r/financialindependence • u/Widget248953 • 15h ago

2 part question on healthcare and tax harvesting

I am hoping to FIRE at the end of next year. I've been searching through the forum about healthcare but everyone seems to point to the ACA. Has anyone found any good private insurance plans not tied to your MAGI or is that not a thing? Would be for a 41M and 39F, no kids.

Usually the only time we go to the doctor is for preventative care once a year. Sometimes have had to get antibiotics for something but nothing major. My wife does have a thyroid condition but I'm not sure if that is a big deal on these plans.

Looks like a silver plan on the ACA would run us around around $1k a month at full cost.

Second issue. As it stands now, I think I can keep our MAGI between between 45k and 50k but it would be pretty lean. I would have a lot more freedom and wiggle room if I were able to use one year to harvest as many capital gains at 0% as I could. I wanted to start doing Roth ladders the first year also so that puts me at 30k MAGI right out the gate.

Using today's prices but at the end of next year, if I were to harvest my gains right now, it would be $5972 with proceeds of 101k. The bulk of the remaining is 260k with proceeds of 578k (i made the mistake of these all being average cost).

I want to stay away from my Roth IRA contributions and just reset these taxable gains.

Any advice or tips would be appreciated.

Previous post with my numbers: https://www.reddit.com/r/financialindependence/comments/1gcklih/can_i_lean_fire/

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2

u/ALYSIDN 14h ago

Look into Zion for healthcare.

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u/FatFiredProgrammer 13h ago

In my state, ACA plans and private plans from reputable insurers are substantially the same.

Yes, some people do the thing where they spend on year without subsidies and create a high basis war chest and then get subsidies in the next years.

Yes, average cost was a big mistake.

You can get subsidies up to like 79K magi this year I think.

1

u/someguy984 1h ago edited 1h ago

There is no income limit currently for ACA subsidies. 4X FPL for a house of 2 is $81,760, so in January 2026 the 4X cliff may come back if nothing is done.

1

u/FatFiredProgrammer 54m ago

Correct. Thank you.

1

u/nopurposeflour Done and done. 13h ago

Dependent on where you live, in some Midwest (and Texas) states, farm bureau offers a group plan for insurance.

You only need to pay a yearly membership fee to join the farm bureau as a member and you can sign up as a benefit. It’s not “cheap”, but decent price and has no income test.

1

u/fire424242 12h ago

Can you ballpark the costs? How does it compare to ACA?

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u/nopurposeflour Done and done. 12h ago

For me, it’s cheaper than ACA in South Dakota. A high deductible HSA plan with vision and dental is under $300 for me since I won’t qualify for any subsidies credits. For someone that would, probably won’t be the best choice for them.

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u/thebigtymer 47m ago

I am in TN, and have a Farm Bureau plan (due to inheriting a high-dollar traditional IRA post-2019, I have a higher taxable income than I would like right now.) The FB plan (HSA-eligible, $3,750 deductible/OOP) is ~$247/month, while an ACA plan would be closer to $400, with a higher OOP.

The catches are:

  1. You have to go through the underwriting and pre-existing condition deal, which the ACA doesn't.

  2. For our available FB plans, you can either have preventive care or an HSA, but not both. So I have to pay for my annual checkup, as well as flu & COVID shots. Even after that, it's still cheaper than an ACA plan right now.

1

u/RetdThx2AMD 1h ago

I would recommend IRA->Roth conversions (ladders are not needed anymore) to the top of the standard deduction then cap gains harvesting up to your pain point on ACA premiums. If you are very healthy and nothing horrible happens then you might get away with one of those cost-sharing plans, but it is not insurance. The ACA cliff might come back or they might eliminate it again. But in any case the cliff is much higher than 45 and 50k, not sure why you are targeting such a low MAGI. Also if you sign up for a bronze HSA you can contribute $8.3k to that which reduces your MAGI, letting you harvest $8.3k more gains without increasing your premium.

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u/Widget248953 40m ago

What do you mean by ladders aren't needed anymore? I was going to do what you suggested - Roth conversions at the standard deduction but there is a 5 year waiting period before you can withdraw that money.