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.

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.

Using Online Crowdfunding to Raise Financial Help for Cancer Care

Triage-Cancer-Blog-CrowdfundingIn recent years, online crowdfunding has become a major industry for those hoping to raise financial support for themselves or loved ones when medical expenses become too big a burden. As crowdfunding has gained in popularity, several issues have arisen regarding regulations and tax and financial implications.

If you already qualify for Medicaid or other government benefit or financial assistance programs, it is important to make sure any money raised through crowdfunding or donations does not push your income beyond the eligibility threshold for your current financial assistance. As some people have learned, this collection of money counts as income, which can cause a person to lose state and federal benefits on many things, like healthcare and food programs.

One other area to be aware of is related to privacy and disclosure of a cancer diagnosis. If you are not disclosing to family, friends, or an employer, then you want to think about how to raise funds while still protecting your privacy. For more information around privacy and disclosure decisions, watch this webinar: http://www.cancerandcareers.org/en/community/videos/BWC-2015/2015-webinar-online.

Even though there can be some potential pitfalls to using online crowdfunding if you are not careful, it can still provide a great deal of help when medical and other related costs become overwhelming.

Some tips for creating a successful funding page include: creating a strong appeal using details and a clear description, using pictures and videos, and building trust with your potential donors. One organization, HelpHOPELivem, is a nonprofit that verifies the validity of donation requests on behalf of a patient, while also streamlining the process for the patient or loved one who has started the campaign.

There are many different crowdfunding sites, but here are a few that are often used for medical bills and healthcare:

  1. GiveForward
  2. GoFundMe
  3. Indiegogo Life
  4. YouCaring
  5. HelpHOPELive
  6. Crowdrise
  7. Crowdfunder
  8. FundRazr
  9. StartACure

While selecting a crowdfunding source, be sure to check out the fees collected by each site. GoFundMe and GiveForward charge 5% of each donation and an extra 3% as a processing fee. Crowdrise offers a 3% pricing guarantee including credit card fees and HelpHOPELive charges a 4% fee with an additional 3% for credit card processing. YouCaring takes about a 3% processing fee. Depending on your needs many of these sites will provide the platform you need to reach a large audience of donors.

Ultimately, the best thing you can do is make sure you are well informed about any of the implications raising money through crowdfunding may have on your ability to qualify for other resources.

If you are a donor who wants to donate to a medical crowdfunding page, make sure that the page is reliable or belongs to someone you know and if possible see if you can provide support in a different way. Material items, such as food, furniture, clothing, and gift cards do not apply to household income. For loved ones who want to create a crowdfunding page for someone diagnosed with cancer, make sure that you have talked with them about their privacy preferences, and sought out individualized tax, financial, or legal advice to ensure that you won’t jeopardize their ability to qualify for other resources or programs, such as Medicaid.

Resources:

  1. http://www.huffingtonpost.com/andre-bourque/is-crowdfunding-your-medi_b_7088486.html
  1. http://www.latimes.com/business/la-fi-healthcare-watch-20150703-story.html
  1. http://www.sheknows.com/living/articles/1107239/go-fund-me-campaign-cancer

Partner Spotlight: LLS Financial Assistance for PCR Testing

Today we are sharing some exciting news from our partner Leukemia and Lymphoma Society about a new financial assistance program!LLS

The Leukemia and Lymphoma Society is pleased to announce the opening of the LLS PCR Testing Financial Assistance and Awareness Program for patients with chronic myeloid leukemia (CML).

Patients enrolled in this program may receive up to $1,000 of financiall assistance for out-of-pocket costs directly related to PCR testing during their enrollment period.

The Polymerase chain reaction (PCR) test is used both in the diagnosis of CML and to monitor for cancerous cells after treatment has begun. It is the most sensitive testing method available, with the ability to detect a single cancerous cell among one million healthy cells. Recommendations suggest that a CML patient should receive a PCR test every three months for the first three years after diagnosis, and every three to six months thereafter based on how well their treatment is working.

Acceptance into the program is first-come, first-served and is based on financial eligibility. A patient may be insured or uninsured. Support for this program is provided by Bristol-Myers Squibb.

For more information or to apply, please visit www.LLS.org/PCR or call (877) 614-9242.