Uncertainty puts Marketplace Financial Assistance in Jeopardy

A recent study found that the average family in America spends 10.1% percent of the family’s income just on health insurance premiums and deductibles. So it’s no wonder Marketplace-Financial-Assistance-Jeopardythat many Americans need a little help purchasing health insurance coverage. The Patient Protection and Affordable Care Act (ACA) made financial assistance available for people who buy health insurance in the marketplaces, based on their income level. However, due to uncertainty in politics, as well as policy and legislative changes, that financial assistance may be in jeopardy.

There are two different types of financial assistance in the marketplaces:

  • Premium tax credits reduce the amount that people pay for their monthly premiums to have health insurance.
  • Cost-sharing subsidies, also known as cost-sharing reductions, help to lower deductibles, co-payments and co-insurance. The way that cost-sharing subsides work is that the insurance company reduces what they charge individuals and, in turn, the insurance companies are reimbursed by the federal government.

Since the beginning of the year, uncertainty has put these financial assistance options in jeopardy. The new presidential administration had suggested that they were going to eliminate the cost-sharing reductions and that they would repeal the ACA, which would eliminate the premium tax credits, as well.

While health insurance companies are accustomed to dealing with uncertainty, like not knowing how many people will get sick during a given year, it is unusual for politics to create such uncertainly in the health insurance market.

Specifically, the uncertainty that will have the greatest impact is the fact that there has not be a clear decision from the President or Congress on if they are going to continue funding the cost-sharing reduction payments to insurance companies, and whether the individual mandate will be strictly enforced. The individual mandate was designed to insure that individuals do not wait to purchase insurance once they are sick. The IRS has already indicated that they will not strictly enforce the mandate moving forward.

Oliver Wyman, an actuarial consultant, states that these sort of ambiguities are new to actuaries who are in charge of setting the rates, and actuaries are predicting that 2018 insurance premiums are expected to increase between 28 and 40%.

Ultimately, the uncertainty around cost-sharing reduction payments, and the lack of enforcement of the individual mandate is projected to be responsible for the bulk of premium increases for 2018 and has already led some insurers to pull out of the marketplaces in some states, to avoid having to deal with the uncertainty.

This uncertainly, along with the current proposals for health care reform being discussed in the U.S. Senate, have the potentially to significantly impact the cancer community.

Stay tuned to our blog for the latest updates on proposed changes to our health care system.

Senate Health Care Proposal – Take 2 

Yesterday, the U.S. Senate released its revised proposal to overhaul health insurance in Senate Health Care ProposalAmerica.  Unfortunately, this new version of the Better Care Reconciliation Act (BCRA-2) would still cause significant harm to the cancer community.

For clarity, here we will focus just on the changes to the Republican proposal that we will refer to as BCRA-2.  Read more about the first version of BCRA.

The major provisions to take note of in this new version include:

  1. Cutting the Medicaid program so significantly that 15 million fewer people would have coverage, according to the Congressional Budget Office.
  2. Allowing insurers to sell plans with bare-bones coverage (“junk insurance”), as long as they also sell at least one policy that meets the ACA’s requirements. The concern is that by allowing individuals to purchase this less adequate, but cheaper coverage, healthier people would gravitate towards these plans, and people with pre-existing conditions would stay in marketplace plans, which would result in an unbalanced risk pool, and higher premiums for people buying marketplace plans. In addition, it would lead to higher medical debt for individuals buying junk insurance if they need medical care and find out that they only have bare-bones coverage. This was exactly a problem that the ACA was trying to address by creating minimum standards of coverage for plans being sold.
  3. Allocating $45 billion to deal with opioid abuse, a clear concession to two Republican Senators’ request.
  4. Adding $70 billion to help states stabilize their insurance marketplace.
  5. Keeping an ACA provision that places a 3.8% net tax on investment income and a 0.9% payroll tax on individuals making more than $200,000 annually.

While the BCRA-2 does contain some minimal improvements from the Senate’s original version, it ads changes that would be more harmful to the cancer community and others with pre-existing medical conditions. And, the overall impact of this proposal is still detrimental to most Americans.

Next Steps

In order for the bill to pass the Senate, the Republican Leadership need 51 votes in support.  There are 52 Republican Senators and 48 Democratic and Independent Senators. If there is a 50-50 tie, the tie can be broken by a vote from the Vice President of the United States, who is a Republican.

Moderate Senator Susan Collins (R-ME), has announced she wouldn’t support a procedural motion to allow debate on the bill. Conservative Senator Rand Paul (R-KY) also is unlikely to support the bill due to the fact that it doesn’t completely repeal the ACA. Therefore, Republicans can only afford to lose one more vote, if they want to pass the BCRA-2. Three other moderate Republicans have expressed serious concerns about this legislation: Dean Heller (R-NV), Shelley Moore Capito (R-WV), and Rob Portman (R-OH).  Senate Majority Leader Mitch McConnell has indicated that he wants a vote on BCRA as early as next week.

Do You Need Health Insurance Now?

If you do not have health insurance coverage, you can apply for Medicaid at any time or purchase a policy through the State Health Insurance Marketplaces if you qualify for a special enrollment period.

  • For more information about how to choose a health insurance policy (including making choices between employer-sponsored options), watch our recorded webinar.
  • If you aren’t sure what your health insurance options are or want to understand more about health insurance, visit CancerFinances.org.

 What You Can Do

  • Contact your U.S. Senators and share your health care concerns, by calling (844) 257-6227. Even if you’ve called before, please call again. Even if you know how your Senators will vote, please call to share your thoughts.
  • To find your elected officials or learn more about becoming an advocate, visit our Advocacy resource page. You can also find the Facebook and Twitter handles for the current members of Congress here.

 Stay tuned to our Blog and sign up for our newsletter, as we will continue to provide updates as more information becomes available, about this issue that affects all of us.

Is a Reverse Mortgage Right for You?

by Kristi Sullivan, CFP

Chances are high that when I mention the idea of a reverse mortgage to clients, I’ll be Reverse Mortgagemet with a very sour expression. I think this is because of the impression that these instruments are expensive and that you give up ownership of your home to use them.

Now I am no expert in these products, but for clients who have most of their net worth tied up in their homes, finding a way to use that equity to pay bills is a must.

Reverse Mortgage Basics

Here are some reverse mortgage basics:

  • Reverse mortgages are also known as home equity conversion mortgages (HECM) and are administered by the FHA.
  • You enter an arrangement with the lender to take money out of your home based on the amount of equity you have and your age.
  • You don’t have to have earned income to qualify.
  • You keep the ownership of your house until the last occupant dies or moves out.
  • You can receive the income from home equity in a variety of ways: For a specific time period, as a credit line to use as needed, or for your lifetime or the time that you or your spouse occupy the home.
  • When you pass away or move from the home, whatever equity is left after the debt and fees are paid will pass back to you (if living) or to your estate. (For related reading, see: How Does a Reverse Mortgage Work?)

An HECM is different than a home equity loan or line of credit. With a traditional home equity loan, you have to pay back the principal and interest over time. With a reverse mortgage, your house actually pays you.

Benefits of a Reverse Mortgage

Brainiacs who are way smarter than me have been modeling the use of a reverse mortgage in retirement planning. The numbers show that using home equity for income, especially when retirement investments are down, can lengthen the time your nest egg will last. Wade Pfau has been doing research on the use of reverse mortgages in retirement income plans and says there are two big benefits:

  1. Using a reverse mortgage early in retirement can reduce the stress of market volatility on the invested portfolio by allowing people to live off of their home equity rather than selling investments when values in their accounts are down.
  2. The second benefit is that opening a reverse mortgage now (especially with current low interest rates) can allow for the principal that you can borrow against to grow for a longer time.

Not everyone can get a reverse mortgage. You must be at least 62 years old, live in a single-family or two-to-four-unit home, and there is a limit to how much mortgage debt can be against the home at the time you apply for the HECM. (For related reading, see: The Reverse Mortgage: A Retirement Tool.)

This is not for everyone. Some downsides are:

  • The closing costs and fees on reverse mortgages are more expensive than conventional loans.
  • You may be tempted to spend your home equity on dumb stuff instead of using it prudently.
  • You still must have enough income or savings to maintain the home and pay property taxes and insurance.
  • There are people out there selling reverse mortgages who may not have your best interest at heart. Investigate and get several quotes before deciding on who to use for a reverse mortgage. (For related reading, see: Beware of These Reverse Mortgage Scams.)

If you are feeling your retirement income is too tight and you meet the eligibility requirements, using your home equity through a home equity conversion mortgage may be worth investigating.

Check out more from Wade Pfau in this Forbes article. For more information, you can also call National Council on Aging at (800) 510-0301.

This post originally appeared at Investopedia on March 3, 2017. 

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.