If enacted, Obamacare would extend coverage to 32 million people who currently do not have insurance.  The healthcare industry already accounts for about 18% of our nations economy.  Toppling this law would be the biggest overturn that the Supreme Court has tackled since the 1930s when it voided parts ofFranklin D. Roosevelt’s New Deal.

The court will most likely make its decision in late June.

Anyone who buys thier own health insurance, or anyone who sells it, knows that the system is terribly broken.  Insurance companies are turning down coverage for thousands of people who would normally be considered healthy.  If they don’t turn them down completely, then coverage is often limited by not covering certain conditions.  For example, I recently helped a gentleman who is taking cholesterol medication obtain some health insurance.  He was accepted for coverage but with the condition that medication for cholesterol would not be covered.  He decided to accept the coverage that was offered and just pay for his cholesterol medication himself.  The plan is going to cost him over $500 per month, just for him.  For his age, this was actually a good rate.  He is in the red zone:  too young for Medicare, but old enough that insurance companies consider him an expensive risk.

Now lets say that this gentleman could not afford an extra $500 per month for health insurance and did not want to buy it.  Obamacare would force him to buy it, or something like it.  And if he did not buy it, he would be penalized with a tax/fee/penalty.  Can anyone explain to me how that fixes the problem of the high cost of healthcare?  Yes, it would put more money into the insurance companies pockets.  And it would put more people into doctors offices because now they can see a doctor for a mere copay.  But it doesn’t seem to address the real problem of how expensive healthcare and health insurance really is.  Forcing more people to buy it would also mean forcing insurance companies to cover everyone, which may actually make insurance premiums go higher.  Unless the government is going to subsidize the cost of it with more taxpayer money.  I think we all know that is not a good solution.  But what is the right answer?  If the government can make us buy health insurance, then why couldn’t they make us also brush our teeth and go to the gym every day.  Sure, those are good things to do.  But is that the government’s role?  I welcome your comments and suggestions.

Health insurance companies make you fill out very detailed applications that ask you for details about your complete medical history.  And the questions are getting tougher these days.  Most companies used to ask if you had been diagnosed or treated for conditions in the last 5 or 10 years.  Now, many are asking if you have EVER had those conditions.  If you have had something (depending on the condition), there’s a good chance you’re going to be declined for coverage.  This is making it harder and harder for many people to obtain health insurance.

I recently had a client who applied for coverage for the whole family:  mom, dad & two kids ages 9 and 6.  The mother had a mild complication during her son’s pregnancy 10 years ago, but no other problems since then, and was on no medications.  The 9 year old son had a short period of time about a year ago where he was feeling dizzy and they didn’t know why.  They did an MRI and it was normal.  He was told by the doctor that it was some kind of vertigo.  He had no other health conditions before or since then, and was on no medications.  The dad and daughter were approved for coverage, but the son and mom were declined.  Both the family and I were shocked.

Many states now have Insurance Risk Pools that provide somewhat affordable, individual health insurance coverage.  In North Carolina it’s called Inclusive Health, also know as the North Carolina Health Insurance Risk Pool (NCHIRP), created in 2007.  If you are someone who doesn’t have access to a employer-based plan, or you’ve been declined for coverage, or you’ve been quoted a rate that is too expensive due to an existing medical condition, then you can apply to your state’s health insurance risk pool.  Many of these plans also offer coverage to people who have lost their jobs due to the effects of international trade and are eligible for the health coverage tax credit under the Trade Adjustment Assistance (TAA) program.

Keep in mind that not all states have a health insurance risk pool such as this.  You can call your state’s insurance commisson to find out.  If you would like to learn more about North Carolina’s program, you can find it at www.inclusivehealth.org or just give us a call today at 866-983-4222, and we can help you apply.

Health insurance is a very important part of your personal financial plan.  If you have a story about someone who has been declined for health insurance, I’d like to hear about it in the comments section below.  Maybe if enough people hear about this problem we can get it fixed.

Small businesses that provide health insurance to their employees now qualify for a
special tax credit (up to 35%), due to recent health care reform legislation.  The
credit, provided under the Patient Protection and Affordable Care Act, is designed to
encourage small employers to offer health insurance for the first time, or maintain
coverage they already have.

Who is eligible?

Groups with fewer than 25 full-time equivalent employees are eligible.  The employer
must pay for at least half of the employees health insurance premiums (can include
dental and vision coverage) and must pay out less than $50,000 in average annual
wages to employees.  The total number of employees does not include the business
owner or family members.

Can an employer with 25 or more employees qualify for the credit of some of
the employees are part-time?

Yes.  Because the limitation on the number of employees is based on Full-Time
Employees, and employer with 25 or more employees could qualify for the credit if
some of its employees work part-time.  For example, an employer with 46 half-time
employees (meaning they are paid wages for 1,040 hours) has the equivalent of 23
Full-Time Employees and therefore may qualify for the credit.

How does the employer claim the credit?

The credit is claimed on the employer’s annual income tax return.

Where can an employer find out more?

Beginning in early June 2010, anyone can call Turning Point Benefits Group at 704-
887-4984 to find out more information and see if they qualify for this credit.  You can
also visit www.irs.gov to get more details.

How long will this tax credit be available to small businesses?

The tax credit is effective for the 2010 tax year, and is currently scheduled to run
through 2014.  In 2014 the tax credit increases from 35% to 50% for qualifying
businesses.

Can other organizations qualify for the credit?

Tax exempt organizations can also qualify for the tax credit.  Those organizations can
earn up to a 25% credit for the same guidelines as the small business.  That rate
increases to 35% on Jan. 1, 2014.

How would the tax credit look in real dollar amounts?

The Internal Revenue Service provided the following fictional business as an example:

Main Street Mechanic, an automobile repair shop with 10 employees, can get
$24,500 in tax credits for 2010.

Here’s how:

Tax Credit for 2014:  $35,000

Challenges

Many parents of disabled children are not sure of the best way to plan for their family’s needs.  Two of the biggest challenges these family’s face is first, how much money will be needed to care for their child; and second, who will take care of the child when the parents are gone.  Family members often feel that the best thing they can do is to open an account in the disabled childs name and put as much in it as possible.  While it is wise to save as much as you can for this person, having it in their name can cause problems when you later try to apply for Social Security, Medicaid, and all kinds of other social programs that are available to them.

Most people with disabilities cannot get their own health insurance.  If they are able to buy it, it’s very expensive and will come with pre-existing conditions exclusions.  The maximum coverage amounts are also often too low.  Because of this, many of these people end up having to apply for Medicaid.  With Medicaid they lose the ability to see any provider that they want to, and they often can’t go to the specialists that they really need to see.

Solutions

If you have a special-needs family member, the first thing you should do is to sit down with a financial advisor who is familiar with this type of planning.  This type of personal financial planning involves a mix of social work, life coaching, and finances.  It will also involve working with a special-needs attorney to draft the proper documents that will protect your loved one and your resources.  A good attorney like this will be able to give a lot of direction on things you can do to protect your family.

Many people don’t realize that you can, and should do the same thing for healthcare related services and low cost health insurance.   The reason most people don’t think of this is that for most services you receive, you just pay a co-pay and that’s it.   Once you pay your co-pay, you don’t really care what it costs, and neither does the doctor.   In fact, the doctor has more than one incentive to perform as many tests and scans as possible.  The more he does, the less likely he is to get sued by you, and the more money he makes.  However, depending on where you receive the service and how it’s billed, may be covered by a co-pay, or it may go towards your deductible (which means you’ll have to pay for it out-of-pocket).

Let me give you a recent PERSONAL example of this.

My wife was told by her doctor that she needed to go have a CT scan done.   The doctor scheduled the appointment for her at an imaging center owned by the same hospital network that he worked for.   Now this was after we had told him that we wanted to have to test covered by a co-pay if possible, and not have it go towards our deductible.   We also told him that she had previously had some imaging done at a certain center where we knew it was covered by a co-pay.   We thought that was the place he had scheduled the appointment. When we arrived at the imaging center for her appointment, she was not on the schedule. They made some phone calls and found out that she was scheduled at another nearby imaging center, the one owned by the same hospital network that my wife’s doctor was in.   So we went over there and spoke to them, and found out that if she had the scan done there, it would go towards her deductible and would cost us about $2,000 out-of-pocket.   But if she had the scan done at the other imaging center that was not part of that hospital network, all it would cost us is a $15 co-pay.  What a difference!

This is why I am writing a blog post about saving money on healthcare on this personal financial planning site.   Health care costs have become a huge part of a person’s finances, and it’s very important for everyone to understand how to save money on these services. The more you can save on healthcare and on low cost health insurance, the more you’ll have to pay off debt or invest for you future retirement.  Healthcare professionals and hospitals are running businesses, and are trying to make them as profitable as possible.  This recession is hurting the healthcare industry just like everyone else.   Because of this, you really should not assume that your doctor is going to always act in your financial best interest. You need to take responsibility to do your homework and shop around to make sure you’re getting the best possible price for the service you will receive.

The fact that the same service could cost your either $2,000 or $15 depending on where you get it is ridiculous and should tell you that there is a lot of work to be done to straighten out our healthcare system.  That would take a whole other web site to cover that topic.  Maybe doctors need to start being worried about getting sued for charging a patient $2,000 for a scan when it could have been done for a $15 co-pay.

With an HSA Qualified plan, you have a higher deductible that must be met each year BEFORE the insurance company will cover anything.  In many cases, once you meet this deductible, all of your healthcare expenses thereafter are covered at 100%.  So if an employee can set aside enough money to meet that deductible, they will be just fine.

There is a great tax benefit here in that you can set aside money pre-tax into a “Health Savings Account” (HSA) that can be used to meet your deductible.  The money in the HSA account grows tax free, and can be rolled forward to future tax years.  In other words, it’s NOT a use-it-or-lose-it type of account.  This allows you to build up a tax-free savings account that can be used for healthcare related costs down the road.  Many banks now offer HSA type accounts, and there are also several providers who specialize in these types of accounts.  Many of them will allow you to invest part of the money into mutual funds for longer term growth as well!

These plans can also be purchased by individuals and families who don’t have group insurance available to them.

The Caution

If you’re going to opt for this type of plan, you need to make sure you set aside money into an HSA savings account to help you pay for your medical costs.  If your deductible is $5000, you’re going to have to pay the first $5000 worth of medical expenses out of your own pocket each year (including doctor’s office visits, medications, etc.).  If you don’t do this, you risk putting yourself into debt to pay for medical expenses, and that is never good.

Here is a news story that one of the TV stations here in Charlotte ran this week on these types of plans… 

“WSOC Channel 9 HSA Qualified Health Plans.”  Please don’t laugh too hard at the goofy guy in the brown suit!

I agree that there are a lot of things about the current health care system that need to be changed.  There are currently not many incentives in the system to keep costs in check. 

Example #1.  Doctors today are scared to death of being sued, and for good reason.  Because of that, they practice defensive medicine to protect themselves.  They prescribe extra tests and proceedures that are not really medically necessary, but will cover their rear ends in the event of a future law suit.  This makes sense to me.  But on top of that, the more tests and proceedures they perform, the more money they make.  So it helps them in two ways to practice defensive medicine. 

Example #2.  A mother goes in to the doctor to get my child’s ear ache checked out.  She pays her co-pay of $15 or $30, and that’s all she has to pay.  Her affordable health insurance plan pays for the rest of it.  Or at least it’s now between the health insurance company and the doctors office to work out how much they will pay.  But to that mother, she really doesn’t care what it costs because it doesn’d directly impact her.  She just wants to make sure she gets good care for her sick child.  In the long run it does impact her as the health insurance premiums go up every year based on everyone’s claims.  But for today, she’s not having to pay anything but her co-pay.

The only party in the health care realationship who does care what things cost is the insurance company.  They are doing everything they can to control costs every day.  If the doctor and the patient were also incented to do the same thing, this wouldn’t be such a big problem.  But in the current health care system, there is no incentive for anyone but the insurance company to control costs.

If you need to find an affordable health insurance plan for your family, visit www.TurningPointBenefits.com today.

According to my understanding of Mr. Obama’s healthcare plan (which may not be accurate), he wants to add millions of new people to the Medicare plan (essentially) which is already over-burdened and headed for financial disaster.  The current numbers already don’t add up with the people who are already on Medicare, and the baby-boomers yet to come.  I don’t see how you can add on additional tens of millions of new patients to an already almost-broke system.

For those of you who are looking forward to having access to the Medicare-like insurance plan, let me just mention what another country with a similar “you-get-to-choose” system is experiencing.  As Mr. Obama has said, people would have the option of either staying on their own private insurance plan, or opting for the government subsidized plan.  Germany has a similar system with two sets of people, those on the government plan, and those on private health insurance plans.  They also have two sets of hospitals, those for people with private plans, and those for people on the socialized system.  The hospitals for privately insured citizens is clean, up-to-date, efficient, friendly, and easy to get into.  The hospials for people on the government healthcare plan is crowded, out-of-date, and can take months to get into.  On top of this, the doctors who work at the government hospital are the ones who can’t get a job at the private hospital, so they don’t have anyother choice of where to go work.  Now just think for a minute…if you had something seriously wrong with you that you really needed help with, like an artery blockage…which hospital would you want to go to?  And which kind of doctors would you want working on you? 

It doesn’t take a brain surgeon to figure this one out.  Our healthcare and health insurance system has some serious problems.  But to pay for a plan like this one and make it work, you can be guaranteed that your taxes are going to go way up, and the quality of our healthcare is going to go way down.