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.

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.

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.

Health Insurance & Open Enrollment: What You Need to Know

Man-on-a-PathWe know that health insurance can be overwhelming and stressful. But it doesn’t have to be. The Patient Protection and Affordable Care Act (ACA) includes changes to make it easier to shop for, and purchase, insurance.

As we approach the second open enrollment period (November 15, 2014, through February 15, 2015) to buy insurance coverage through the state Health Insurance Marketplaces created by the ACA, here are a few tips to help you navigate health insurance.

  1. Make sure you understand common health insurance terms. Don’t be embarrassed if you’ve heard these terms a lot, but still don’t totally understand them or how they all work together. Here are a few critical ones:
    • Premium: the amount you pay monthly just to have health insurance
    • Deductible: the amount you have to pay each year before the health insurance policy starts paying for your medical expenses
    • Co-Pay: an amount you may have to pay each time you access certain health care services (e.g., $25 when you see the doctor, or $10 for each prescription drug)
    • Cost-share: the difference between what your health insurance policy pays and what you pay for your medical expenses (e.g., 80/20 plans are ones where you are responsible for 20% of your health care costs and the plan is responsible for 80%, after you meet your deductible)
    • Out-of-Pocket Maximum: the most you are responsible for paying for covered medical care each year. The deductible plus any co-pays or cost-share amounts that you pay add up to help you reach out of pocket maximum. Once you reach that amount, your insurance should pay for 100% of your covered medical expenses.
  1. Keep an eye out for hidden costs as you shop for new insurance. For example, if you are in the midst of treatment, a Bronze level plan (60/40 cost share) is likely not going to be appropriate. And pay attention to whether or not plans have separate deductibles for medical services and prescription drugs.
  1. Learn about what is actually included in the ACA and how the law may potentially benefit you. One resource would be Triage Cancer’s Quick Guide to the ACA, available for free at: http://triagecancer.org/health-care-reform.
  1. Look into possible financial assistance options available to you.
  1. Know that that there are places to go for more help when trying to navigate health insurance:

 

Triage Cancer Partner Highlight: Fifth Season Financial

by Adam Balinsky FIFTHSEASONFINANCIAL_COLOR

A year after Adam and his family moved to the United States from Canada, his wife, Tracey, was diagnosed with breast cancer. While dealing with the sobering realities of their new situation, Adam began to experience first hand how very differently the U.S. health care system operates, as compared with a more comprehensive and inclusive Canadian system.  Adam quickly realized that there are ample ways to support patients medically and emotionally, but very limited structured support for the financial strains patients often face.

A 2010 study by the National Cancer Institute estimated that Americans will spend $158 billion annually on cancer treatment by the year 2020.  That figure represents a staggering annual 27% increase. 

Given Adam’s experience and statistics like these, Adam was motivated and inspired to proactively do something about it.  Adam passionately believes in the mission of Fifth Season Financial – a company that provides financial assistance for those facing advanced illnesses, including cancer.  He made it his mission to help people who are struggling with all of their financial pressures; rent or mortgage bills, utility bills, medication, or anything else that might be causing a financial strain.  To date, Fifth Season has assisted over 330 patients and their families – and provided over $55 million in financial help through the “Loans for Living” program.

Fifth Season aims to be a financial resource for those needing to gain access to immediate cash, which the “Loans for Living” program provides, by securing a loan through the patient’s life insurance policy.  Loans are usually between 30% – 60% of the face value of the life insurance policy.

However, a key goal of Fifth Season’s program is to provide patients with access to cash they need now, and to also preserve part of the policy for the patients’ family and dependents. There are only two requirements to qualify for the program – having advanced cancer and having a life insurance policy. The evaluation process is very simple and free of charge. There are no restrictions on how the money can be used, and it generally does not disqualify someone from government or other needs-based assistance programs.

This is what two of Fifth Season’s clients had to say:

“As a committed Christian, I don’t toss around the term Godsend lightly. But I can truly say that’s what Fifth Season has been for me. Just knowing the money is there to pay my living expenses and keep my new business going makes all the difference in the world. Stress is terribly counter-productive when you’re facing a life threatening disease like cancer – and like it or not, financial stress is one of the worst” – Lisa from Colorado

“Fifth Season gave me financial piece of mind, and allowed me to focus my energy on my condition, and my family’s well-being…thank you.” – Stephanie from Virginia

Adam Balinsky is the President of Fifth Season Financial, an organization that provides financial help to individuals diagnosed with advanced cancer. For more information about Fifth Season Financial, call 866.459.1271 or visit www.fifthseasonfinancial.com.

Hot off the Presses!

COCHave you been on the search for a comprehensive resource on navigating your way through the cost of a cancer diagnosis?

Look no further!

Triage Cancer teamed up with our partner, Cancer Support Community, to bring you the Fifth Edition of Frankly Speaking About Cancer: Coping with the Cost of Care.

Finances are stressful enough, let alone when you have a cancer diagnosis. This FREE educational resource provides patients and their loved ones the most recent information when it comes to managing the cost of care. This edition includes topics such as:

  • The most up-to-date information on health care reform and health insurance options, including the Health Insurance Marketplaces
  • Updates on ways to help pay for treatment
  • Employment protections and disability insurance benefits
  • New information on cancer community resources
  • And so much more!

Share this resource with your health care team, advocacy groups, or anyone who might be battling the cost of cancer care.

Order or download Frankly Speaking About Cancer: Coping with the Cost of Care for FREE here:

www.cancersupportcommunity.org/MainMenu/About-Cancer/Understanding-Cancer/Coping-with-the-Cost-of-Care

Have questions and/or comments about the book? Email us at info@TriageCancer.org.

Follow us on Twitter or on Facebook for additional resources on cancer survivorship!

 

Finding Help with the Cost of Medicine

Every day, more and more Americans are facing high medical costs. Uninsured Americans are facing the most difficulty, often looking at extremely high medical bills and expenses they must cover on their own. People with insurance are feeling the pinch as well with high deductibles and co-pays draining their bank accounts. For those struggling with the healthcare costs, there are many different kinds of programs and resources across the country designed to help. But they can be difficult to locate and are not well advertised. NeedyMeds can help you find these often life-saving programs.

NeedyMeds is a nationwide non-profit organization that maintains a website of free information on programs that help people who can’t afford medications and healthcare costs. We regularly update data on over 5,000 assistance programs, 13,000 free/low-cost/sliding scale clinics and 1,000 drug discount coupons. All our information is accessible online, at no charge and without registration.

One of our most popular resources is our Patient Assistance Program database.  Patient Assistance Programs provide medications for free or at low-cost to patients who qualify. Each program is different, but most are designed for uninsured or underinsured patients with low-income. To find a program on the NeedyMeds site click on the Brand Name Drugs list or Generic Name Drugs list to locate your medication and find out if there might be a program available. Click on the name of the medication to get information on the program, including application forms and contact information.

We list many programs that are diagnosis specific as well. In the Disease Information Page section you’ll find pages that contain all of the help available on one centralized page. They are a great place to start your search for help on the website, as they link to other sections of our website, as well as to additional outside resources. In addition to a general Cancer Resource Page, you can find resources for specific cancers including Breast Cancer, Leukemia, Lung Cancer, Melanoma, Lymphoma and Prostate Cancer.

We also provide a free drug discount card that offers a discount of up to 80% at more than 63,000 pharmacies nationwide. Anyone can use the card regardless of income level or insurance status and no registration is required. The card can be used to save on prescription drugs, over-the-counter drugs and medical supplies written on a prescription form.

For more information visit NeedyMeds website.

Disclaimer

Triage Cancer Partner Highlight: NeedyMeds

Today we introduce you to NeedyMeds.  NeedyMeds is a Triage Cancer partner who is doing amazing work to help those who may need access to lower cost care and prescriptions. Please read on to learn more about their services! 

Needy Meds Logo

All About Free and Low Cost Clinics

One of the most popular sections of the NeedyMeds website is our listing of Free, Low-Cost, and Sliding-Scale clinics.  As health care has become more and more expensive, the need for low-cost health care has increased.  Many people living in more rural parts of the country have a very limited number of options to see a doctor, and depending on their insurance status the number of available “in-network” doctors is even lower.  Many people do not regularly see their doctor, only seeking help when a more serious condition arises.  It can be a scary situation to be uninsured and have an unforeseen medical problem come up.

 Free, Low-Cost, or Sliding Scale?

We list three different types of clinics on NeedyMeds.org.  The first are free clinics which are of no cost to the patient (self explanatory).  The second are low-cost clinics which usually have a low flat-fee for all patients or types of visit.  The third are sliding-scale clinics.  The price for these clinics is based on the patient’s ability to pay, and is usually derived from their income and family size as it relates to the federal poverty level(link to page explaining).

 What Services are Offered?

Each clinic offers a different variety of services.  Many clinics are just medical clinics and do not offer any other services, and there are also many strictly-dental clinics.  There are plenty of clinics, however, that offer a wide array of services.  Some services include women’s health, mental health, family planning, STD testing, vision, pediatrics, podiatry and pharmacy services among others.  Each clinic also has its own hours, and may only serve select towns or counties.

 Are There any Requirements?

Every clinic also has its own set of eligibility requirements.  In most cases these requirements deal with insurance status, income and family size.  Some clinics require that the patient has no insurance whatsoever while others work with both the uninsured and underinsured. Many clinics accept patients on Medicare and Medicaid – but not all.  Sliding-scale clinics in general have an income requirement based on the federal poverty level, making the clinic only available to those under a certain annual income.  There are also many clinics that have no income requirements.

 How do I Find a Clinic?

We list over 13,000 clinics on NeedyMeds, making it very easy to find one near you. From the Free Clinics page, either click on your state or type in your zip code to find a clinic in your area.  A list of local clinics will appear with contact information, as well as eligibility requirements, services, and hours. You can print out a selection of clinics or the entire page of clinics from your search.

Samuel Rulon-Miller has been with NeedyMeds since 2010, and manages their blog The NeedyMeds Voice. You can reach him at samuel@needymeds.org. For more information on NeedyMeds visit http://www.needymeds.org.

*This blog was originally posted on The NeedyMeds Voice on January 14, 2014.

Disclaimer

A smarter way to get cash from your life insurance policy

A cancer diagnosis can often take a financial toll on the patient and their loved ones.  A 2009 study found that medical bills and illnesses are involved in over 62% of personal bankruptcies. Upon diagnosis, out-of-pocket costs immediately begin to accumulate.  Prescription medication, doctor’s fees and surgeries can be financially overwhelming, especially when the family’s primary provider is diagnosed.

When facing financial hardship patients will often cut back on other expenses, tap into savings, run up credit card debt and liquidate assets.  While it is often looked upon as an expense, your life insurance policy can actually be one of your largest sources of cash available today.

There are companies out there to assist you with reviewing your policy and figuring out what your options might be.  For example, Life Credit Company, is a company that offers the Living Benefit Loan™ program.

As a licensed consumer finance company, Life Credit Company has developed a new way to get cash from your life insurance policy.  A Living Benefit Loan™ enables you to borrow money against your life insurance policy without the personal obligation to repay.  Upon your passing, the loan is repaid using your policy’s death benefit proceeds, with the remainder going to your beneficiaries.  You will never be obligated to make loan payments or incur any out-of-pocket expenses.  You are not required to pay insurance premiums while you continue to keep ownership of your policy.  As a result of this program, you can get the money you need today, while preserving a portion of your life insurance policy for your beneficiaries.

If you have an immediate financial need that can only be solved with your life insurance policy, consider exploring these options before pursuing a Living Benefit Loan™:

  • Call your insurance company and ask them if your policy has any cash value.  You may be able to use some of the cash value to meet your immediate needs and keep your policy in-force for your beneficiaries.
  • Find out if your life insurance policy has an accelerated death benefit rider.  An accelerated death benefit is a benefit that allows you to receive a portion of your death benefit directly from your life insurance company if you have been diagnosed with a terminal illness.

If your policy doesn’t have a cash value and you don’t have an accelerated death benefit, a Living Benefit Loan™ might be exactly what you need to help with your financial demands.

For more information about the Living Benefit Loan program visit www.LifeCreditCompany.com.

Life Credit Company, LLC is a licensed consumer finance company providing life insurance policyholders with access to funds via a Living Benefit Loan™. Having facilitated over $250 million of loans, our team has the experience and resources to effectively assist you.

This blog is for informational purposes only. It is not intended to replace professional, legal, or medical opinions or advice.  It is not Triage Cancer’s intent for persons to rely upon information on this site in lieu of legal or professional advice.  We do not endorse any companies, treatments, brands or manufacturers of any materials used for the sale of products, policies, diagnosis, or treatment of any condition. Any opinions expressed within this site are the opinions of the writers and not those of Triage Cancer. Reliance upon anything written by any person associated with Triage Cancer and/or within this site is solely at your own risk.