Figuring Out Health Insurance When You Leave Your W2

Mike DeHaan: [0:00] What is going on collecting keys crew? Welcome to today's episode of the collecting keys real estate investing podcast. This is the show where we teach you to make massive income, not just passive income with your real estate investing business. And on these Friday episodes, we do a little deep dive into a miscellaneous topic either from a listener or something that either Dan or myself have been pondering recently. If you don't know me, my name is Mike DeHaan, and I left corporate America in 2018 determined to do just literally anything else from what I was doing in my corporate engineering job. And I just really did not wanna rot in that cubicle, man. I just decided that I need to make a change. So I jumped ship back in 2018. Now for some ups and downs, I found my success with my real estate company that I currently run. And we have now grown that to be comfortably doing over 100 transactions every single year. We've done that the last couple years. And this year, we're hoping to do even more than that. So in this episode, I'm going to touch base on one of the most frequently asked topics or people that are looking to follow a similar path for me and break away from those corporate handcuffs. And that is, what do you do about health insurance? And now let me preface this by saying that I'm not an expert in this at all.

Mike DeHaan: [1:18] I'm also going to be doing a pretty like surface level discussion about this because, you know, it's not something that I get incredibly excited about, but it is something I'm asked about all the time. I will also say that I do not currently have children. So I have different insurance needs than people that choose to go that direction. Because apparently, like, kids get sick all the time or something. I don't know. It just always seems like people that I know that have kids are at the hospital or at the ER or they're sick themselves because of their kids. I just don't have that issue. Right? But what I can share is what I have learned about the whole process from going through it myself, and navigating kind of the complex healthier situation that we have in The United States. If you're not from The United States and you have something else that you do there, like you're in Canada and they just like, I don't know, send like a bounty doctor to come around and heal you or whatever they do, a shaman, good for you. This will not apply to you at all, so go and enjoy your socialist medicine, you fuckers. Anyways, first one, they're gonna dive into. Big thing to keep in mind as you start to look at these different options is that every state is very different with this. K? And not only is every state different, but also the state legislatures as well as the federal government change all the time.

Mike DeHaan: [2:27] So it's highly possible that you will be getting to a point where you kind of understand this and or like even listen to this episode. Right? And you really realize that everything that I said or that you thought you learned is worth fuck all because it all changed because the most recent electee came in and butchered the entire system that existed. Alright. And just so for the record, I'm recording this in May 2024. So just understand that there are a lot of things that could change for a variety of reasons, and this is also different every single state. Okay? So anyways, talking about the state specifically, there are a lot of different things that you will have to learn around what companies work in the different states. Some states, particularly more blue ones, tend to be a little bit more challenging, because they will commonly offer some kind of like state sponsored health insurance. It's something that we deal with up here in Washington. And that's great for like poor people, but the problem is, makes it so that the larger companies, they're less inclined to offer service in those areas. Right? And they will have extra hurdles and extra regulations around it, or they won't operate here at all. Right? And so like for me up here in Washington State, are a ton of different options that people have used in different areas that I've talked to, and like go bunch of other entrepreneurial groups that I don't even have access to.

Mike DeHaan: [3:42] Right? Different insurance companies, different health share systems, all these sort of things that are very, very trendy. I can't even do that. And so before you go into the weeds, and get your heart set on these different things, just go and make sure that whatever you're considering is actually applicable in your state. And so it's kinda get a better understanding of that. Once you have it figured out, there's a lot of different avenues you can take. Right? You can either go and explore like the federal marketplace, the Obamacare stuff, or you can go and look at the insurance companies directly or use an insurance broker. That's what we typically do. There's always different like insurance shopping sites that you can use. Now, if you have like an active real estate business, and you make decent money, you will likely not qualify for anything in the federal marketplace, unless you kinda play the tax game, you depreciate the fuck out of all your rental properties, and you bring your taxable income super low, which is something that people can do. Right? I know people that make like $500,000 a year, but they show the government that they basically make nothing, and so they pay pennies, or they get free health insurance because of that. That, again, comes with different limitations, especially a lot of doctors don't wanna deal with it. But if you're trying to check the box, good for you.

Mike DeHaan: [4:49] That is something you can do. However, if you are not playing the game, you're going to have to shop around with some of these different insurance brokers and these companies directly because the federal marketplace, the Obamacare marketplace, whatever that was called now, is probably not going to have any options for you. Okay. So when you start doing this, just so you know, it will be overwhelming. There will be a ton of different options, a lot of which you don't actually know what they mean, or what even they're offering. And they kind of make it complicated, I'm pretty sure on purpose, because what they want to do is they want to charge you as much money as possible for the least amount of service. That is literally how insurance works. Right? It sucks, but something we can do about it. Couple different things to sort of think about the start is the basic plans that you run into are these like high deductible plans with like low premiums. Basically means they have a low monthly payment, but you have to spend a huge amount at the doctor before you can get fully insured. So it's gonna be, like, low deductible, but higher premium plans, meaning you're paying more every single month. But you have to spend less at the doctor before you can get fully covered. There's a bunch of stuff in between. And there's like catastrophic insurance, which is like, if something really bad happens to you, you get cancer, something goes really awry, that they'll they'll provide additional coverage there.

Mike DeHaan: [6:04] There's more standard care focused stuff if you have like diabetes or you're having sort of like chronic illnesses that'll help that way. There's an insane number. Right? And so it's really going to depend on you personally, like kind of what makes the most sense. You're probably gonna have to spend a decent amount of time figuring this out, especially the first time through when you're kind of learning the language in the game. And now, if you're someone that like comes from history of health issues, you should probably fork out a little bit more money every single month and do that high payment, low deductible style plan. If you're someone that has like diabetes, you come from a family that has history of cancer or strokes, you're overweight, things like that. Those things happen. Right? We all are dealt different cards. You should probably just like be smart about that and go with the plan that's gonna cover you a little bit earlier because you're more likely to have issues. Don't worry about though, because like honestly, big, big picture, it's not like an insane amount of money. Like, it'll feel like a lot coming from free, right, that you were getting out of w two. But like, realistically, you can typically get those sort of health plans for like 800 ish to $1,000 a month, which again sounds like a lot. But if you're making any sort of money in your business, or you're looking to grow your business to any kind of scale, it'll become a rounding error very, very quickly for you.

Mike DeHaan: [7:17] Okay? And so just, you know, be big picture oriented with it, and don't put yourself at risk by not being able to afford your diabetes medication just because you didn't wanna pay the little bit higher monthly expense. For me personally, I kind of fall into the other camp when it comes to outlook on health where I am a very healthy and generally a very low risk person when it comes to health issues. Right? I eat well. I work out. I have done that like my whole life. I get my blood tested two times per year that I pay additional costs for, right, that does not go through my insurance. I don't have any, like, major health issues that I'm concerned about that run-in my family. And as a result, like, I personally am comfortable just having catastrophic insurance. So if I get, like, t boned by a drunk driver, I get shot or something, then I can be covered there. And then I have a high deductible, low premium health insurance plan that keeps my wife and has expenses as low as we can for Washington State, but still, you know, will cover us if we do have something major that happens. Right? That isn't necessarily a catastrophe. For example, let's say, you know, my wife developed some sort of issue, or I developed a sort of issue, and we have to go through, undergo medical treatments, it will actually be possible to still get insurance at some point after we spend a certain amount of money.

Mike DeHaan: [8:26] And for us too, our deductible is like $12 or $15. I just keep that in account. It's there all the time. So if I do have a four out of pocket, I can do that up to that amount, and then basically, you're self insured from there. Okay? And so for us on a monthly basis, this makes our insurance about half of what it would be if we did kind of like the higher payment one. And so even though it admittedly opens us up to having to spend more money, if we do have something go wrong, with like the catastrophic being there, and the fact that I'm relatively confident that we're not gonna need it, I am okay to be paying less and just keeping more of that money in my pocket that I can use as as I need to. And now fundamentally, with all of this stuff, the most important thing to keep in mind, right, is when you no longer have like that cushy corporate insurance to keep you alive if things do go weird, you have to be diligent about taking better care of yourself, so that you hopefully don't need the insurance. Like like, the best way to approach this is just by reducing your chance of even needing this insurance to begin with. And again, you have it because of like major problems that can occur with your health.

Mike DeHaan: [9:27] But really, a lot of things can be avoided through lifestyle decisions. Right? And if you're someone who doesn't want to do that, and you wanna be able to be an entrepreneur, but also just take care of yourself, honestly, should probably stick with your w two job because let's be honest, you're not gonna have the discipline to be successful anyway if you can't take care of your own body at least like a little bit. And then like, you're also being willing at that point to openly leave yourself and your family to more financial risk because of your health because you can no longer just rely on this free health insurance plan to cover all of your own bad decisions. So understand that you are now going to have to be more diligent about it if you decide to go this route and pick up for for yourself in the insurance realm. And if you are a healthy person, honestly, health insurance is one of the worst, most just like pointless reasons that people use to stay at their w twos that they hate. Like all the time, I've talked to so many guys who are just like, man, I really wanna leave my job. I just can't because of you know, insurance, and I got two kids. Just eat it, dude. Like like, just take the leap, figure out your insurance.

Mike DeHaan: [10:32] Yeah, it's gonna cost you a little bit money. You'll be fine when your time is now 100% focused on learning how to make significantly more money than whatever the annual cost is. Right? The opportunity cost of trying to save that $25,000 a year for your insurance is honestly hundreds of thousands or billions of dollars. So just think about that if you're a healthy person, and don't use it as like an excuse that the corporate machine is using to hold you in place at that w two job. Right? It's a benefit, but they use that as like the ultimate reason to keep people there because they know it is a complex system. People wanna wanna figure it out, and it provides the number one thing that keeps people in jobs that they hate, which is security, which is the death of joy. Right? Like, honestly, it's the death of your dream is an ambition of security, so don't fall prey to that. So anyways, big picture, insurance, it's a complicated thing. I mean, I admittedly have not an expert on this, right? Like I said, I covered it at a surface level. I don't like to waste a lot of time stressing about this stuff. Like, my goal is to make enough money that I don't really need to care about this. I can just have base level and then self insure the rest of it. Because honestly, if you think about it, this whole system in The US is totally just like fucked up. And so why should we wait for them to fix it? Instead, you can take matters into your own hands with these things by just buying yourself out of the system. So make that the goal instead, Then at least you can be in control of your own destiny instead of having to rely on all those fads that are gonna just screw it up again anyway.

Mike DeHaan: [11:55] So anyways, hopefully, that was helpful for you guys. If not, that's fine. You can let me know that too. So hit me up on Instagram at Mike underscore invest. Tell me what you think. Tell me what your thoughts are on the whole health insurance situation and how you've tackled as an entrepreneur. Because also to you, if there are things that I missed or didn't say, do you think could be good information? I'd love to hear it so that way I can be more educated if people ask me this in the future. Because seriously, guys, I get asked this all the time. And I hate it. And it's something that I felt need to be addressed. So anyways, I appreciate you guys listening. And I'll talk to you next week.