Folks on today’s podcast, it’s a follow up to the last health insurance alternative. A lot of you guys are quitting your day jobs eventually, and the question comes up, what the heck do I do for life insurance or not life insurance, for medical insurance to pay my bills in case I get sick or, something bad happens to me.
So we’re gonna be going to this today with another alternative. Just to get that in your ear and you of be thinking about it. This is the kind of stuff we talk about at our events, which is gonna be coming up very soon. Time is running out to sign up for the retreat. Go to simplepassivecashflow.com/ 2023 retreat and sign up there.
Actually apply there if you are not in our family office group and you’re a newcomer, but really there’s no other way to build relationships. Investors meet myself. Ask all the questions you’d like, or even the hard questions. I think that’s why we create this intimate environment where you guys can ask those difficult questions.
But something I’ve been working on I decided not to go for and buy a house to live in because, My problem is I don’t have a W two day job and clean financials. So what mortgage lenders will do for people like me is they need to get me past this income verification.
They wanna know that I can pay, that I have income, but because I have no W two salary I have, they have to look at my, either my 10 90 nines, which I report. or they look at my bank statements and they go through all my stuff. And as you guys know, mortgage lenders are in the box thinkers.
They don’t really understand. It’s pretty common that, in investors, they bang their head against the wall because the mortgage lenders like you lost all this money on this K one. It’s yeah, you’re supposed to lose a lot of money. It’s all depreciation and paper losses, which is supposed to offset and lower my taxes.
But it hurts you in this situation. But there are lending options as I discovered for folks like myself and a lot of you guys out there who show a lot of negative losses from the K one s on your tax forms to save thousands of thousand dollars in taxes, which is in what my opinion, how you’re gonna do it.
The trade off is when you’re trying to get a home loan and especially a home loan, over that ju loan size, to buy a 1, 2, 3, 4, $5 million house and above. In this tough situation. But just to, so you guys don’t have to go through the brain damage, like once you get past the income verification, which I did, right?
I got past that dungeon stage. Basically, it’s credit score determines your amount of how much loan you can get. They’re quoting me. I need, they need to see 50% loan, the value or loan to income. So they figure out what my income was. I didn’t review it, but whatever it was decent enough.
And then that’s how they figure out what’s your maximum monthly payment is. If you guys wanna hear more about this in detail, we had a podcast about this in the last year, non qualifying co mortgages, and he locks with Benson Pang. If you guys wanna go check out the website on this, but you know the quotes that I got back were.
Nine and a half to 10 and a half percent. And I’m all for taking the arbitrage between, the your cost of borrowing your money and then go invest it and make more other places. But, That really tests my fortitude, right? It’s not like you’re paying four or 5% in an infinite banking policy and you’re gonna go make 15, 20% plus because now the interest rate is higher and also the yields have dropped in deals because the cash flow is a lot lower and due to uncertain times worth where interest rates are at right now.
So that will change probably next year. At this kind of point in time, I was like, yeah, probably not the best. And I gotta admit, I was a little sticker shocked by the monthly mortgage rates there. But, it just and it pissed me off and it’s you know what, I’m just gonna go pay cash for this thing, and I don’t want the mortgage lender to get 1%, 2% on this thing.
I even looked. So this is 30 year fixed mortgages. And I also found that, in this non qm, non-qualified mortgage world where they actually treat you like adults and let you make choices even though they may not be good for you, that they also allowed for some interest only for the whole note.
Which was, you, I, from what the comparison I made, like you’re paying maybe half a percent higher. So if you’re paying. Point 9.5%, it bumped it up to 10%, so not much. Definitely made the payment come down maybe by 10% per month. But, in, in theory, if you’re a, use debt to your advantage purists, right?
You want to get that interest only, but obviously that, that clashes with, I think, most conventional thinkers out there. Still at the end of the day, I kind felt like, just buying a house just was a, I think this is where it comes down to more personal how you are, how you view life and like I’m more to spend money on experiences and things.
I’d rather go and spend a few thousand dollars a month, or heck even $5,000 a month on meals with others. Time savings, spend time with my family or just have less stress of doing, saving money. Like drive, driving to Costco to stand in that awful line.
To save $10 or for me, $30 in gas cuz my gas, my tank is pretty big. But It’s or spend that five, $10,000 plus on a mortgage at a very high interest rate. I think it made that. Made it very obvious and I don’t know what I was thinking. I’m sure a lot of you guys cut waiver on like bad purchases like that, it just, I think for me going through that exercise I was interested and I also wanted to share a lot what I was seeing in the non QM world in terms of mortgages and but also it was a good exercise for me to you.
Reiterate what is it that’s really important to me? What is my ideal life? And, if you’re somebody who wants to buy a big house, because that’s important, that’s totally cool. I no qualms about it. And I think it’s great that you own it. But if you’re somebody who’s on the fence and, you can’t have everything, but you have to figure out what is the most important thing here.
That’s, I think, the message and that’s my takeaway, if you guys want more insights on this, catch up with me in Hawaii when you guys come here in January for the retreat. There’s still time to sign up for that and if you guys are new to the group, join the club.
Simple pass at cash.com/club and we’ll also gonna be doing an Ask Lane show, so make sure you’re on the email list. You can sign up on that list and you can submit your question at simplepassivecashflow.com/question will air it on the show and enjoy the podcast.
Hey, simple passive castle listeners. Today, we are going to be talking medical sharing. What do you do after you leave that w two job and you leave that health insurance behind some other cheaper alternatives and something that I’m personally looking at lately, but don’t you introduce our guest Thomas Lindsay on everyone, Thomas.
Hey, how you doing lane? Thanks for having. Yeah. So Thomas helps people transition from get out this healthcare dilemma that we all will find ourselves after we finally fire the boss and leave that pushy W2 job behind. So let’s start from the top, right? You get health insurance, and maybe we can talk about how it’s a little bit you.
It’s expensive. Why is it so expensive in a normal study? It’s expensive because the insurance companies and the hospital systems like it expensive they make their profits are a percentage of the cost. So one of the things that happened with the ACA is that they said that you have to spend 80% of the premium on.
Medical care, right? And then the rest could be used for administrative expenses, including profit. How do you grow your profit? If it’s based on a percentage of premium, you grow your premium, right? And therefore you grow your profit, you can’t shrink premium and make more profit. You make less profit.
The whole thing and it’s, and it was that way before the ACA I think the ACA just really accentuated the storyline, which is the more premium people pay, the more the insurance companies make. And it’s just a, it’s really a dirty little system where consumers are, left to think that this is somebody else’s money.
I buy insurance and then the insurance company. Pays for my medical expenses. And I have no idea how much it costs. I have no idea how much they’re being billed, how much they’re paying. I think they’re working for me in my, on my behalf to keep costs down, but they’re not right. And a lot of my investors that are doctors or dentists, they see this from the other end.
They’ve gotta do all this coding. Actually. I have a few investors that are actually the coding people. Who support the the medical staff doing all this stuff and, that’s not cheap, right? No, there’s it’s over, it’s 33 to 35% administrative burden essentially. And it’s ridiculous. Cuz when you have that third party in the middle it just creates. Excess costs.
So for a normal person leaving the W2 job, and I’m assuming that traditionally those people you would go and you’d get like a bronze, gold, silver, or just a right open market plan. Is that correct?
Yeah. You have a, yeah. You have a couple of options, right? Once you. No longer once you’re no longer part of a group health plan. You can either go to the exchange or go to the private marketplace or get an association plan. So if you’re a CPA and you’re part of that association, then they’ll have an association plan that, that you might be able to access and use, but those are your three choices.
They’re all terrible, right? Because the premiums are high, the benefits are low. It’s a poor value. And, but that’s all, but that’s, what’s available to the individuals. And what is that? What is the somebody who is maybe 50 years old, pretty good health single person. How much would they expect to pay?
Once they leave their corporate job per month on health insurance on. If it’s just them or them and their spouse, yeah, they’re gonna pay, they’re gonna pay six, $700 in employee, an individual premium and a family of five that kind goes up two or three. If you’re a family and you, yeah.
If you’re 50 years old and you have family coverage, you’re gonna be, in the 1700 to 2000 plus range for any kind of. Benefit, right? Yeah. Yeah. Which isn’t a, that much actually. Traditionally people think you don’t wanna leave your day job just cuz you are gonna have medical insurance, but I always tell people, Hey, do the math, right?
If your medical insurance is gonna be a thousand, $2,000, that may just mean like a few rental properties. There you go, you don’t need to stay at your crappy job for the extra 15 years or stay the extra four years to get that supposedly grandfathered health insurance plan. Yeah. It’s real short term thinking, right?
You, a lot of the stuff is like we’re brainwashed. I thinking like the health and coverage is this magical benefit, but yeah, it all costs money at end of the day. And it costs. I guess what we’re saying here, if you go to the normal, bad options, you’re gonna spend to a thousand of $2,000, we can do better than that.
That’s why you listen to podcasts and listen to stuff, but we’re gonna talk about medical cost sharing today, which I guess maybe you’ll start at the price, right? Like how much does this typically cost in comparison to the normal. It’s gonna be about 60% less than what you’re currently paying and you’ll get, you’ll have lower out of pocket expenses typically as well.
So not only is it cheaper from a monthly cost standpoint, but when you actually go to use the benefit, when you actually go to get medical care, you’re gonna pay less. Out of pocket with most of these health share plans and specifically with Soldera. Yeah. So take us how, what is this thing and, how does it work?
How is it that it’s saving the costs are so much lower? Yeah. It’s saving because it puts you as a consumer in charge of your care. And also. It, you are shopping for the healthcare, right? So you’re a cash pay customer and the health sharing organization will reimburse you for the expenses that you incur that are beyond your chosen level of self insurance in essence, like the deductible, right?
If I’m gonna pay the first 500 of each need then everything after that would be shared among the community. But the way it works is you present, let’s say you, if you’re going for, voluntary procedure or appointment you can either there’s no network, so you can go wherever you want.
You can choose your own doctors or hospitals or whatever. You can either call and talk to the care logistics team and they’ll hook you up with a provider or you can do that yourself and go where you want, but you present yourself as a cash pay customer and they will bill you, you might have to pay something up front when you’re there.
But you wanna pay, you don’t wanna pay any more than your chosen, what they call initial UNS shareable amount. So you don’t wanna pay any more than that. And then have them bill you, and then when you get those bills, you send them into Sedera and then they share them among the community and send you the money to then pay the provider.
So it’s different in that regard, right? Normally with insurance you. You show up, there’s gonna be a copay and a deductible, and even you might even know that there’s co-insurance, but you really don’t know. You wait for the provider to tell you what that is, and they have to look at your card or maybe even call the carrier and then charge you accordingly.
And then they build the insurance company and then the insurance company pays them. And if there’s something that you owe you’ll get. You’ll get a bill for that. And it’s like a paperwork nightmare. You get bills, you get explanations of benefits and you really don’t know what anything costs and you don’t care because it’s, somebody else paying for it.
Or you think the insurance company’s really looking out for you and keeping the costs down, but you’d be, you’ll be shocked when you go from that model to this model. where you actually are engaged in the process and you are aware of what’s being billed. It’s a game changer. So one, one con obviously that you just mentioned is, know, you gotta come out with a little bit of money out of pocket which is probably no problem.
Average listener here. They’ve got a few 10 grand sitting in the bank. 50 a hundred grand in their life insurance policy. They, so they can come out of pocket a little bit. So then you take the, when the real bills come through the majority of the costs, they take that to their the medical share group, which H how many people are typically in one grouping?
It’s the entire community. So with Sedera there’s a little over 17,000. Members that are pulling their resources together. And there’s all kinds of medical sharing groups out there. Some of ’em are small, some of ’em are pretty large. So you can build some of a steady state.
Cause I think I’ve seen some really small ones where it’s maybe like a few hundred people or I don’t know how their, exactly how small is, but the medical sharing facilitators. They bring in the bills and they call up client, 57 and 84 and 236 and say send Tom a check for it this much, and this much.
Yeah. That’s a real convoluted way of doing it. So two things I would say to that is one anything below a thousand would. I would not want to be a part of Ty if you’re a large employer, then when you get to a thousand employees, maybe 1500 employees, that’s when it’s makes sense to start self-insuring to where you’re, you are up to a certain point, right?
You. But before that you don’t wanna be, there’s not enough people yeah. To spread the risk, not enough steady state, keep the costs down. Yeah. Yeah. So I would say that. And then to your, what was your other point? You, you said something else and I just I guess another question I have is oh, people are like, alright, this isn’t like a huge institution.
Even 17,000 is a smaller number. I think people are worried, especially people that are they have some money and they, maybe they take care of themselves cuz they know, fitness is the real wealth after a while. How do I make sure I don’t get into a group of, four foot, five, 300 pound people who eat Twinki for lunch every day.
That’s a great question. And the, yeah, there’s really no way of doing that. At a certain size, it’s gonna be the average of, America, which is not right. The average is not good, but the way costs are controlled is makes all the difference in the world. So one there’s preexisting condition exclusion.
So any condition or any, anything that you have that’s been treated in the past three years or been diagnosed in the past three years? Or that you’re even you’re aware of, and maybe you didn’t even get treatment, you have that issue that’s not shared. Not fully shared among the community until year four of your membership in year one, they don’t share anything in year two, they’ll share, up to $15,000 towards that condition.
And then year three 30,000 and then year four. It’s fully shareable. So that’s one way they do it with, preexisting condition limitations, and then through the cost control mechanisms that they have in place. And just getting actual fair pricing from providers instead of paying, the inflated costs that the insurance companies pay.
And then other services like second MD, if getting a second opinion, they also don’t. Don’t pay for things like if you’re drunk and you get in a car accident, that’s not shareable. If you just like breaking the law, like there’s some religious affiliated, which the one that you’re working with they’re not religious affiliated, but I know some of the religious affiliate, they won’t pay for things like abortion or correct some certain other procedures.
So you gotta be careful about those too, right? And so that’s how, some of the ways they control the cost and make sure that it’s, it’s really for, situations where, you’re in an accident or you’re you get ill and it’s not self inflicted. It’s not, something you didn’t need to have, something voluntary.
So those are ways to control the cost. And it’s amazing what you can achieve when you do that. You can significantly reduce costs by more than half utilizing those tools. Yeah. And I think it’s just another example of, look, if you’re just gonna do what everybody else does, you’re gonna get slaughtered with everybody else.
If you invest in the 401k, you’re gonna work at your day job for 50 years. If you invest, if you use the same healthcare. Coverage is everybody else you’re gonna pay two or three times the price. But like anything else it’s, it’s not without a little bit of work. And but what I keep telling people, especially in the past investors, seller and mastermind that I have, it’s not that hard to be an astute investors.
You don’t need to underwrite deals. You don’t, you don’t need to like go travel. There’s just certain things that you need to do. And this is just a small example of that, there’s some tricky things here. But yeah, I guess Thomas, like where do we start? Like somebody’s quitting their job in the next year or two, maybe take us some practical steps of, know, engaging with a company like yours, but what are some ways of comparing different options?
Yeah, step, step one would be to, evaluate your own current health situation, right? To determine whether do you have a preexisting condition? Are you getting regular treatment for that? How much does that cost? If you can. You can do a little bit of homework. Just because you have a preexisting condition doesn’t mean that you won’t be better off in a health share arrangement.
You just need to look at the, how much that actually costs you. Then look at the health share and say, okay, how much are they gonna share towards this in year one, year, two, year three. And how much will I be saving when I, ditch my insurance and go with this route? Because I can use that savings to help.
Cover some of those costs, right? So you gotta do that analysis. And then there, there are several, there’s probably only really five health share organizations that I would consider. And so you’d go and do a comparison to see, who’s got the best best for you membership benefits for you, right?
Got it. So those would be, those are really the two steps that, that she need to take to get the ball rolling. Yeah. And what would you say like less than half or about 50% savings, the the typical on these things and, yeah, I would say 40% plus easy. I saved 62% when I switched.
After I left my corporate job and then I lost, I couldn’t afford the Cobra premium, cuz my income was cut in half and I went without actually for a while trying to find something that, that I could afford. And that’s when I found the medical cost sharing and I was paying. $1,750 and it went down to $487 in essence.
So I think that’s actually more than 62%. But yeah, you guys can I’ll put all this information along with other information about the subject simple, passive, casual.com/healthcare. And this is something I’m looking into these days. I’ve got health insurance through my wife, but I want to quit that silly W2 job.
And that’s really the only thing holding me back. And I know a lot of people back from putting the day job is just this, what are we gonna do for healthcare, right? Yeah. Somebody I heard use the term spouse with benefits. , that people are looking for, spouses with benefits or that’s the reason, the only reason that the spouse is working is so that they have the health insurance.
it’s a, it can be a game changer. It was for me and I’ve been in insurance, my entire career. I’m a, I’m an insurance professional. I’ve I as a, in my corporate job for 23 years, we did payroll, HR, employee benefits and work comp insurance for employers all across the country.
And we would provide health insurance plans on a group basis. would put together self-insured plans. And so I’ve been in this space, my whole career. I just never realized as an individual out, a free range chicken out in the wilderness, how difficult it was and how expensive it was to find healthcare until it happened to me.
And I was super grateful to have found this this alternative. And so I’m a huge advocate for. And, again, I, when I first came across it as an insurance guy, I was let my red flags go up and I’m like this is not. Yeah. I For me it was, it sounds too good to be true, but then when I start to, travel and I meet in other investors and join different masterminds, these are the things that we talk about, like which, which Medi share are we using or healthcare sharing plan.
Somebody mentioned to me like, there’s one with. bunch of CrossFitters like those kinds of people with eight packs and can I don’t know if they make ’em run like a run test or what, but. Someone mentioned there’s some health sharing plans with that I wanna get in those, those guys don’t there you go.
Get sick. yeah. There’s one affiliate for Sera out of California who has a CrossFit. And so he promotes it among his CrossFit membership and I think he’s rolling it out to other CrossFit, specifically to CrossFit companies yeah. To offer to their me. So for the insurance company it behooves them to get those type of fire breathers in their community.
Cause totally. Yeah. They want the people who are health conscious, who, doesn’t mean you have to be, you don’t have to be a health nut and, or, or being Superman shape. But just, Caring a little bit about, yourself and eating in things in moderation and getting exercise and moving around, it goes a long way to reducing how much burden of a burden you are on the healthcare system.
Yeah. I’ll be on the lookout for that one, but anything anything else we think we missed that, that kind of folks knew newer to this, they need to know about. Yeah, just, there’s a, you wanna look at what the preexisting, first of all, I would say, this is definitely something everybody needs to take a look at.
There’s no reason that you need to continue to do the same thing over and over again, like you were saying earlier and expect a different result, right? The 401k healthcare, get all that stuff. Yeah. Costs. Aren’t gonna go down. And it’s not gonna get less expense. And this is a way where you can take control and have a little bit of individual responsibility in the system and really fight back against, the huge corporations that control healthcare in this country.
So wear it with a badge of honor and go out and help make a change, and cuz that’s the only way things will change is once the insurance companies fill that. But definitely check it out. Fight the power. And what’s your contact for people to get ahold of you ask more questions.
You can reach us@gotpurehealth.com. You can find me on LinkedIn, Thomas rock Lindsay. And then, yeah, I’ll put this all up on simplepassivecashflow.com/healthcare along with a lot of other things I’ll find on the subject. We’ll figure this out together, folks and this would be another good option, joining that simple passive cash flow accelerator program, you get in and you build relationships with other sophisticated and accredit investors and you talk about this stuff, it’s just not something you’re gonna just walk down the street and say, yeah, I do this for my healthcare.
It’s a little personal. So we make people sign confidentiality agreements. So we can talk about this stuff freely. Thanks for joining us guys. And we’ll see you guys later. Thanks lane.