I visit a doctor once a year at the most, and I hardly require prescription medicine. The cost of my health insurance premium is about $800 this year for my HMO plan. My employer pays a larger percentage of the total premium, but the prices increase each year by a percentage much higher than inflation. A similar HMO plan, if I were to quit my job and buy individual health insurance in New Jersey, I would pay more than $800 a month, though there are less expensive options.
I’m lucky I don’t have any dependents.
The more individuals in the world with access to good and affordable heath care, the healthier the world will be in general, so I am in favor in reform that brings better care to more people. While reduced costs for me would be nice, that would be just an ancillary — and selfish — benefit. Will any of the various sets of proposed legislation succeed? I don’t know anyone who can answer that question with any sort of definitive answer. Health care is a monster, a complicated system with many moving parts that won’t be fixed right away.
The Congressional Budget Office released their cost estimates for the version of the legislation that is up for a vote within the Senate Finance Committee, and the numbers look better than expected: The bill would could $829 billion over ten years and actually reduce the budget deficit by $81 billion over the same time period. This bill doesn’t include a government-run plan, but it also leaves more people uninsured than some would like.
This legislation has a long way to go. The version of health care reform offered by the Senate Finance Committee needs to be combined with the version being considered by the Senate Health Committee. The Senate then needs to vote on and pass a bill. The House of Representatives also needs to vote on and pass its version of the health reform bill (H.R. 3200). Eventually the bills that pass both the House and the Senate need to be combined, voted on, passed and presented to the President.
None of this will happen without more changes and compromises, and even then it may not gain the votes needed to succeed.
Please share your thoughts and join the discussion. What issues should health reform address? What are your experiences with health care?
Not only are most personal bankruptcies due to medical bills beyond the ability of the consumer to pay, but most of the households declaring bankruptcy for this reason do so despite having health insurance coverage.
Researchers from Harvard Law School, Harvard Medical School, and Ohio University reported 60 percent of personal bankruptcies in the United States involved medical bills, an increase of 50 percent over the past six years. Furthermore, seventy-five percent of those bankruptcies were claimed despite having health insurance, intended to cover medical expenses and prevent unaffordable bills.
The researchers indicated that only 29 percent of those who declared bankruptcy explicitly cite medical bills as the cause, but the 60 percent figure includes households with medical bills totaling more than 10 percent of family income.
Health insurance appears to be useless when it is most needed. Twenty-five percent of insurance companies cancel coverage immediately when an individual covered suffers a disabling illness. Within a year, another twenty-five percent of insurers cancel coverage.
Even with medical coverage, here are the average bills, out of pocket, for some of the most expensive conditions:
- Multiple sclerosis: $34,167
- Diabetes: $26,971
- Injuries: $25,096
- Stroke: $23,380
- Heart disease: $21,955
The study was funded by the Robert Wood Johnson Foundation and will appear in the August edition of the American Journal of Medicine.
Medical bills underlie 60 percent of U.S. bankruptcies: study, Reuters, June 4, 2009
When I write about advocating for the consumer when he or she is in debt, I usually receive a good amount of feedback blaming the consumer for his or her situation. Yes, in many cases, households fall into debt because they buy more things they cannot afford, whether knowingly or unknowingly. In many cases, they ignore their own financial condition without worry for their future or while knowing that a declaration of bankruptcy can save them when life gets rough.
Not everyone falls into these categories, I remind the critics. Medical emergencies are expensive and cannot always be adequately planned for in advance. Credit card debt maybe the only option, or sometimes just a slightly better option that financing your bills directly from the hospital. Here is one example from the New York Times:
Mr. Kupka has multiple sclerosis. The Kupkas, who live in Lindstrom, Minn., have an annual income of $45,000 — a combination of her salary as an office manager and his disability payments. More than 20 percent of that income goes toward health care. Their annual insurance premiums total $5,400, and then there’s the $4,000 Mr. Kupka spends on drugs, doctor’s visits and lab fees before he fulfills his policy’s deductible.
In the three years since Mr. Kupka’s disability forced him to stop working as a mental health therapist, he has accumulated $12,000 in debt. “It’s frustrating,” he says. “We earn too much to qualify for state and county assistance, but not enough to stay ahead of the bills. I’ve thought maybe my wife and I should get divorced. But not only is it against our faith, it turns out it wouldn’t help…” [A]s Mr. Kupka’s situation illustrates, it’s not just uninsured patients who rack up large bills. Nearly two-thirds of those with debt problems… had health insurance.
The article offers tips for dealing with insurmountable medical expenses:
- Confront, don’t ignore, your situation. If you don’t pay your bills and the hospital decides to use a collection agency, your hardship will increase. Your credit report and credit score will be adversely affected.
- Review your bills. Health providers make mistakes on bills all the time, but many errors are not caught. Some procedures or services may have several names, identical is everything except price, so it helps to work with a medical expert if you have any questions. You can also resubmit your bills to your insurance company if coverage is denied. If you are still not satisfied, your bills may qualify for a third-party review.
- Hire an expert. The article suggests working with the Medical Billing Advocates of America to find a qualified mediator to negotiate between yourself and the health care provider.
- Don’t use a credit card. If you can help it, avoid paying your bill on a credit card if you can’t pay off the balance quickly. Interest charged for your use of someone else’s money will increase your debt. Watch out for credit cards offered by a hospital with immediate approval. These are like store credit cards; they might offer a 0% interest rate up front, but you might fall into a trap and owe much more interest than they’ll tell you when they’re busy saying, “You’re approved!”
- Don’t let debt collectors take advantage of you. Know your rights for dealing with debt collectors in your state. They may only call you during certain hours, they may not harass you, and they may not threaten you. If they break the rules, you can file a complaint with the Federal Trade Commission.
Situations deteriorate faster if you do not have health insurance. Find a way to get covered if you are not a member of plan yet.
According to a recent survey of 1,004 individuals born between 1960 and 1980, roughly Generation X, many expect their family or the government to provide care or funding for care as they age. Here are some of the more interesting statistics from the study, released by America’s Health Insurance Plans (AHIP), an association of health insurance providers with a mission to expand access to health care.
- Among survey respondents who do not own long-term care insurance, 36% plan on relying on government assistance, like Medicaid, to finance their long-term care.
- 55% of respondents within Generation X plan to rely on a family member for providing long-term care. 10% will rely on a visiting nurse and 9% believe they will live in an assisted-care facility.
- 95% of Generation X do not own long-term care insurance, and over half of those who are not covered do not realize that health or disability insurance most likely does not cover long-term care.
Today, long-term care in a nursing home in the United States carries an average annual cost of over $70,000 (according to AHIP). I can only imagine that just like health care costs, this price tag will continue to climb faster than the rate of inflation.
I’m not currently covered by long-term care insurance, but I decided to take a look at what is offered at my current employer. They offer their own group long-term care insurance. They have four separate plans based on coverage level. The first level would cover nursing home care up to $100 per day or home care up to $75, with a lifetime maximum of $182,500. The level offering greatest coverage would cover nursing home care up to $250 or home care up to $188, with a maximum of $456,250. There are two intermediate levels of coverage, as well.
Based on AHIP’s annual cost of $70,000 of a nursing home, I decided to look into the $200 per day coverage. My first thought is inflation. If I need long-term care, it will most likely not be for forty or fifty years, maybe more. After five decades of inflation, I think the daily cost of long-term care is going to be much more than $200. I am surprised that something basic, coverage adjusted for inflation, is offered at an additional premium.
According to my company’s calculator, I would pay $22 per month starting now for coverage at $200 per day once I enter the assisted care facility. But if I want my coverage adjusted by 5% every year, the premium jumps to $81.20 per month. The projected lifetime premium payments jump from $13,992.00 to $51,643.20.
If the cost of long-term care rises at that same 5% annual rate for fifty years, I could be looking at a daily cost of over $2,000 a day! A $200 daily benefit won’t help much if that is the case. Why both with coverage that is not adjusted for inflation?
Do you have long-term care insurance? Or do you plan to rely on family or government?
You can download AHIP’s survey results here [ppt].
America’s 20 Best Health Plans. Unsurprisingly, my plan is not on this list from MSN and US News & World Report. The top award goes to Harvard Pilgrim Health Care of New England in Maine and Massachusetts. I should take advantage of my Aetna plan more by visiting a doctor for a check-up once in a while, particularly since the price of my plan is going up next year.
Aflac CEO Says He’ll Give Up Golden Parachute if Ousted. Aflac, which isn’t seeking bailout money from the government, would owe Dan Amos $13 million if a merger or acquisition results in the elimination of his job. Amos has graciously volunteered to give up this income if he leaves the company in these circumstances. He’s setting an example for other highly-paid CEOs who plan on taking windfall compensation even as their companies fail or ask the public for handouts.
76% Say Obama Can Fix Economy – Poll. No pressure, though. Meanwhile, Bush and 19 other world leaders from developed and developing countries are meeting in Washington to discuss the financial crisis. While expectations are probably too high for the meeting, it will be interesting to see if anything comes from it.
Citigroup to Lay Off Another 10,000 – Report. Even after Citi received $25 billion from the government, we can expect more lay offs and significantly higher interest rates on consumer credit cards.
For the “News and Blogs” features, which I plan to run almost daily as long as I have additional articles to share, I select some of the most interesting posts from my RSS reader and from pfblogs.org. If you don’t believe you blog is included on my RSS reader, please let me know to so I can add it. Thanks!
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I have written an article for PC World Magazine called The Insider’s Guide to Black Friday Bargains. Please read it, and if you are so inclined, give it a “thumbs-up” on the website.
A Hypnotic Answer to Financial Angst. It’s becoming increasingly popular for those who worry about money to treat their anxiety through hypnotherapy. The success of the technique is hard to measure, but those who have pursued this form of treatment seem to be happy with progress. Expensive hypnosis sessions may do more damages to your finances without much real benefit, but if participants feel better and come away with a better approach to dealing with money, it may be worthwhile.
Putting Santa on a Budget. If Santa Claus brings gifts to your house, bear in mind that his investments sank since last year, just like yours, and he’s dealing with the global economy as best as he can. He’s cutting back on some expenses, and I’d imagine these include reindeer fuel. He might have had to lay off a percentage of his elf workforce. And of course, he’s spending less on gifts for families across the world. If you explain this to children, they might just understand why Santa is not bringing them as many gifts this year.
Text of Paulson Remarks on TARP. Here are Treasury Secretary Henry Paulson’s comments on the Troubled Asset Relief Program (the Bailout) from yesterday, in full. To summarize: Bailout money will no longer be used to buy “toxic” mortgage-backed assets but it will be used to “prop up” banks. These banks must begin lending the money provided by the Bailout in order to get the conomy flowing again.
On Good Debt and Bad Debt. Is there such a thing? Like Trent from The Simple Dollar, my position is that debt is debt, and cannot be inherently “good” or “bad.” “Good” debt is debt that allows you to have resources that afford you returns in excess of the expenses of debt. For example, a student loan might be good debt. “Bad” debt is debt that traps you and offers you no or little reward, like credit cards and car loans. Circumstances change, and what is good debt for one person might be bad debt for someone else.
Do-it-Yourself Christmas: 34 Great Gifts You Can Make Yourself. Already noting that Santa is cutting back this year, let’s put him to work rather than using the mass-production elven workforce. Here are many great ideas for adding a personal touch to gift-giving. It’s frugal, too!
News and Blogs sponsor: Discover More Card is currently offering a $50 bonus for new cardholders.
A former high-powered, strongly motivated boss of mine did not believe in sleep. In order to be the best in the world at what we do — and this was the goal, no doubt — sleep is an obstacle to be overcome. I disagreed, as it seemed to me at some point, bodies and minds will find what they need whether or not you try to control them.
While he was in his office until four in the morning many nights, trying to work, I was getting the sleep I needed to be effective during waking hours. Our disagreements about this as well as some other philosophies of life eventually led to my departure from the organization.
Scientific studies have long proven the importance of a good night’s sleep, but there’s some new research that links sleep deprivation and serious illness.
A 2008 research project at the University of Chicago’s medical school kept young, healthy volunteers awake for all but four hours a night for six nights running. The result: The levels of subjects’ hormones shifted – in particular a hormone called leptin that affects appetite. They became ravenously hungry, scarfing down pizza and ice cream long after they would have felt full normally, and their blood sugar shot up to pre-diabetic levels – an ominous result after less than one week of inadequate sleep.
…[T]he World Health Organization (WHO) has gathered data from around the globe showing that sleep deprivation depresses the immune system, to the point where WHO is considering labeling chronic sleep deprivation a carcinogen, comparable to tobacco and asbestos.
Sleep deprivation also results in an overestimation of health; people deprived think they have more control than they do.
One experiment at U. Penn’s medical school kept subjects up until 4 A.M., woke them at 8 A.M., and then gave them a series of tests designed to measure memory, alertness, and the ability to react quickly to new information. The researchers were startled to find that subjects’ mental acuity declined markedly after just one night and kept dropping with each successive night of four hours’ sleep. Even more worrying: The study’s volunteers were unaware of their impairment. One woman, so fatigued that she could barely say her name, was nonetheless certain she was able to drive home.
In addition to these studies, entrepreneurs surveyed about their sleep habits have claimed to come up with many of their ideas while asleep. So it seems that sleeping is good for business.
Here are five free ways to improve sleep and five more free ways to improve sleep. Get Rich Slowly also has a brief guide to better sleep.
Make Sleep Work For You, Anne Fisher, Fortune Small Business, August 25, 2008.
Rather than firing up the central air conditioning, you can keep it off or lower its power in the heat of the summer by exploring some of these low-cost alternatives.
1. Use fans. While fans don’t change the temperature of the air, they increase air movement, which will make you feel cooler by a few degrees. Look for fans with large blades. In general, the large blades will move more air with less power and less noise.
2. Cool the air naturally. If you hang damp sheets in front of your window, air coming into your house or apartment will lower the temperature of the air as it enters.
3. Wear light colors. Black fabric absorbs heat while light-colored fabric reflects. Light-weight fabric allows your skin to breathe. Fashion aside, proper summer clothing can help keep you cool.
4. Install shades and blinds. By keeping your rooms shielded from the sun, you can avoid direct light and heat. Keep the blinds closed during the day and open the windows during the night. There are window coatings available that let in light while keeping out heat. Try searching Home Depot for heat and glare control window films.
5. Wear a cooling bandana. Here’s a stylish way to keep yourself cool. Cooling bandanas can be soaked in water and are worn around the neck. As the water evaporates your body remains cool. You can find cooling bandanas on Amazon.com.
6. Avoid chores. Forget about using the clothes dryer or the oven; these appliances emit heat, so your cooling system must work harder whenever you’re cooking or drying. While the weather is hot, eliminating strenuous chores will help protect your body from dehydration. Alcohol and caffeine should be avoided as well for the same reason.
7. Spray yourself with water. Never was a wet tee-shirt contest a better idea. Keep yourself wet with sprinklers outdoors or spritzers (water bottles with a spraying handle) indoors.
8. Leave the house. Take advantage of large businesses that must keep their air conditioners running to keep customers comfortable; take a trip to the mall. If you do stay in and run the air conditioner, however, keep the thermostat high and supplement the house cooling with fans.
Where I live, the temperature has been above 90 degrees lately, with the heat index over 100 this past weekend. I don’t have it quite as bad as those in Texas, for example, but heat makes everyone uncomfortable. As someone I knew used to say, you can only remove so many layers of clothing.
Beat the Heat Without Busting the Budget, Rodika Tollefson, LifeWire
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