Would you believe….that 42% of the people questioned in a recent national survey have no idea what ObamaCare is? I suppose it’s because ObamaCare won’t fit into a Tweet. You can bet that 100% of the 42% think ObamaCare means “Free Stuff”.

Hey, free stuff is not free. In the case of ObamaCare free stuff means you get it free while somebody else pays for it for you. Just like corporate income taxes, the corporations just pass that tax along to the buyer of its product.

ObamaCare is loaded with new taxes and the folk that pay those taxes are not going to just pony up the additional cash and then sit quietly in the corner. Instead, they are going to find ways to recoup those dollars.

If you mow lawns and landscape yards to pay the rent and feed your family, and Obama and the Democrats raise taxes on your lawn equipment manufacturers, their suppiers and gasoline and oil producers, your costs to run your business will increase. Then, to keep your business afloat, you must raise the prices you charge to your customers. So…whoever pays you also pays the increased taxes. You are stuck with having to raise your prices, but for no increase in you net income. Yeah, that really makes sense doesn’t it.

Starting January 1, 2014, ObamaCare’s requirement that all of us must own health insurance, or pay a tax penalty,kicks in.

Actually, “Exchanges” in each state must be ready to start enrolling people by October 1, 2013, for insurance to become effective on January 1, 2014. Exchanges are web-sites, phone numbers, and some may appear as free standing buildings. Starting in July 2013, a quarter million health insurance agents and brokers will begin training to provide the required health insurance via the exchanges. You can work with one of the qualified agents or brokers, or dial up an exchange directly. It’s your choice…the price is the same either way.

If you prefer to just hang on to the health insurance you own now, you are free to do so. Those policies should be all right…at least through the end of 2014.

Starting Junuary 1, 2014: For individuals earning up to $29,327, and for families earning up to $88,200, there will be cash provided by your neighbors who pay income taxes to off-set part of the government required health insurance premiums. How much tax payor cash help you will receive will depend upon your actual earnings and the number of people to be insured by your policy. NOTE: For most of us, IT IS NOT GOING TO BE FREE!

So, if you are part of that 42% not aware of ObamaCare, find out about it now. It is going to hit you in the pocket book, so you’d better be ready. Go on-line and look up “PPACA”, then skip reading anything you see dated before 1/01/2013, as a lot of things have changed since the end of 2012.

Carpe Diem

Hey! Didga know that by October 1, 2013, President Obama’s “Affordable Care Act” mandates that “Exchanges” in every state must be ready to start enrolling millions of uninsured “Americans” into Obama health insurance policies?

What is an Obama health insurance policy you ask? It is a nanny-state health insurance policy, designed by the Obama government, in four versions: Bronze, Silver, Gold and Platinum. Benefits vary from better than nothing to the Obama government’s version of Valhalla.

If you like filling in government forms, you will absolutely love filling in the Obama government health insurance application form. Obama health insurance applications are expected to be filed on-line. Don’t own a computer? Tough! Go to the library or to some Obama government specified office to complete your application.

Expect to complete a form requiring twenty-one (21) steps plus added questions. You must be able to prove your identity, CITIZENSHIP, and income. To start, be ready to provide all your financial information, income, expenses, sources of cash, etc…consider it an IRS anal audit. Next, slog through a swamp full of arcane insurance language as you attempt to select which one of the four-sizes-fit-all Obama insurance plans fits your needs.

The Obama government expects you to complete your form in “only” thirty (30) minutes…so pack a lunch and bring something to drink, ’cause you know a Government 30 minutes means about an hour.

Oh, by the way…your application will be checked by three (3) Federal agencies, led by the IRS. (As in the old WW II movies as people attempted to move about the German countryside: A menacing guy in a leather trench coat…”Show me your papers mien herr.”)

If you are one of the 51% who,last November, voted to keep ObamaCare in place…Rejoice! You got what you voted for…and just like a STD, its going to last a while and get nasty before we can rid ourselves of it.

Carpe Diem

These blogs call for some profound statements to make the reader come right out of his/her seat. However, writer’s block has had its way with me lately. Then I remembered the movie Young Doctor Frankenstein and Marty Feldman’s character, Igor, when Young Dr F mentioned to Igor that he could maybe do something about Igor’s grotesque hump…Igor’s reply, “Hump, what hump?”.

Since the beginning of this year I have been in a headlong dash to produce as much new insurance business as the good Lord will permit. How else can one keep his/her head above water in this “rapidly improving economy”? (Quotes in place as that is the swill coming from Washington.)

We re-elected a president who says we don’t have a spending problem and only need to increase taxes on the “wealthy” to add new “investment” into our economy. Meanwhile, we (us, the US in USA) continue to borrow more than US can pay back in several lifetimes. Like some of us who have resorted to paying one credit card bill with a loan check from another credit card, sooner than later you run out of credit resources. Then what?

Unlike you and me, the federal government can just print money and pray that the rest of the world will take that bogus cash at face value. As with Continental Dollars from our revolutionary war days and Confederate Dollars from the war between the states, people will begin to lose faith in the value of the dollars being cranked out by the wizards of smart in Washington. When that happens hyper-inflation will set in just as it did in 1930′s Germany when a loaf of bread cost thousand of marks and one’s frau had to take along a cart full of cash to buy groceries for a single day.

I strongly disagree with PresBO. We do have a spending problem. We have a gazillion dollars coming in every year from income taxes and hundreds, maybe thousands of other taxes. Like you and me, the Federal government must learn to live within its means. When it does not do so, guess who ends up holding the bag? You and I…and your kids and their kids and their kids. When the Washington crowd kicks the financial can down the road as has been happening far too long, you and I are the ones down that road when the whole thing comes crashing down…while the Washington crowd sits home with their guaranteed pension cash and health care.

Think about it…and think about it really hard when next congressional elections arrive in 2014.

Carpe Diem

All the news about raising the debt ceiling has taken the heat off ObamaCare as that train wreck continues down the tracks toward its destiny with national bankruptcy.

Recently, I read that Healthcare is projected to take up 50% of the Federal budget by the end of the decade. Holy smoke! What happens when you add Social Security into the mix?

By 2014, ObamaCare mandates each state to have a system in place offering health insurance through a series of “Exchanges”…insurance stores selling health insurance policies containing benefits demanded by the fed’s in Washington. Looks as if there will be a Plan A, Plan B, Plan C, etc. You pick your plan from the Fed’s list, then pay premiums each month to an “insurance” company offering that Plan.

I put insurance into quotation marks above because what you buy from an Exchange is no longer insurance. Instead, you will be paying your dollars to a company which must accept your application (Guaranteed Issue), pay your claims, and keep track of your records. Your premium dollars go into a pool to pay everybody else’s medical bills.

Broadly speaking, traditional Insurance Companies assume a monetary risk which would be impractical or impossible for one person to assume, assign cost to the risk assumed, and by contract guarantee to compensate the insured person if that person sustains a monetary loss resulting from a risk assumed by the insurance company.

Insurance companies’ engineers are called Actuaries…PhD number crunchers, and data miners. They set the price for the products. To stay in business, insurance companies must collect enough dollars to pay for claims and administration, including a ton of taxes, plus some profits for their owners. (Figure about 5% gross profit for most.)

As ObamaCare mandates that all health insurance companies issue health insurance to all comers starting in 2014, the actuaries can no longer set higher premiums for poor risks. On the flip side, they can no longer offer lower premium rates to the majority good risks like you. Instead they must pour everyone into the same actuarial stew pot, then figure out how much to charge for your coverage.

How will they do that?…know what a WAG is? How about a SWAG? Well, a WAG is a Wild Ass Guess, and a SWAG is a Systematic Wild Ass Guess. You and I take WAG’s all the time, while professional number crunchers take SWAG’s, and pick up big bucks for doing so. Further complicating matters is the fact that 2014 health insurance is guaranteed issue, with full coverage for “pre-existing conditions”

While we are expected to buy 2014 health insurance or pay a tax penalty for failing to do so, the tax penalty will be much less than premiums required to purchase the insurance…so guess who is going to buy health insurance in 2014? That’s Right! Sick people with pre-existing conditions, while most will just pay the fine each year…until they get the bad diagnosis from their doc. Then they will drop by their local state exchange and pick up some health insurance….and what effect do you suppose that will have on the long term cost of health insurance? Can you spell, The Sky is Not the Limit?

But, not to worry. ObamaCare provides premium assistance to individuals earning up to 400% (that’s almost $90,000 for a family of four) of the federal poverty line…Yep, your income tax dollars will be going to your boss to help pay his health insurance premiums each month…but, isn’t that the way Socialism is supposed to work?

November 2012, offered us an opportunity to vote in a national referrendum for maybe the first time since our founding as a Republic of soverign states. The US is now at a tipping point. The results of November’s election will inpact our country for the next 100 years.

ObamaCare’s Individual Mandate was upheld by the Supremes in 2012, thanks to Chief Justice John Roberts. Now that Mandate has you firmly in its sights starting in 2014.

Certain of us will be exempt: Undocumented aliens, convicts in prison, American Indian tribes, those between jobs for up to three months, those with certain religious objections, and those who are truly poverty stricken. Everyone else is on the hook. Our friends at the IRS will administer the lash to those of us found guilty of ignoring federal law by opting not to own health insurance beginning January 1, 2014.

Starting in 2014, your penalty will be $95.00 per adult and $47.50 per child up to a family maximum $285.00, OR 1.00% of the family’s income whichever is Greater.

In 2015, those penalies increase to $ 325.00 per adult and $162.50 per child, with family maximum of $975.00 OR 2.00% of family income whichever is greater.

In 2016, another increase to $695.00 per adult, plus $347.50 per child, with family maximum bumped to $2,085.00 OR 2.50% of family income whichever is greater.

Younger individuals will likely opt to pay the penalty tax, as the tax would equal less than a year’s total premiums for health insurance. Then when they encounter a pending large medical bill, they will enroll in a health insurance plan under ObamaCare’s guarenteed issue provision.

Under the individual mandate part of the law IRS can hector you to pay the fine, but cannot criminally prosecute you for failure to comply, plus no liens can be placed on your property based on your failure to comply alone. However, IRS can withhold income tax refunds due you if you fail to pay the fine.

Most of the regulations are yet to be written, so there are still uncertainties with which to contend. Remember Nancy Pelosi’s now immortal statement that…”We must pass the law to find out what’s in it.”

What’s in it are hundreds of land mines yet to be stepped on by you and me. The Patient Protection and Affordable Care Act (ObamaCare)is a poorly crafted piece of legislation and will cause us headaches for many years to come.

Carpe Diem

Attention Medicare Beneficiaries: If you received a non-renewal notice from the insurance company providing your Medicare Advantage plan in 2012, you may take advantage of a Special Election Period (SEP), beginning December 8, 2012 and ending February 28, 2013, to enroll in a new Medicare Advantage Plan assuming one is available in your area.

Medicare Advantage Plans are provided under Part C of Medicare, effectively offering the opportunity to hire an insurance company to provide your Original Medicare Parts A&B benefits to you. Medicare Advantage Plans generally offer some additional benefits not included under Parts A and B of Medicare such as dental, hearing, vision, health clubs, etc.

Traditionally Medicare Advantage Plans require only nominal monthly premiums, and many are available in exchange for zero monthly premiums. See a qualified Medicare Insurance Agent, or visit www.Medicare.gov, for more on Medicare Advantage Plans.

If you received a Medicare Advantage Plan non-renewal notice you may, during the SEP above: (a) enroll in another Medicare Advantage Plan, assuming one is available in your area, (b) change to original Medicare and a Medicare Prescription Drug Plan, (c) enroll in a Medicare Supplement Plan and a Medicare Prescription Drug Plan.

Carpe Diem

If you voted for Obama you can feel proud that you had a hand in locking in ObamaCare, and increasing everyones’ taxes. If you are a “lower wage” earner, your taxes are going to increase just as those earning more…ain’t nobody gonna duck this one.

What? You say that you don’t pay income taxes because you don’t earn much…and that Uncle sends you cash in the form of a refundable tax credit? Here’s a flash for you…your Social Security and Medicare payroll taxes are going up, and soon. Look for your net paycheck to shrink in 2013.

Twentyone (21) tax reductions from the Bush years are set to expire on 12/31/2012. Starting in 2013, Social Security Tax from your paycheck jumps back to 6.20% from 4.20%. Your income tax Child Credit drops from $1,000 to $500. If you have young kids or a dependent adult living with you, your Dependent Care tax credit is scheduled to shrink to half of that available in 2012.

Increased taxes in 2013 affect everything and everyone, including YOU…reduced tax breaks for you if you ride a bus, rail or taxi to and from work, college education and student loan interest write-offs cuts are coming in 2013.

Higher taxes equal higher costs for everything you buy, whether you use cash or an EBT card. Look for inflation to cut into your buying power.

Regarding this year’s presidential and congressional elections: Alexis de Tocqueville, a noted political thinker and historian, traveled throughout America during the early 19th century and combined his observations into two (2) volumes titled Democrary in America.

Here are just a few of his thoughts:

“A democracy cannot exist as a permanant form of government. It can only exist until the voters discover that they can vote themselves largesse [read,Free Stuff] from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. Tha average age of the world’s greatest civilizations has been 200 years.”

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

“Americans are so enamored of equality, they would rather be equal in slavery than unequal in freedom.”

“We can state with conviction, therefore, that a man’s support for absolute government is in direct proportion for the contempt he feels for his country.”

“Society is endangered not by the great profligacy of the few, but by the laxity of morals amongst all.”

Yep. DeTocqueville nailed America in 2012, over two hundred years ago.

Carpe Diem

Armageddon, the site of the final battle between the forces of good and evil according to the New Testament, cataclysmic in its effect.

“Taxmageddon”, according to Factsheet number 104 from The Heritage Foundation, “Unprecedented Tax Hike for 2013″…an expected tax hike of $494 Billion,($494,000,000,000.00)!
That works out to an average $3,800.00 in new taxes for every American houshold in 2013 alone, per The Heritage Foundation. If you have not been paying attention,start now.

A little over a third of the tax increases will occur when your 2012 tax rates increase in 2013, resulting from Congress and the Administration’s failure to extend the current tax rates.

Another 25% of the tax increases will result when the temporary 2011 reduction in the payroll tax expires on 12/31/2012. That payroll tax reduction of 2.00% should never have been there in the first place. The “Payroll Tax”, is yours and your employer’s contribution to Social Security, which is already starved for dollars to pay for your retirement, disability, and survivor benefits…a classic example of robbing Peter to pay Paul. The Administration simply borrowed the cash to make up the lost revenue, adding to our already staggering deficit.

Most of the remaining tax increases come from Obamacare, such as the 3.80% surtax on all forms of income over $250,000.00. Existing income tax rates will increase on ALL tax payers, not just the “rich”. If you have a couple bucks invested for a rainy day, your capital gains taxes will increase as will taxes on dividends. The Marriage Tax penalty will return to bite families filing joint tax returns. Returning will be phase outs of itemized deductions and personal exemptions. If your employer provides you with a Flexible Spending Account (FSA)benefit plan, your FSA contributions will now be capped at $2,500.00 per year. I could go on, but it gets depressing.

If you think increased taxes only affect “rich” people and don’t mean anything to you because you are part of the 47% who pay no income taxes, you are in for a nasty surprise. Increased taxes equal increased prices for everything in sight and most things you can’t see. That six-pack of Bud that you pick up at the 7-11 on the way home after work will start costing you more because Budweiser’s costs are going to jump.

As an aside, even if taxes stay the same your dollars are going to buy less and less as the Fed continues to run the printing presses 24 hours per day, cranking out more and more paper money not backed by anything other than borrowed cash. Oh, if this is boring you try reading up on economics 101. You should inform yourself, because Washington counts on your ignorance as a tool to keep you in the dark…to keep you voting for the politicians who promise to “spread the wealth around.” Ask yourself: What happens after the wealth has been spread? Where do I go then?. Back in February 1976, Great Britian’s then Prime Minister Margarate Thatcher said, “…and socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite characteristic of them.”

Take some steps now to blunt the blow of 2013′s impending tax hit. If you have income due in early 2013, try to have it paid to you before New Year’s day 2013. Investment gains recognized this year instead of next year will be taxed at this year’s rates. Talk to a CPA or other savvy tax advisor now to ready your ship for the coming tax storm.

Between now and year-end everyone will be caught up in the presidential election, but keep your eye on the ball. Find out about your House Representative and your Senators. Where do they stand on tax issues…not what they say but what have they actually voted for. Many of them will be on the ballot, and you will have the opportunity to vote them in or vote them out. Today we have a Senate that has not passed a budget in over THREE YEARS. That is a disgrace! The leadership in the Senate is counting on your ignorance to give them a pass.

Remember, if you do not vote in November you forfeit you privilage to complain. To bitch and moan you must have skin in the game.

Carpe Diem

Whoop De Do! September is Life Insurance Awareness month…So What?

So this: Life is tough. Life is unfair. Life does nasty things to you. No matter what you do, life happens anyway.

So what can you do to ensure that those depending on you don’t end up under the bus if life deals you a nasty surprise, such as a disabling illness or injury, or (gasp) death?

Well, owning insurance to replace your lost income will not bring you back or undo the accident or illness, but it will certainly provide a life line to those depending on you for support. Ask yourself what would happen if you or a father or mother kissed his/her spouse and kids goodbye one morning, hopped into the car, drove away to work…and never returned? Mom or dad has gone away for good. What else has gone away?

Gone away is that pay check the family depends upon. When I entered the insurance business many years age, dad went to work every day and mom stayed home to raise the kids and manage the household. The family lived on 120% of whatever dad brought home, so missing even one pay check was tough.

Today, the majority of moms and dads both work and, guess what?…the family lives on about 120% of what both earn together. If either misses a pay check things get tight fast.

Okay, mom or dad isn’t coming home tonight. So what does not go away? The rent or mortgage payment…No. Power, water, phone bills…No. Grocery bill…No. Clothing…No. Car payment…No. House and car insurance…No. Local and state taxes…No. Medical expenses…No. You get the idea. The bills never go away.

You have a couple choices: Ignore the possibilities and hope for the best. Trust the government to save you with Medicaid, Social Security, the local food bank, and HUD housing, etc…. or cut the problem off at the pass by owning life insurance to replace your lost income at death and disability income insurance to provide cash to pay the bills while you are laid up.

How to pay the premiums for life and disability insurance?
Only you have the answer to that one but, if you smoke, STOP. Your annual savings alone will buy more insurance than you may imagine. If you stop off for a six pack on the way home most evenings, cut back to three days per week, and use the savings to buy life insurance. One of the few things that costs less today than ten years ago is life insurance.
Many businesses offer to payroll deduct insurance premiums for their employees, and most folk can afford a few dollars per pay check…which buys more life insurance than you might expect.

Finally, who or what is most important in your life? If your life revolves around you and nobody else, owning life insurance is not your thing…but owning disability income insurance might save your little fanny some day. If you are married, or have a significant other, shield them from the nasty side of life by owning life and disability insurance. Of course you could always accumulate a nice fat investment account to provide the needed income, but how many of us really has one of those? Please remember with life insurance as with disability income insurance, “the event that creates the need creates the cash!”

Carpe Diem

Okay, you are 40 years old and will never be 80. That is just too far into the future to imagine. Just ask any 80 year old person, and they will tell you that age is insidious; it sneaks up on you day by day, month by month, year by year, until one day you look into the mirror and SHAZAM! Who is that old wrinkled person looking back at me?

As a nation we are living longer with each new generation…good news and bad news. If you plan to retire at age 65 or 70, how will you survive for another 25 or 30 years? Where will the dollars come from to support you in the grand manner to which you have become accustomed? If you build a nest egg amounting to $1,000,000.00 by the time you retire, then invest it and earn 5.00% interest each year, net after taxes, your retirement income will be $50,000.00 per year. Can you earn anywhere near that return today? Sad to say, but that will be a real challenge.

In the last few decades the price of everything, with few exceptions, has gone up and continues to rise. A relatively few years ago, one could live comfortably on a $25,000 annual income, but today it takes three times that number to maintain the old standard of living. So,if age 80 appears eons into the future for you, better start now to build up a pile of cash for that little old lady or gentleman waiting down the road for you, ’cause mama or daddy are not going to be there to bail you out. They have been long dead, and you are on your on kiddo.

Start TODAY to save some cash every week, even if it is only $10.00 or $20.00. Start now and keep it up every week. You will be amazed at how that habit will take hold. Your big challenge will be to keep your hand out of the pile of cash when a temptation to buy some item hits you, so invest your cash in something hard to liquidate immediately. Save yourself from yourself.

Build a hedge around your retirement stash. Buy life insurance to hedge the danger of dying too soon and leaving your family holding the bag. Buy Disability Income Insurance
to hedge the danger of lost income while disabled and unable to bring in a pay check. Buy Long Term Care Insurance to make sure that little old lady/gentleman waiting for you down the road has the cash to help live out their life with the dignity you have come to expect…because that sweet old lady or refined old gentleman will be you. Just wait a while.

Carpe Diem