health insurance

Hospital Care for the Wealthy Differs from What the Rest of Us Receive

September 21, 2015 By Guest Writer Leave a Comment

With health care costs rising at a rate of 7 percent each year, hospital care is increasingly unaffordable for many Americans. In fact, thousands of Americans file for bankruptcy each year because of expensive medical bills they cannot pay. However, one group of Americans are having no problem affording the increased cost of hospital care: the wealthy.

Recent studies have shown that many people considered to be wealthy have no problem with paying top dollar to be treated like royalty in the midst of a medical crisis. When Sen. Edward M. Kennedy was diagnosed with brain cancer, he had the wealth to convene his very own group of national cancer experts to discuss his case and recommend treatment. While this may seem excessive to many of us, for the wealthy, it is just a matter of course. Here are some other ways that hospital care for the wealthy differs from the hospital care the rest of us receive.

Access to Health Care

The wealthy enjoy better access to doctors and are rarely required to wait for appointments. You never hear of the wealthy waiting in emergency rooms for hours. You never hear of the wealthy being left on a stretcher awaiting an available room. In some cases, the wealthy have their own hospital floors with better nurse-to-patient ratios, better bedding, and concierge service. In New York-Presbyterian/Weill-Cornell Hospital, wealthy patient even have spectacular views of the East River. They can afford to pay about $2,400 per night.

More Attention from Doctors And Nurses

Many doctors and nurses treat wealthy patients differently. They may even deviate from usual protocols for the comfort of the patient. Doctors act differently with the wealthy because they know their decisions will be examined in detail by hospital administrators and possibly the press, and the public. The most senior doctor on staff generally performs the procedures needed.

More Testing and Treatment Options

Wealthy patients are often made aware of more costly treatment options. Some health insurance programs for corporate executives pay for routine full-body CT scans as part of their annual physical. While these expensive and detailed tests have never really been proven to improve health outcomes, doctors do them with little question for wealthy patients that demand them. If there is an incidental finding, more testing is often scheduled to pinpoint the problem. The wealthy also have greater access to treatments that are experimental and not covered by traditional health insurance.

For many, it is not surprising that someone with fame, stature, and/or wealth would receive more attention at the hospital. However, this increased attention doesn’t always result in better medical care. As the recent death of Joan Rivers has shown us, even routine procedures can go terribly wrong and sometimes physicians are more concerned about their reputation than they are about treating the patient. Illness is a great equalizer in our society and the wealthy are not immune.

10 Types of Insurance You Either Need or Should Strongly Consider

July 30, 2015 By Will Lipovsky 4 Comments

Not many people enjoy insurance shopping. Insurance policies use legal jargon that often makes the contract hard to understand. Sometimes the end goal doesn’t seem to be worth the effort. After all, why would you buy a policy if you can’t understand all the details about its coverage? Despite the downsides, insurance usually wise. Let’s explore the 10 types of insurance everyone should consider:

1. Health Insurance (Mandatory)

Health insurance is probably the most important form of insurance. Not only do you want to make sure you have doctor’s visits and prescription medication covered, but you want to make sure you have insurance in case you fall extremely ill. If you aren’t offered health insurance through your employer, there are plenty of private health insurance plans you can buy. There is also Obamacare. There are also state plans for people who have financial difficulties.

Also not that health insurance may affect your tax refund.

2. Dental Insurance

Unfortunately, a lot of health insurance plans don’t offer dental insurance. Dental insurance is important to have, especially considering that it’s incredibly expensive to have teeth pulled, filled, or drilled. A lot of people pay out of pocket for dental visits or surgery when they could have a portion of that visit covered by insurance. If you have an employer that offers health insurance without dental coverage, consider seeking out additional coverage.

3. Auto Insurance (Mandatory)

If you own a car, auto insurance is also important to have. Auto insurance differs depending on various factors such as location, age, the type of vehicle, and your driving history. Shop around for an insurance policy before settling on one. The main purpose of auto insurance is to cover the financial loss or liability of your vehicle if you’re involved in an accident. While liability coverage varies depending on your policy and the extent of the accident, having an auto insurance policy can save you a lot of money if you are ever involved in an accident or lawsuit.

Here are tips on how to get the best auto insurance rate. Read this post about getting cheap auto insurance ($18.07/month).

Members who switch to USAA Auto Insurance save an average of $434 a year

4. Homeowner’s Insurance (Mandatory with Most Mortgages)

Homeowner’s insurance policies cover the protection of private homes and any items of value that are stored inside. It also acts as liability insurance for any accidents that occur in the home, such as vandalism or theft. Homeowner’s insurance policies vary depending on the location and size of your house, and policies are usually more expensive when you have more items or add-ons you want covered such as a covered garage or house extension. Additionally, it’s important to see whether or not your homeowner’s insurance covers damage from natural disasters since not all policies will cover those events.

But remember… sometimes homeowner’s insurance is not enough.

5. Renter’s Insurance

If you rent an apartment or house, you should definitely consider buying renter’s insurance. Some issues that fall under homeowner’s insurance might be covered through your landlord, such as vandalism or unexpected natural disasters. However, it’s still a good idea to purchase renter’s insurance to cover the cost of your belongings in case of theft or other unexpected occurrences.

6. Property Insurance

Property insurance falls under a different category than homeowner’s and renter’s insurance policies. While some of the previous forms of insurance don’t cover natural disasters, property insurance usually does cover damage from floods, hurricanes, earthquakes, or fires. However, there are two different types of property insurance policies: open perils and named perils. Open peril policies cover all losses that are not excluded in the policy, and those exclusions are usually items like terrorism, earthquakes, war, or nuclear incidents. Named peril policies mean that the exact cause of loss – i.e., floods, hurricanes, theft, fire – need to be listed in the policy.

7. Life Insurance

If something happens to you, life insurance will provide your beneficiary with monetary compensation. Life insurance is generally purchased for people who have financial dependents. Single people really don’t need this type of insurance.

You want to make sure to purchase a policy that would provide your financial dependents with the same amount that you would annually make. There are many different types of life insurance policies out there, including ones that accumulate cash values and others that allow you to liquidate a certain amount when needed. Again, ignore this type of insurance unless you have someone who depends on your income.

8. Disability Insurance

Disability insurance covers a portion of expenses if you are suddenly unable to work due to injury or illness. Short-term disability insurance usually covers you for up to six months and provides a monthly stipend to cover your expenses and missed wages.

9. Liability Insurance

Liability insurance covers an insured party in the event of a lawsuit for certain events. For instance, if someone comes over to your house and slips on a sidewalk and then sues you for negligence, liability insurance will cover your legal bills. Liability insurance is also important if you run your own business. It protects you from employees who might damage your property or litigation costs caused by employee errors.

10. Natural Disaster Insurance (Sometimes Mandatory – Depending on Location)

If you don’t have coverage for natural disasters through your homeowner’s, renter’s, or property insurance, you might want to consider buying an insurance policy. In certain areas (like flood zones) this type of insurance is mandatory.

You won’t need to buy every single policy for a natural disaster, since it’s impossible to know when those might occur. But if you live in an area that has frequent earthquakes or floods, for instance, earthquake insurance or flood insurance should be something to consider.

Suggested further reading: 25 ways to save money on all types of insurance.

Health Insurance May Affect Your Tax Refund

February 1, 2015 By Lilian Nwa 3 Comments

The Affordable Care Act, popularly known as ObamaCare, strives to ensure that all Americans are covered by health insurance. Part of the impetus for the passage of the ACA is that Americans continue to spend significantly more on healthcare than other industrialized nations, partially due to the fact that after Mexico, the U.S. is the fattest country in the world. Unsurprisingly, Americans suffer from the diseases associated with obesity such as diabetes, high cholesterol, high blood pressure and other chronic diseases at rates higher than seen in other countries, which is felt by our healthcare system. Regularly visiting a physician, as provided for under the ACA through health insurance coverage, should prevent the worsening of chronic diseases and might enable physicians to treat problems before they become unruly, chronic and expensive illnesses.

To ensure that the ACA is affordable and covers all Americans, most people must have health insurance or pay a fine (from $95 per person up to 1 percent of household income, whichever is greater for the year 2014), though Americans making less than four times the Federal Poverty Guideline are allowed to reduce their monthly insurance premiums with subsidies granted by the federal government. Other Americans might qualify for exemptions, allowing them to avoid fees and fines altogether; however, special qualifications must be met in order for them to avoid these payments.

For all Americans, however, this tax filing season is the first instance when people will have to “deal with the Affordable Care Act” and unfortunately, this might result in lower tax refunds. To receive the subsidy, the ACA requires that individuals estimate their future income. The IRS then sends this information to insurance companies, which will subsequently reduce the premiums for eligible households.

But the IRS may overpay or underpay insurance companies based on these estimates, a problem that will be ameliorated when those who underestimated their income receive less in the form of a tax refund. Some tax filers might even have to return “hundreds or thousands of dollars back o the IRS [though] there is a $2,500 cap on paychecks.” The number of individuals who have to do so, however, is likely very small, but to determine appropriate subsidy amounts, Americans must complete Tax Form 8962. For those who might owe a penalty, Form 8965 will determine the amount of the fine.

Alternatively, those Americans who have insurance coverage without any subsidies simply need to check a box on their 1040 tax form, indicating that they are covered by an insurance policy. Indeed, in a recent statement, Jacob Lew, Treasury Secretary for the Obama Administration, reminded citizens, “For the vast majority of Americans, tax filing under the Affordable Care Act will be as simple as checking a box…A fraction of taxpayers will take different steps” such as claiming an exemption and yet “A smaller fraction…will pay a fee if they made a choice to not obtain coverage they could afford.”

Don’t forget the last day to sign up for health insurance this year is February 15.

(Photo courtesy of Phillip Ingham)

Obamacare Health IRS Form Should Soon be Coming in the Mail

January 12, 2015 By Jeffrey Strain Leave a Comment

Administration says form 1095-A will be arriving in mail for taxes

With the new year, you should start to get tax forms in the mail. There is a new one you should be on the lookout for if you were one of the millions of people who signed up under the Affordable Care Act (Obamacare) and received subsidies for your insurance. If you did, you should be receiving a new form in the mail for this tax season.

The form is called form 1095-A, and in many respects, it’s like a W2 form for health care insurance. You’ll need this form to fill out your 2014 taxes, and the administration announced it has started to send them out to people. Keep an eye out for it in the mail, and be sure not to accidentally throw it away as junk mail. There was worry earlier that these forms could delay people getting their tax refunds this year.

The 1095-A is a form for those consumers who, as part of Obamacare or their state’s health exchange, received tax credits for the insurance they purchased. The form will show the amount of money the government subsidized the insurance premium you chose, and the information is taken from what you input into the system when applying for the health coverage. It’s important to check and make sure the numbers are correct, and you’ll need to report this number to the Internal Revenue Service (IRS) when you file your taxes. If you do see a mistake on the form, contact HealthCare.gov or your particular state insurance exchange to resolve any discrpencies.

Since this is the first year that those who have purchased subsidized health insurance will be receiving this form, government officials are concerned many people will not know what the form is, or ignore it since they have never needed it when filing their taxes in the past. They want to make clear that the information on this form is needed for filing your taxes, so it’s important to make sure to open it when it arrives. The form itself doesn’t need to be filed with your taxes.

The information on form The 1095-A will be needed to fill out form 8962, which will be filed with your taxes. Either you, or your tax preparer, will need to fill out form 8962. This form shows whether you received the correct subsidy amount you were entitled to under the law. The amount you’re entitled to depends on the size of your household, your income and the cost of health insurance in your area. If you received too much of a subsidy, the IRS will automatically reduce the amount you get back on your tax return. This might happen if you received a raise or your income increased in 2014 beyond what you put in when filing for health care, and you failed to report this income increase to your state insurance exchange or HealthCare.gov. On the other hand, if your income was less than what you estimated it would be when you signed up, the IRS will increase your refund.

Tax Form 1095-A May Delay ObamaCare Recipients Tax Refunds

August 30, 2014 By Kal Kurdi 13 Comments

Millions of Americans may experience a delay in receiving their tax refunds next year. If you’re among those who have applied for, and successfully received healthcare benefits through President Obama’s Affordable Care Act initiative, there’s a new form you’re going to have to get from the insurance exchange before you can even file for your 2014 tax return.

This new form is called the 1095-A, which you can take a look at here. The form will list all of the individuals in the household who receive the benefits and how much the government has spent subsidizing their premiums. The forms are to be issued by the same agency that was heading the HealthCare.gov initiative, whose debacle in launching the site last fall has not yet been forgotten.

The Health and Human Services Department (HHSD) had, at that time, launched the website which only riddled most applicants with various errors. It was estimated that only 1% of the interested parties were able to successfully register, but even those who got through failed to have a smooth registration process. Later on, insurance companies were stating that most of the initial applications were missing information.

The lack of confidence in the HHSD primarily stems from that. Justifiably, some tax professionals are concerned that they simply won’t be able to have all the forms out and in the hands of the millions of Americans by the January 31st deadline.

Although it may seem a week or two delay won’t amount to much, it in fact could put a serious strain on the families who depend on their tax returns to fill any financial voids. President Obama’s administration says that the task is on track, but refuses to provide any additional details.

States who operate their own health insurance marketplaces are also required to issue their own forms to those receiving their benefits. Though the biggest responsibility falls on the shoulders of the HHSD to get the forms to the individuals residing in the 36 states that it serves. The fact that they’re going to have to manage that and the 2015 registrations simultaneously may in fact delay the 1095-A’s timely delivery.

Although some seem confident the forms will arrive on time, it cannot be ignored there’s a real possibility of a negative outcome. Unfortunately, all recipients can do is idly wait for that day to arrive and hope the mess from last fall was a one-time incident.

Early Retirement Without a Huge Nest Egg

May 7, 2013 By Jennifer Derrick 5 Comments

Many people dream of retiring while they’re still young enough to have some fun. Then they look at their bank balance, sigh, and decide that they will have to work until they’re eighty. This might not be true, however. Lots of people retire early without a fortune in the bank or a large inheritance on the way. To do so, however, requires a lot of thought and planning and a willingness to live a bit differently from the herd, both now and once you do retire. Here are some thoughts if you want to retire early.

It has to be a priority

This is probably the single biggest factor that separates those who actually retire early from those who talk about it. If you want to retire early, it has to be a priority and you and your partner (if you have one) have to be onboard together. You are going to have to save, save, and save some more and this is going to mean some sacrifices, both before and after you retire. You’re also going to have to want a different type of retirement than the golf-course-resort-living style of retirement that so many people desire. If you can’t commit to making saving and doing things differently a priority, or your partner isn’t willing, early retirement likely isn’t going to be possible for you. You have to want it more than you want almost anything else.

You may have to have some form of income

To protect whatever principal you have saved, you may need some form of income that can bridge the gap until you can collect Social Security or a pension, or until you can tap plans like IRA’s and 401k’s. This doesn’t have to mean another full time job. You may have rental properties or some sort of hobby you can monetize. If travel is in your plans, there are campgrounds and resort properties that hire seasonal workers and include lodging and utilities in the payment package which will greatly reduce your spending in lieu of income. Maybe you take a part-time or temp job that just sounds like fun. You can work at something fun for a change instead of the daily 9 – 5 grind.

You have to have a plan for health insurance

Heath insurance is the one thing you cannot be without. Without good insurance, a relatively simple illness can wipe you out, never mind a catastrophic accident or illness. When you leave the work world, you’ll probably lose your insurance. Fortunately, there are plenty of private plans you can buy and some are reasonable if you’re already in good health. Shop around to find one that meets your needs. Don’t just think you’re young enough to go without.

You have to slash expenses

Retiring without a huge nest egg means that your daily expenses have to go way down. You need to start now so that you can amass enough money to even think about retiring, and to get used to living on less. You will typically find that many people who retire in their thirties, forties, and fifties do it by eschewing a typical consumer lifestyle. They go without cable, they don’t eat out, they live in small, affordable housing, and they don’t drive expensive cars. They buy the bare minimum needed to live, preferring to sock upwards of 80% of their income into savings. And they keep that low cost of living into their retirement. If living such a “reduced” lifestyle isn’t for you, then you either need a very high income to retire early, or you have to give up the dream.

You have to educate yourself about finance

If you’re going to retire early, you need to know about investments. Sure, you can hire a planner to help you, but that expense is going to eat into your funds. And you still need to know if you can believe what the advisor is telling you. So you have to make it a priority to learn all you can about the different types of investments and how to withdraw from them without putting your plans at risk. You’ll also need a good understanding of taxes and how they affect your plans.

You cannot have debt

You cannot retire early if you’re still making hefty mortgage, car, credit card, or student loan payments. Those things typically take a full income to deal with and if you’re retired, you’re likely not bringing in enough to support debt. You also cannot carry much debt, if any, while you’re saving and preparing to retire. Every dollar you have to make in payments is one less that you can sock away for your nest egg.

You have to be willing to do things differently

You’ll find that most people who retire early don’t live a conventional lifestyle. Some are nomadic, staying with friends or family or in cheap hostels while they travel. Some live in tiny apartments or alternative housing. Some don’t have cars, preferring to keep costs down by relying on public transportation or their own two feet. Some are “back to the landers” who become almost entirely self-sufficient. Some live in campgrounds part of the year while they work there and see the surrounding area. Some even move to foreign countries where the cost of living is much lower. In order to keep that small nest egg from giving out, you have to be willing to look at life a little differently and try some unconventional alternatives.

You’ll need nontraditional retirement accounts

Your investments need to be primarily in accounts that you can tap prior to traditional retirement age. You can’t tuck all of your money into traditional IRA’s and 401k’s because these carry penalties if you withdraw from them too early. You need to look at Roth IRA’s which allow you to withdraw your contributions (but not your gains) at any time without penalty, and consider other forms of investment that you can access early.

You need to have an end of life plan

Once you’ve covered your immediate health care by getting health insurance, you need to know how you will pay for the end of your life. The end of life can get very expensive if you have to go into a nursing home. Medicaid will take care of you if you have no assets, but you’re not going to like where they put you. Have good long-term care insurance, give power of attorney to someone you trust, and have a living will that dictates how you want to be cared for, if at all, if you cannot make your own decisions. You want to have fun when you’re retired, but the end will come eventually and you have to know how you’ll pay for that.

Understand how children will impact the picture

Many people who retire early don’t have kids. If they do have kids, chances are they had them very early in life, only had one or two, kept the expenses way down, and pushed them out of the house by the time the parents are in their forties. That gives the adults some good earning years to really pad that retirement account. You’ll probably also find that any children are expected to pay their own way through school because the parents prioritized early retirement over paying for college. You can argue about whether that’s right or wrong, cruel or unfair, but it’s a fact that kids do impact the financial picture. You have to ask yourself which is more important: Having several kids and giving them every advantage, or your own early retirement.

You have to make a plan and stick to it

You can’t just talk about wanting to retire early. When you first get the idea that this is something you want to do, you have to sit down, do some math, do some research, and then create a plan. You have to know how you will save, where you will save, what your insurance options will look like, what you’ll do about housing and transportation and other expenses, what other sources of income you might have available and when, and how much you’ll need to make your plans work. It’s not enough to say, “I want to retire at fifty.” You have to make a plan, work that plan, and adjust that plan as you go along. This is where many people fail. It’s easy to talk about retiring early, but it is hard work to make it happen.

Early retirement isn’t just a fantasy. Many people manage it. If you value your time more than money, retiring early can give you that time you want to do the things that matter to you. You can’t do it on a whim and it isn’t easy, though. Even if you’re in your forties now, it’s possible (with a lot of discipline) to get where you want to go by the time you’re in your fifties. And that’s still ten to twenty years sooner than when many of your peers will retire.

(Photo courtesy of Tobyotter)