Living Paycheck to Paycheck and then . . . Cancer!

Paycheck to PaycheckAt the beginning of 2016, headlines all over the country read something like “63% Of Americans Don’t Have Enough Savings to Cover A $500 Emergency.”  This alarming statistic was according to a 2015 study by Bankrate.com.  What it really meant is that nearly two-thirds of us are living paycheck to paycheck.  What does a $500 emergency look like– your car needs new breaks, your dog has to go to the vet, or your refrigerator breaks down. These are not uncommon expenses, and they shouldn’t be unexpected expenses.  Nevertheless, 63% of us are not ready to face these everyday emergencies.

What happens when someone in that 63% of Americans is diagnosed with cancer? It can lead to a financial catastrophe. Thanks to the Affordable Care Act (ACA), more Americans have health insurance than ever. But for many people, including those with health insurance coverage through their employers, that insurance doesn’t kick in until they meet their high deductible. If they don’t have $500 in savings, they certainly don’t have the money for their deductible, which often ranges from $1,000 – $10,000. For those without health insurance, they have to pay the entire cost of their cancer treatment. For those with insurance, patients often report being left with out-of-pocket costs ranging from $25,000 to $40,000, beyond what their insurance covered.

Cancer is expensive.  Patients face a myriad of expensive diagnostic tests and therapies including CT scans, MRIs, surgery, chemotherapy and/or radiation, hospital stays, anesthesiologist fees, on-going multiple doctor visits, lab testing, and more. According to the Kaiser Family Foundation, the cost of chemotherapy is going up 10% per year!  And all of this doesn’t take into account lost wages, travel expenses, child care expenses, and other unexpected expenses that may come along with a cancer diagnosis.

If you find yourself or a loved one in this situation, there is help.  Triage Cancer has many financial tools and resources available to you:

Talk with your health care team, as they may know of local resources, as well. The key is not to assume that you don’t qualify. If you don’t ask, you will never know. Remember, you aren’t the only one possibly living paycheck to paycheck.

Unexpected Costs of a Funeral

Too many people are caught off guard by the cost of a funeral. In general, funeral costs Unexpected Costs of a Funeral are not something you think about until you are at a very vulnerable point in your life. You are grieving the loss of a loved one and at the same time, being forced to make very expensive funeral decisions. Our hope is to provide you with a valuable perspective of the hard costs involved in a funeral and provide resources to help you start to plan for some of those expenses.

There are three main cost categories in funeral planning: costs related to the funeral home, the cemetery, and the grave marker. These costs can easily range from $3,000 to $15,000.  We know that these costs can vary greatly depending on where you live and what you choose, but here is a list of the most common expenses:

Funeral Home

  • Funeral director’s basic services fee
  • Embalming and body preparation
  • Casket
  • Funeral ceremony and viewing
  • Miscellaneous (e.g., hearse, death certificates, obituary, memorial services, flowers, music, prayer cards, motorcycle officers to escort a funeral procession between a memorial and burial site, and other custom features)

Cemetery

  • Grave site (plot)
  • Open/Close Fee (digging and placing the casket in the grave)
  • Fee to place the grave marker (also called a head stone)

Note: most cemeteries have rules about the type of headstones allowed, including the size and features.

Grave Marker

  • Headstone

Note: the price of a headstone is generally calculated by weight, so the larger the headstone, the more expense it will be. If you want custom features such as an engraved photo or image, that will cost more.  If you are not purchasing the headstone from a cemetery, but from another retailer, you may also have to pay to ship the headstone.

The good news is that if you are prepared for these costs, you can reduce them and find strategic ways to pay for them. For instance, you can compare prices of funeral homes. Funeral homes are businesses and just as you would compare prices on anything else, you can compare funeral home costs. Also, though the funeral home may not have it on display, they must offer a simple pine casket. You can even buy your casket at Costco. A funeral home cannot require you to buy a casket from them. In addition, no state requires embalming if certain time constraints are met.

Depending on your preferences, you could also consider cremation. By 2025, it is expected that 56% of people will choose cremation. Cremation can be less expensive, averaging around $3,200 plus the cost of a $20 urn that you can buy online.

Some funeral homes and cemeteries will not accept credit cards or payment plans, but require payment in cash and up front. Some funeral homes and cemeteries will allow you to set up a payment plan, if you pre-plan a funeral. You can also consider purchasing funeral or “final expense” insurance, to cover the cost of expenses.

Don’t let funeral costs catch you off guard.  Thinking through these options and your preferences can help you be prepared and avoid overpaying for a funeral.

For information about pre-planning:

http://www.nfda.org/consumer-resources/planning-a-funeral

https://www.funerals.org/consumers/

For more general information about estate planning.

2017 Raise for Social Security & SSI

Triage Cancer Blog SSA Disability Insurance

The Social Security Administration (SSA) recently announced that the cost of living adjustment (COLA) for 2017 will be a 0.3 percent increase for Social Security and Supplemental Security Income (SSI) benefits.

That means that the SSI federal benefit rate in 2017 will increase by $2 to $735 per month for an individual, and by $3 to $1,103 per month for an eligible couple.

The estimated average monthly Social Security benefit payment will increase by $5 to $1,360 for retired workers, and by $4 to $1,300 for surviving spouses.

This marks the first COLA in two years, as there was no adjustment in 2016.

We will have to wait until next month to learn what the Medicare premiums for 2017 will be.

For more information on the other benefit changes for 2017, visit https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf

Prescription Drug Coverage: New Recommendations from the National Association of Insurance Commissioners

As someone dealing with cancer, you are probably no stranger to the exorbitant costs of triage-cancer-blog-rx-drugs-naicprescription drugs.  In fact, the cost of all drugs, not just cancer drugs, has received quite a bit of news coverage lately. Everyone admits there is a problem, but very few have identified any solutions.  Now, the National Association of Insurance Commissioners (NAIC) has done just that.  At the NAIC’s summer meeting in August, a report was issued with a list of recommendations for state and federal policymakers to improve access to affordable prescription drugs.

Key Recommendations:

  • Limit consumer out-of-pocket costs, by, for instance, prohibiting co-insurance for prescription drugs
  • Prohibit insurance companies from changing their formulary mid-year, if it negatively affects enrollee access to drugs
  • Limit the number of drug tiers that insurers can use
  • Require formularies to be updated weekly and include information about drug tiering, the actual dollar amount of any cost-sharing, any utilization management or network restrictions, and the process to request a drug exception, among other information
  • Adopt standardized plans with meaningful cost-sharing limits to lessen the effects when an insurance company uses drug tiers
  • Collect standardized, plan-level data to enable the development of consumer tools and apps
  • Solicit feedback from external stakeholders—such as advocates, other state agencies, ombudsmen, and independent medical experts—to inform the formulary review process.

Frustratingly, these recommendations won’t translate into meaningful change for quite some time.  Still, without consumer advocates starting the conversation about reform, change would never happen.

Your Year End Tax Planning Starts Now!

triage-cancer-blog-end-of-year-taxes

Back to share more expert advice is financial planner, Kristi Sullivan! Today she is sharing some practical end of year tax tips for individuals and small business owners.

Think you can wait until December 31st to do tax planning for 2016?  Think again!  Starting your tax to-do’s earlier in the year makes life easier for your CPA, financial advisor, AND you.

Thanks so much to Elizabeth Moore, CPA and Partner at Ryan, Gunsauls & O’Donnell, LLC for these top 5 actions to take NOW.

  • Get your books and records in order for the year (i.e., record all of your cash receipts and disbursements in QuickBooks or the software of your choice, reconcile your bank and credit card accounts, update your mileage logs, gather receipts to document expenses, etc.).
  • If you haven’t met your deductible, get all of those medical and dental appointments out of the way and PAID for by check or credit card prior to year-end.
  • Take inventory of your business fixed assets (i.e. furniture, fixtures, equipment, vehicles, etc.) NOW and determine what you need to buy this year, instead of waiting until 12/31.  Not only must the purchase occur prior to 12/31, it must be placed in service prior to 12/31 to be eligible for depreciation.
  • Start researching the business vehicle of your choice, NOW, instead of on 12/31.  To establish adequate business use (i.e. 50% or more) of a vehicle to get the maximum amount of depreciation deductions, buying well before year-end is a must.
  • Donate to your favorite charity including churches, schools, or other 501(c)(3) public charities.  You can even donate up to $100,000 directly from your IRA to a charity of your choice, which counts toward your Required Minimum Distribution (RMD) for the year and isn’t includable in your adjusted gross income for the year, which is a huge tax benefit.

The post Your Year End Tax Planning Starts Now! first appeared on Sullivan Financial Planning.

Triage Life Insurance

Many people ask us if they are able to buy life insurance after being diagnosed with cancer.

And the answer is . . . it depends.

The reason we buy insurance, is to protect us in the event that something happens.

Car insurance protects our cars; home owners insurance protects our homes; life insurance provides for the people we care about when we pass away.Triage Cancer Life Insurance

The insurance industry argues that if we wait to buy life insurance until we have a serious medical condition, then that’s like buying car insurance after we have been in a car accident.

Life insurance companies are still allowed to refuse to sell policies to people with a pre-existing medical condition. Because the life insurance industry does not have the same protections that are now available in the health insurance arena, it is left up to each insurance company to decide the parameters for if or when they would be willing to insure someone after a cancer diagnosis.

For example, some companies have a policy that they will insure someone 10 years out from a diagnosis of cancer, some companies have a policy that they will insure someone 1-5 years out from the completion of active treatment depending on the type and stage of diagnosis, and some have a policy to not provide coverage at all. Each company is different.

So, that means the only way to know which companies sell policies to people who have been diagnosed with cancer, is to contact the insurance companies that offer policies in your state and ask them.

To find out which companies sell policies in your state, you can contact the insurance agency in your state, and look for the section on life insurance. You can find your state’s agency here: http://triagecancer.org/resources/stateresources. For example, the Texas Department of Insurance lists these companies as selling life insurance policies in Texas.

It can be valuable to shop around, because policy costs can vary a great deal among companies.

Sometimes, there are other options available for getting a life insurance policy, such as getting a group policy through an employer or a professional association, where they may not ask medical questions and do not impose pre-existing condition exclusions.

Here is an article on some other tips for buying life insurance after a cancer diagnosis.

Cancer in the News

What does the Affordable Care Act (ACA), race/ethnicity, and the 2008 economic recession have in common? They have all had an impact on the cancer community.

ACA Saves California Families $2,500 on Health Care

Ever since the ACA’s premium tax credits and cost-sharing subsidies took effect in 2014, Triage Cancer Blog Cancer in the Newsthe health care reform law has received severe criticism in the news media. Yet a recent study from the California Health Care Foundation shines a different, more positive light on the impact of the health care law. New data shows that median annual out-of-pocket spending for families with individual health insurance coverage has dropped nearly $2,500. This drop in spending is attributed to increases in consumer protections and coverage in the policies sold through the state health insurance marketplaces under the ACA. Although this study was specific to California, national health care spending has declined as well. For more information about the Affordable Care Act and how it impacts the cancer community, read our Quick Guide on Health Insurance.

The Deadly 2008 Recession

The 2008 economic collapse was a dark time for the world, as it caused many companies to lay off workers, who in turn were left unemployed and in debt. A new study has found that the 2008 recession also caused an additional 260,000 cancer deaths worldwide. The increased deaths are largely attributed to the US and Russia, both countries in which employers or individuals have to pay for their healthcare. On the other hand, countries with universal health coverage, like Britain, saw no additional cancer deaths between 2008 and 2010. This is because people in Britain, employed or not, had health insurance whereas many unemployed Americans and Russians either faced poor or delayed treatment, were diagnosed late, or couldn’t afford medical attention altogether. But it’s important to note that although the UK and other countries with universal health coverage did not experience an increase in deaths, they still underwent a significant rise in unemployment. This forced many countries into cutting their spending on health care. Ultimately, the impact a financial downturn has on the economy trickles down to cancer patients, for a reduction in government spending can impact access to care and impact cancer survivorship.

Intersectionality in the Cancer Community: Hispanic and Black Young Adults More Likely to Die of Their Disease Than White Counterparts

According to a study conducted by the University of Colorado Cancer Center, black and Hispanic cancer patients, between the ages of 15 and 29, have an increasingly higher risk of mortality than same-aged white cancer patients. This disparity is largely explained by one’s socioeconomic status and access to financial resources. However, even after holding insurance status constant, the scientists found the same discrepancies among the race/ethnic groups. The study therefore suggests that race/ethnicity is not only independent of socioeconomic status, but also that race/ethnicity plays an independent role in mortality. Additionally, this demonstrates that intersectionality among patients is in fact a lived reality in the cancer community. Meryl Colton, a medical student at the University of Colorado School of Medicine, says that “Knowing that a disparity exists allows us to ask questions that can help ensure everyone receives the best possible care.” Now the focus can turn to identifying those questions and finding the right answers to them.

Is good credit really that important?

Triage Cancer Blog - FICO 9 Good CreditIt’s probably not a surprise to anyone that cancer can negatively affect someone’s credit.  But what does that actually mean?  Having good credit is imperative in today’s world.  Credit may be checked when someone tries to rent an apartment, lease or buy a car, buy a home, or even get cable television. In addition, in some states, during the job application process, employers can conduct background checks that include looking at an applicant’s credit score or full credit report and may make character judgements based on information in the report.  Therefore, it is important for individuals to learn their credit score and check their credit report on a regular basis.

A credit score is a three digit number determined by looking at five main categories of your financial history: debts owed, new credit applications, length of credit history, type of credit used, and payment history.  The score is then used by lenders to predict one’s financial risk.  The most widely used credit score is the FICO© score.  FICO scores range from 300 to 850, a higher number means you are more creditworthy and less risky.

The three largest national credit bureaus are: Equifax, Experian, and TransUnion.  Your FICO score may differ among the three credit bureaus.  There are smaller Credit Reporting Agencies (CRAs) that provide specialized consumer reporting services that report payment data for services such as phone, electricity, and cable.

Periodically, FICO releases new versions of its scoring that calculate various types of debt differently.  For example, FICO 8© weighed high credit card limits more than the sporadic late payment. The most recent version, FICO 9©, released August 7, 2014, made significant changes in the way it regards medical debt.  In previous versions, FICO did not distinguish between medical debt and other types of unpaid debt.   FICO 9© puts less emphasis on unpaid debt due to medical bills as compared with other types of unpaid debt, and will not take into consideration accounts in collections that have been paid in full.

For more information about FICO scores visit, www.myFICO.com or our past post on FICO ® Score – What is it and What Does It Mean for You?

An Update on the Movement for Paid Sick Leave

Triage Cancer Blog Paid Sick LeaveThis past Labor Day, President Obama signed an executive order requiring federal contractors to offer workers up to seven days of paid sick time per year.

For some, paid sick leave is something that is taken for granted. Most employers are not required to offer their employees paid sick days. More than 43 million private sector workers (40% of the workforce) lack access to any paid sick time. Many of these workers are low-wage employees who cannot afford to miss a paycheck.

Employers that do offer paid sick days are often going above and beyond what is required under the law, because their workers tend to be more satisfied, productive, and healthy employees. There are also steep costs associated with hiring and training a new employee (estimated at about one-fifth of an employee’s salary), and paid sick leave can help to retain good employees.

Laws requiring paid sick days for employees are few and far between.  Check out the Triage Cancer Chart on State Laws to see if paid sick days (and other legal protections) are required in your state or city.

Latest news

On March 10, 2016, Vermont’s governor signed legislation to require paid sick leave, making Vermont only the fifth state to do so. This law goes into effect January 1, 2017. Learn more.

These is also a bill pending in the U.S. Congress right now, the Healthy Families Act (H.R. 932/S. 497), which would give people up to seven sick days per year to recover from their own illness, seek preventive care, or care for a sick family member.

For the cancer community, access to paid sick leave can allow for paid time off for medical appointments, treatment, and recovery. Paid sick leave can also work in coordination with reasonable accommodations, FMLA leave, and other employer benefits.

It is an election year, so if access to paid sick leave is something that is important to you, ask your candidates how they stand on this issue.

Learn more about existing paid sick leave laws and legislative campaigns at the state and federal level.

Triage Taxes: The fee for not having health insurance

If you can afford health insurance and have chosen not to buy it, you will pay a fee when you file your federal tax return for the year you chose not to have coverage.  Called an individual shared responsibility payment, the fee is sometimes called the dollar-941246_640“penalty,” “fine,” or “individual mandate.”

You will owe the fee for any month you, your spouse, or your tax dependents don’t have health insurance that qualifies as minimum essential coverage— unless you qualify for an exemption

Learn about health coverage exemptions.

The fee for not having coverage in 2015:

The fee is calculated 2 different ways – as a percentage of your household income, and per person. You’ll pay whichever is higher.

 2% of household income/ Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace

OR

$325 per adult, $162.50 per child under 18/Maximum: $975

The fee for not having coverage in 2016 is the higher of these:

2.5% of household income/Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace

OR

 $695 per adult, $347.50 per child under 18/Maximum: $2,085

Learn more about estimating and paying the fee.