No. of Recommendations: 10
For the past 30 years I've been investing in Big Pharma stocks as a hedge against medical costs in retirement (e.g., Pfizer, Eli Lilly and Merck make up the bulk of my pharma allocation, with smaller bets in the emerging and very profitable companion animal sector (Elanco and Zoetis.))

This strategy has served me well as the dividends thrown off by these investments have handily exceeded my $20,000/yr planning estimate for health insurance premiums in my 60's.

Of course, Obamacare was enacted in 2010 and I took the time to actually read the legislation rather than rely on Fox News pundits for the info. I learned that it was possible to retool my portfolio to take advantage of the wonderful arithmetic associated with the refundable tax credits found in the Obamacare law. I was able to drop my annual health care premium down to $648/yr by age 60. (See link)

http://www.retireearlyhomepage.com/obamacare_2017.html

Ironically, President Trump's innumerate attempts to kill the Obamacare law actually made my health insurance premiums even cheaper.

Here in Washington State we're blessed to have highly educated people serving in the Capitol who govern using science and arithmetic. The Governor and State Insurance Commissioner took full advantage of the Trump innumeracy on Obamacare and retooled the state health insurance market to maximize the Federal tax credits available to Washington State residents. My health insurance premium dropped from $648/year to less than $20/yr. (See link)

http://www.retireearlyhomepage.com/obamacare_2017r3.html

Obviously, as a long time Texas resident who observed that health care policy in the Lone Star State was often informed by racism, bigotry and ignorance (leading to lower quality care and increased costs for everyone), this more nuanced and educated approach in WA State was unfamiliar to me. But for a $20/year annual health insurance premium, I'll take it.

Does it still make sense to invest in Big Pharma stocks to fund your health insurance premiums?

Likely yes. Though I suspect that eventually voters will emerge from their stupor and demand that price competition be enforced in drug purchases, I don't see much decline in drug industry fortunes. Health insurance companies have more than tripled in value under Obamacare since there are still plenty of ways for insurers to game the system. I'm confident that drug companies are smart enough to do the same.

intercst
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