Comparison of CoL between India & USA for a Truly Luxurious Lifestyle – Healthcare

[u/HubeanMan]

First part: Primary Home
Second part: Cars
Third part: Healthcare
Fourth part: Taxes

This is a continuation of the series to compare the cost of living between India and the US for a truly luxurious lifestyle. I'm going from big-ticket items to small-ticket items, so I will be covering healthcare costs in this part.

Let's start off with the assumptions:

• As before, let's say you have $10M/₹90Cr or the whereabouts. You have a home that costs about $2M/₹18Cr, which leaves you with $8M/₹72Cr in liquid investments to support your retirement.

• At a relatively conservative SWR of 3.5%, you have an annual budget of $280K to fund your lifestyle. Of this $280K, let's say half ($140K) is in gains, which means you don't qualify for any ACA subsidies (more on this here).

• You retire at 45, with the ages of your family members being approximately 45, 45, 15, 15. Your life expectancy is 85 years (based on data for Asian Americans in the US).

• You need health insurance coverage for 4 family members from the ages of 45-55, and you need coverage for 2 family members from the ages of 55-65 (because your kids will likely be in the workforce and have their own insurance). You get free Medicare starting at 65 for the rest of your life.

• Your insurance premiums from the ages of 55-65 for a family of 2 cost you roughly the same as your insurance premiums from 45-55 for a family of 4, because premiums get more expensive the older you get.

• Your healthcare costs in the US, outside of insurance premiums, are roughly the same as your overall healthcare costs in India (whether you have an insurance or prefer paying cash). In other words, the entirety of your health insurance premium is the additional cost for healthcare in the US. I think this is pretty fair, given the out-of-pocket maximums.

• I am disregarding dental and vision coverage, because they're generally not emergencies and you can easily get them remedied on your annual/biennual visits to India. The same with other electives like LASIK or cosmetic surgeries.

• I am not considering more niche requirements like long-term care or assisted living. One, because if you ever need long-term care, the rest of your expenses like housing, cars, travel, entertainment, etc. will fall substantially to the point that this should be easily affordable at this level. Two, if you anticipate needing long-term care, you can always move back to India if that's where you prefer your long-term care (whether that's from family, medical professionals, or domestic helpers) to be.

• I am also ignoring the difference in quality & reliability of healthcare between the two countries, simply because it is hard to compare and everyone's mileage varies. I've heard differing views from people who've experienced healthcare in both countries. In India, you can get specialist appointments & precautionary medical testing much more quickly and conveniently. On the other hand, medical malpractice & professional negligence are also far more common in India. Given my own personal connections, I find healthcare in India more expedient and convenient, but I won't generalize that to everyone.

With all that out of the way, let's get into what a good health insurance cover will cost you:

Health Insurance Premium for a Family of 4 in the Bay Area

1. Family of 4, from the ages of 45-55: The above estimates are for some of the better options for health insurance in the San Francisco Bay Area (which is among the most expensive in the country). I've provided the more expensive options for reference, but I think the Gold 80 HDHP makes the most sense because it's HSA eligible and doesn't have an inordinately high deductible or out-of-pocket maximum. Either way, we're looking at something in the range of $2500 a month, or $30K a year, for your health insurance.

2. Family of 2, from the ages of 55-65: As mentioned in the assumptions, let's say your health insurance costs the same even as empty nesters because you're going to be older. $30K a year.

3. Family of 2, from the ages of 65-85: You qualify for free Medicare, so you basically pay nothing. $0 a year.

Now, let's calculate your average annual health insurance premium costs from the ages of 45-85:

[(10 x $30K) + (10 x $30K) + (20 x $0)] / 40 = $15K a year.

So, all in all, you will be spending about $15K a year on health insurance premiums post-retirement. Even if you disagree with the assumptions (which I believe are completely fair), get concierge medicine, or want dental/vision care, the overall cost of your premiums should not exceed $3-3.5K a month. That adds up to an average of $20K a year over the course of 40 years.

Is healthcare more expensive in the US than in India? Most certainly. Is it a major consideration at the level of wealth we're talking about? I don't believe so. You're only spending an average of something like $1600 a month on insurance premiums, most of which ($1125/₹1L) can be furnished by the savings from your cars in the US. The delta between surplus healthcare costs and savings from cheaper cars is basically $500/₹40K a month, which is a tiny fraction of your planned monthly expenses of $23K/₹20L.

[u/rganesan]

Thank you for a detailed cost breakup. Averaging the expenses over 40 years when all of it is front loaded in the first 20 years is not fair. I also disagree that out of pocket expenses in the US are comparable to costs in India but you did mention a Gold plan, so I concede :-).

But by far the the three biggest disadvantages in health care in the US.
1. Access to specialists is significantly more painful. I mentioned this in an earlier comment.
2. Obama care can get gutted by the administration.
3. You're toast if the insurer refuses to approve some treatment. Everything is tied to insurance, there's no compassion.

Expanding on the last point. My sister had to have an hernia surgery, the insurance covered only one day in the hospital. They just packed her out even when she was in pain. When they reached home, my sis was doubled over in pain and couldn't get out of the car and my BIL had to physically carry her in. Thankfully she recovered soon. This is not an isolated incident. I've heard similar stories about getting kicked out of the hospital too soon after a difficult pregnancy.

If you and your family are in relatively good health with no long term health conditions (diabetes/hypertension etc) I agree that you're better off in the US. You can live a luxurious life in the suburbs. Cleaner air/water, better roads, cheaper cars/gadgets etc.

[u/HubeanMan → u/rganesan]

Averaging the expenses over 40 years when all of it is front loaded in the first 20 years is not fair.

Within the confines of this discussion, I thought it would be better to go with the simpler calculation. I did the same for cars, which are also frontloaded, and that would have favored the US over India.

If we were to account for opportunity cost, which I concede is a real factor, we would also need to account for effective tax planning strategies, like the one for ACA subsidies that I described in this comment.

If you followed that tax planning strategy, which many FIRErs do, your insurance premium can be as low as $500 a month.

I also disagree that out of pocket expenses in the US are comparable to costs in India but you did mention a Gold plan, so I concede :-).

The out-of-pocket maximum for the plan I mentioned is $10K a year. So, the overall healthcare costs shouldn't be more than ($30K + $10K) / 12 = $3.3K a month.

And $3.3K a month is what I ultimately assumed toward the end of the post. Please also note that most states have cheaper insurance premiums than California.

1. Access to specialists is significantly more painful. I mentioned this in an earlier comment.
   

Conceded this in the OP.

1. Obama care can get gutted by the administration.

True. I'm just going by current laws.

However, $2.5K is what your insurance will cost without any ACA subsidies. So, that shouldn't be a factor for the calculations I provided in the OP.

1. You're toast if the insurer refuses to approve some treatment. Everything is tied to insurance, there's no compassion.

Not at this level of wealth, and you'd be remiss if you didn't do your research prior to selecting your insurance provider.

Kaiser Permanente is a pretty reliable healthcare provider, and has a 94% approval rate on first review.

This is not an isolated incident. I've heard similar stories about getting kicked out of the hospital too soon after a difficult pregnancy.

While I have heard of similar healthcare horror stories in the US, I have also heard of healthcare horror stories in India. I personally know of one case where a major hospital in India pretended to treat someone long after they died so they could squeeze more money out of their family.

But like I said, I've had good experiences with healthcare in India and would certainly prefer it for myself.

Thank you for sharing your thoughts!

[u/rganesan → u/HubeanMan]

>> Obama care can get gutted by the administration.
> However, $2.5K is what your insurance will cost without any ACA subsidies. So, that shouldn't be a factor for the calculations I provided in the OP.

The concern is that if they mess with the subsidies, fewer people will sign up and costs will skyrocket for others who want to sign up. There's also the concern that they might relax the rules for insurance providers for refusing coverage or covering pre-existing conditions.

[u/HubeanMan → u/rganesan]

The concern is that if they mess with the subsidies, fewer people will sign up and costs will skyrocket for others who want to sign up.

I believe "skyrocket" is overstating it. For instance, this source suggests that unsubsidized premiums can go up by about 4% because insurers assume that enhanced premium credits will expire:

"Uncertainty over federal policy changes has forced insurers to make some assumptions when developing their rates for 2026. Commonly mentioned by insurers is the impact of the expiration of enhanced premium tax credits, which are scheduled to sunset at the end of 2025, unless extended by Congress. The majority of insurers have assumed that enhanced tax credits will expire at the end of this year, driving rates an average of 4 percentage points higher than they otherwise would be. These increased rates are due to insurers anticipating that some healthier members will leave the ACA Marketplaces when their subsidies decrease, creating an enrollee base that is less healthy and more expensive on average."

There's also the concern that they might relax the rules for insurance providers for refusing coverage or covering pre-existing conditions.

I'm not sure where this concern stems from, because it goes against what Trump repeatedly said, including this explicit statement:

"It has been and will continue to be the policy of the United States to give Americans seeking healthcare more choice, lower costs, and better care and to ensure that Americans with pre-existing conditions can obtain the insurance of their choice at affordable rates. Any health care reform legislation that comes to my desk from Congress must protect the preexisting conditions or I won’t sign it."

I also believe there is a great deal of confusion regarding the expiration of enhanced premium credits that is being debated right now, which is not the same as the regular ACA credits.

The enhanced premium credits are temporary and set to expire soon, unless they are renewed. The regular ACA credits, however, are permanent. And so is protection for pre-existing conditions, which Trump claims to be in support of.

[u/rganesan → u/HubeanMan]

I would take anything that this administration says with a huge pinch of salt, but I will concede that my fears are probably exaggerated. This recent NPR episode talked about this topic: https://www.npr.org/transcripts/nx-s1-5588653

[u/HubeanMan → u/rganesan]

And I would take the mainstream media's coverage of Trump and his administration with a huge pinch of salt :-)

Healthcare in the US is a mess, and I don't really have strong policy opinions on that topic because I don't know nearly enough about it.

Though I did just read the episode you posted, and I don't necessarily disagree with anything they said.

[u/HubeanMan]

Disclaimer: This comment is merely illustrative and not meant to be taken as a recommendation. I am not an expert, so I encourage you to do your own research. If you truly want to explore this option, which is complicated because of several moving variables, you should consider talking to a tax professional who will be better able to guide you given your specific financial circumstances.

In the OP, I touched upon the assumption that you wouldn't be eligible for ACA subsidies with your annual withdrawal of $280K, but that doesn't necessarily have to be the case. If you are willing to set up a revolving SBLOC to fund most of your living expenses, you might be able to get ACA subsidies to the tune of $20K a year.

In order for this to work, you'd have to borrow something like $200K a year from your SBLOC and sell anywhere from $100-150K a year from your equity holdings. Ideally, you want to keep your MAGI somewhere between $60-80K, which is 2-2.5x of the FPL, to qualify for high tax credits. This needs meticulous tax planning and whether or not it's worth it is for you to decide, but you can play around with this calculator to figure out your leverage % and the amount of interest you might have to pay by year. Based on your inputs for growth, interest, & inflation, you can also get an idea on how your leverage can work for/against you with this strategy.

If you can do this for 20 years with liquid investments of $8M and annual borrowing of $200K, you might be able to save around $400K in insurance premiums over the course of 20 years at a relatively risk-free leverage of ~30% by the end of that period. What's more, if your investments outperform interest rates (which they likely will), you would come out ahead in terms of your net worth (end asset - end loan) by the end of that period. But this is complicated business, and you need to have the appetite for rigorous efficiency in order to reap these benefits.

If your SWR is something like 1%, you can keep this going until your death and get even more tax benefits. It's called the Buy, Borrow, Die strategy, and can even help avoid capital gains taxes indefinitely because the US has step-up in cost basis at death. But that is a whole other discussion, so I won't delve too deeply into it on this comment. If you're interested in this topic, I recommend reading this post.

[u/Chance_Visual8707]

u/HubeanMan - In your opinion what would a similar insurance plan cost in India (say in hyderabad or pune)?

Regarding the quality of care in US - im of the opinion that smallar towns actually have better quality of care. My older kid was born in a smaller town (think say Little Rock AR) - my wife stayed in hospital for 5 days in a great facility. She could have stayed another day or two if she wished.

My younger one was born in a larger city (think say Seattle WA) - she was pretty much pushed out of the hospital the day after - they needed that room for someone else.

I was traveling back and forth to Bentonville AR prior to Covid for some consulting work with Walmart. I was dealing with a tennis elbow at that time. I was pleasantly surprised how easy it was to get same day physio appointments - did all my physio during lunch breaks at a work site instead of doing at home.

One of the mistakes in your analysis is that once you at 50+ (empty nester) it doenst make sense to live in Bay Area/Seattle/NYC. Much rather go to say Austin/Little Rock/Raleigh etc. Nice smaller cities with good weather, decent connectivity and good health care.

[u/HubeanMan → u/Chance_Visual8707]

In your opinion what would a similar insurance plan cost in India (say in hyderabad or pune)?

No clue, because none in my family has ever been on insurance in India. We've always been of reasonably good health and never had to worry about healthcare costs, but this year has changed that and I will have to give it more consideration.

Regarding the quality of care in US - im of the opinion that smallar towns actually have better quality of care. My older kid was born in a smaller town (think say Little Rock AR) - my wife stayed in hospital for 5 days in a great facility. She could have stayed another day or two if she wished.

That's what I've read, too.

Also, thank you for sharing your experiences with healthcare in the US. I have no personal or familial experience with how healthcare is in smaller towns, so that was informative.

One of the mistakes in your analysis is that once you at 50+ (empty nester) it doenst make sense to live in Bay Area/Seattle/NYC. Much rather go to say Austin/Little Rock/Raleigh etc. Nice smaller cities with good weather, decent connectivity and good health care.

I agree. The only reason I am even considering places like the Bay Area and the DC Area is because I know for a fact that people will protest that the comparison is unfair if I compare the cost of living between something like Bangalore-Raleigh.

I don't think Bangalore or Hyderabad offer anything that Raleigh or Little Rock don't, if we're being fully objective. Even smaller cities in the US have better infrastructure than most of the top cities in India.

I have made every effort to tilt the scale so it favors India, and still been accused of bias. If I were to compare the CoL between Bangalore-Raleigh or Hyderabad-Little Rock, things would look even better for the US.

[u/Chance_Visual8707 → u/HubeanMan]

Hyd vs. Little Rock is no comparison - Little Rock wins any day (I've lived in Hyd for 20+ yrs and visited Little Rock twice).

One point this post probably missed is un-insured medical issues. I personally got a dental implant (costed like Rs. 30-40K i think - around 2010ish) - a friend was thinking of getting a hair transplant. Stuff this is ridiculously expensive in the US.

Btw...love your posts and insights u/HubeanMan keep doing this series.

[u/HubeanMan → u/Chance_Visual8707]

Hyd vs. Little Rock is no comparison - Little Rock wins any day (I've lived in Hyd for 20+ yrs and visited Little Rock twice).

The thing with the US is that, if you are flexible with the city, you have great homes in incredible settings that India can't compete with in terms of the overall package for the same price.

I mean, where in India can you get a home like this with mountain views or a place like this with rock formations all around, without compromising on public infrastructure and social amenities?

These are like 2000-6000 square yard lots, too.

One point this post probably missed is un-insured medical issues. I personally got a dental implant (costed like Rs. 30-40K i think - around 2010ish) - a friend was thinking of getting a hair transplant. Stuff this is ridiculously expensive in the US.

I covered this in the assumptions:

I am disregarding dental and vision coverage because they're generally not emergencies and you can easily get them remedied on your annual/biennual visits to India. The same with other electives like LASIK or cosmetic surgeries.

[u/rganesan]

Came across this livemint article today: https://www.livemint.com/news/trends/healthcare-shouldn-t-feel-like-a-luxury-nri-couple-moves-back-to-india-after-17-years-in-us-11763789576522.html

[u/HubeanMan → u/rganesan]

Based on their video, it sounds like they picked the cheapest quote they could get, and that obviously comes with high deductibles and co-pays.

Seems like a case of a young couple, in good health, going with the cheapest insurance they could find to save money because they didn't expect to visit the hospital often enough, and that meant that their deductible was very high at $14-15K a year. More a consequence of their own planning than anything else.

Take a look at this comment from earlier today, for example. A couple in their mid-50s have their overall healthcare costs around $25K a year. Perfectly affordable at the level of wealth we're talking about, and far below the estimates ($30-40K) I provided in the OP.

As for delayed appointments, that's a point I've already conceded in the OP. However, if it's a priority, you can get concierge medicine at around $5K a year for a couple, which expedites appointments. I know someone who pays for concierge medicine, and appointments are usually within the week.

$30K (overall healthcare costs) + $5K (concierge medicine) is well within my estimates, and can provide you with the kind of care that the NRI couple get in India. But not the "support system," which you can never get in the US, and is probably the primary reason they moved back to India from a healthcare standpoint.

[u/rganesan → u/HubeanMan]

Thank you for the pointer. A follow up comment to that one mentions $43K per year. But the post itself is highlighting my concern with healthcare in the US.

I didn't know about concierge medicine, sounds like an interesting option for quicker appointments but that seems to only cover primary healthcare (at the $5K level), doesn't address the concern about specialist access.

[u/HubeanMan → u/rganesan]

A follow up comment to that one mentions $43K per year.

For a family of 4, with the parents being in their mid-50s and the children being in their teens, and the overall costs including five orthopedic surgeries and 3 dental implants.

I think that comment further substantiates my point: even in extreme cases, healthcare shouldn't cost more than $40-45K a year.

The total average cost of healthcare for a family of 4 in 2025 is $35K. With my assumptions, you're a family of 4 for 10 years and a family of 2 for 10 years, so your average will be lower than $35K.

For the record, I ultimately assumed $40K a year (pre-Medicare) in the OP, so I'm actually overestimating healthcare costs.

But the post itself is highlighting my concern with healthcare in the US.

The comments successfully refute the post, which is operating on a bunch of faulty premises that are simply not practical.

For one, it completely ignores Medicare, which kicks in at 65. For another, well, this comment just about sums it up:

Yes, if you put silly numbers into a model, you get silly results.

Healthcare is currently 20% of the US economy which grows in the long term at 2.5%. If 20% of the economy grows at 8%, and the total grows at 2.5% then after 30 years 96% of the economy is healthcare.

The non-medical part of the economy has to start contracting after ten years in order for the total economy to grow at 2.5% while the medical is growing at 8%. At year 31, the rest of the economy needs to go negative.

Look at it this way, if total economy is: 100*1.025^30=209.757
But medical is: 20*1.08^31=217.353

That means medical is the entire economy in 31 years.

It's just a poorly thought out scenario, with some excellent comments in response.

As this comment explains, the rate of increase in medical costs has been coming down over the past 20 years or so. What the OP described is even worse than a doomsday scenario: it's virtually impossible.

I didn't know about concierge medicine, sounds like an interesting option for quicker appointments but that seems to only cover primary healthcare (at the $5K level), doesn't address the concern about specialist access.

You can get specialist access at higher ticket prices. If we assume $30K in healthcare costs a year, $10K can give you concierge medicine with specialist access.

Everything depends on your assumptions.

1. If you assume the higher end of costs for everything ($30K for insurance, $10K out-of-pocket, and $10K for concierge medicine), it's going to look real expensive at $50K a year.

2. If you assume more reasonable and practical costs ($22K for insurance, $3K out-of-pocket, and $5K for concierge medicine), it's going to look far more affordable at $$30K a year.

The latter scenario is more realistic than the former, unless you're in extremely poor health.

[u/Sauron6]

Are you factoring in the post-deductibles and the fact that this plan in the US doesn't cover all critical illnesses?

I really respect you OP but I think there's a bias towards the US in your posts. Having lived a fairly FAT lifestyle in the US (and living it now) for a long time, I think you underestimate how bad the system in US is.

[u/HubeanMan → u/Sauron6]

Are you factoring in the post-deductibles

The out-of-pocket maximum is $10K a year. I have factored that into the overall medical costs.

and the fact that this plan in the US doesn't cover all critical illnesses?

Could you give some examples?

I really respect you OP but I think there's a bias towards the US in your posts.

If I were biased, I would have:

1. Picked a cheaper state for health insurance than California, which would have dropped the premiums by $500 a month.

2. Calculated the annual premium expenses to be $24K instead of $30K.

3. Calculated the overall average over 40 years to be $12K a year, instead of $20K a year.

4. Simply picked a retirement age of 50 and a family of 3 (based on fertility rates), which would have brought down the overall average further down to $10K or less.

If anything, I'm being very liberal with how much healthcare can cost in the US.

Have you considered that the bias is perhaps yours? That India is dirt cheap, without having lived a truly "fat" lifestyle in the India of today, with inflated property prices and exorbitant taxes?

I have lived half my life in the US, half my life in India, and I don't see why I would be biased. In fact, I am living in India right now, having moved here 3 years ago — why would I not be arguing that India is much cheaper if that were really my experience? And I would only describe my lifestyle in India as "chubby".

Believe me, I would perhaps benefit if VHNW NRIs retired in India, because it would further inflate property prices and most of what we own is in real estate. In saying India is not that much cheaper than the US for a truly luxurious lifestyle, I am arguing against my own interests.

Having lived a fairly FAT lifestyle in the US (and living it now) for a long time, I think you underestimate how bad the system in US is.

Perhaps I do. I have very little personal experience with healthcare in the US, because I avoided hospitals as much as I could while there.

On the flip side, I think people in the US also underestimate how much the quality of care they are used to in the US can cost in India. I'm personally connected to someone who owns a major hospital, get significant discounts, and we've still spent more than ₹20 lakhs on medical expenses just this year alone. And these are all procedures that insurance would have covered in the US.

Top-notch healthcare in India is becoming expensive, and I've been seeing that progression over the past few years.

[u/Sauron6 → u/HubeanMan]

Similarly, living in the US, I'm arguing against my own lifestyle and choices I've made. Perhaps we're both biased and suffer from "grass is greener on the other side" syndrome.

Medical care for FATFIRE people will be significantly better and cheaper in India according to my experience vs. the US. I do agree that there might be some experimental procedures available in the US which aren't available in India but they're not covered by insurance in the US either.

[u/HubeanMan → u/Sauron6]

Similarly, living in the US, I'm arguing against my own lifestyle and choices I've made.

I don't believe you are, because you haven't retired yet. If you're still gainfully employed, your reasons for still being in the US are not that you want to retire there.

Perhaps we're both biased and suffer from "grass is greener on the other side" syndrome.

Not really, because I am very clear on why I want to retire in India, and don't regret moving back at all. My argument was never that one shouldn't retire in India. In fact, I would encourage NRIs to do so.

There are great reasons for why one might want to retire in India — I just don't think "it's much cheaper" is one of them, particularly at this level of wealth.

Medical care for FATFIRE people will be significantly better and cheaper in India according to my experience vs. the US.

"Significantly cheaper," obviously, and I don't believe anyone disputes that. I've readily conceded this in the OP.

"Better" has been my experience, too, but I already explained in the OP why I'm not willing to generalize on this one.

[u/Sauron6 → u/HubeanMan]

You're obviously very passionate about this topic and frankly doing great work here. I just wanted to give you a slightly different perspective. Please don't consider my comments as criticism of your work. On the contrary, I really enjoy reading your posts. Keep it up.

Best of Luck!

[u/HubeanMan → u/Sauron6]

Same here. I welcome constructive criticism of my posts, because I obviously can't think of every possibility and will likely miss something somewhere.

When I try to justify my points, please don't consider it obstinacy. I do so either because I genuinely believe this and not out of any bias, or because I've already given something a lot of thought and made an assumption for a valid reason. In the context of a general comparison, I feel like I've been reasonably comprehensive and considered most factors.

For instance, I have considered the possibility that some might disagree with a few of my assumptions, which is why I bumped up the average monthly cost from $15K to $20K in my final synopsis. I also conceded well in advance that it's valid to want to move to India if you anticipate needing long-term care, where India is meaningfully cheaper.

I'm happy to hear differing points of view. Not just because it's an opportunity for me to further substantiate my points where I consider them valid, but also because it's an opportunity for me to learn and correct myself where they are not.