Is Long Term Care Insurance for You?

When an accident or illness lays you low for months at a time, owning Long Term Care Insurance (LTCI) provides the cash to allow you to remain at home during your recovery. If recovering at home is not an option, LTCI pays the rent required by an assisted care facility. LTCI is not just for older folk. Owning it would be good for you too. As is true for most life/health insurance, younger people pay lower LTCI premiums both at the beginning and in the long run.

As a nation we are living longer than our parents and grand parents. That is good news/bad news for most of us. Now we are concerned about outliving our retirement dollars. Long run, Social Secuity and Medicare are paying out more than they take in. How much will be left for you in the future? Washington could tax everybody at 100% of income, and that still would not be enough, long term, to keep up Social Security and Medicare, as they exist today. When and if ever Washington begins to address those issues you can expect program cuts and “means testing” to reduce your Medicare and Social Security benefits.

Medicare does not pay a dime toward your long term care expenses. Owning LTCI today makes good business sense. Rely on yourself and your insurance company to provide long term care dollars when needed. That beats depending upon some government agency by a long shot.

Talk to your insurance broker about LTCI today. It will be time well spent.

Carpe Diem

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Who Pays the Bills When You Can’t?

Your assignment today is to pull out your check book, or go to your debit account’s auto-pay screen. Then list your regular monthly bills…the ones recurring every month: rent or mortgage payment, utility bills, cable/phone bills, car insurance, homowners/renters insurance, groceries, car/automobile lease payments, health insurance, gasoline, oil, maintenance…these support your life style. Okay, add ‘em up. The total is what you need, every month, to float your boat…and those are net-after tax numbers.

Now, imagine your income, investnments and savings drying up over the next several weeks. How do you pay the bills then? You could start robbing banks…but after the law grabs you, your life will become a worn cot behind steel bars and bologna sandwiches every day, plus a three hundred pound room-mate with a digestive problem and bad breath…all courtesy of the tax payors.

A sudden accident or lingering illness could rob you of your ability to generate income for yourself and your family…and take away your ability to pay those critical bills every month. If you think it won’t happen to you, don’t be so sure. The odds of your becoming disabled and staying that way for many months or years is much greater than that of your dying before age 70.

For many years businesses have hedged their bets by obtaining Income Replacement Insurance on the lives of key employees as a way to shift the disability risk to insurance companies. Thus, when a key employee is disabled and no longer able to perform, the insurance company provides income in the form of disability payments to the employee, freeing up salary dollars to allow the business to bring on a replacement…just makes good business sense.

It follows that you too should apply that good business sense to your life. In your household, you are the “Key Employee”…if you are married, and you both work, your household contains two “Key Employees”. Who brings in the money when you can’t? Who pays the bills when you can’t? Unless you hit the Lotto in the past few weeks, you do not control enough cash to carry you through an extended time of no income.

Look into Disability Income Insurance today. Talk to your insurance agent or broker about it. As a rule of thumb, figure on paying an Annualized premium equal to about month’s benefit pay-out…hedging eleven months with one month’s benefit amount. As the premium payor, your Disability Income Insurance benefits are income tax free, and that also helps with the bills.

Carpe Deim

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Last Minute Alternatives to Keep You in ACA Compliance

Affordable Care Act (ACA) “Obamacare” Open Enrollment Period ends March 31, 2014. If you are not enrolled in a health insurance plan by March 31,2014, you will be forced to wait until November of this year before you may enroll in new health insurance.

The tax penalty for failing to enroll in a health insurance plan in tax year 2014 is the greater of $95.00, or 1% of your adjusted gross income in 2014. (i.e., If your income from all sources should be $35,000.00, your tax penalty would be $350.00.) That tax penalty will increase substantially in 2015 and in the following years.

If you are one of the many earning too many dollars to qualify for a tax credit but not enough to cover Obamacare’s bloated insurance premiums without straining your budget there is a possible shelter for you…not a long term answer but enough to see you through 2014, in the hope that ACA may be changed or replaced with a more workable law within the next couple years.

Designed for those between jobs needing health insurance to cover the gap between employer provided group health insurance plans is a product referred to as Temporary Health Insurance, or Short Term Health Insurance. Such plans provide traditional major medical insurance benefits during the gap between group insurance coverage…can last anywhere from thirty (30) days up to ,usually, eleven months.

For now Short Term Health Insurance plans have escaped the clutches of Obamacare, and work just like traditional health insurance: You must satisfy a deductible which you select…any amount from less than a thousand dollars up to five thousand dollars or more. After your deductible has been satisfied, you and your insurance company share in claims above the deductible…typically 80% is paid by the insurance company and you pay the remaining 20%, ( could also be 70%/30% or 50%/50%)…until you reach a cut-off point. At that point, the insurance company starts paying 100% of the bill.

Because such health insurance is designed to cover you for a relatively short period of time, does not cover “pre-existing”conditions, and ends when paid claims total, usually, $1,000,000.00, or sometimes $1,500,000.00, its premiums are lower than those demanded by Obamacare plans. If one has owned Short Term health insurance for a full eleven months, and still needs health insurance, that person may apply for a second such plan to last up to another eleven months.

Caveat: If our insured person, above, collected on a claim during the period he/she was covered by the first Short Term policy, the second short term policy may not cover the condition causing the claim, as such would now become a “Pre-Existing” condition. However, if you need affordable health insurance now, and Obamacare plans cost more than your budget allows, look into owning a Short Term Health Insurance plan. Just Google Temporary Health Insurance, or see the link on my web-site.

Carpe Diem

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The ACA Mandate Clock is Ticking

You have until Match 31, 2014 to enroll and pay for health insurance meeting requirements of the Affordable Care Act (ACA), nee Obamacare.

If your household income is low you may qualify for healthcare provided by your state…Medicaid. However, if you are not a head of household, or single with very low income you may fall through the cracks…no Medicaid and no tax credit help to pay health insurance premiums. But because our Federal government is benevolent you will not be forced to pay a penalty tax for not owning health insurance in that circumstance.

In 2014, the penalty tax for an individual is the greater of $95.00 or 1% of income above the income tax filing threshold. Starting in 2015 the penalty tax shoots up like a rocket.

Take heart. You may be exempt from paying the penalty tax if:

You earn too little to even file an income tax return…
You qualify for a hardship exemption…
You belong to a qualifing religious group…
You are a member of a health care sharing ministry,,,
You are presently in prison…
You work/live full time in a qualifying foreign country…
Plus several additional catagories

What does ACA mean when it refers to “household income”? My reading of that is all wages, salaries, tips and other income from ALL sources, less qualified expenses, generated by everybody living in a household…..On an income tax return form 1040, see line 37, “Adjusted Gross Income”…that’s your household income.

If you miss the 3/31/2014 enrollment cut-off, you must wait for the next enrollment period, starting in November 15, 2014, until you can apply for ACA health insurance. There are circumstances allowing you to enroll after the 3/31/2014 cut-off, so talk to your health insurance broker/agent if you need more information.

Carpe Diem

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The Law of Unintended Consequences Never Goes Away

Ever try to save a few bucks by attempting your own plumbing repair? Real qualified repair guys just love you to pieces, because that $75.00 repair job usually grows to $300.00, by the time the week-end amateur finally cries Uncle, breaks down and calls Joe the Plumber.

It isn’t that you weekend do-it-yourselfers don’t have a lot on the ball. It’s because you just don’t know what you don’t know when it comes to plumbing, then plunge into the project failing to remember to first turn off the water supply,or really leaning on a pipe wrench and end up twisting a copper pipe into a crumpled mess…you know, we’ve all been there.

Politicians shoot themselves in the foot too…by passing poorly construced laws, with good intentions, but sometimes harming more people that those the law intended to help.

House Democrats and their colleagues in the Senate launched the Patient Protection and Affordable Care Acts of 2010 at the behest of the President without first stepping back to consider its unintended consequences. Now we find ourselves in a quagmire of unintended consequences.

After a raft of presidental edicts(by-passing congress along the way), attempting to repair the damage done by the law’s unintended consequences, our country is no closer to closing the uninsured gap. In fact, the consequences of the Affordable Care Act have caused millions to lose their health insurance.

In December 2013, by edict, the President floated still another “fix” to allow those who lost health insurance due to the Affordable Care Act to apply for Obamacare Catastrophic Care health insurance plans and relieved them of any tax penalty for not being insured by January 1, 2014. However, such Catastrophic Plans contain a $6,350.00 per person calendar year deductible…OOPS!

Do you mean the insured person must pay his/her premiums each month plus $6,350.00 out-of-pocket before the insurance pays one cent? Absolutely!

Is it time to call the plumber yet?

Carpe Diem

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A Light at the End of the Tunnel

October 1st arrived with great fanfare as the new “Marketplaces” (nee Exchanges) launched. At last, a light at the end of the health insurance tunnel.

Have you tried to log on to your state’s “Affordable Care Act” website?If you were successful, take a giant step to the front of the class to receive your gold star. But for the rest of us, that light at the end of the tunnel is attached to a big locomotive and it is quickly bearing down on us. If you are not covered by “Minimum Essential” health insurance coverage on January 1, 2014, you may be subject to a fine (or as Justice Roberts decreed, a “tax”).

If you are a younger person, not insured now, not planning to enroll, but intending to just pay the tax because it is less than $100.00 during 2014 tax year, think again. The initial tax penalty is equal to the higher of 1% of your prior year’s income or $95.00 per adult plus $45.00 for each child, up to $285.00 per family.

Starting in 2015 the penalty tax goes up to $325.00 per adult plus $162.50 per child up to the higher of $975.00 or 2% of your 2014 family income. After that the tax increases again to the higher of 2.5% of prior year’s family income or $695.00 per adult and $347.50 per child, up to $2,085.00 per family.

The penalty kicks in on Janaury 1, 2014. So, if you change your mind and then enroll in March 2014, you may be accessed a penalty tax for the portion of 2014 while you were uninsured. Also, keep in mind that 2014 enrollment period for Obamacare ends March 31, 2014.

Projected monthly premiums for the Affordable Care Act’s Bronze, Silver,Gold,and Platinum plans are considerably outside most people’s comfort zones. Your decision is whether to take food off the table to pay health insurance premiums, or skip the insurance and take food off the table to pay the penalty tax. “Change you can believe in” can get to be pretty darn expensive.

Carpe Deim

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Getting Ready for theTrain Wreck

October 1, 2013 is opening day for you to enroll in your choice of four (4) health insurance policies demanded by the Federal Government, whether you want it or not. Once you enroll, your new health insurance goes into effect on January 1, 2014…and you must want it as a majority of you voted to keep the Federal mandate back in November 2012.

If you already own individual(or one covering you and your family) health insurance now, meaning you are not covered by health insurance provided by your employer AND if that health insurance policy went into effect before March 23, 2010 AND if you have made no changes to your policy since then, your insurance policy is “Grandfathered”. If you own a grandfathered policy, you may keep it, and you can skip enrolling in one of the Federal Government mandated plans.

If you already own individual(or one covering you and your family) health insurance now, meaning you are not covered by health insurance provided by your employer but such health insurance was effective AFTER March 23, 2010, your health insurance policy is NOT grandfathered, and you are required by the Federal Government to replace your present health insurance, on or before it reaches its anniversary date in 2014, with new government mandated coverage.

All is not lost, however, and there is a way to postpone being forced to buy Federal Government health insurance if you now own non-grandfathered individual health insurance which you wish to keep for a bit longer.

Contact your present health insurance company and ask them if they would be willing to renew you current policy in December 2013 to December 2014. Assuming your present health insurance company is willing to grant your request, expect your premium to increase some, as it does every year as your age advances. That gives you all of next year to keep the health insurance you like and to settle on which of the forced Federal health insurance plans you must purchase for 2015.

The four new Federal Government mandated health insurance policies will be provided by commercial health insurance companies; however, age, the area you live in, number of people in your family and whether or not you smoke, are the only factors which may be used to calculate the premiums starting January 1, 2014. As a person’s health history is no longer a factor in setting premiums, expect premiums over-all to Increase. As we age, statistically, healthcare costs rise…because older age generally means more trips to the doc. (Healthy older folk keep the statistics in balance.) I expect premiums will increase sharply for younger adults but may not rise as much for those fifty and older.

Until now, if you were in poor health your premiums were higher, to recognize the extra claims risk being assumed by your insurance company…or you may have been unable to qualify for health insurance at all. Health insurance companies, as any other business enterprise, must operate at or above break-even level or go out of business. They could have offered health insurance to everybody, regardless of health history, all along but premiums would have been over the roof and nobody would have bought their product. Now the Federal Government demands that health insurance companies cover everybody, and it forces you to buy a product or pay a cash penalty at a cost you would have rejected in a free market.

To partly offset the Federal Government mandated health insurance premium costs, those of you earning less than four times the federal poverty income level*, will qualify for a partial premium reduction in the form of a tax credit…meaning part of your premium will be paid by you and the remainder (the tax credit) will be paid directly to the health insurance company by the federal government…read, your neighbors down the street.

The amount of the tax credit will depend upon the actual premium required by the health insurance policy selected, amount of household income, and other factors. Starting October 1, 2013, to determine if you qualify for a premium tax credit (the part of your premium to be paid by your neighbors down the street), you must apply for Federal Government mandated health insurance through a “Marketplace”…originally called an Exchange. These are web-sites and phone numbers….or you can contact your present health insurance agent and access the Marketplace via your agent.

Washington, D.C. claims to be on schedule to launch its Federal Government mandate on 10/01/2013, but when you start fiddling with one sixth of the US economy it can bite you in the behind…big time. So, I expect the roll out to hit some spectacular bumps in the road.

Carpe Diem

* In 2013, the federal poverty lever is $11,490.00 in annual income for a single person, and $23,550.00 for a family of four (4). Four times these poverty levels equals $45,960.00 for a single person and $92,200.00 for a family of four. (These are slightly higher amounts in Alaska and Hawaii)

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Don’t Need and Don’t Want No Damned Insurance!

Did you ever watch an accident or train wreck as it was about to happen?
You know it is going to occur but there is nothing you can do to avoid it or keep it from happening. Several years ago I was watching from the seventh floor of an office building as a train approached a crossing on a main street about a block away. An eighteen wheeler tanker truck loaded with gasoline approached the crossing, failed to stop, plowed through the crossing arm and into the train’s path.

Horn blaring, the train’s engine hit just behind the driver, blasting the truck cab to the side and gashing into its trailer loaded with five thousand gallons of gasoline. As the train ground to a halt, sparks from rails against locked steel wheels cascaded into a shower of gasoline as it gushed from the reptured trailer. As the train crew jumped from the engine the gasoline exploded into a giant fireball enveloping them as they tried to run away.

The resulting inferno burned for hours. Three train crewmen were incenerated. The engine’s fuel tanks exploded destroying it and the first several freight cars behind it. Several buildings near the site also burned. The fuel truck’s driver survived as the truck cab was separated from the fuel tanker’s load upon impact and he was only slightly injured.

How do those things happen? An experienced local trucker driving on a busy street approaches a railroad crossing that had been in the same place for 100 years and somehow fails to see flashing warning lights and well identified crossing arms four feet above the street.

What caused this catastrophy? It was not texting while driving…hadn’t been invented yet. Accidents happen…and this one did.

This was a true story…really happened in Jacksonville, Florida…so, next time you start wondering what would happen to your family if you suddenly were not around to pay the rent and buy the groceries, talk to your friendly life and health insurance agent about buying some peace of mind in the form of life insurance or disability income insurance or long term care insurance…any or all of the above.

Carpe Diem

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Exchanges Are in Your Future

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

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Federal Health Insurance Exchanges Are Coming

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

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