Fri Aug 22, 2003
LTC Insurance Helps When You Need It Most
Most wealthy individuals have put a lot of time and effort into building their estate, and often spend a great deal of money protecting their property with insurance policies. Many of these people, however, fail to protect one of their most valuable assets: the ability to work and earn a living.
A recent insurance industry survey indicates the odds of an individual experiencing a disability or illness requiring extended custodial or medical support are 120 times greater than losing a house due to fire or some other catastrophe. At the same time, while advances in medicine and technology are extending people’s lives, the cost of long-term medical care is rising at an alarming rate. Put all this information together and it seems clear enough that long-term care (LTC) insurance seems like a very good idea.
What is it: LTC is the kind of care a person, young or old, needs when assistance is required to perform normal life activities such as bathing, dressing, eating or just moving around. The need for such care can result from a variety of circumstances, ranging from old age to sickness, accidental injury or any disability that prevents an individual from performing these tasks. Sometimes this care is provided in a nursing home, but it may surprise you to know that approximately 85% of LTC is provided at home or in assisted-living facilities. In any event, the national average cost for LTC services was $56,000 in 2002.
Medicare may provide short-term coverage for stays in skilled nursing homes, but it is not intended to cover custodial or assisted-living care, nor does it cover extended home health care. As a result, the United States Government Medicare guidebook suggests that Americans should not count on Medicare as their primary source of LTC funding.
Fortunately, the tax law provides benefits to encourage individuals to purchase LTC insurance.
Tax deductions: If you purchase a “qualified” LTC policy, you may treat the premiums as medical expenses, assuming you itemize your deductions. You can claim a deduction to the extent your total medical expenses (including LTC premiums) exceed 7.5% of your adjusted gross income. There is a dollar limit, however, on the amount of the premium that can be treated as a medical expense.
Self-employed taxpayers, meanwhile, can deduct 100% of their health insurance premiums, whether or not they itemize their deductions. And for this purpose, health insurance includes qualified LTC insurance. However, the deduction for LTC insurance premiums is subject to the dollar limits mentioned above.
Caveat: In order for an LTC policy to be “qualified,” certain requirements must be met. For example, policy must be guaranteed renewable and the policy generally cannot provide for a cash surrender value or other funds that can be paid, assigned, borrowed or pledged as a loan. And the policy issuer must inform you that the policy is intended to be a qualified policy.
Final point: There is legislation pending in Congress that would create additional benefits for purchasers of LTC insurance. Refer back for any late breaking tax developments affecting LTC policies
Universal Care New Rates for 10/1
Universal Care has announced new rates effective on October 1st, 2003. Medicoverage has already updated the site to include this new information.
Harvard Study: U.S. Administrative Costs Double Canada's Rate
According to a new study published in the New England Journal of Medicine, thirty-one cents of every dollar spent on health care in the United States goes to pay administrative costs. This cost is nearly double the rate in Canada.
The report from Harvard University and the Canadian Institute for Health Information found that on average Americans spend $1059 per person per year on medical administrative costs alone. The per capita administrative cost contribution by Canadians was determinate to $307. The estimates do not include the advertising costs of drug companies or hospitals, health care industry profits, or the value of patients' time spent on paperwork.
The research team, led by Steffie Woolhandler of Harvard, said "The difference in the costs of health-care administration between the United States and Canada is clearly large and growing," The researchers said yesterday that the United States wastes more money on health bureaucracy than it would cost to provide health care to the millions of uninsured Americans.
The study found that overhead costs were a main source of difference between the two systems. U.S. insurance companies spent 11.7 cents of every health care dollar on overhead (largely made up of underwriting and advertising). Canada’s government health system overhead cost only 1.3 cents for Canada's government-run system. Similarly the U.S. Medicare system for the elderly health care cost just 3.6 cents.
The study found that after certain exclusions, administration accounted for 31 per cent of health-care expenditures in the United States and 16.7 per cent in Canada.
Source: Toronto Star
Tue Aug 19, 2003
Latest Poll: Americans Chose Health Coverage over Higher Salary
According to a national survey by Stony Brook University (SBU), more Americans say they would choose a lower paying job with health coverage over one with a higher salary but no health benefits. The survey entitled “The Health Pulse of America” was conducted by SBU's Center for Survey Research between July 22 and August 12, 2003. Over 800 adults from across the country were interviewed. 71% of survey respondents indicated that they would take the lower salaried job with benefits, while only 24% would take the higher paying job with no coverage.
Even when researchers separated the two issues, the result were still consistent: 73% rated good health care benefits as very important, while only 37% rated a higher salary as very important. Quality retirement benefits and job security also ranked higher than salary.
According to said Leonie Huddy, director of the SBU research center, "This poll clearly illustrates that Americans are very concerned about job-related health care,". "This willingness to trade health benefits for salary occurs across the economic spectrum - it is equally prevalent among professional and blue collar workers, those without a high school diploma and college graduates, and members of high and low-income households. Frankly, I was quite surprised by these results."
Mon Aug 18, 2003
Blue Shield Offers Two New Plans
Blue Shield is marketing two new PPO plans for an October 1,2003 effective date. The new individual health insurance plans are called Active Choice 500 and Active Choice 750. Both plans have been added to the MediCoverage site. Click on the compare benefits linik to see details about each plan.
Fri Aug 15, 2003
Self Employed Can Deduct Health Insurance
According to information posted on www.irs.gov, self-employed individuals can deduct their health insurance costs on their 2003 Federal tax returns. The deduction cannot exceed your net income and is made against your adjusted gross income. For more information visit www.irs.gov or contact your personal tax advisor for specific information. MediCoverage is not a tax professional and this information is not intended as tax advice.
Source: www.IRS.gov
Tue Aug 12, 2003
Newt Gingrich Calls For Health Care Reform
Newt Gingrich called on Congress on to use its negotiations over Medicare prescription drug benefits as a means to overhaul the nation's entire health care system.
Referring the prescription deal before congress as "the largest single domestic program change since Lyndon Johnson's 'Great Society' of 1965," Gingrich said, "anything less than this [overhall] effort will lead to a politically and financially unsustainable outcome."
Gingrich, a former Republican speaker of the house and author of the health care reform book "Saving Lives & Saving Money" claims that seniors must be given the option of staying in the current Medicare system and adding a prescription drug benefit. We shouldn’t "frighten the current generation of seniors" so that Medicare recipients will accept reforms that are primarily designed for Baby Boomers who are nearing retirement.
Gingrich explained that if Medicare embraces 21st Century technology and information systems, a plan could be crafted that supports existing Medicare members and future generations.
Source: Cox News Service
Mon Aug 11, 2003
Pacificare Net Rates Effective August 1st.
Blue Shield is marketing two new PPO plans for an October 1 effective date, Active Choice 500 and Active Choice 750. Both plans have been added to the medicoverage site. Click on the compare benefits linik to see details about each plan.
Sun Aug 10, 2003
Vitamin E May Counter Soreness from Exercise
Tufts University Health Center reports that the antioxidant nutrient vitamin E may help repair body damage from strenuous exercise. According to exercise physiologist Jennifer Sacheck, PhD, vitamin E supplements can retard free radical activity and reduce exercise related soreness and damage in some individuals. Free radical production can go into overdrive after intense exercise and end up "chewing up more tissue" than it repairs.
Destroying all free radical activity should not be the goal of active individuals, experts caution. Whenever an individual exercises, muscles undergo tears and inflammation and free radicals help clear away damaged muscle tissue. While free radicals produce a beneficial service, too much free radical activity can cause additional pain and damage.
Dr. Sacheck tested two groups of very physically active men in her most recent health study. One group was between the ages 66 to 78 and the other group was considerable younger- all between the ages 23 to 35. She gave all the men either 1,000 Inter-national Units of vitamin E every day for three months or a placebo. Participants ran for 45 minutes a day and then evaluated their soreness.
While Dr. Sacheck' assumed “ the older men would respond more dramatically," she was "surprised" at the noteworthy effect that also occurred in the younger participants. According to her findings the older group experienced less inflammation but the younger participants also had less soreness and muscle damage.
Before individuals should take 1,000 units of vitamin E a day, Dr. Sacheck offers a number of precautions. The most important is safety related. "We're not ready to recommend that the general public take 1,000 units of E daily. This was a short-term study, and the volunteers were under medical supervision and not taking any medications. Vitamin E can cause bleeding problems, particularly when combined with certain drugs."
She also pointed out that it was not clear vitamin E would help most regular exercisers. Her study group was made up of very active individuals who were comfortable with a rigorous exercise regiment.
Lastly Dr. Sacheck noted that here study results were not overly dramatic. "It wasn't like, 'Wow, I'm not sore, and the guy who didn't take vitamin E is,'" she says. The effects were apparent but subtle.
Source: Tufts University Health & Nutrition Letter
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