Posts Tagged ‘Costs’
Spiraling Health Care Costs
Spiraling Health Care Costs
Americans are deeply unhappy with the country’s health care programs and costs. And rightly so. As one author observed, “A recent survey showed that only 17 percent of respondents in the United States were content with their health-care system . . . Why the discontent? The superficial reasons are simple enough to describe: the system is hugely expensive, very bureaucratic, and extremely patchy. The expenses first: U.S. health care costs a third more, per person, than that of the closest rival, superrich Switzerland, and twice what many European countries spend. The United States government alone spends more per person than the combination of public and private expenditure in Britain, despite the fact that the British government provides free health care for all residents.”
The United States pays more for health care per capita than any other industrialized nation — and even then, Medicare is not a comprehensive, pay-for-everything national health program like those of many nations and United States per capita health care costs continue to escalate rapidly.
Here’s what you need to know about health care costs as you plan for retirement.
Americans age sixty-five and over spend four times more on health care on average than do Americans under the age of sixty-five. At the outset of this decade, the average per capita health-care outlay for a person under the age of sixty-file was about ,800. For people over the age of sixty-five, it was ,089. And for Americans ages eighty-five and older it was ,001. Clearly, health care outlays are likely to get substantially larger as you age. You need to plan for them.
U.S. health care expenses have grown mightily. U.S. health care expenses have dramatically escalated each year as new medications, new treatments, diagnostic tools, and health care innovations have come onto the market.
For example, the median nationwide cost for a hospital stay — excluding physicians charges — was ,280 in 1997; by 2004 it was almost double at ,455. The average total cost for treating a heart attack climbed 40 percent in just seven years. All in, health care costs have escalated fast and the increases are gaining momentum.
Health care costs are likely to continue to grow unabated. Unlike in other countries, no laws meaningfully curb the continual climb of health care and drug costs in the United States. For example, many Americans continue to import drugs from Canada because Canadian prices are significantly lower. This is true even though the new Medicare Features introduced in 2006 offset the cost of pharmaceuticals for U.S. retirees. To curb the cost of medicines, Canada prohibits drug companies from advertising on its television channels. In the United States, on the other hand, the very legislation that created the new Medicare drug benefit (Part D) expressly prohibits the federal government from attempting to negotiate lower prices with drug companies.
Count on it: medical costs are sky-high and likely to keep climbing unless there is a radical overhaul of the system.
More and more corporations are cutting back on health care benefits as medical costs soar. Recent statistics show companies cutting health care benefits and requiring employees and retirees to pay more for them. As one survey of corporate benefit trends concluded, “[Benefit] reductions have become not just common, but expected, with the only question now being of how much more of a reduction in benefits and or an increase in cost will be directly placed on individuals . . . In the end . . . individuals, either as taxpayers or consumers, will need to pay the bill.
I believe this trend will gain greater momentum over the next decades. It will be part and parcel of the continuing erosion of employment benefits — like the demise of traditional pensions — that is taking place throughout the country. Just like pensions, more and more health-care expense is going to become a do-it-yourself responsibility because heath care insurance costs are simply becoming too great for companies to shoulder competitively.
Taken all together, you can count on: (1) higher and higher health care costs, (2) more health-care-benefit cutbacks by U.S. employers, (3) the need to factor large health-care expenses into your funding plans, and (4) the need to buy supplemental health-care insurance to shield your savings from cost attack.
Of course, these views will not come as a surprise to most folks. Recent polls show that — immediately after the foremost financial concern of having enough money for retirement — the next great concern of most Americans is health care. More than half of adult Americans are “very worried” or “moderately worried” about being able to pay for serious illness or catastrophic health-care expense.
Copyright © 2008 by Jim Schlagheck
The above is an excerpt from the book Cash-Rich Retirement
by Jim Schlagheck
Published by St. Martin’s Press; March 2008;.95US/.00CAN; 978-0-312-37740-3
Copyright © 2008 by Jim Schlagheck
Author
Jim Schlagheck is an author, banker, longtime advisor to the ultrawealthy, and the coproducer of the public television series Retirement Revolution. He has written numerous articles on investing, retirement, and finance, and is also an acclaimed speaker who describes better ways for retirement readiness to audiences of wealth-management professionals and lay investors nationwide.
Jim Schlagheck is an author, banker, longtime advisor to the ultrawealthy, and the coproducer of the public television series Retirement Revolution.
New teacher health plan helps keep contract’s costs down
New teacher health plan helps keep contract’s costs down
Balancing limited pay increases with a health plan retooled to hold down insurance costs, teachers and the school board have agreed to a new three-year contract.
Salary increases in the agreement will cost taxpayers 1% more next year, then 2.5% and 3% in the second and third years.
“The teachers understood where we were economically, and understood raises had to be moderate,” Negotiating Committee Chairman Richard Steinhart told fellow school board members.
“They’re still getting increases, where many people in town aren’t,” negotiating committee member John Palermo said of teachers. “And it’s the same benefits package — but at a much cheaper cost.”
The contract was unanimously approved by the Board of Education on Oct. 13, and had been previously ratified by the teachers’ union — reportedly with just one dissenting vote among more than 200 cast by members of the National Education Association-Ridgefield (NEA-R).
The health plan changes are designed to “migrate” most teachers into a “high-deductible health savings account plan” similar to the one school administrators agreed to last year. The teachers current “point of service” plan would be retained but higher deductible and co-pays. There are incentives designed to get teachers to switch to the less costly plan.
Geri Carley, president of roughly 420-member union local, said: “In this current economic climate, the teachers were pleased to reach a three-year agreement with the Board of Education, one that allows for modest salary increases, while realizing that we have a responsibility to the community of Ridgefield, to either participate in the lower cost HSA insurance model or shoulder a higher premium share with the current health insurance plan. In the end, what’s most important is the fact that the high quality of programs and instruction in the Ridgefield school system will be maintained.”
The three-year agreement runs from July 1, 2010, to June 30 2013.
“Thank you, thank you, thank you,” Board of Finance Chairman Marty Heiser said to the school board after its vote Tuesday night.
He praised the agreement as one that would help the town hold down recent escalation of salary and benefits costs.
“I really appreciate what you did, and what the teachers did,” Mr. Heiser told the board.
The change to a health savings account plan is a move the board tried to get teachers to switch to during last year’s frenzied budget reduction work on the heels of world financial crisis.
Mr. Steinhart said that, among teachers unions, “This is the kind of contract that’s never been done in the State of Connecticut before,.”
The contract starts with a current teacher salary account of about million a year.
A 1% general wage increase accompanied by “no step movement” for the first year, 2010-11, would add 5,000 to town costs.
No general wage increase is given in the contract’s second year, 2011-12, but teachers would get the traditional step movement up the salary scale and people on the top steps would get raises of 1.55%. The town’s second year cost increase is just under 1,000, 2.5% in the salary account.
A general wage increase of 0.59% would occur in the third year, with step movement and a 2.01% increase for top steps. Those changes would increase the salary account by 3% or ,074,000 for 2012-13.
Altogether, the contract spreads .3 million in raises over the three years.
Teachers’ current contract gave raises in the 3% range but the cost to the town runs about 5% a year when “step increases” — movement by individual teachers up the salary scale — are factored in.
A starting teacher with just a bachelor’s degree an no teaching experience makes ,710 a year today. Through the three years of the new contract that to would rise to ,167, ,897 and ,172.
At the top of the pay scale, a teacher with a PhD and 20 or more years of experience makes 2,108 this year. Under the new contract that will increase to 3,129, 4,727 and 6,832 over the three years.
After the Oct. 13 board meeting Mr. Steinhart and Mr. Palermo said that as more and more teachers switch to the high deductible health savings accounts or “HSA plan,” the contract would save the town significant amounts each year without really reducing teachers’ benefits.
“This is a dramatic savings for the town,” Mr. Steinhart said.
“It’s never been done. We encouraged the teachers to move to the HSA plan. I’ve always said we have a moral and ethical obligation to provide high quality health care to the staff, and the HSA plan provided those plans at a great reduced cost to the taxpayers of Ridgefield.”
In the health savings account plan agreed to, employees share 17% of the premium cost, which increases to 18% in the contract’s final year. The board will contribute 60% to the deductible amount (,000/,000) in the first year, and 50% in the second and third years.
“You look at the average out-of-pocket cost, it will be less for most teachers — not everybody,” Mr. Steinhart said.
Superintendent Deborah Low said, “These changes will significantly moderate health insurance cost increases that the board would otherwise experience over the life of this contract …Teacher negotiations are never easy,” she added. “However, the agreement above represents a dramatic departure from past negotiations, and reflects the team’s commitment to achieving a settlement that reflects the current economic climate. I recommend this settlement without reservation.”
“Quite frankly,” Mr. Steinhart told the board, “we hope to do this for all the other unions, as well.”
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Premium tax would hike health-insurance costs
Premium tax would hike health-insurance costs
Why? Because Congress wants to levy a .7 billion premium tax on all private health plans each year for the next decade to pay for reform.
That’s a billion tax.
Health plans will have no choice but to pass these costs on to the consumer. This tax will make it tougher for families to afford coverage, increase the difficulty for small-business owners trying hard to insure workers, and stifle job creation.
In Florida, small businesses are the bedrock of our economy. This tax will hit our economy especially hard. It’s just not what families and small businesses need as they dig their way out of a severe recession.
The Congressional Budget Office evaluated this tax and found it will lead to “higher premiums for private coverage.” The nonpartisan CBO estimated that premiums for individual coverage could rise by as much as 13 percent.
This tax also might be disruptive to policyholders, because it could damage the ability of health plans to deliver all the benefits that members expect.
That’s because Congress is ready to impose this health-insurance tax in 2010. That’s after families have already signed up for coverage for next year, and after small businesses have already negotiated coverage contracts.
The result? Health plans may not receive enough premium to cover the costs of the massive tax, and benefits might suffer.
Unfortunately, health plans have been demonized in the pursuit of reform. But in reality, it’s not true to claim that health plans make a lot of money; their profit margins are actually pretty small.
In 2008, private health plans made .61 billion in total profits nationally, according to Forbes magazine. The industry’s profit margin was just 2.2 percent, ranking health plans 35th out of 53 industries in terms of profitability.
As the president and CEO of SantaFe HealthCare — the parent company of AvMed Health Plans — I am truly concerned by this proposed tax. As one of Florida’s oldest and largest nonprofit health plans, AvMed reinvests its earnings each year to continually improve on the benefits and services it offers to members in Orlando and elsewhere.
Obviously, a health-insurance tax that wipes out most of our annual earnings is counterproductive to our mission. Surely, congressional leaders must grasp that this tax doesn’t make sense.
There are better ways to pay for the systemic health-care reform that AvMed and other health plans support.
Instead of taxing health insurance, Congress should focus on the underlying costs of medical care. We can achieve huge cost savings by ending unnecessary treatments and services, rooting out rampant fraud and ending frivolous medical lawsuits filed by trial lawyers.
Health reform shouldn’t hurt Florida’s families and small businesses. It shouldn’t hamper the ability of health plans to provide benefits.
Time’s running out.
Please contact your congressional representative and Florida’s two senators today. Ask them to vote against this harmful health-insurance tax. We can achieve true, lasting reform in better ways.
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Health Care Bill Would Bring Higher State Medicaid Costs
Health Care Bill Would Bring Higher State Medicaid Costs
The health bill passed by the House of Representatives Sunday would cost Nevada taxpayers an extra 3 million from 2014-2019, to provide health care to the needy.
According to early state estimates, the bill would make an additional 70,000 residents eligible for Medicaid. The state would be mandated to cover another 8,000 individuals who are now eligible but have not applied to be covered by the state health insurance program for the poor.
About 209,000 Nevadans are currently covered by Medicaid.
Including state and federal money, “the total cost of reform is .3 billion,” said Mike Willden, director of the state Department of Health and Human Resources.
Willden went through the numbers for the Nevada Vision Stakeholder Group, formed to develop a plan for the future, looking ahead as much as 20 years.
Meanwhile, Gov. Jim Gibbons railed against the costs of the bill in a written statement Monday: “The bill disguises its true cost by shoving Medicaid expansions down to the state level and shuffling Congressional Budget Office estimates into later years so it appears to save federal tax dollars. It is an insult to those who truly care about meaningful health care reform.”
But Jon Sasser of Washoe Legal Services said during the Vision Stakeholder meeting the bill will expand the number of people eligible for Medicaid and that should put less stress on counties, which handle medically needy cases. “It means extra millions of federal dollars coming into our state,” Sasser said.
Most of the health care bill doesn’t kick in until 2014, Willden said. Some states are starting early, but Willden said he doesn’t see Nevada doing that because of its budget shortfall.
The federal-state dollar match for Medicaid is 50-50. Federal stimulus funds pushed that to a 64 percent federal match, saving the state million to million a quarter. But after the stimulus money expires Nevada will be back to picking up the 50 percent share, Willden said.
Willden said only 8 percent of the population is covered compared to 14 percent in other states. The state spends 5 per capita compared to the national average of ,021.
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Dental Insurance – Costs Far Less Than The Consequences
Dental Insurance – Costs Far Less Than The Consequences
Brushing, flossing, and using mouthwash three times a day; stay away from sugars and other acidic foods (like fruit!); the amount of rules there are for keeping the human mouth healthy is amazing.
Between the dentists and the cost of their care, is it any wonder that most Americans are without dental insurance? Most are afraid to go to the dentist at all, even when they can afford it.
Great Benefits of Employers Schemes
The best place for a person to get dental insurance is through his or her employer. Employers are often given great rates for offering dental plans to employees and as such, should have a good system in place to make sure employees have adequate dental coverage.
There are also a number of city, county and state programs in place to make sure even the poorest citizens can get themselves (and their kids) to the dentist on a regular basis. Bigger cities often have non-profit dental clinics and some colleges, especially those with dental schools, offer free exams because the work is done by students.
Should an individual seek coverage, there are many resources available. The first place to check is the local city and state health websites. Those websites often have links to insurance carriers who offer dental insurance to the otherwise uninsured for an affordable rate.
The state may also have a state-wide dental insurance program that citizens can purchase for a very affordable rate. This is an excellent option for people earning a low wage.
Dental Insurance Comparisons Sites Slim Down The Bill
If seeking private dental insurance, the best place too look is an insurance comparison site on the internet. ‘DentalInsurance’ offers group dental insurance, individual and family dental insurance plans.
Simply enter an email address and zip code and the site will provide you with all of the insurance carriers in that zip code’s area and the different plans they offer.
People can compare and contrast them and then contact the companies directly to apply for coverage.
‘DentalPlans’ is another site that is of use if somebody wants to compare dental insurance plans. This site compares Dental insurance and discount dental plans which can also be used to save people money when it comes to the care of their teeth and gums.
The site works basically the same way as ‘DentalInsurance’:- enter a zip code and then compare the plans available in that zip code’s area. Regardless of which method a person chooses to keep his or her mouth covered when it comes to dental care, the most important thing to keep in mind is that dental coverage is important.
In the long run dental insurance can end up saving people a ton of money and, above all, having coverage makes it easier to keep the mouth healthy.
(c) 2007 Best Dental Health Guide. If you want to find the best information and product ideas to keep your teeth healthy and bright. You can, right here, on Martin Haworth’s fascinating website at http://www.BestDentalHealthGuide.com