and how the healthcare is going nuts. Well, Holly, you and I are also in the insurance business, and we deal with the word premium all the time. And one of the things I wanted to go over as well, now that we’ve gone through an alternative to normal healthcare, is to contrast that with what we’re talking about when we discuss infinite banking with our [listeners] and clients. Really what is the difference—in other words, in the healthcare world, we want to get our premiums really low . . . but this is what I’m worried about that when people hear the word premium, they automatically put that in the context of payment/money disappearing, and then we have to uproot that when we go to show them how to build wealth with a policy, and the only way to do that is pay premium. So I wanted us to expound on that.

Holly: I think the way we look at it is that we ‘ve been taught to look at almost anything—healthcare, insurance, term insurance, whatever that be—as a premium is a payment. And we get in our mind this is a payment that we’re putting in. And instead of as you build wealth, we often say you’ve never made too many deposits into your own bank account. You’ve never deposited too much money for yourself. You’ve given deposits or payments to everyone else but never enough to yourself. So if you really want to build wealth, you have to look at what we say: you want to put as much premium as you can into a whole life insurance policy because that premium—if you look at it as a premium but you start to understand in your mind that it’s actually you depositing into your own privatized bank account per say, that this is your money you’re depositing, and you’ll be able to use it again, it doesn’t correlate so much as a payment as much as a deposit. And really asking yourself, have you ever paid yourself too much money? Nate, have you?

Nate: Nope. Never made too many deposits.

Holly: Never. We never have. And if we can see that transformation as this is not a payment (because premium we just say it’s a payment) but if you could start thinking of that as a deposit, that will switch your mindset into understanding that you’re building wealth because you’re making a deposit to yourself and your family.

Nate: Yeah, and that’s one of the things that’s a difficult process to get to. And that’s what I’ve said many times if this whole banking concept that we love and teach didn’t have to deal the word insurance or the word premium, people would be lined up for miles just asking to come in and learn about this. Since we deal with insurance, it makes it more complicated than it needs to be. We come in with preexisting ideas about the words, the nomenclature involved. And that halts us, stalls us, in our mind. So that’s one of the things I wanted to get through here. Everywhere, whether it’s term life insurance, car insurance, home insurance, health insurance . . . many times, people are trying to put in as little as they can to get the maxim benefit. You shop around to try to get the lowest amount you have to put but still get the benefits you want. But when you’re dealing with a banking policy, the more you put in the wealthier you’ll be. So in every other instance, putting in more money means you have less. If I pay a higher premium than I need to for car insurance, I’m actually worse off than I was the day before. I have less money to work with. The payment is gone. The way you see the banking premium, when we do a whole life policy for banking, that is actually not a payment, the money doesn’t disappear. It’s sitting there in the policy ready to go, and the more you put in—the higher the premium—guarantees the wealth you will build without having any risk or anything like that. I wanted to bring in the fact that we do deal with the word premium in many areas. It happens to be the one area that can actually help you with a premium . . . an area that we need to change what we think about it.

Holly: When Nate’s talking about that, what he’s saying, too, is that this is a premium payment. Yes, it is. But it’s going to (when it’s a mutual company) your life insurance policy, and it’s working for you. There’s a guaranteed growth that’s growing tax-free, and if you can get as much money, if you think about it, growing tax-free as you can, then that gives you more wealth that’s growing that you’re able to use in the future. And you’re basically exchanging places with the banker, where you’re making a deposit with the bank, and then they’re loaning that money out. You’re actually making a deposit to you, and then you’re able to loan out and use that money yourself.

Nate: That’s one of the reasons why we want to help you with healthcare and get you thinking in other ways that you may be able to provide healthcare that are more cost-effective, like healthcare sharing ministries, or there are some other options as well. If you have less money going to them, guess what that means, you have more money going to you. We would encourage you to use that in your policy. Use it to build the policy and create wealth with that money simply by changing where it’s going. So the more money you can find to save and the more deals you can make, the better off you’ll be. To be successful doing the banking concept, in order to be successful, you need to change in your brain the word premium that we’ve associated with something we don’t care for. Everywhere else in life we need to switch that to something we look forward to, and the more I put in, the better off I’ll be automatically. So if we can change the word from premium payment and think of it more as a deposit, you’ll set yourself forward to make a lot of money inside the policy and what you do with it. But if you continually think of it as a payment and money gone, like all the other premiums in the world, you’ll limit your effectiveness.

Holly: We want you to be as effective as possible, but we also want your money to be as efficient as possible for you. So the other thing we get to is, even with healthcare or any type of insurance: “How long am I going to have to pay this car insurance for?” or (Nate, I’m sure you’re at this age) “When does my car insurance premium drop because of my age?” (because I’ve had more experience driving a car, or it’s better if you’re a female versus a male). “When do I get that lower cost for the premium?” Because we want to pay the least amount for as short as possible, right? If you could not pay health insurance or car insurance—most of us, if there wasn’t a penalty, we wouldn’t pay for it, right?

Holly: But with the other way of thinking, what we’re trying to get you to think in order to build wealth and continue wealth and pass wealth on from generation to generation, you have to continue to make premium payments (like I said, premium, I used the word payment there). But if you thought of I’m going to continue to keep making deposits as long as possible, then that wealth continues to grow as long as possible. We never want to stop wealth from growing, but we’ve been taught to stop paying ourselves or stop paying that premium because as soon as we can stop paying it, it’s not a payment anymore. But really you want to ask yourself, would you ever want to stop making deposits to yourself? You never ever want to stop doing that. We’ve let fear control us.

Nate: The question you want to ask, and I’ve asked before, after making the payment, do you have more or do you have less? And that’s the question you need to be asking at any given point is after this transaction will I have more money or less? And with a policy, many times you’ll have more. Maybe not at the very beginning, but after a couple of years passed by, you’ll have so much more every time you put in than the day before you put the deposit in. If someone were to offer you, “Hey, if you put $1 in, I’ll give you $1.50 tomorrow,” you would want to do that as many times as possible, even if you’re 90. I promise you. And that’s what you can do with the policy. Any final thoughts, Holly, before we close it down?

Holly: One final thought is just remember that when you’re looking at healthcare, that there are options out there. We don’t have to be afraid of it. And we don’t have to be afraid to ask questions. What we do have to do is be diligent and do our own research, and don’t just believe that what’s out there is the only thing out there. The co-ops are so great, and they do help so many families and individuals. They are an alternative to traditional health insurance. Nate?

Nate: As Holly said, life favors those who take action. Don’t be afraid to take action with something. Do your due diligence; figure it out. But if you’re one of those people who pay $1000 or more every month in health insurance premiums, it’s probably time you found something else because it’s just getting too out of hand right now. So hopefully this was valuable to you. You may have switched how you saw premiums dealing with banking and also got some new ideas on how to work with the health insurance world. Other than that, I hope this has benefited you. This is Dollars and Nonsense. If you follow the herd, you will be slaughtered.

Holly: Get free resources and transcripts from this episode by visiting www.livingwealth.com/e10.