February 20, 2014
Mass. Health Law Cut Debt, Bankruptcy
Medical debt is a primary cause of bankruptcy. But new research finds that the Massachusetts health reform, by extending health insurance to a greater share of the state’s population, has reduced residents’ total debts and bankruptcy filings and improved their credit scores.
This experience is especially relevant now that the federal Affordable Care Act (ACA), modeled after Massachusetts’ 2006 reform, has effectively made health insurance mandatory nationwide, starting this year.
Health insurance is central to a household’s financial health, because one medical catastrophe can blow a hole in their savings account or throw them into bankruptcy. Most households who lack coverage are in the bottom half of the income distribution, and more than one in three uninsured individuals can’t afford his medical bills and is forced to pay them over time. Two out of three individuals paying over time owe more than $2,000, and one out of five owes more than $8,000.
Researchers at the Federal Reserve Bank of Chicago and Notre Dame examined the Massachusetts reform’s financial benefits for state residents between the ages of 18 and 64, using a Federal Reserve data set based on credit reports. Between 2006 and 2012, health reform increased the state’s insured population from 90 percent to 97 percent of all residents.
The benefits included: …Learn More
January 21, 2014
HHS Website Decodes Long-Term Care
Every day, some 10,000 Americans are turning 65, and every day, more of them start thinking about their long-term care.
For help, try the U.S. Department of Health and Human Services’ recently redesigned website, Longtermcare.gov. It’s very easy to navigate and is packed with reliable information to help visitors:
- Search for specific types of services in your area, by zip code.
- Learn whether your home and location are compatible with aging in place.
- Analyze long-term care costs, by type of service and state.
December 3, 2013
Estate Planning 101: Who Knew?
Boston trust attorney Michael Puzo has seen it time and again: people procrastinate about writing a will or putting their estate in order.
“It forces them to face their mortality, and they don’t want to,” he said.
Even those with modest assets – a house, a 401k, and maybe a life insurance policy – should carefully make an estate plan. But are the nuts and bolts of wills and estate planning widely understood?
This question loomed as Puzo translated these legal complexities in a way anyone could grasp during his presentation to employees of Boston College, where Squared Away is based. For readers who may not know where to start, here are 10 fundamentals gleaned from his talk:
A good estate plan achieves four goals:
- Distributes one’s assets to the desired person or people.
- Ensures beneficiaries receive the money when you want them to.
- Makes appropriate bequests either directly or indirectly through a trust, rather than a will.
- Minimizes taxes.
When thinking about a will, get out a blank sheet of paper and write down everything of value that you own, whether it’s a checking account, the house, a wedding ring, or life insurance policy – and who you want to receive each of them.
Many people may be surprised to learn they “have more money than they think they have,” Puzo said.
The difference between probate and non-probate property is critical: …Learn More
November 7, 2013
Healthcare Credits Reach Middle Class
Individuals earning nearly $46,000 a year and families of four earning $94,000 may be eligible for federal tax credits under the new health care law.
Tax credits are the mechanism by which the federal government caps how much people pay for health insurance premiums, which are set by the private market. The premium caps are based on how much someone earns, relative to the federal government’s definition of poverty.
Here’s an example of how premiums are calculated for, say, young, single workers who earn between $17,236 and $22,980 per year, which is between one-and-one-half and two times the poverty level. The premiums, which range from 4 percent to 6.3 percent of their income, start at about $57 a month for those at the low end of this income range and up to $121 at the high end.
In the following charts, Squared Away converted into dollars the income and premiums that the Henry J. Kaiser Foundation, in its brief on the healthcare law, has expressed as percentages of the U.S. poverty thresholds: …Learn More
November 4, 2013
Affordable Care Act: Who Gets What
The Henry J. Kaiser Family Foundation just released an excellent interactive slide show explaining how the Affordable Care Act addresses the various health insurance and financial challenges facing 47 million uninsured Americans.
Kaiser divided the uninsured into 10 groups – 28 million part-time workers, 8 million adults in their early 20s, and 3.5 million self-employed people, among others – with details about the specific provisions pertaining to each.
There’s a lot of detail here, so focus on the profiles that interest you most. Advance through the slides by clicking the arrow at the bottom of the screen. To return to the home page, click the “house.” …Learn More
October 1, 2013
There are now two reasons to postpone retirement.
The financial reason has been covered repeatedly in this blog: working longer increases a retiree’s savings and monthly Social Security income, while shortening the number of retirement years that their savings will have to fund.
If that doesn’t convince you, here’s the other reason: working longer may prevent dementia.
That’s the conclusion of a study on nearly 430,000 French retirees. After analyzing their health and insurance records, the researcher determined that each additional year an older worker remained in the labor forced further reduced the risk of being diagnosed with various forms of dementia, including Alzheimer’s disease. …Learn More
September 26, 2013
Social Security Claiming and Psychology
It’s common for people to begin collecting their Social Security benefits soon after they turn 62, ignoring the financial planners and retirement experts urging them to postpone and increase the size of their monthly checks.
A new study has uncovered four powerful psychological traits that influence this decision: the individual’s expected longevity, his fear of loss, whether he perceives the Social Security system as fair, and patience.
The study surveyed some 3,000 people, primarily in their 40s and 50s. This is a good age to ask about Social Security, because claiming the benefit is a few years away, “but they’re thinking more about it,” researcher Suzanne Shu said when presenting the findings at an August meeting of the Retirement Research Consortium in Washington.
In an online survey, Shu, who is from the University California at Los Angeles, and John Payne, from Duke University, posed a series of questions designed to understand the psychology of the individuals they were studying. They also asked when they planned to claim their Social Security and then determined which psychological traits were linked to those who said they planned to file early.
Four influences on claiming came out of their preliminary findings:
Fear of loss. People who have a stronger aversion to financial loss also tended to say they would claim earlier. To them, the researchers said, a delay in receiving their benefit checks “looks like a potential loss.” …Learn More