With the Baby Boomer population coming of age, there is a massive exodus out of the workplace. One critical shortage that could not have come at a worse time is the decreasing number of doctors. The American Association of Medical Colleges estimates the U.S. faces a shortage of 91,500 physicians by 2020. Over that same period of time, more people will be requesting medical services which will undoubtedly create further inefficiencies in our health care system.

Two major culprits of this problem are Medicare and Medicaid. While Medicare is a federal government-sponsored healthcare program primarily for seniors, Medicaid is for low-income families and is managed by both the state and federal governments. Medicare and Medicaid differ in terms of who they cover, and how they are funded and governed.

Real Doctors are feeling the pain

Dr. Martha Boone, a Urologist in Atlanta, is concerned about both of these inefficient entities. She has endured major financial sacrifices to avoid layoffs. She spends resources on two employees whose primary responsibility is to bill Medicare and other Insurance carriers to get paid for work she has already done. Also, she had to stop taking Medicaid because after 18 months she had to give up pursuing them for payments that they never paid.

The consequence of this growing trend is that many people on Medicaid now have to go to the emergency room and Dr. Boone is having trouble maintaining her practice. She states, “If a person who has $350,000 worth of education and 17 diplomas can’t afford a 1500 square office, what does that tell young people in our country about education?”

More patients, less  profit

One major concern that doctors in general have is a decrease in their revenue. One would think that January 14 couldn’t come soon enough for those doctors who struggle financially. Logic would suggest that more people to serve in the healthcare system would equate to a higher income. This logic is flawed because there is a projected reduction of $718 billion to Medicare, which is based on reduced reimbursement with the idea of reducing fraudulent behavior like billing for services never rendered or billing for a higher-priced treatment than the healthcare provider actually conducted. Honest doctors, and ultimately patients will have to adjust to substandard healthcare.

More people + less time = danger

As the number of patients increase, while at the same time, the number of doctors decrease, patients and doctors will have considerably less time to interact with each other. One unintended outcome of providing universal access to healthcare and require health insurance will be a connected negative string of events: less time with the doctor, less time to really understand the ailment(s), more incorrect tests, more overlooked tests, inaccurate diagnoses, and ultimately more malpractice suits.

One may begin to wonder why anyone would want to become a doctor or why someone who had been practicing for enough years to live a decent retirement would even have a desire for the medical profession. High prestige is saving the medical profession from becoming as potentially scarce commodity. In order to maintain the dignity of the profession, it is imperative that the private sector, states, and the federal government work together to maintain the dignity of the people who sacrificed time and money to pursue a dream that was supposed to be realized.

Nobody wants to believe that they will ever need long-term care, but there are some statistics that you need to know so you can make an informed decision. Yes, of course, you are not a statistic, but these numbers are staggering and may shed some light on the issue at hand. These statistics are objective and meant to give you information rather than to persuade you.

Factors against purchasing long-term care insurance

The consumer price index (CPI) is a modest measurement of inflation. In 2012, the CPI was at 3.1% and the cost for long-term care insurance premiums increased between 6% and 17% in the same year according to the American Association for Long-Term Care Insurance. Translation: Long-Term Care is eating away your money at a faster rate than inflation. This is important to know as you decide if you can afford to pay for long-term care insurance premiums.

According to Morningstar, A person aged 55 or younger paid an annual premium of $1,831 ($152.58/mo.) for long-term care insurance policy (provides a daily benefit of $150, four to five years of coverage in home and institutional settings with a 90-day waiting period). However, those people between 70 and 74 paid $3,421 ($285.08/mo.) for the same long-term care coverage.

Individuals who have modest means may have challenges paying simple living expenses, and therefore, the thought of paying for long-term care is not a feasible option especially if they passed the ideal age to purchase long-term care at a more reasonable rate.

Factors for purchasing long-term care insurance

As you can see from the statistics above, there are financial risks involved with purchasing long-term care. However, peace-of-mind is a benefit in which some individuals place a high premium. The cost for out-of-pocket for nursing home care vastly vary depending on where you live in the US. For instance, individuals who live in Des Moines paid $60,773 in 2012 for nursing home care, while people in Manhattan paid $162,425.

Perhaps you are thinking that you have a low chance of needing long-term care. 40 percent of all people 65 or older will enter a nursing home during their lifetime. In 2012 there were 9 million people over the age of 65 who needed long-term care. That number is expected to rise sharply as the number of people turning 65 is happening faster than any other time in history.

Making a sound decision about whether to opt for long-term care insurance involves weighing the probabilities. Is it worth it to pay the premiums for many years while premiums continue to rise in exchange for the peace of mind that your nest egg won’t be wiped out to pay for your care at the end of your life? On the other hand, what if you never need long-term care, or only need it for a limited time?

Unfortunately, you will never know until after-the-fact. Whether or not you decide not to purchase long-term care, make an informed decision. The decision to buy long-term care insurance is a very important decision that you should not leave to chance. The future of your family’s financial well-being is potentially at stake.

If you reside in the Greater Los Angeles and Southern CA area, please don’t hesitate to contact me with your long term care insurance questions. I can help you to best determine if long term care is a good fit for you. My contact details are below…

Updated July 8, 2013

Rumors are swirling around the country about how business owners are going to respond when the Health Care Reform act officially starts. One reaction is to cut workers’ hours to fall under the full time status. Under Obamacare, 29 hours/wk is the amount of time someone can work without being considered full-time.  As a result, some reports suggest that many large business owners will drastically reduce their hours to avoid the penalty.

A large business is defined as 50 or more employees. Employers that pass the 50-employee threshold and don’t offer insurance face a $2,000 penalty for each uncovered worker beyond 30 employees. In other words, an employer who has 100 employees will incur $70,000 a year tax. Surveys show that some CEOs will elect to pay the penalty because of the enormous financial burdens health care puts on their profits.

David Overton, CEO of Cheesecake factory already pays health care for each of his employees who work over 25 hours. In a CBS Interview, he expressed concern about what the numbers will actually look like when January of 2014 enacts the first real financial impact of the health care reform act. He states, “…we pay millions and millions of dollars for health care… we don’t know how much more we’ll pay. For those businesses that don’t pay for their employees, they’ll be in for a very expensive situation.” These costs may inevitably have to be passed to the consumer to help offset the rising cost of healthcare.

Welch Allyn, A multi-national medical device manufacturing company is planning to lay off 275 employees over the next three-years. The layoffs are a response to a health care reform related 2.3% medical tax. CEO, Steve Meyer states, “We firmly believe this restructuring program is the right thing to do for the long-term success of the business, however, we also fully recognize the hardship it will cause some of our colleagues in the short term.” To help offset the layoff, Meyer plans to reimburse up to $4,000 for each person impacted by the layoff who decides to go back to school within a year of their departure.

While these CEOs are concerned about the financial impact of their company, the employees of these businesses may have to make more drastic decisions. Since Walmart decided to raise their healthcare premiums up to 36 percent, many of its employees had to consider whether or not to maintain their health insurance coverage at all.

Obamacare requires businesses with 50 or more employees to provide health insurance. Previously, this requirement was set to take effect January 1, 2014, but because of a rash of protests this ruling has been extended to January 1, 2015. If you have more than 50, but fewer than 100 employees, you can explore the exchanges, which may be a more cost effective alternative. If you choose not offer insurance in 2015, you will be fined $2,000 per employee for all but the first 30 employees. If you have fewer than 50 employees, you will not be held responsible to provide health insurance.

The ripple effects of health care reform will be enormous. Customers who purchase consumer goods and services will bear the burden of increased costs passed to them. Employees who work for these large companies will collectively experience massive lay-offs. Employers will have to make difficult decisions that will impact the lives of those people they employ, and ultimately their businesses. For people involved in large corporations, there is a tsunami headed their way. Only time will tell the full impact of these changes in the health care reform act.

Own a business in the Greater Los Angeles or Southern California Area, and need health insurance advice in preparation of the Health Care Reform Act? Happy to help! See my contact details below…

Have you ever wondered about the history of Life Insurance?  Where did it all began, and why are so many high-rise buildings owned by life insurance companies? Based on my personal and professional experience, I have a sneaky suspicion that this topic is not going viral (because history is boring to lots of people and life insurance is a taboo topic for even more people).  There are, however, people who ask me to give a simple explanation about how life insurance started.

Life Insurance in Ancient Rome

Thousands of years ago Romans created burial clubs because they believed that people needed to have a proper burial so their spirit could properly travel into the after-life. Communities agreed to place a fraction of their earnings in a common fund that could be used to properly bury their members. This process lacked sophistication, this was the beginnings of life insurance.

Life Insurance in England

It is widely believed that the modern form of insurance we understand today began with a group of merchants in the shipping industry. Lloyd’s coffee house was the famous gathering place of shipping merchants and investors who formed associations to purchase shares to spread risk among the members. On long voyages the ships were subject to fires, piracy,  and shipwrecks. In return for their investment, they would receive their money back in interest along with goods acquired from other places around the globe.

Life Insurance in America

More recently in America, the colonists who migrated from Europe were dying in large numbers because of disease and famine. When the head of the household died, it put a large financial strain on the family. Often, a small number of the locals would contribute funds to help the family survive, but this practice often placed a financial hardship on their families.

Since people knew death was such a common occurrence that would eventually impact everyone, the colonists agreed to place money into a common fund so if someone in that community died during the year, a small amount of money contributed from a larger number of people could pay to support the effected family without draining any one family’s finances.

Over time, these communities grew larger and some of the colonists became more sophisticated in their understanding of life expectancy. Equipped with more knowledge, these specialists began to learn more about pooling risk and resources to create large cash reserves to pay insurance claims. Investors began to see the financial potential and created companies to sell life insurance at a profit.

Modern Life Insurance – Cheaper now, but purchased less

Following World War I people increasingly purchased life insurance, and by 1920, there were more than 120 million life insurance policies owned in the U.S. Based on census data, that equaled approximately one policy for every adult person in the U.S.

Nowadays, life insurance is a very precise industry that studies the life expectancy of huge groups of people, and can predict with incredible accuracy how many years the average person will live, and how many people per thousand will pass away in each ten-year band. This accuracy, along with increased life expectancy has benefited the clients by lowering insurance premiums since the 1980s.

Despite the good news,  sales have fallen steadily, and now LIMRA estimates (2010 report) that only 44% of U.S. households have individual life insurance coverage, which is a 50 year low, but life insurance has remained an important piece of a family’s financial planning.

Whether you work for a large or small business, have health care benefits or not, you will be affected directly or indirectly. The question is how will The Affordable Health Care Act impact you? Starting in January of 2014 the entire world of health care is going to change. With these changes, you must be aware of them if you want to take proactive measures.

Small Business Employees

Many people who work for a small sized company were less likely to have benefits because of the high cost of health care for the employer. Health Care reform may actually become more affordable for small business owners who have less than 25 full-time employees because of government subsidies. The tax credit created by the 2010 Affordable Care Act will allow these businesses to get a 50 percent reduction in the cost of providing health coverage. The only condition is that these companies must participate in the health care exchanges set up by the states. Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance.  Each exchange will have a plan that offers a bronze, silver, gold, or platinum package according to their price and the type of coverage they offer.

The good news is that a 50 percent discount will provide more opportunities for employees who could not previously afford coverage to finally gain access to healthcare. The bad news is that a 50 percent reduction of a number that has doubled is no benefit at all. In other words, we will have to see if the tax credit will be enough to give small business employees enough of a cost break to maintain their current standard of living.  As of the time of this writing, some experts suggest that the cost of healthcare purchased through the state exchanges will be sold at prices below-market value. Since healthcare reform will require everyone to have coverage, employees will be less likely to remain with an employer simply because they offer healthcare and another employer doesn’t.

Large Business Employees

Employees who work for large business are certainly more likely to have healthcare now, but that could drastically change in 2014. Businesses that have over 50 employees will be forced to pay $2,000 per employee each year if they do not provide healthcare. While that seems like a hefty fine to pay, companies could literally save hundreds of thousands to millions of dollars by not providing health care.

According to Kaiser Family Foundation, the average cost of individual health insurance was $5,615 per year. Using this very simplified averaging method, an employer with 100 workers would pay approximately $561,500 in healthcare premiums. If these same firms take the penalty, they would pay $200,000. That is a $361,500 cost savings, which could theoretically be the difference between people keeping and losing their jobs.

It is nearly impossible to predict how these changes will impact small and large employees because there are too many variables to consider. Healthcare providers have to contend with increased operating costs, which drive up prices. These price increases mean that this cost will affect the people employed will pass along to both small and large employers, and therefore, those employed by these companies may take the brunt of this economic blow.

Short Term Medical Health Insurance may be a viable way to get coverage at an affordable price until you figure out how health care reform is going to affect your health insurance and health care.

Looking at Your Options…There are health insurance options which you can explore today in anticipation of health care reform. If you reside in the southern California area, feel free to contact me to explore your options, or sign up for our Newsletter which will notify you of our upcoming Insurance and Financial Planning Seminars in the Greater Los Angeles and Southern CA areas. My contact information is below…

5 Reasons why people want short-term medical (STM)

1. They are between jobs or unemployed.

Workers who are between jobs want more options than COBRA, which relatively speaking, tends to be a costly option. Short-term medical insurance is designed to provide coverage between one month and one year. For example, Sara finds out that her new job will offer her medical benefits in 36 days, she can get exactly 36 days of coverage. The length of coverage (which varies by state) typically lasts from 30 days to 1 year.

2. A young adult finished with school, or a student no longer covered under a parent’s insurance plan

Young adults can be covered under their parents plan until age 26. Increasingly, parents are no longer able to cover their children for health care. Because many young adults are healthy, health insurance might seem expensive and pointless. It’s not. An ankle-twist from a pick-up ball game, a broken arm from a skateboard wipe-out, a common cold that morphs into pneumonia—that could turn into thousands of dollars in medical expenses. When these things happen, mom and dad are no longer getting the bill. You are.

3. An early retiree

People retire early or get laid off before they are eligible for Medicare at age 62, need the most cost effective form of health care. According to the AAPRP Public Policy Institute (PPI) :

• One in three adults lives in families that spend at least 10 percent of their after-tax income on health care.
• For older adults who do purchase insurance plans on the individual market, the average out-of-pocket costs for premiums and health care are typically two-and-half times higher than the costs paid by people their age who have employer-sponsored coverage.
• Starting in 2014, there will be controls on how much more health insurance carriers can charge based on age.

Short-term medical may be a very affordable choice for the healthy among this group. There are 5 qualifying questions one must be able answer, “no” in order to qualify.

4. Waiting for other coverage to begin

Someone with a new job may not automatically have coverage from the first day of work.  The health insurance waiting period often temporarily leaves people without insurance. Going without medical insurance even for short periods of time has the possibility of creating large piles of medical related bills such as completely paying for doctor visits, hospital stays, and physical therapy.

5. More affordable

While everybody would like to afford an exotic luxury vehicle, but most cannot afford all of the bells and whistles – not to mention maintenance costs that come with it.  Similarly, those who are best suited for short term medical insurance are those who don’t plan to visit the doctor frequently, but just pay for peace-of-mind. Short term health insurance plans are intended to protect against unforeseen accidents or illnesses, rather than to provide comprehensive coverage, and, as such, typically do not include coverage for preventive care, physicals, and immunizations. Depending on the carrier, dental and vision care can be added as supplements.

For more information on Short Term Medical Health Insurance, go to:  http://www.your-insurance-experts.com/category/health-insurance/short-term-medical-insurance/

Whether you are insured or uninsured, the Affordable Healthcare Act will change the way in which you access healthcare. For some, your circumstance will improve as you gain access to a system that prevented your participation due to pre-existing conditions. For others, you may end up being laid off from an employer or worse yet, if you own a business, you may find it difficult to keep your doors open altogether. The point here is not to paint a picture of doom and gloom, but to reveal that everyone will have a price to pay for healthcare reform.

The Insured

Plan for your employer to gradually shift some of the health care costs to you in order to maintain profitability. For example, you will most likely notice an increase in the amount you pay for doctor visits. The sheer volume of usage in the medical community is going to drive up costs, which means that insurance companies will pass on that cost to employers, and ultimately to you.

On the surface, these group health insurance plans may look better because they come with low premiums, but have higher deductibles and co-payments for doctor’s visits. Currently, workers are are typically asked to pay the first $3,000 to $5,000 of each year’s medical expenses themselves.  Undoubtedly, these figures will increase. Another cost cutting strategy, which in this instance is a win-win approach, is to offer incentives for the employees who take preventative measures such as offering weight loss and healthy living classes to cut healthcare costs.

The biggest concern regarding health care reform is that your employer may have to get rid of their benefits package altogether. With healthcare costs going up, you may be caught bearing the entire financial burden of medical care for your family. If you work for an employer who has less than 50 employees, they are not obligated to provide healthcare for you. While this is true, it’s probably not worth overreacting because your boss probably offers you benefits because they want to compete with other companies to prevent them from stealing your talents.

The Uninsured

You are primarily the focal point of health care reform. Whether you have a preexisting condition or live significantly below the poverty line, you officially receive access to medical care starting in January 2014. For those of you who are sick, but live above the poverty line you will have to pay for care, but theoretically your costs will not be more expensive than everybody else’s.

Within this larger group of uninsured individuals, there is a subgroup of folks who have no desire to have any coverage at all. According to the federal Health and Human Services Department, one of those groups is the “Healthy & Young,” comprising nearly half (48 percent) of the uninsured. The other group is classified as the “Passive & Unengaged” (15 percent). The federal government has incentives for you to enroll in programs because you help keep costs down. You help insurance companies lower costs for everyone else when you make a monthly payment for insurance that you do not use. Insurance companies use those funds to pay for services other sick people will have to use much more regularly.

As a country, we tend not to worry or take preventative measures regarding the unknown because we do not forecast how we will be affected. Groups who have a higher price to pay, both literally and figuratively, will begin to feel the difference in 2014. Over the next few years, the national conversation about healthcare reform will get louder as we see its implementation and feel our pocketbooks get a little thinner. Short term health insurance will often be the solution uninsureds turn to…

Coming Soon!

Please check back for details on our upcoming Seminars, or subscribe to our Newsletter to be notified of future seminars.

Seminars are announced on the following link:

http://www.your-insurance-experts.com/category/financial-planning-seminars/

Seminar Topic Areas Include:

• Financial Planning
• Retirement Planning
• Health Insurance
• Life Insurance
• Debt Management
• Obama Care and the Heath Care Reform Act

**Seminars are customized for individuals and business owners.

For details, please contact: Len Cooper at (909) 261-2686 or info@your-insurance-experts.com

Seminars are given throughout the Southern CA area, including: Los Angeles, San Diego, Riverside, San Bernardino, Fontana, Moreno Valley, Rancho Cucamonga, Ontario, Corona, Victorville, Murrieta, Temecula, California.

Chances are, you have heard of the Health Care Reform Act known as Obama Care, but the real question is, “How does it impact me?” Does it impact your health insurance? Well, we will all be quite impacted by Obama Care either directly or indirectly. There are 2700 pages of legislation to prove it. Individuals who are not covered by health insurance (either permanent or short term health insurance) by January 1 will be taxed at the end of the year starting in 2014.

According to FactCheck.org:

• The minimum tax/penalty you could pay is $95.
• The tax you owe will be phased in from 2014 to 2016. By 2016, the minimum penalty is $695 per person.
• If you make less than $9,500, you owe nothing. If you make more than $37,000, you owe 2.5% above the level to file a tax return (right now – $9,500 and $19,000 per couple).
• If you make more than $9,500, but less than $37,000, you will owe $695 by 2016
• You will never be penalized more than the lowest cost health insurance plan offered by each state health insurance plan purchased through state exchanges.
• The Congressional Budget Office (CBO) estimates that these policies will cost about $4,500-$5,000/yr. for each person, but that was in 2010.

However, people who decide how much health insurance will actually cost believe the rate hikes will be severe. Mark Bertolini, CEO of Aetna, predicted that a 20 percent increase is a modest estimate. For some people, health insurance premiums would double. “We’re going to see some markets go up as much as 100 percent,” Bertolini told Bloomberg News.

Think about individual health insurance as a public swimming pool. Before 2014, individuals with pre-existing conditions were prevented from entering that pool because they needed extra life guards to keep them from drowning. After 2014, those same individuals will have full access to that pool, which means that the other swimmers will have to help pay for the extra life-guards. Medical claim costs are the biggest driver of health insurance premiums, which means that the healthier people in the pool will have to help pay for the people who are sick.

According to the Agency for Healthcare Research and Quality:

• Five percent of the population accounts for almost half (49 percent) of total health care expenses.
• The 15 most expensive health conditions account for 44 percent of total health care expenses.
• Patients with multiple chronic conditions cost up to seven times as much as patients with only one chronic condition.

Americans have a tendency to wait until a situation impacts them directly to respond. Hopefully, you take time to educate yourself further on this issue, and avoid unnecessary financial penalties due to a lack of planning about your health insurance. If you are currently uninsured, consider a short term medical health insurance policy. It is flexible, inexpensive, and a great solution in the near term until you can figure out your permanent, longer term health insurance needs.