Gee, Does Medical Tourism Mean I Can Go To Appleton???

by LAS

I ran across a mention that a hip replacement costs only about $27,000 in Appleton, Wisconsin, while it can cost as much as $126,000 in a major metro area such as Houston, Texas. Why the disparity?

Obviously wide variations in income levels between major metro areas and smaller towns are a big factor. But also the fact that the hospital has to pay much higher property taxes and other expenses in a big city is another major factor. It may also have to buy another lot to build a parking structure on for patients and visitors, while the small town has free street parking.

The small town hospital might also sacrifice some frills, too. 

Joe Schmo and Mrs Schmo and the Inherited IRA

by LAS

Joe Schmo can leave his IRA to your surviving spouse (Mrs Schmo) or child (Johnny Schmo), no problem. But doing it right can avoid a big tax bite. This is according to Jane Bryant Quinn, so if your local finance advisor is at all confused over how to handle this, tell him that.

Mr Joe Schmo has a very fine IRA, but one day he kicked the bucket. Fortunately he designated Mrs Schmo as his beneficiary.

Mrs Schmo has to put this IRA in her name. This is called retitling. With a traditional IRA, she has to leave the money alone until she reaches age 70 and a half, when the law requires her to start making withdrawals. (NOTE: With a Roth IRA, you can keep money you do not need in the IRA for the next generation.)

Mrs Schmo is under 59 and a half, so this is how she should re-title this IRA: “Joe Schmo IRA (deceased MO-DAY-YR) for the benefit of Jane Schmo, beneficiary.”

When Mrs Schmo reaches 59 and a half, she ought to re-title it once more, this time in her own name. This has the advantage of allowing her to let the money accrue value until she need it, or rather when she is required to make withdrawals at age 70 and a half.

Now, let's say that a parent leaves the balance of an IRA to an adult child. The child also has to re-title the IRA. Joe Schmo leaves his IRA to his only child, Johnny Schmo, so Johnny has to re-title it like this: “Joe Schmo IRA (deceased MO-DAY-YR) for the benefit of Johnny Schmo, beneficiary.” (if there are several children, each one should re-title his or her share of the IRA)

Note that inherited 401(k)s can also be similarly retitled as an inherited IRA.

There is a book out there on this specific topic, “Retire Secure! Pay Taxes Later” by James Lange. 

“Payable-on-Death” or Power of Attorney to Avoid Inheritance Taxes?

by LAS

Bereaved parents who added an adult child to their bank accounts have found that the state can tax their own money as an inheritance, if the child dies an untimely death.

Laws in Pennsylvania, Indiana, and Nebraska tax inheritances. Also, Iowa, Kentucky, Maryland and New Jersey tax inheritances but exempt parents from being assessed this tax. (NOTE: When I lived in Wisconsin I had to pay inheritance tax to the state as well as the federal government; I have no idea why Wisconsin is not on this list.)

So keep this in mind if you live in those states and you wish to have an adult child handle bills for your funeral and other debts without waiting for probate to be settled. We have found that most banks will allow you to put the name of an adult child on your account under the terms of “payable on death” – which would have avoided the cases of parents paying taxes on their own money because of an untimely death of the designated child. 

One Nagging Question About Qualifying for PPACA Exchanges

by LAS

One of the nagging questions that keeps bothering me about the states insurance exchanges is whether the people who need it will be be able to get coverage.

The PPACA law was intended to expand Medicaid coverage to all low-income adults under age 65 beginning in 2014. This would have brought 16 million uninsured under the Medicaid umbrella – assuming income of up to $15,415 for an individual and $26,344 for a family of three.

However, the Supreme Court ruled that the states can decline (opt out) of the expansion of Medicaid. About a dozen governors have said they will not expand Medicaid in their states, or are leaning in that direction. Now, since the Supreme Court ruled on this matter, I hear that the federals are trying the ol' carrot-and-stick approach with the recalcitrant states in question.

While I am on the subject of PPACA, here is what goes into effect in 2014:

by LAS

Several provisions of the PPACA law, aka Obama-Care, will go into effect in 2014. Let's review them now.

First, we should mention that the “employer mandate” has been pushed back to 2015. No word on what happens then.

Second, rules regarding waiting periods will go into effect. The most important provision is that waiting periods for health care coverage can no longer extend past 90 days. This may be a bit tricky for employees who work seasonal or variable hours. In that case, it may be that these employees might not be covered at all in 2014 if the employer requires its employees to work a minimum number of hours to be covered.

Third, pre-existing conditions cannot be used as a grounds for denying a policy nor for denying treatment for that condition. Plans cannot discriminate against persons for any of a range of health factors. Plans cannot impose restrictions on eligibility or charge more for coverage based on health history, etc. Women cannot be charged more than men. Also a part of this clause is that all employees must be given comparable healthcare plans; that is, high-income employees cannot get gold-plated plans and everyone else gets a tin version.

Fourth, starting in July 2013, employers start paying one dollar per employee into a fund for the Patient-Centered Outcomes Research Institute, which will collect and publish data relating to effectiveness of medical treatments. The assessment goes up to $2 per employee for years 2 thru seven, when it is designed to terminate.

Fifth, rewards for meeting requirements under wellness programs will increase from 20 percent of cost of coverage to 30 percent. Wellness incentives for quitting smoking will increase up to 50 percent.

Sixth, the so-called “donut hole” in Medicare Part D prescription coverage will shrink until it is eliminated in the year 2020.

Seventh, the individual mandate may (or may not) also be pushed back, but there was never any provision for sending people to jail for not buying insurance. People may lose all or part of a tax refund, or pay an annual tax for 2014 of one percent of income or $95, whichever is greater. 

The House tries yet again to delay or gut Obama-Care mandates; And who is behind all these attempts

by LAS

The GOP-dominated House has yet again passed a bill to delay or gut key provisions of the PPACA (aka Obama-Care) law. This week they passed bills to delay implementation of two key provisions, the individual mandate and the employer mandate (for businesses with 50 or more workers).

First of all, even though the House has made several attempts to delay or gut provisions of the reform law, it is very unlikely that the Senate will even discuss comparable bills on the floor. In fact, the House has voted 37 times already to “repeal or defund at least part of the health-care law, including three times to annul the entire measure” since 2010.

The Obama administration said in a statement that the measure to delay the employer mandate is “unnecessary,” and legislation postponing the individual requirement “would raise health insurance premiums and increase the number of uninsured Americans.”

However, House members of the GOP ran on promises to delay or defund PPACA in 2010 or 2012, and so they wish to make a little political hay during the summer months by keeping the issue on the House floor.

But my question is more about who is behind all these attempts to gut the bill. The key is the the employer mandate applies to companies with 50 or more employees. Specifically, companies that may have thousands of employees.

What many Americans may not know is that the PPACA law includes something called the non-discrimination clause. This has nothing to do with the color of a policy-holder's skin or what religion he or she believes in.

As it is now, companies can design deluxe healthcare plans for executive employees,as long as the plan was fully insured. But the non-discrimination clause in Obama-Care applies to ALL group healthcare plans, in terms of eligibility or benefits. The fact is that current healthcare plans treat different groups of employees differently. Most people are aware that the top brass gets the best perks package in the company. But most people may not be aware that even their healthcare plans are different, and that the PPACA specifically bars this and penalizes this practice.

First let us define the term “highly compensated” employees. This group includes the five highest-paid officers of the company, the shareholders who own 10 percent or more of the company, and all employees among the top 25 percent of all the company's employees.

Violators of the non-discrimination rules will be subject to stiff fines. This starts at $100 per day, per “failure penalty” – which will likely apply to each NON-highly-compensated employee who is left out of the cushy coverage plans. The company is also vulnerable to a civil lawsuit to compel it to provide the same upscale coverage plan to the non-covered employees.

Multiply that $100 per day per non-covered employee for a large multinational corporation, and you are talking about a significant hit to the corporate pocketbook. For a company with say, 500 employees, this easily adds up to a fine of $37,500 PER DAY. This is where I believe the pressure is coming from on House members to keep trying to negate provisions of the PPACA law.

Corporate America really believes that the executive class has to be lured to work for a given company with the most extraordinary gold-plated perks of every kind. Not being able to offer a healthcare plan that has no deductibles and no copays seems like a small loss when they are offering a company car, country club and health club and golf club memberships, the proverbial key to the executive washroom, stock options, and much more.

The employer mandate is being delayed for one year with White House permission. And the government has stated that there will be a phasing-in period where employers will be given time to make adjustments before the government begins sanctioning those that do not comply. But still I would not be surprised if corporate America tries to get all current healthcare plans to be grandfathered under the law, thereby escaping all sanctions and fines entirely. 

Why health insurance premiums are tumbling in New York under Obama-Care

By LAS

The Washington Post of July 17 reports that health insurance premiums in New York state will plummet under PPACA (aka ObamaCare) provisions – some at least by half and some to as little as a third of the cost before controls take effect.

According to the Post, “Individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly,” Roni Caryn Rabin and Reed Abelson report. “With federal subsidies, the cost will be even lower.”

New York has had a law since 1993 that insurers have to accept anyone who applies for a health care insurance policy, no matter what kind of pre-existing condition they might have. That explains the highest premiums in the country. In fact, the Post explains it in scintillating simplicity thus: “New York has, for 20 years now, been a long-running experiment in what happens to universal coverage without an individual mandate. It’s the type of law the country would have if House Republicans succeeded in delaying the individual mandate, as they will vote to do this afternoon. The result: a small insurance market with very high insurance premiums.” (my bold)

However, now that some of the provisions of the PPACA law are taking effect, healthy individuals who had believed that they would always be healthy and never have to have medical care, will now be contributing to the pooled coverage, and bringing the average cost of healthcare (AND insurance premiums) down. Yes, DOWN.

That is why the House attempts to gut the individual mandate are very disturbing and will only serve to undermine the promised savings of the program. So far, the Senate has not caved in to Republicans or to the corporate pressure to delay or delete sensitive provisions of the PPACA program. Let's hope it stays that way!

[For original story in the Washington Post, you may go to http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/heres-why-health-insurance-premiums-are-tumbling-in-new-york/ ]

A Few Examples of Unusual, Humane Senior Care

by LAS

Here are a couple examples of humane senior care programs around the country. These are not the only ones out there, but we just wanted to let you know that you have choices when it comes to placing an aging parent in some kind of facility.

DAY CARE – at NIGHT

The Elder-Serve at Night program offered by The Hebrew Home in the Bronx, New York.

Similar to senior day care where adult children drop off a parent while they go to work, this one allows adult children to sleep when the senior is prone to wandering at night.

Patients can just socialize with the other patients, paint, do yoga, listen to live music. Therapies are offered – physical therapy, light therapy, and even aromatherapy.

Staffers are present at all times to provide services, and dispense medications if needed.

NO RULES for DEMENTIA PATIENTS

The Beatitudes Campus in Phoenix is flexible enough to accommodate patients who want a late dinner and a bath at 3 am. There are nurses who can play the piano, so that patients who remember little else can sing the lyrics to old songs. If a patient does better without medications, then he or she may be taken off the drugs.

The Campus provides a calming atmosphere that helps everyone to remain calm and engaged in things that they enjoy.

RURAL RETREAT for SENIORS

The Life Care Cneter of Nashoba Valley is a rural facility in the Littleton, MA area. A resident llama named Travis allows residents to pet him.

Staffers work at figuring out what triggers upsets and what kind of prop or activity will soothe them. For one person, music is soothing. For another, who was a former librarian, just holding a book is comforting.

Best wishes in finding the right place for a beloved but brain-damaged or senile parent.