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After pulling out of a merger deal with Aetna, major insurance company Humana announced that it will drop out of the Affordable Care Act exchange in 2018. The company had already been scaling back its plans available on the exchange. For 2017, it was only selling policies in 11 states.

Although Humana has been a relatively small provider in the Obamacare healthcare marketplace, its pulling out of Obamacare may signal more changes to come. Humana cited an “unbalanced risk pool” as its reason for pulling out of the marketplace. But Humana, like many insurance companies, is likely anxious about the future of the entire Affordable Care Act.

Related: Insurance Giant Aetna Pulls Out of Obamacare

Congress and President Trump have promised to “repeal and replace” the ACA, but haven’t given many details about their plans. Because of this, many insurance companies have already pulled out of the healthcare marketplace.

According to the Kaiser Family Foundation, 18 states have only one or two insurers in their marketplaces in 2017. In general, insurer participation increased between 2014 and 2015, but dropped significantly between 2016 and 2017. Alabama, Alaska, Oklahoma, South Carolina, and Wyoming each have only one insurance company operating in their exchanges. Many states maintain diverse exchange offerings, but participating insurers are still on the decline.

So what does it mean for you?

As noted above, Humana was only offering health insurance plans in 11 states for 2017. If you’re one of the consumers currently covered by a Humana plan through the individual marketplace, you’ll have to find an alternative plan next year. You can, however, keep your current plan through the end of the year.

On a grand scale, Humana’s change of heart won’t directly affect many consumers. With that said, Humana’s exit puts even more pressure on the Republican Congress and White House administration to make some serious changes to the healthcare law.

More Ahead: President Trump’s Proposals for Childcare

With more insurers leaving the marketplace, those that remain are likely to increase their 2018 rates in an attempt to ward off further financial losses. Those costs will fall to the consumers if the law isn’t altered or replace quickly and efficiently.

It remains to be seen what sorts of changes the Trump administration and the Republicans in Congress have for the Affordable Care Act. But with major players like Humana pulling out, the pressure is on to come up with a solution–one the insurance companies can live with–sooner rather than later.

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An estimated 9.1% of the population in the United States have symptoms of depression, according to the Centers for Disease Control (CDC) Morbidity and Mortality Weekly Report.

Depressive illnesses are more than just being sad occasionally. Among people with depression, there is a measurable chemical imbalance in their brands, and this prevents signals from being transmitted from neuron to neuron correctly. So depression changes how people think. And any obstacle to rational decision-making has significant long-term effects on an individual’s quality of life. As a family’s financial situation is one of the primary concerns of this blog and a primary factor in the quality of one’s life, it stands that depression can cause difficulties with money worth a discussion here.

Although depression is often chronic, it can be triggered by external events, or at least correlated to life factors. One of these factors is state of employment; the longer someone is out of work and looking for a job, there is a higher probability of that person showing symptoms of depression. To be certain, the CDC study shows 21.5% of unemployed persons in the United States have depression, compared to 6.6% of the employed population. Of those unable to work 39.3% have depression.

A cycle exists that makes depression particularly dangerous, even when putting aside the increased risk for self-harm, suicide, or violent behavior. Frequent or consistent financial problems, stemming from the loss of a job, a divorce, a bankruptcy, health problems, or a variety of other reasons, can lead to depression’s chemical imbalances. Those imbalance can prevent what others might consider “clear thinking,” the type of cognitive abilities that might, in other situations, be able to help people improve their finances. And that frustrating mental condition can lead to more financial trouble, keeping the depression persistent.

In some cases, people have the ability to adjust their thinking on their own, and change their circumstances — or at least, change the way they perceive their circumstances. There was an example of this recently in a story on CNN Money:

When Ray Camp lost his job at a Dell supplier at the height of the recession, it took a toll on his soul and his family. After nearly four years of looking, all he found was 16 hours of work every other week at a company fours away from his home in Nashville, Tenn.

He was crushingly depressed and felt worthless. His sour mood made him difficult to be around, putting a strain on his family. His story is a familiar one among the 3.1 million Americans who have been unemployed for more than six months…

In February, Camp finally decided he was no longer a failed job applicant but a new retiree. After four years, he had embraced retirement and started collecting social security since he had also turned 62. “Once I finally got into the mindset that I’d never have to face rejection again, I started to feel 100%,” said Camp, who now spends the hours he lost on job searches playing with his grandchildren and mowing his lawn.

For some people with depression, the mindset change is only possible with therapy or medication. In fact, the CDC distinguishes between “major depression” and “other depression,” and it is this “major depression” that is less likely to be overcome through nothing more than a decision to look on the bright side of life.

The Suicide Awareness Voices of Education group explains the differences between a healthy brain and a brain with depression:

A person living with depression does not always have the same thoughts as a healthy person. This chemical imbalance can lead to the person not understanding the options available to help them relieve their suffering. Many people who suffer from depression report feeling as though they’ve lost the ability to imagine a happy future, or remember a happy past. Often they don’t realize they’re suffering from a treatable illness, and seeking help may not even enter their mind. Emotions and even physical pain can become unbearable.

It should thus be no surprise that depression can become an obstacle not only to financial independence but to basic financial stability.

Depression affects your performance at your job. Motivation is a casualty of depression, so this affects how you work, if you do happen to have a job. Motivation is crucial for performing as you’re expected to perform at your job. As depression goes untreated, it may be difficult to hold onto that job.

Depression affects your spending. With depression, people may seek behaviors that heighten their sense of pleasure to counteract the general depressive moods. One method of self-therapy involves spending money. Buying things and experience can create a high feeling that masks emotional pain, at least temporarily. “Retail therapy” is a common type of self-medication, so to speak. And the temporary feeling of satisfaction gained from buying a present is more powerful than the reasoning and logic behind the idea of spending only what you can afford.

Depression can increase debt. From spending more than you earn in order to feel good to the lack of an expectation of feeling good when paying off debt, depression can lead to a larger portion of one’s life spent in debt or accruing new debt. Debt severely limits your options in life, and when in combination with unemployment, it can leave you with nothing over the long-term.

Treating depression can be expensive. Stories like the one in CNN Money about someone overcoming depression on his own are not the norm. Dealing with major depression requires professional help. And doctors are not cheap. Health insurance comes in handy when paying for psychologist visits or medication, but many with depression are not working. Until the Affordable Care Act, citizens in the United States have typically relied on employer assistance to subsidize the expense of health care, but the Act may be ushering in a new era in which individuals manage their own health care insurance, with the potential for subsidies from other taxpayers. Regardless, treatment is expensive, and those needing the treatment may not be in the best position to afford the help they need. Thus, they don’t get the help, and depression and its financial effects continue.

I think the best thing that those of us without depression can do is to learn to be somewhat empathetic towards those who do. We, who are often too smart for our own good, expect people to be able to make rational decisions about their lives, and I’ve seen many people get frustrated when people in their lives do not act in responsible ways with their finances. We want to believe in personal responsibility and accountability, where good results come about from hard work and good decision-making, and where people have the capability of improving their lives. We want people to be able to take action. We want people to control the way they react to certain situations.

We want people to “choose happy.”

But depression is one of many things that prevent people from seeing these “truths” that we want so much to share with the world.

It took me a long time, but I now live under the philosophy that happiness isn’t something that needs to be sought, it’s just a choice. I can always choose how I react to any situation in which I find myself. But every once in a while, I still have to remind myself that this is not a choice everyone is free to make at every moment. The ability to make a choice rests on the brain’s ability to make neurological connections, and that ability can be impaired.

Read the latest CDC report on depression.

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The issue of healthcare is one that keeps people in jobs far longer than they’d like. I’ve seen up close how someone with chronic health issues must deal with these choices, and in certain situations, the choices can be difficult.

Medicare coverage doesn’t begin until age 65, so where does that leave someone who stops working prior to that birthday? The issue of being able to afford health insurance on one’s own, even with the potential for subsidies through Obamacare if one’s income is low enough, can prevent people from leaving bad working environments. If you’re a working professional in your sixties but not a top executive, your chances of being able to quit one job and start fresh in another are quickly diminishing. Companies can’t discriminate against employees or potential employees based on age, but if you’re perceived as being close to retirement, you’re going to have a hard time getting hired in a new job.

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Nurse and Patient via FlickrUnless you’ve been planning for decades to retire early by saving as much of your excess cash as possible to pay for potential medical expenses, it doesn’t take a intensive analysis to determine you’d be better off if you continue to work, even in a bad environment, until Medicare is an available option.

Not everyone has this choice. According to a recent survey by Fidelity, retirees left the workforce at age 62 on average, many not because they were dissatisfied with their work environment, but because health issues or physical limitations prevented them from continuing at their job.

There are ways to reduce health care costs on your own, like choosing a lower-cost high-deductible health plan. That could save money in premium payments, but this would only work for retirees who don’t expect to have many health issues before age 65. Through my own observations of people close to me, the likelihood of being close to retirement age without any health issues is low, even among people who have been living healthy lifestyles throughout their lives as adults. The body and mind age, entropy increases, and there’s little science can do about it today.

A common motivation message in today’s world is that it’s possible not only to retire early, but to retire extremely early. In general, and especially for the middle class, extremely early retirement is a myth foisted on the public. Retiring at or before the age of 30 — or even 35 — is not going to be possible without earning a lot of money quickly, saving almost all of it, and living a lifestyle that most middle class Americans would not be interested in.

And even then, many of the loudest early retirement proponents cheat: for instance, one might forget to mention one has a spouse who is not retired, whose income is covering day-to-day expenses, and whose job is covering health insurance and medical care for the family. That’s great, but it’s hard to call a household retired without changing the definition of retirement.

If you do retire in your thirties or even forties, you have at least a couple of decades before you’d be able to qualify for Medicare. Fidelity’s respose to the survey mentioned above included research that shows that someone who retires at age 62 rather than 65 can count on spending an extra $17,000 a year for health care before Medicare begins; imagine extending out that expense several decades in addition to the effect of rising health care costs and inflation by the time Millennials reach age 65.

So how can you retire today and manage paying for the increasing costs of health care?

1. Cheat, like many others. I’m not saying cheat the healthcare system, I’m saying cheat about how you consider yourself retired. Today, people “retire from the rat race” and open up their own businesses. The idea of being an entrepreneur is the farthest thing from being retired as possible because starting your own business requires much more work than clocking in at a corporate job in a cubicle every day. And you have more bosses than ever before — in the form of clients.

Nevertheless, people want to call this retirement, and who am I to argue with the shifting nature of the English language? So become a successful business owner (as if the decision to do so and the ability to succeed go hand-in-hand — they don’t) and let your business’s profits cover your healthcare expenses.

2. Cheat, like some more others. As I mentioned, you can call yourself retired if your spouse still works and his or her company covers most of the costs of your family’s healthcare. People actually do this. As long as your spouse doesn’t mind your being a freeloader, why not dump the responsibility of paying for living expenses on your better half?

Now, maybe you have saved up money over time and have invested a lot of that for the future. But wouldn’t you rather have the profits from your investments reinvested for the future while having today’s work-income pay for today’s expenses?

3. Save up for a long time. I wish I had known right from the beginning the realities of living expenses — many of which I have still yet to experience because I am still relatively young and healthy. I started my career out of college with a salary so low and basic expenses so high that savings was impossible. I don’t regrey my career choices but maybe I would have compromised differently, earlier than I did, with my living situations.

It’s easy to judge with the benefit of hindsight.

If retiring before age 65 is a goal for anybody, they must start planning today for the cost of healthcare without Medicare. And like any government program, you never know what the future holds. Medicare might not exist in its current form in 30 years. There’s a possibility a national healthcare system will be expanded, but there’s also a possibility that it will be more difficult to qualify for Medicare if it exists.

So contribute the maximum possible (whether bounded by mandated maximum investments or the confines of your net income) to your 401(k) and take advantage of Health Savings Accounts. At the same time, monitor your expenses so you know that the money you spend on a daily basis is going to enrich your life somehow rather than to disappear in a wasteland.

4. Stay as healthy as possible. Life does present you with some choices pertaining to your health. You can choose to eat healthier foods and avoid destructive habits. Healthcare costs for non-smokers, in general, are significantly lower than those for smokers, even when insurance tends to level the playing field somewhat.

But these choices can only take you so far. Bad things happen to people in good health, and that’s more than just accidents. You can’t control your genetics. If there is a hereditary issue that runs in your family, you have a high probability of exhibiting the same issue. The most you can do is prepare for it emotionally and financially.

5. Embrace the idea of preventative care. When I graduated college, I hadn’t been to the dentist in years. I probably hadn’t had a dental appointment since having my races removed during my senior year of high school. And I avoided going for another couple of years. But my father eventually suggested I go, and he gave me the name of his dentist. So I went, and I’ve been going regularly ever sense.

It took me a little longer to begin going to a general practitioner for regular medical check-ups. There was a widely-reported study that regular physicals do nothing to increase health (and reduce healthcare costs), and instead, facilitate more tests and expenses than necessary, so I’m not sure where I stand on visits to the doctor’s office. I do know that, for instance, I have a genetic predisposition towards Type II diabetes, so it’s important for me to watch my weight if I want to avoid the health problems and expenses associated.

I’m now living my life without an employer to subsidize my healthcare and health insurance costs. Perhaps that means I’ve retired, but I’m still trading my time and efforts for an income. I will never qualify for Obamacare subsidies, and I could continue paying for the most expensive health insurance option if necessary. I’m in a relatively unique position today, but if I had made different choices, or if some unforeseen problems arise in the future, affording health care could become difficult.

And thanks to people close to me who have had to make difficult choices, I can see how health care costs can be a significant problem for someone who doesn’t quality for Medicare yet.

How are you figuring the cost of health care in your plan to retire?

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The Affordable Care Act requires most American citizens to have health insurance or health care starting in 2014. Many of those required to have health insurance will owe additional tax if they are not enrolled in a plan. It’s no surprise that many citizens are not happy about being told by the government that they have to spend money. And whenever the government requires something of its citizens, it doesn’t sit well with many of those who don’t agree with what is being required.

When the government drafted young citizens into the armed forces during times of war, protests intensified with each action until the draft was eliminated, and some enterprising individuals did whatever they could to avoid military service, including fleeing to another country. National defense and national health may be good reasons to encourage citizens to take actions that would be for the benefit of society, but Americans’ individualistic nature prevents everyone from gladly jumping on board the train.

Take up thy stethoscope and walkThis time around, those who don’t want to accept the government’s requirements can avoid jail. The penalty for not buying a health care plan from a private company is to pay a fee. Compare this with other civilized companies that have a national health system, where everyone is covered for basic health care through a public, government-operated organization, and it’s just a service provided by the government and financially supported by citizens like infrastructure maintenance and national defense. The fee varies, and some households can avoid the fee entirely.

According to the Tax Policy Center, these groups are not subject to the health insurance requirement and can avoid the fee entirely:

  • Individuals with income below the income tax filing threshold. If you don’t have to file your tax return, you don’t have to pay a fee.
  • Individuals for whom the cost of getting health insurance (net of ACA subsidies) would exceed 8% of household income in 2014. That percentage would rise in subsequent years if premium growth exceeds income growth.
  • Individuals in states that did not accept the ACA’s Medicaid expansion who would have qualified for Medicaid under the expansion. These states did not accept the expansion: Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.
  • Members of Indian tribes.
  • Members of certain religious faiths.
  • Members of a health care sharing ministry.
  • Individuals not legally in the U.S. (undocumented aliens).
  • Incarcerated individuals.

For all other individuals, in general, the penalty for not having health insurance is 1 percent of household income after discussions with a maximum of $95 per adult and $47.50 per child. The penalty is capped at the average cost of a bronze level health plan for the same family, so in some cases — large families, most likely — it could be cheaper to buy health insurance than to pay the penalty.

Using the penalty calculator I ran some simulations. For a large family with a household income of $750,000 — this is a wealthy family — it’s probably cheaper to buy a bronze health insurance plan by 2016 as the fees increase. For a large family with a household income of $45,000, for whom the average price of a bronze plan would be $16,700 (or more than one-third of total income), the penalty of $285 for 2014 seems much more affordable. But the average health care plan price doesn’t take into account subsidies that are available for families that couldn’t otherwise afford private health care. Health care purchased from a private company through the national or state exchange can still amount to less than the fee if the situation calls for that much assistance.

My COBRA health insurance coverage ended in January, and I spent some time last year shopping for health insurance using the national exchange. Despite lots of initial difficulty, my application did go through, and I was able to sign up with health insurance from AmeriHealth. At the same time, however, I discovered that I was eligible for state continuation of COBRA through California’s program, Cal-COBRA.

Because I liked the plan I had under COBRA, I stayed with Cigna, stayed with my doctor, and paid a little more under Cal-COBRA rather than accepting the plan with AmeriHealth. The best AmeriHealth plan would have left me with fewer benefits than the plan with Cigna, but would have saved me money on monthly premiums. And because I can afford individual health insurance, the health exchange and the options presented aren’t really designed for me.

How do you feel about the Affordable Care Act penalty? Would you rather pay the penalty than be forced to buy health insurance? Do you see preventive healthcare as an important piece of a civilized society, or is health insurance primarily an individual issue?

If you want to calculate your health insurance penalty over the next few years, use this calculator.

Photo: Flickr

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When Do You Call Out of Work Sick?

by Luke Landes

Looking back over my career, which for me started in non-profit out of college in 1998 and 1999, included teaching middle school and high school, transitioned into the finance industry, and eventually culminated in working for myself full-time, I’ve had an opportunity to consider my approach to “sick days.” In the early days, I took […]

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Adult ADD/ADHD Limits Financial Success

by Luke Landes

As a kid, I might have had attention deficit disorder (ADD). I was never diagnosed as far as I know, but I had many of the symptoms of the “inattentive” type of ADD, and some of those symptoms continued into adulthood. An actual diagnosis of ADD as an adult would require exhibiting at least six […]

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Concierge Medicine As a Replacement for Insurance

by Luke Landes

Although I’ve mostly figured out how to get my financial life in order, other aspects of my life still need work. For example, I’ve visited a physician only a few times over the past ten years. I should be seeing a doctor about once a year if I were to listen to the typical medical […]

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How to Work Out Without Over Working Your Budget

by Guest Author

This is a guest article by Jennifer Calonia, Junior Editor at GoBankingRates. In the article, the author offers suggestions for staying fit without breaking the bank. It’s that time again: Beach season is fast approaching and franchise gym promotions are in full swing to lock you and your checking account into a pricey workout regimen. […]

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The Cost of Raising a Child With Autism

by Luke Landes

A few years ago, I shared a statistic showing that it costs almost $200,000 to raise a child, from birth to age eighteen. If that weren’t enough of a financial burden, consider that one out of 88 children are now diagnosed with autism, according to the Centers for Disease Control and Prevention (source, pdf). Regardless […]

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Church Health Insurance: Effective in the Amish Community

by Luke Landes
Horse and buggy

The Amish community is exempt from the health insurance mandate that is now federal law. Members of this community rely on each other for taking care of their health, rather than relying on insurance companies. It’s an interesting approach to healthcare, and it is effective for communities where people rarely leave or enter. I visited […]

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