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Health care is a huge expense for many people around the world. Often, it stands in direct opposition of our aspirations for a free and fulfilling life. We would need to experience a GDP growth of 4.3% to offset the decline in happiness from a decrease in life expectancy of just one year. So it’s worth asking the question: if health is wealth, is health management wealth management?
It’s not easy for a lot of people to save money to get ahead. Anyone with huge health care costs is at an even greater disadvantage. Health care for millennials is estimated to reach $4,500 USD per year, up to 33% higher than the previous generation. And that’s precisely why it is important for us to take things into our own hands where we can.
Being employed is one of the most common paths to good health care. So for those aspiring to #FIRE or ‘retire’ early, health care is something that needs to be carefully considered. Some believe that minimizing out-of-pocket expenses should be the priority. Others think that insurance is a bad deal considering their personal level of risk.
It’s not a straightforward problem to solve, and it all depends highly on one’s own situation. The most important thing is that we do what we can to greatly reduce our likelihood of needing health care. This includes choosing and developing a well-rounded, healthy lifestyle. Health management is a major part of wealth management. Because regardless of how much coverage one has, it’s very difficult to live a rich life without your health.
The Cost of Coverage
I’m Canadian and I live in Mexico. In Canada, health care is provided by provincial governments. Hospitals bill the province directly. It is a publicly funded arrangement and Canadians pay virtually no health insurance premiums.*
I still work in Canada. Because I am in the country more than 180 days each year, my health care coverage is unaffected. Through my employer I receive additional coverage generally referred to as ‘extended medical’ or ‘benefits’. This includes some coverage each year for things like massage, acupuncture, physical therapy, emotional therapy, counselling, and more. Also included is 80% dental care coverage and full coverage for prescription drugs. These are all taxable benefits of my employment, and in combination with the basic public health care plan is a common model for families and individuals in Canada.
Eventually, I plan to be living in Mexico or traveling outside of Canada at least half of the year. Then, I will need to find an alternative solution for health care coverage. “Expat Insurance” or a private plan in Mexico are both affordable but represent a cost increase over my current coverage. I understand that things are more complicated in the USA. Premiums are sky-high, deductibles are on the rise and the overall costs are increasingly unpredictable. Health care is a huge issue to citizens everywhere, and it’s hard to deny that the future is bleak at the moment.
If you’re healthy and already relatively wealthy, you can consider going without medical insurance in places where premiums are extraordinarily high. In this case, it would be advisable to continue to put away what you would have been putting into premiums to pay for anything that comes up. I only see this being worth it for American readers, where premiums are sky-high, but it could be applicable elsewhere.
Health Management = Wealth Management
Unexpected emergency health expenses are enough to worry about on their own. However, many millenials are suffering from chronic health problems at an alarming and increasing rate. Depression, hyperactivity, high cholesterol, hypertension and diabetes are all on the rise among young people. This threatens their lifetime earnings, savings and freedom potential. This will also continue to increase health care costs for everyone, again restricting personal freedom across the population.
If you’re able-bodied, you are living a rich life already. You must be grateful for and take stewardship of this good fortune and do your best not to squander it. Ultimately, it’s not only about quantity of life. Quality also matters a great deal.
…simple and easy are not equal…Tweet
Just like saving money is a habit often difficult to implement, so is maintaining health. The formulas are simple and well known: eat well, live actively, socialize often. But simple and easy are not equal, and we often find it difficult to maintain these actions over time.
The choices we make today, tomorrow and yesterday have very little to do with where we end up next week, but a lot to do with where we end up in 20 years. This is just as true for our health and the associated costs as it is for investing, relationships and so many other cornerstones of a free and fulfilling life. As the great cartoonist Bill Watterson once wrote, “…day by day, nothing seems to change, but pretty soon, everything’s different.”
“…day by day, nothing seems to change, but pretty soon, everything’s different.”Tweet
A Game of Chance
Keep in mind, living healthy will not guarantee you anything. But neither will sound investing strategies. We’re all just playing the odds right from day one. The most likely path to wealth, health and happiness is to stack the odds in your favor (but never cheat).
Living in Mexico, I meet a lot of Americans who have horror stories about themselves or a family member or friend who had some huge, unforeseen medical expense that literally bankrupt them. That’s scary, and largely out of our control. But most health care costs are the result of chronic issues. Current trends indicate that millennials could see a 40% increase in death rates as compared with Generation X. And these types of conditions and problems are generally within our control.
We can take control of many aspects of our lives to give ourselves the best chances for success. We don’t have to do what everyone else is doing – a concept hardly novel to the #FIRE community. Our health is no exception. By making a series of sensible, small decisions on a consistent basis we can highly increase our chances of avoiding altogether the physical, emotional and financial costs that poor health can bring to bear.
We must form habits that will allow us to automatically do the ‘right’ thing. Otherwise, it will always be easier to spend our money on a shiny new toy or to indulge in an extra piece of cake – especially if we let ourselves sleepwalk in that direction. The path to wealth, health and happiness is already well-known. The real challenge lies in getting to the trailhead.
In my next post I’ll be sharing some simple little hacks and habits I’ve picked up along the way that help me live well and contribute to my overall health management. This includes a few diet hacks, thoughts on exercise and my simple but effective morning routine.
*In British Columbia, where I am from, it is currently a nominal $80 a month for an individual, but that will be eliminated in January 2020 to align with the majority of provinces.