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Wednesday, March 21, 2018

Medical Expense Tax Deduction UPDATE!

The Tax Cuts and Jobs Act, signed into law in late December, 2017, contained some great news for folks that incur significant medical expenses AND itemize deductions on their tax return.  Historically, the threshold used to determine the amount of eligible/deductible expenses has been 7.5% of adjusted gross income (AGI), until an increase to 10%LEARN MORE

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Friday, December 1, 2017

Preventive Healthcare Services and Coverage

An important and often overlooked benefit of the Affordable Care Act (ACA) is full coverage and benefits for preventive care.  Specifically, the ACA established that virtually all private health plans must provide 100% coverage (i.e., no cost share) for a host of preventive healthcare services.  The only exception to this requirement are so called “grandfathered”LEARN MORE

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Monday, June 26, 2017

My 7-Point Health Care/Insurance Reform Plan

Ordinarily, this Blog site is used to provide information, ideas, strategies, explanations; in short – clarity – for health care/insurance stakeholders.  Today I’m departing from the usual fact based format to provide my thoughts and opinions on what would be a good way forward with respect to REAL healthcare/health insurance reform. These ideas are basedLEARN MORE

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Long Term Care’s Silver Tsunami

Recently I read an article in a trade publication that addressed the so called “silver tsunami”, related to long term care.  While the word “tsunami” certainly got my attention, some of the statistics mentioned in the piece had me downright concerned. As an employee benefits consultant/broker, health insurance is almost always at the top of the list in terms of importance and cost, followed by dental, life insurance, disability income, vision, and tax preferred spending accounts (e.g., health savings accounts, flexible spending accounts, health reimbursement arrangements).  However, with 10,000 Americans turning 65, each and every day, and the propensity to need some form of assisted care in the future as we age, LONG TERM CARE INSURANCE (LTCI) deserves a “seat at the table”.  Here are some important considerations relative to long term care, which includes facility care at various levels, and potentially care received in the comfort of one’s own home…

***UPDATE***
See updated figures for 2021, along with 25 year projected data – scan_sstevens_2022-05-18-11-40-41

Based on insurance company – Northwestern Mutual Life Insurance Company’s 2014 Long Term Care Study:
  • Currently 1 in 3 Americans provides or is expected to provide care for a loved one.
  • The largest share of caregivers is in their peak earning years of age (45-64).
  • 47% of working caregivers reduce or deplete personal savings to cover expenses related to care giving.
  • 80% of primary and 50% of secondary caregivers reduced retirement plan contributions to cover long term care related expenses.
  • 75% of Americans agree that as people live longer, the need for long term care is greater.
  • By the year 2020, it is estimated that 25% of the workforce will be 55 years of age or older.
And finally…
  • Someone turning 65 years of age today has a nearly 70% chance of needing some form of long term care services/support in their remaining lifetime.
There are a number of quality insurance companies offering long term care insurance protection in the form of both individual and group policies. And, there are a several factors to take into consideration when evaluating long term care insurance.  Some of these factors include:
  1. The maximum benefit period (usually expressed in a number of years, or in some cases, for life).
  2. The per day or per month benefit amount.
  3. The total amount of benefits available or the lifetime maximum benefit (generally determined by multiplying the per day benefit amount (no. 2.above) by 365, then multiplying this figure by the number of years associated with the maximum benefit period (no. 1. above).
  4. The length of time before benefits are payable (referred to as the benefit waiting period).
  5. Whether or not the policy provides coverage for care provided in and out of a nursing home, assisted living facility, and/or the person’s home.
  6. Whether or not the policy only provides benefits for licensed care givers.  Some policies provide benefits to care givers that are not necessarily licensed providers, but rather, friends, neighbors, and relatives.
  7. Inflation protection.
  8. Partial or full return of premium in the event benefits are never triggered.
  9. Whether or not the policy can continue with limited benefits if the policy owner decides to stop paying premiums (generally referred to as a non-forfeiture option).
  10. Whether the policy pays benefits based on an expense incurred, indemnity, or disability model.
  11. Whether the policy is considered qualified or non-qualified.  (Note: in order to be eligible for tax deductability of premiums, the policy must be qualified.).
And unlike other forms of insurance that have clearly defined benefit “triggers” (e.g., death, accident, fire, theft), LTCI benefits are usually triggered by a physician’s certification of either or both of the following:
  1. Inability to perform a specific number of “activities of daily living”, or ADL’s, which may include bathing, continence, dressing, eating, toileting, and transferring; or
  2. Cognitive impairment (e.g., dementia, Alzheimer’s disease).
Finally, the federal government encourages the purchase of LTCI by allowing tax deductability of a portion, and in certain instances, all of the premiums paid for coverage.  For example, in 2015, an individual between the ages of 60 – 70 can deduct up to $3,800 if such premiums and other allowable medical expenses exceed 10% of adjusted gross income (AGI).  Tax deductability of LTCI premiums paid for group/employer provided coverage depend on the structure of the organization (i.e., partnership, S corporation, C corporation).  And, like many other insurance benefits provided by employers, LTCI benefits received are tax free to covered employees and dependents!
 
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Tuesday, June 2, 2015

Disproportionate Hospital Share (DSH) Payment Change

The Affordable Care Act (ACA) changed the method used to compensate hospitals for disproportionate share, sometimes referred to as DSH. This new method applies to charges “effective on or after fiscal year (FY) 2014. Under the new method, eligible hospitals receive 25% of the former “DSH” amount, and additional funds as follows:

Wednesday, October 15, 2014

Ebola ~ Just the Facts

Readers of this blog (soon to be “resource library”) typically find health INSURANCE, FUNDING, and FINANCING issues addressed here. But occasionally, health CARE issues come to light which I feel compelled to address. With all the media coverage and confusion surrounding the recent outbreak of the Ebola virus, I decided to attempt to clarify some important facts. My primary source of information for this post is the Douglas County Health Department (Douglas County, Nebraska), which under the direction of Dr. Adi Pour, does a fantastic job of data mining and educating, among other things.
The Ebola virus was first discovered in 1976 in the Ebola River…

Wednesday, June 11, 2014

Prescription Drugs – Health Care’s Low Hanging Fruit

There is an often overused metaphor equating things easily obtained with “low hanging fruit”. And in the world of health care and consumer driven health care (CDH), there is perhaps NO lower hanging fruit to be had than prescription drugs. I would further submit that few if any other product category in our entire economy has the sheer number of FREE… DISCOUNTED… REDUCED… SAMPLE offers connected to it, by a variety of constituencies including – manufacturers, distributors, insurers and employers – than do prescription drugs. But do the very people these offers of “low hanging fruit” are directed toward understand the “what”, “why”, or even “where” associated with them?

Friday, February 21, 2014

Gallup Healthways Well-Being Grades for 2013

There is an old expression – “Figures don’t lie, liars do figure”. We all rely on data for various purposes, and the health care industry is no exception in its use of data to explain, defend, describe, or refute various measures. In fact, there is a relatively quiet movement underway to establish health care standards to better enable providers to utilize a standardized, “best practices” method of delivering care. If you want to understand this movement better, google – “patient centered outcomes research institute” or PCORI, and check it out. (By the way, the Affordable Care Act (ACA) requires health insurers and self funded plans to fund the PCORI at a rate of $2 per insured member per year in 2014.)

Wednesday, January 29, 2014

In Healthcare, Time is of the Essence!

We’ve all heard the expression – “time is of the essence”. But a recent blog post I came across compelled me to share the incredible application of this expression to the health care industry. Not only does effective triage and initial diagnosis portend better outcomes, it also has a significant impact on efficiency and costs. And let’s face it, at a time when health care consumes nearly a fifth of our nation’s gross domestic product (GDP), finding ways to cut health care costs is critical.
So it got my attention when Dr. Sorensen reported in his blog that – “It is in the first 15 minutes of a medical encounter that up to half of all medical costs are set in motion.

Wednesday, January 15, 2014

What’s Causing Health Care Spending to Slow?

Those of us in the health care industry (both delivery and financing) are pleasantly surprised, albeit cautiously optimistic, to learn that health care spending has slowed rather dramatically in recent years. In fact, for the first time ever, the percentage of our Gross Domestic Product (GDP) attributable to health care has decreased from 17.3% in 2011 to 17.2% in 2012 ($2.8 trillion). Fellow health care stakeholders may find it interesting that in 1960; health care consumed a mere 5% of our nation’s GDP. Put another way, in 2012 health care spending grew by 3.7%, which is virtually identical to the spending percentage growth in 2009, 2010, and 2011. By contrast, in 2002, health care spending grew by a whopping 9.7%.

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