Dear Readers,
Beginning in 2010, there will no longer be income limitations for those wishing to open a Roth savings account. So in other words, if you wish to rollover your plan assets to a Roth IRA, you no longer have to fork over 20 percent as mandatory withholding.
Your accountant or investment advisor will need to meet with you to ensure that you are both observing IRS rules regarding rollovers to a Roth IRA. Such as there has to be a “triggering event”, that is retirement, or being laid off, or qualifying under a hardship provision. For more complete information on these qualifying events, you may go to the IRS site at irs.gov/publications/p590/ch02.html.
Hear Ye! Hear Ye! This has been a public service announcement.
Sunday, September 6, 2009
Sick of the Insurance Industry Whining
by L.A.S.
Sorry, insurance executives, but I am just about sick of your whining that healthcare reform will threaten your business. OF COURSE, it will threaten your business! But it became necessary because the system is in danger of breaking down completely.
You, the insurance industry, found every dodge that you could to get around having to pay claims promptly. You, the insurance industry, found every way of weeding out the people who might actually use your product and cost you money. You, the insurance industry, then had the gall to flaunt your swollen purse by spending millions on lobbying and on extravagant getaways for your executives. Do you see the problem?
Some people just don't get it.
Now let me just say that my heart is not going to bleed for the insurance executives of this country. HOWEVER, I am going to be concerned that an abrupt change in the business model of the total insurance industry will affect the security of the investment. In other words, changing the business model could topple not only health insurance but also the life insurance, auto insurance, and annuity branches of the insurance tree, since many insurers cover all those bases.
We cannot go from a completely private model to a mostly public healthcare model unless we develop some kind of phase-in plan.
We would not be in this predicament if we had taken the opportunity in 1919 to start a national healthcare program at about the same time that other nations tackled this issue. Instead, we were sweet-talked by the life insurance industry which convinced us all that it was ready, willing and able to develop a private health insurance industry from scratch.
We never got such a golden opportunity again, not even when Pres. Johnson pushed through a Medicare and Medicaid program in the 1960s.
So that is why I have reluctantly concluded that we must go slow in this drive to develop some kind of public option for every American. We have to develop some long-term planning to phase in this program.
While I am on the subject of public option, I would appreciate it if people stuck to real numbers. The number “one hundred million” or even “a hundred fifty million” has been bandied about as the number of Americans who already have insurance that would switch to a public option if it were made available. That IS NOT TRUE.
The number came from a preliminary study, and yes, at first it did come up with about 125 million or so who might switch to a public option, as yet undefined.
HOWEVER, and I apologize for using so many capital letters in this article, but however, that number was rescinded when the study went back again when it had more specifics to go on.
The corrected final number was about 150 THOUSAND, not million! Repeat, 150 THOUSAND Americans might drop their private coverage and opt for the public option. That is a fraction of the original number and nothing that would drastically endanger the financial underpinnings of the insurance industry or of the public option.
Also I am not happy to see that Obama is proposing adding another layer of bureaucracy to our swelling government payroll. We could get the processing done more efficiently by farming it out to the private sector. We could process claims more efficiently by using private industry, because it already has more advanced computer software for processing medical insurance claims.
So while I readily admit there are pros and cons to the healthcare reform provisions and to the implementation of reforms, I am nonetheless going to stuff some cotton in my ears so I will not have to listen to any more whining from those insurance execs. OK?
Sorry, insurance executives, but I am just about sick of your whining that healthcare reform will threaten your business. OF COURSE, it will threaten your business! But it became necessary because the system is in danger of breaking down completely.
You, the insurance industry, found every dodge that you could to get around having to pay claims promptly. You, the insurance industry, found every way of weeding out the people who might actually use your product and cost you money. You, the insurance industry, then had the gall to flaunt your swollen purse by spending millions on lobbying and on extravagant getaways for your executives. Do you see the problem?
Some people just don't get it.
Now let me just say that my heart is not going to bleed for the insurance executives of this country. HOWEVER, I am going to be concerned that an abrupt change in the business model of the total insurance industry will affect the security of the investment. In other words, changing the business model could topple not only health insurance but also the life insurance, auto insurance, and annuity branches of the insurance tree, since many insurers cover all those bases.
We cannot go from a completely private model to a mostly public healthcare model unless we develop some kind of phase-in plan.
We would not be in this predicament if we had taken the opportunity in 1919 to start a national healthcare program at about the same time that other nations tackled this issue. Instead, we were sweet-talked by the life insurance industry which convinced us all that it was ready, willing and able to develop a private health insurance industry from scratch.
We never got such a golden opportunity again, not even when Pres. Johnson pushed through a Medicare and Medicaid program in the 1960s.
So that is why I have reluctantly concluded that we must go slow in this drive to develop some kind of public option for every American. We have to develop some long-term planning to phase in this program.
While I am on the subject of public option, I would appreciate it if people stuck to real numbers. The number “one hundred million” or even “a hundred fifty million” has been bandied about as the number of Americans who already have insurance that would switch to a public option if it were made available. That IS NOT TRUE.
The number came from a preliminary study, and yes, at first it did come up with about 125 million or so who might switch to a public option, as yet undefined.
HOWEVER, and I apologize for using so many capital letters in this article, but however, that number was rescinded when the study went back again when it had more specifics to go on.
The corrected final number was about 150 THOUSAND, not million! Repeat, 150 THOUSAND Americans might drop their private coverage and opt for the public option. That is a fraction of the original number and nothing that would drastically endanger the financial underpinnings of the insurance industry or of the public option.
Also I am not happy to see that Obama is proposing adding another layer of bureaucracy to our swelling government payroll. We could get the processing done more efficiently by farming it out to the private sector. We could process claims more efficiently by using private industry, because it already has more advanced computer software for processing medical insurance claims.
So while I readily admit there are pros and cons to the healthcare reform provisions and to the implementation of reforms, I am nonetheless going to stuff some cotton in my ears so I will not have to listen to any more whining from those insurance execs. OK?
How Much Will You Spend on Healthcare In Retirement?
By L.A.S.
Will Medicare really cover all or most of your health care expenses while you are retired? I witnessed the bills and stress that my parents went through after my father retired, and I am pretty sure that the answer is no.
The most recent surveys of annual out-of-pocket expenses for seniors show that seniors pay anywhere from $3800 to $8300. Again, this is OUT OF POCKET expenses. This does include your premiums for Medicare, which seem to increase every year.
The truth is that seniors spend MORE on out-of-pocket health care expenses than any other age group. Seniors 65 and over spent an average of $4888 per year on out-of-pocket, according to a 2004 study; that included deductibles, copays, insurance premiums, and miscellaneous expenses not covered by insurance.
I might as well take the opportunity to remind you that Medicare does not cover hearing aids, dental care, or vision needs. My mother was actually rather lucky that she had gotten dentures rather early in life and so did not have the rude awakening as to how expensive dental care has become.
Breaking down the senior demographic into smaller divisions shows that the older you are, the worse it gets. Those 65 to 74 spent $3850 a year; those 75 to 85 spent $5060 a year; and those 85 and older spent $8300 a year.
Try to stay out of the hospital. The deductible for a hospital stay under Medicare was $1068 in 2009. If you are unlucky enough to stay in the hospital for more than 60, you will then incur daily charges of $267 a day. After 90 days as an inpatient, those daily charges increase to $534. As a practical matter, the hospital and your doctor will do all they can to get you transferred to an intermediate care facility or released to your home. By an intermediate facility is meant a rehabilitation hospital, a day-care facility, or perhaps an assisted living home.
Medicaid was never intended to pay for long-term care in a nursing home. However, seniors have hit on ways of spending themselves down to poverty-level in a way that allows them to stay in a nursing home they already live in. These strategies include but are not limited to: divorce, transfer assets to children, or setting up irrevocable trusts.
Transferring assets to children is becoming less and less successful with increasing “look-back” periods for determining if you are trying to hide assets. You are subject to a five-year “look-back” period by the state in which you live, and any tangible assets that have been transferred during that time (especially cash, stock, real estate) Medicaid will add to your list of assets.
Seniors eligible for long-term care under Medicaid can keep a house and car, but the house's value is limited to $500,000. The cash assets cannot exceed $2000 for singles and $3000 for couples.
Will Medicare really cover all or most of your health care expenses while you are retired? I witnessed the bills and stress that my parents went through after my father retired, and I am pretty sure that the answer is no.
The most recent surveys of annual out-of-pocket expenses for seniors show that seniors pay anywhere from $3800 to $8300. Again, this is OUT OF POCKET expenses. This does include your premiums for Medicare, which seem to increase every year.
The truth is that seniors spend MORE on out-of-pocket health care expenses than any other age group. Seniors 65 and over spent an average of $4888 per year on out-of-pocket, according to a 2004 study; that included deductibles, copays, insurance premiums, and miscellaneous expenses not covered by insurance.
I might as well take the opportunity to remind you that Medicare does not cover hearing aids, dental care, or vision needs. My mother was actually rather lucky that she had gotten dentures rather early in life and so did not have the rude awakening as to how expensive dental care has become.
Breaking down the senior demographic into smaller divisions shows that the older you are, the worse it gets. Those 65 to 74 spent $3850 a year; those 75 to 85 spent $5060 a year; and those 85 and older spent $8300 a year.
Try to stay out of the hospital. The deductible for a hospital stay under Medicare was $1068 in 2009. If you are unlucky enough to stay in the hospital for more than 60, you will then incur daily charges of $267 a day. After 90 days as an inpatient, those daily charges increase to $534. As a practical matter, the hospital and your doctor will do all they can to get you transferred to an intermediate care facility or released to your home. By an intermediate facility is meant a rehabilitation hospital, a day-care facility, or perhaps an assisted living home.
Medicaid was never intended to pay for long-term care in a nursing home. However, seniors have hit on ways of spending themselves down to poverty-level in a way that allows them to stay in a nursing home they already live in. These strategies include but are not limited to: divorce, transfer assets to children, or setting up irrevocable trusts.
Transferring assets to children is becoming less and less successful with increasing “look-back” periods for determining if you are trying to hide assets. You are subject to a five-year “look-back” period by the state in which you live, and any tangible assets that have been transferred during that time (especially cash, stock, real estate) Medicaid will add to your list of assets.
Seniors eligible for long-term care under Medicaid can keep a house and car, but the house's value is limited to $500,000. The cash assets cannot exceed $2000 for singles and $3000 for couples.
Everybody's for Healthcare Reform, Till You Ask Them About Specifics
by L.A.S.
Polls show that the vast majority of us, 80 percent, are in favor of health care reform. But when you ask about specifics, then you have a much harder time arriving at a consensus. Each group that is being surveyed has concerns about different portions of the reform bills on the table (whether the so-called Kennedy bill or the moderate Baucus version) -- and each group has a different portion that it does not like.
When the survey asks whether the respondent favors a particular bill, support drops to 20 percent. And when you ask the public in general if they support improved records efficiency, again, 80 percent approve. BUT if you ask them if they favor centralized electronic medical records, then again, support drops way below half.
At this point, it is apropos to insert a lovely statistic regarding the cost savings that come from adopting computerized medical records: $81 BILLION annually!! BILLION!! PLUS we could improve accuracy and reduce medical errors, which is worth far more than money.
In regards to that last question, I suspect that it is the word “centralized” that upsets people, and frankly I do not blame them. I am all for electronic medical records; those with experience in using electronic records (such as the Veterans Administration) have a very good reputation for speed, efficiency and accuracy as a result of using electronic records.
But my point is that there is such a wide range of thoughts on what specific measures would improve American health care that it is extremely difficult to forge a common list of goals for what that reform ought to accomplish.
One of the major bones of contention is whether government ought to duplicate coverage offered by the private sector. I am of the belief that yes, if you want a public option, then the government is going to have to also insure people who are perfectly healthy and do not have chronic ailments -- in other words, the very people that the PRIVATE insurance sector dearly wants as a customer. To do otherwise is to wind up with a public option that is really the equivalent of the high-risk pool for drivers who can no longer get private automotive insurance.
Having government get stuck with a high-risk, high-expense pool of policy-holders is to invite economic disaster. The premiums will be high, because their usage of healthcare is high and they have serious or multiple health problems. This is NOT a good use of taxpayer dollars, and this is NOT going to be able to deliver on its promise of affordable health insurance for all those in the plan. The government will have to force young, healthy people to participate in the same pool as these high-risk or high-cost policy-holders, if it is going to remain financially sound and if it going to be able to cover a sizable number of Americans who do not currently carry health insurance.
I am sorry to have to explain this to you. And I am sorry if it is not what you want to hear. I do not like the prospect of forcing anyone to participate in any government plan or program, but I recognize the actuarial necessity for it.
Polls show that the vast majority of us, 80 percent, are in favor of health care reform. But when you ask about specifics, then you have a much harder time arriving at a consensus. Each group that is being surveyed has concerns about different portions of the reform bills on the table (whether the so-called Kennedy bill or the moderate Baucus version) -- and each group has a different portion that it does not like.
When the survey asks whether the respondent favors a particular bill, support drops to 20 percent. And when you ask the public in general if they support improved records efficiency, again, 80 percent approve. BUT if you ask them if they favor centralized electronic medical records, then again, support drops way below half.
At this point, it is apropos to insert a lovely statistic regarding the cost savings that come from adopting computerized medical records: $81 BILLION annually!! BILLION!! PLUS we could improve accuracy and reduce medical errors, which is worth far more than money.
In regards to that last question, I suspect that it is the word “centralized” that upsets people, and frankly I do not blame them. I am all for electronic medical records; those with experience in using electronic records (such as the Veterans Administration) have a very good reputation for speed, efficiency and accuracy as a result of using electronic records.
But my point is that there is such a wide range of thoughts on what specific measures would improve American health care that it is extremely difficult to forge a common list of goals for what that reform ought to accomplish.
One of the major bones of contention is whether government ought to duplicate coverage offered by the private sector. I am of the belief that yes, if you want a public option, then the government is going to have to also insure people who are perfectly healthy and do not have chronic ailments -- in other words, the very people that the PRIVATE insurance sector dearly wants as a customer. To do otherwise is to wind up with a public option that is really the equivalent of the high-risk pool for drivers who can no longer get private automotive insurance.
Having government get stuck with a high-risk, high-expense pool of policy-holders is to invite economic disaster. The premiums will be high, because their usage of healthcare is high and they have serious or multiple health problems. This is NOT a good use of taxpayer dollars, and this is NOT going to be able to deliver on its promise of affordable health insurance for all those in the plan. The government will have to force young, healthy people to participate in the same pool as these high-risk or high-cost policy-holders, if it is going to remain financially sound and if it going to be able to cover a sizable number of Americans who do not currently carry health insurance.
I am sorry to have to explain this to you. And I am sorry if it is not what you want to hear. I do not like the prospect of forcing anyone to participate in any government plan or program, but I recognize the actuarial necessity for it.
Maggie Mahar's New Book on Moyers re Money-Driven Healthcare
by L.A.S.
I have been citing and linking to Maggie Mahar's web site for at least a year. To my great joy she has finally published a book and has appeared on PBS's weekly Bill Moyers program. The book is titled, “Money-Driven Medicine: What's Wrong with America's Healthcare and How to Fix It.”
Let me say that I am so glad for Ms. Mahar that her hard journalistic work has finally come together into a book and documentary. She demonstrates what it is really like for doctors who came out of medical school eager to heal people, and then get bulldozed by a corporate form of medicine that tells them they have to bring in X amount of dollars per week for the practice.
Patients who do not have a primary care doctor wind up going to see several specialists. This fragmentation of medical care not only is more expensive, but less cohesive and may even endanger your life. Lack of oversight by one coordinating physician means no one is checking whether your medications are duplicating or cancelling each other out.
Moyers spared no mercy on the current Obama administration for how it has changed since Obama was a candidate and promised and end to the bad old ways of negotiating programs behind closed doors.
Bill Moyers featured the book on his Friday PBS show on Aug. 28. Please visit his site at http://www.pbs.org/moyers/journal/08282009/profile.html for the interview and the broadcast of the Alex Gibney documentary by the same name. You can also click on a box on the right-hand column to ask Maggie Mahar a question about health care reform.
The web site for the book with clips and transcripts of the interview on Bill Moyers is at http://moneydrivenmedicine.org/
I have been citing and linking to Maggie Mahar's web site for at least a year. To my great joy she has finally published a book and has appeared on PBS's weekly Bill Moyers program. The book is titled, “Money-Driven Medicine: What's Wrong with America's Healthcare and How to Fix It.”
Let me say that I am so glad for Ms. Mahar that her hard journalistic work has finally come together into a book and documentary. She demonstrates what it is really like for doctors who came out of medical school eager to heal people, and then get bulldozed by a corporate form of medicine that tells them they have to bring in X amount of dollars per week for the practice.
Patients who do not have a primary care doctor wind up going to see several specialists. This fragmentation of medical care not only is more expensive, but less cohesive and may even endanger your life. Lack of oversight by one coordinating physician means no one is checking whether your medications are duplicating or cancelling each other out.
Moyers spared no mercy on the current Obama administration for how it has changed since Obama was a candidate and promised and end to the bad old ways of negotiating programs behind closed doors.
BARACK OBAMA: The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies. And you know what, the chairman of the committee who pushed the law through went to work for the pharmaceutical industry making $2 million a year. Imagine that. That's an example of the same old game-playing in Washington. I don't want to learn how to play the game better. I want to put an end to the game-playing.
BILL MOYERS: Now look at this recent story in the LOS ANGELES TIMES. Lo and behold, since the election, the pharmaceutical industry's $2 million dollars a year superstar lobbyist Billy Tauzin has morphed into President Obama's pal. Tauzin says the President has promised not to pressure the drug companies to negotiate with the government for lower drug prices and has agreed not to allow cheaper drugs to be imported from Canada or Europe - contrary to the position taken by candidate Obama…
Bill Moyers featured the book on his Friday PBS show on Aug. 28. Please visit his site at http://www.pbs.org/moyers/journal/08282009/profile.html for the interview and the broadcast of the Alex Gibney documentary by the same name. You can also click on a box on the right-hand column to ask Maggie Mahar a question about health care reform.
The web site for the book with clips and transcripts of the interview on Bill Moyers is at http://moneydrivenmedicine.org/
Canadian Drug Prices Up Too -- by Almost 16 Per Cent
by L.A.S.
If you've been idealizing the Canadian health care system because it appears to work while keeping costs under control -- that may be. But the fact remains that overall medical care costs (that is, everything except medications) rose 13 percent in 2008 and just over 14 percent in 2009. And prescription prices rose 15.9 percent so far in 2009.
Canadians are feeling squeezed by the recession just as much as we are. Nervous Canadians are taking advantage of their healthcare benefits, and paying more attention to wellness issues. Among employers, wellness programs are gaining support as a way to control costs while reducing absenteeism and increasing productivity.
If you've been idealizing the Canadian health care system because it appears to work while keeping costs under control -- that may be. But the fact remains that overall medical care costs (that is, everything except medications) rose 13 percent in 2008 and just over 14 percent in 2009. And prescription prices rose 15.9 percent so far in 2009.
Canadians are feeling squeezed by the recession just as much as we are. Nervous Canadians are taking advantage of their healthcare benefits, and paying more attention to wellness issues. Among employers, wellness programs are gaining support as a way to control costs while reducing absenteeism and increasing productivity.
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