October 15, 2015
High-deductible Health Plans on the Rise
Health insurance is really starting to hurt.
Premium increases and deductible creep, documented in the Kaiser Family Foundation’s comprehensive annual survey of employer health benefits, are eye-popping figures. Although there has been a slowdown in medical inflation and health care spending overall, the growing prominence of high-deductible plans is evidence that more of these costs are shifting to employees.
- One in four workers today is enrolled in a health insurance plan with a high deductible – up from 4 percent a decade ago – exposing them to larger out-of-pocket expenses than traditional health plans if they become ill. [Kaiser’s definition of high-deductible plans is that they are accompanied by a tax-preferred savings plan to help workers pay their medical bills.]
- These deductibles average around $2,000 for single coverage, but they exceed $3,000 for about 20 percent of single workers. Deductibles average $4,350 for a family plan, but nearly 20 percent face deductibles exceeding $6,000.
- Average annual premiums for single workers in these plans range from $773 to $1,021, while family plan premiums are $3,660 to $4,407.
- Everyone’s deductibles are rising much faster than premiums. For example, the share of the annual premium paid by all single workers with health coverage has increased 19 percent since 2010, to $1,071. But their deductibles have risen 67 percent, to $1,077.
- Retiree health care trends, in contrast, might be stabilizing. Since 2009, the share of larger companies offering the coverage to retirees has bounced around between 23 percent and 28 percent.
Employers are also paying more for annual premiums, according to Kaiser – about $1,000 more per single worker than they paid in 2010 and about $2,800 more for a family plan.
But it’s clear from the data that this shared burden falls heavily on employees.
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October 13, 2015
Free Help Navigating the Medicare Maze
HICAP, SHIP, SHINE – whatever your state calls the program, the mission is an urgent one.
With some 10,000 baby boomers turning 65 every day, these programs help new enrollees grapple with their Medicare options and make decisions, especially during open enrollment, which begins on Thursday and ends Dec. 7.
Medicare is “confusing” to boomers, because they “have more than one option, and most of us, when we were working, had only the PPO or the HMO” to choose between, said Christina Dimas-Kahn, program manager and a telephone counselor in San Mateo County, California’s Health Insurance Counseling and Advocacy Program (HICAP).
The top requests for assistance coming into her office are from new enrollees to Medicare, followed by the elderly who can’t afford their medications, messy billing problems between Medicare and health providers, and questions about long-term care and how to pay for it, she said.
The primary goal is “education and empowering you to enroll yourself,” said Joshua Hodges, who oversees the programs for the U.S. Administration for Community Living (ACL), which funds them. Their “beneficiary focus” has become even more crucial, he said, since the advent of Advantage managed-care plans, which complicate the choices faced by Medicare beneficiaries.
Click here for a state-by-state directory of State Health Insurance Assistance Programs (or SHIPs) – their official name. SHIPs are also available to residents of Puerto Rico, Guam, the Virgin Islands, and Washington DC. …Learn More
October 6, 2015
Your Aging Parents or Clients: 7 Tips
When Bob Mauterstock asked how many financial advisers in the room had elderly clients showing signs of diminished mental capacity, a few hundred raised their hands.
Next, he asked, how many have a protocol for these clients? Fewer than 10 put up hands.
With the U.S. population over age 85 growing at a rapid clip, advisers increasingly are facing this issue, he explained last week at the Financial Planning Association meetings in Boston. A 2009 Fidelity survey backs him up: 84 percent of advisers said they had clients touched by Alzheimer’s disease.
Mauterstock, the author of “Passing the Torch, Critical Conversations With Your Adult Children,” shared seven tips to help advisers, clients, and their families. While many of his suggestions apply to wealthier people receiving comprehensive financial services, they’re also useful to people dealing with a parent experiencing cognitive decline.
Recognize the symptoms. “Diminished mental capacity is a slow, gradual thing,” he explained. Don’t wait until the signs become crystal clear before taking action. He used the example of his own client – a Harvard-educated anesthesiologist – who started calling repeatedly and asking to speak with his accountant. Mauterstock’s staff gave him the accountant’s phone number – only to get the same call over and over again. Better to recognize the signs early, contact the client’s family, and devise a plan.
Do the Homework. Advisers should have a complete checklist of things to discuss with clients before they experience cognitive issues, from a durable power of attorney to the handling of trusts held in their name. He also recommended documenting client meetings once cognitive decline sets in. Having another adviser in these meetings is in the client’s interest – as well as the adviser’s – and helps ensure that good decisions are being made. An advocate for the client should also sit in, to help with decisions as they become increasingly difficult to work through.
Hold Family Meetings. The most important thing an adviser can do when cognitive decline starts setting in is to ask the client to call a family meeting. …Learn More
September 3, 2015
Medicare Hotline Complaints Detailed
Last month, Squared Away published a primer for new Medicare enrollees choosing between their two available options: an Advantage plan or traditional Medicare plus a Part D drug plan and/or supplemental Medigap policy.
Millions of beneficiaries receive their Medicare benefits without any major problems. But today’s blog is about a report detailing complaints to the national telephone hotline operated by the Medicare Rights Center, a non-profit patient advocacy organization. Two of the top issues reported by seniors were denials of coverage and rocky transitions from employer or other health insurance into Medicare.
Here are some of the findings:
- 60 percent of calls about Advantage plans involved denials of coverage for physician care, home care, therapy, medical equipment, tests and other services. Some calls about coverage denials also involved traditional Medicare. However, in contrast to private Advantage plans, Schwarz said that private Medigap plans must follow Medicare’s lead in determining what’s covered. “If Medicare pays, then Medigap pays,” she said.
- The majority of denials of drug coverage involved medications not on the list approved by the senior’s drug plan.This primarily affects either seniors starting new medications or new plan enrollees who learn that their plan doesn’t cover all their medications. Advantage and Part D drug plans are not permitted to deny coverage in the middle of a plan year if they’ve been covering a drug for a specific medical condition, unless the drug is removed for a specific reason, such as the appearance of a new generic. They can, however, remove the drug from the list when the senior’s annual policy expires, Schwarz said. …
September 1, 2015
New Online Financial Resources
Squared Away periodically alerts readers to information online that might be useful to them. These three crossed the transom in August:
- Natural disasters quickly turn into financial disasters. On Hurricane Katrina’s 10th anniversary, the National Endowment for Financial Education and other organizations have released a guide, Disasters and Financial Planning. The guide includes tips on how to insure properly against hurricanes, floods, or forest fires and how to hire contractors to make repairs after disaster hits.
- The U.S. Social Security Administration posts a raft of brochures online to explain everything from how to get your newborn’s Social Security number or replace your old one (citizen or non-citizen, international students) to disability information for veterans. There’s also information on federal benefits many people may be unaware of. For example, low-income Medicare enrollees can apply for extra help – up to $4,000 per year – to pay for their prescription drugs. Many of the brochures come in multiple languages, including Somali and Vietnamese. Click here to see the full list of publications on socialsecurity.gov.
- The Center for Financial Services Innovation’s Consumer Financial Health Study sorts Americans into four financial states: “unengaged,” “tenuous;” “at risk,” and “striving.” They’re characterized by typical behavioral characteristics of how they handle – or fail to manage – their finances. For example, the unengaged typically “do not know how much their monthly debt payments are.” …
August 25, 2015
Workplace Benefit Inequality
Inequality goes beyond the wealth and income disparities that frequently make it into today’s headlines. Employer benefits also flow more freely to people at the top.
The newly released survey of employers by the U.S. Bureau of Labor shows how stark the differences are.
The charts below compare the share of private-sector workers in the lowest income bracket who receive benefits – their earnings are in the bottom 25 percent of all U.S. workers’ earnings – with the share in the top 25 percent. Four benefits are compared: health insurance, the percent of health premiums paid by employers, paid sick leave, and – since it’s August – paid vacations.
For the other charts, click here.Learn More
August 11, 2015
Medicare Primer: Advantage or Medigap?
Traditional Medicare with a Medigap plan or Medicare Advantage? My Aunt Carol in Orlando wrestled with this decision for some five hours in sessions with her Medicare adviser, which she followed up with multiple phone calls – and a raft of additional questions.
“You have to ask these questions. You really have to think about it,” she said. “It’s confusing.”
Essentially every 65-year-old American enrolls in Medicare, and many get additional coverage. One form of additional coverage is through supplements to traditional Medicare, which include a Part D prescription drug plan and/or a Medigap private insurance plan to cover some or all of Medicare’s co-payments, deductibles, and other out-of-pocket costs. The other is through Medicare Advantage, a managed care option that typically provides prescription drug coverage and other services not included in the basic Medicare program.
So which to choose? Consumer choices have proliferated since private plans were added to Medicare 40 years ago. The typical beneficiary today has about 18 Medicare Advantage options, a multitude of Medigap plans for people who choose the traditional route, and 31 prescription drug programs, according to the Kaiser Family Foundation.
This primer is for new enrollees like my aunt. A future blog will provide suggestions from leading Medicare experts about ways to think about this important decision and the financial issues at stake.
The following compares the primary advantages and disadvantages of traditional Medicare and Medicare Advantage plans. But everyone is unique, and it’s impossible to simplify a process that requires each individual to research his or her best options, based on the severity of their health issues, their preferences and financial situation, and the policies available in their state’s insurance market. …Learn More