JoMoney wrote: ↑
Tue Oct 31, 2017 7:35 pm
Slacker wrote: ↑
Tue Oct 31, 2017 6:23 pm
WhiteMaxima wrote: ↑
Tue Oct 31, 2017 4:08 pm
35 years is too young to retire. What if there is hyper-inflation? You are out of job for so long and no longer hireable. What if you have serious illness and need 0.5 mil to treat. Don't even think about it.
Most everybody, in the US, would be in trouble (working, not working, etc) if they had a serious illness that required 0.5 million (out of pocket) to treat outside of the top 5% by wealth. How common (percentage of US adults over 35) is it to have 0.5 million out of pocket expenses not covered by healthcare that are not terminal?
Not sure exactly how frequently major medical events happen to individuals, but I can point out that a common cause of financial failures is medical expenses.
...Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year—making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data. And even having health insurance doesn't buffer consumers against financial hardship...
And if the cost of healthcare continues to rise at the pace it has in the past few decades, the squeeze will only get worse. I don't know what the answer to the rising cost problem is, but I do know if healthcare costs continue rising at rates faster than incomes, gdp/economy/etc.., something has to give. There's only a hundred cents in a dollar and if healthcare takes a few cents more than in the past that's a few cents less available to everything else.
I just want to decompose some of the numbers here.
cnbc wrote:NerdWallet estimates that households containing 1.7 million people will file for bankruptcy protection this year.
So that is 15% lower than the number you cited. Furthermore, that is households with 1.7million people not 2 million people are filing for bankruptcy. However, we are discussing 0.647 million people/households actually affected by bankruptcy or 0.5% of US households
. Granted, this is an annual number.
Nerd Wallet 2014 study on medical bankruptcy
nerdwallet wrote:NerdWallet Health estimates almost one in five—or roughly 51 million—American adults may be contacted by a debt collection agency about medical debt in 2014.
$21 billion in medical debt was collected from American consumers in 2012.
That looks like medical debt amounts to about $411 per person on average in aggregate.
New York Times article on Medical Debt
New York Times wrote: Twenty-nine percent of the people with medical bill problems said a family member had been forced to stop working or cut back on hours. (On the other side, about 41 percent of people said they’d taken on extra work to help pay bills.) “Is that a job problem or a medical bill problem?” said David Himmelstein, a professor of public health at the City University of New York’s Hunter College School of Public Health who has studied medical bankruptcies. “It’s both of those things.”
So it may be safe to say that the total chance of this happening to the OP is reduced by close to 29% since they won't have to worry about the issue of "stop working or cut back on hours".
Snopes had this to say about Bankruptcies
Snopes wrote:However, in that analysis NerdWallet repeatedly stated that their findings were “estimates” or “extrapolations,” and some of their data were quite old even back in 2013...The potentially ameliorating effect of the ACA on bankruptcies was also cited by a July 2015 Wall Street Journal article which (in part) described research into medical bankruptcy done by Northeastern University law professor Daniel Austin: Prof. Austin’s study found the percentage of medical bankruptcies to be far smaller. Overall, 18% to 25% of personal bankruptcies filed in the U.S. were prompted by medical debt.
So perhaps now, the number of personal bankruptcies tied to medical billing is as high as 260,000 people per year.
Now, when you reflect on the (small) size of debt collections claims for medical billing, the often stated low emergency funding of the average american and the nerdwallet study (updated in 2014). It does not appear that a $500,000 medical bill is very likely at all. It seems more likely that one goes to a hospital charging 50x as much as a similar hosptial for the same service and potentially pay up to $200,000, but far more likely is that the average american having to file for bankruptcy just does not sufficiently live below their means causing them to be ill prepared. I think the $500,000 scenario is less likely than the OP simply dying at a young age from any number of reasons so long as the OP stays insured.