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The Sucker’s Guide to Healthcare Purchasing

“Invert, always invert”

Carl Jacobi

Jacobi was a famous German mathematician who taught about the power of inversion, a mindset which will often lead to better results than solving problems directly.

What should I do to get ripped off? How can I be unhealthy or unhappy? What habits will help me trail my peers?

“He new that it is in the nature of things that many hard problems are best solved when they are addressed backward,” said Charlie Munger.

What will lead the typical American healthcare consumer to poor health and high healthcare costs?

 

 

Ignore the biggest drivers of your health: your diet, relationships, exercise, sleep. Those are someone else’s problem.

Warren Buffett offers this example.

“Let’s say that I offer to buy you the car of your dreams. You can pick out any car that you want, and then when you get out of class this afternoon, that car will be waiting for you at home.”

“You have only one mind and one body for the rest of your life,” Buffett says. “If you aren’t taking care of them when you’re young, it’s like leaving that car out in hailstorms and letting rust eat away at it. If you don’t take care of your mind and body now, by the time you’re 40 or 50, you’ll be like a car that can’t go anywhere1.”

 

 

Don’t try to saveYou’re at an information disadvantage. Millions in America may shop for their healthcare networks, coverage choices, deductibles, keep their HSA dollars and invest them, use GoodRx to save on prescriptions, go to surgery centers instead of expensive hospitals (the bigger the building the bigger the bill) ask for 2nd opinions, and ask questions before paying a bill. Don’t fall for it. There’s even a new supposedly nifty tool to value your health insurance benefits relative to peers. This Charles Schwab employee shows why their benefits are average 2. Don’t bother. 

 

Ignore Premiums. While insurance in other domains is for catastrophic protection, chose the health insurance that covers everything. Ignore the compounding cost of high premiums. Over time, premiums matter a lot but it’s best to think only about the worst case scenario. A typical 30 year old male may only have $20-50 per month in out-of-pocket medical expenses but it’s best to not shop for the best coverage, especially if you’re paying the full sticker price for the premiums.

 

Autopilot wins.

 

Disclosures: my personal healthcare coverage is a $5,000 deductible cost-sharing plan (non-ACA compliant). Healthcare investments: Cigna, Clover Health, HealthEquity. I have an affiliate agreement with Lively HSA (I’m also a happy customer) and GoodRx. 

Photo by Michaela Murphy on Unsplash

  1. Buffet does live off peanut brittle, burgers, and coke but his zest for life, genes, and ability to control so much around him does him some good.
  2. $863 more in their HSA would make it a top decile health insurance package.
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