I will be the first to say that these numbers actually surprise me. This article published by Reuters here http://www.reuters.com/article/2014/05/05/us-usa-healthcare-poll-idUSBREA440DA20140505 states that uninsured rates have declined by 5%! I honestly thought we would see a shift in who was insured. For instance, we would see those who previously could not afford insurance going on Medicaid and getting subsidized and those who could afford insurance before, but now can't due to high rates, opting out. I think the article agrees there really isn't an exact answer to this though as there are many factors still in play. A lot of people, myself included, have older health plans that still reflect lower rates. My policy isn't set to expire until December and I know most of Las Vegas on those older plans are in the same boat.
I wonder if that 5% represents those who were uninsured because they couldn't get insurance, but could afford it, or if they were the millions of people who previously couldn't afford insurance due to lack of employment and now have Medicaid. I know we got almost 3-5 times the calls for people wanting Medicaid than any other call. A lot of people who got subsidized insurance were just replacing what they already had and/or looking for alternatives to their COBRA options.
I think the real test to this new system is going to be in a few more years when we start seeing some strong economic job growth. The only question is will this law halt that job growth? A lot of socialized countries see higher natural unemployment rates than we do. So maybe we are seeing a new norm? This law will be seen as a success then in getting more people insurance as was intended.
Monday, May 5, 2014
Friday, May 2, 2014
Financial planners, fees, and retirement
I was at my local library checking out a book about personal finance and a DVD caught my eye. It was from PBS. I am a complete nerd and have always enjoyed public television and radio and the educational material there. The title also caught my eye "The Retirement Gamble." http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/
I figured, this ill be good to watch. I checked it out and watched it just last night. First of all, it was an incredibly good show to watch. As a financial planning professional and an avid student of financial thought and processes, it got my brain juices flowing.
The first thing I really enjoyed is the revelations about how people view retirement plans and the way they look at saving. Most people don't fully understand their money and spend it in many different ways. When they are offered the option to save through a retirement plan at work, they tend to participate because they are told it is a good thing to do. It used to be that companies saved for you and you were committed to that company for the rest of your life, because if you worked long enough, they would fund your retirement. This clearly changed with some tax restructures and new innovations in the market. I could go in on this all day about the economics of labor, but let's skip that for now.
The second thing that caught my attention was talking about growth in these plans. Most people don't know where to invest their money. The choices keep getting larger and larger. There are also more people trying to invest, so everyone wants in on the pie. Where the story gets lost is they look at the people trying to sell their products as "evil" because they want to charge fees for their management services. I know fees can really affect your retirement, but it is no different for you to pay above cost for any product and service. People have this notion that everyone else should work for free, except them. When you hire a professional to grow your money, expect to pay them for their work. If you don't want to pay them, then don't. Stuff your money under your pillow and don't complain. The most complaints tend to happen when people are losing money in their investments. It's not the manager's fault when the markets take a deep dive and then you, along with the rest of the world says "SELL!" at the same time. That's just simple economics and you can't blame them for something that is mostly out of their control.
The third thing they brought up, which I have been a great admirer of, is index funds. One of the greatest things to come out of technology, is the use of computers to match the overall market. In a market economy, people always look for ways to cut costs and get more business. By having a computer run the show, they are able to match the market and do it for a minimal fee. Fund management companies can do what every human has tried to do to match the market, and not have to hire someone. This is market efficiency and automation at its finest. The problem is humans want to preserve their jobs and hate change. They tend to fight automation and naturally try and push their own services without looking at the alternatives. Imagine if your competitor had a better product or services that was completely automated, while you had been doing your job for 20+ years at higher costs. You sure as heck won't want to give up your job just because someone else can do it better.
My final thoughts on the whole thing are to just make good financial decisions and let the new generation enact some change. The government and people have been bent on regulating people and the retirement accounts, when a change has already begun in lowering costs and making the system better for many people. I hope to become the well known adviser who efficiently directs people to making great decisions without much pain and need for hand holding. I am hoping the huge financial losses so many have gone through will get ourselves thinking about saving more and utilizing our brains more to accomplish our money goals. Growing up in Las Vegas, I have seen gambling all my life. When people are winning they are happy and keep trying for that big gain. They don't know how or when to walk away. Maybe people need to look at retirement planning the same way and when they achieve their goals, walk away and get themselves in a good spot so they don't have to freak out.
I figured, this ill be good to watch. I checked it out and watched it just last night. First of all, it was an incredibly good show to watch. As a financial planning professional and an avid student of financial thought and processes, it got my brain juices flowing.
The first thing I really enjoyed is the revelations about how people view retirement plans and the way they look at saving. Most people don't fully understand their money and spend it in many different ways. When they are offered the option to save through a retirement plan at work, they tend to participate because they are told it is a good thing to do. It used to be that companies saved for you and you were committed to that company for the rest of your life, because if you worked long enough, they would fund your retirement. This clearly changed with some tax restructures and new innovations in the market. I could go in on this all day about the economics of labor, but let's skip that for now.
The second thing that caught my attention was talking about growth in these plans. Most people don't know where to invest their money. The choices keep getting larger and larger. There are also more people trying to invest, so everyone wants in on the pie. Where the story gets lost is they look at the people trying to sell their products as "evil" because they want to charge fees for their management services. I know fees can really affect your retirement, but it is no different for you to pay above cost for any product and service. People have this notion that everyone else should work for free, except them. When you hire a professional to grow your money, expect to pay them for their work. If you don't want to pay them, then don't. Stuff your money under your pillow and don't complain. The most complaints tend to happen when people are losing money in their investments. It's not the manager's fault when the markets take a deep dive and then you, along with the rest of the world says "SELL!" at the same time. That's just simple economics and you can't blame them for something that is mostly out of their control.
The third thing they brought up, which I have been a great admirer of, is index funds. One of the greatest things to come out of technology, is the use of computers to match the overall market. In a market economy, people always look for ways to cut costs and get more business. By having a computer run the show, they are able to match the market and do it for a minimal fee. Fund management companies can do what every human has tried to do to match the market, and not have to hire someone. This is market efficiency and automation at its finest. The problem is humans want to preserve their jobs and hate change. They tend to fight automation and naturally try and push their own services without looking at the alternatives. Imagine if your competitor had a better product or services that was completely automated, while you had been doing your job for 20+ years at higher costs. You sure as heck won't want to give up your job just because someone else can do it better.
My final thoughts on the whole thing are to just make good financial decisions and let the new generation enact some change. The government and people have been bent on regulating people and the retirement accounts, when a change has already begun in lowering costs and making the system better for many people. I hope to become the well known adviser who efficiently directs people to making great decisions without much pain and need for hand holding. I am hoping the huge financial losses so many have gone through will get ourselves thinking about saving more and utilizing our brains more to accomplish our money goals. Growing up in Las Vegas, I have seen gambling all my life. When people are winning they are happy and keep trying for that big gain. They don't know how or when to walk away. Maybe people need to look at retirement planning the same way and when they achieve their goals, walk away and get themselves in a good spot so they don't have to freak out.
Wednesday, April 30, 2014
Who really pays for health care
Via @nprnews: Who Really Pays For Health Care Might Surprise You http://n.pr/1rEYxu0
I got this article in my daily news feeds and thought I would share my thoughts on this. I met with a local union organization yesterday about some political endorsing and they asked me why healthcare costs keep going up. I think I said it well, but not sure if they got it. The key is transparency. The article clearly shows that there are many hands paying the bills. We think it's us through insurance premiums and deductibles, but in reality someone else is subsidizing it.
This year has been a big eye opener for a lot of people who saw larger increases in insurance premiums. For a lot, these costs have never been budgeted for before and making that premium payment is a huge burden on their finances. I would bet that if more people had to allocate larger portions of their income to pay for healthcare they would figure out very quickly how to decrease that so they can enjoy the better things in life. When we get subsidized, we have a false sense of what costs are really there and we consume disproportionately. The reason money exists is because the world truly has limited resources and money keeps those resources in check so we don't over consume. We love consuming and could easily overdue it.
There is a concept in economics called the 'Tragedy of the commons" which relates perfectly to anything we have. Imagine wanting to get to work at 8:00am on a Monday morning on the freeway. There is plenty of road space available for one car to drive down and easily drive 65 MPH. The problem is there is also thousands of people wanting to get to their destinations at the exact same time. Thus we get traffic jams and only get to move at a snails pace. We have this limited resource- freeway room, and we have many people trying to use it. If this was a business, someone would realize there is an opportunity to open up a new freeway and take some of that excess capacity, but because roads are publicly funded and heavily subsidized, that additional road might not happen for many years and people just have to adjust. Some drivers might take different routes and find more efficient routes, but others will still keep driving the crowded freeway. It gets even worse when that traffic is sporadic, because you don't take that route very often or get on the freeway at that time normally.
Imagine if you knew every morning what the traffic would be like? If you knew the cost of going to work would be before you got on? Your chances of taking that alternate route might increase, especially if it's a time or place you don't normally travel. Health care is similar to that road most people don't normally deal with. When they do get on the road, they find it super costly and have no clue where to go and get stuck in traffic. If only they knew what was coming before they got on, the decisions leading up to there would have been changed drastically. Since they were paying for the road ahead of time through insurance premiums (or so we hope) they might treat the road with a little more respect and understand what kind of blood and sweat went into it as well. Since they truly had no clue, they really don't care and expect it to pay for them 100% along the way.
Transparency and open reporting of costs, placing financial responsibility on individuals, and shedding light on our financial lives will make things much better for all of us.
I got this article in my daily news feeds and thought I would share my thoughts on this. I met with a local union organization yesterday about some political endorsing and they asked me why healthcare costs keep going up. I think I said it well, but not sure if they got it. The key is transparency. The article clearly shows that there are many hands paying the bills. We think it's us through insurance premiums and deductibles, but in reality someone else is subsidizing it.
This year has been a big eye opener for a lot of people who saw larger increases in insurance premiums. For a lot, these costs have never been budgeted for before and making that premium payment is a huge burden on their finances. I would bet that if more people had to allocate larger portions of their income to pay for healthcare they would figure out very quickly how to decrease that so they can enjoy the better things in life. When we get subsidized, we have a false sense of what costs are really there and we consume disproportionately. The reason money exists is because the world truly has limited resources and money keeps those resources in check so we don't over consume. We love consuming and could easily overdue it.
There is a concept in economics called the 'Tragedy of the commons" which relates perfectly to anything we have. Imagine wanting to get to work at 8:00am on a Monday morning on the freeway. There is plenty of road space available for one car to drive down and easily drive 65 MPH. The problem is there is also thousands of people wanting to get to their destinations at the exact same time. Thus we get traffic jams and only get to move at a snails pace. We have this limited resource- freeway room, and we have many people trying to use it. If this was a business, someone would realize there is an opportunity to open up a new freeway and take some of that excess capacity, but because roads are publicly funded and heavily subsidized, that additional road might not happen for many years and people just have to adjust. Some drivers might take different routes and find more efficient routes, but others will still keep driving the crowded freeway. It gets even worse when that traffic is sporadic, because you don't take that route very often or get on the freeway at that time normally.
Imagine if you knew every morning what the traffic would be like? If you knew the cost of going to work would be before you got on? Your chances of taking that alternate route might increase, especially if it's a time or place you don't normally travel. Health care is similar to that road most people don't normally deal with. When they do get on the road, they find it super costly and have no clue where to go and get stuck in traffic. If only they knew what was coming before they got on, the decisions leading up to there would have been changed drastically. Since they were paying for the road ahead of time through insurance premiums (or so we hope) they might treat the road with a little more respect and understand what kind of blood and sweat went into it as well. Since they truly had no clue, they really don't care and expect it to pay for them 100% along the way.
Transparency and open reporting of costs, placing financial responsibility on individuals, and shedding light on our financial lives will make things much better for all of us.
Thursday, April 24, 2014
Health Insurance Options
Open Enrollment on Nevada Health Link is now over. What is next? How can I get covered now? Well, we have options for you to get you insured until the Exchange opens up again. First, you could still get a major medical plan through us with the insurance carrier Nevada Health Co-Op. The Nevada Health Co-Op is still issuing effective dates at the first of the following month after you enroll for coverage.
Second, you could sign up on a short term medical insurance plan. A short term medical insurance is not a major medical plan but can give you some coverage with plans covering up to 2 million dollars. I may recommend a plan like this for a few months if a client wants to get insured with a carrier that has a waiting period such as, Health Plan of Nevada, Assurant, Anthem, Coventry One, and Sierra Health and Life.
What are the benefits of short term medical plans? Most plans will give you an effective date the next day and a lot of the premiums are lower than a major medical plan. Please call us to find out more information. We can help ease the stress of shopping for health care coverage.
Second, you could sign up on a short term medical insurance plan. A short term medical insurance is not a major medical plan but can give you some coverage with plans covering up to 2 million dollars. I may recommend a plan like this for a few months if a client wants to get insured with a carrier that has a waiting period such as, Health Plan of Nevada, Assurant, Anthem, Coventry One, and Sierra Health and Life.
What are the benefits of short term medical plans? Most plans will give you an effective date the next day and a lot of the premiums are lower than a major medical plan. Please call us to find out more information. We can help ease the stress of shopping for health care coverage.
Wednesday, April 16, 2014
Deductibles
What are Health Insurance Deductibles?
Just like car insurance, health insurance also has deductibles. When you purchase health insurance part of your preferences that you choose will be the amount of deductible you will have on your plan.
Deductibles defined:
Just like car insurance, health insurance also has deductibles. When you purchase health insurance part of your preferences that you choose will be the amount of deductible you will have on your plan.
Deductibles defined:
The amount you owe for health care services your health
insurance or plan covers before your health insurance or plan begins to pay.
For example, if your deductible is $1,000, your plan won’t pay anything until
you’ve met your $1,000 deductible for covered health care services subject to
the deductible. The deductible may not apply to all services.
Source: "Glossary."
HealthCare.gov. N.p., n.d. Web. 19 Mar. 2014.
Wednesday, April 9, 2014
Open Enrollment is over- so now what?
Boy are we glad march 31st has come and gone. For those of you who did not get a chance to purchase health insurance- don't fear! If you started an application in any way on the Nevada health Link website, you have a special enrollment for the next 60 days and will be able to complete a brand new application and finish! I highly recommend calling us and getting help so we can do it right though.
For those who didn't start an application, would rather not deal with the exchange (we don't blame you), you can still enroll in health insurance with us outside the exchange. If you have a qualifying event (I will explain later what these are) you can have coverage start the month following when you sign up as long as you sign up before the 15th of the month. If you do not have a qualifying event, then we can still get you insurance, but there is a 90 day wait. This only applies to Nevada Residents though. The 90 day wait is calculated as 90 days from the first of the month following enrollment. That means if you sign up today (April) you can have your coverage start Aug 1.
Qualifying events are basically life events where you went through a change. You either lost your other coverage from work, lost your job, got divorced, or moved out of the service area. If you get married and want to enroll with your spouse or had a new baby, you also get a special enrollment. If you are a member of a Native American Tribe you can enroll anytime and get those special enrollments all year long!
For those who didn't start an application, would rather not deal with the exchange (we don't blame you), you can still enroll in health insurance with us outside the exchange. If you have a qualifying event (I will explain later what these are) you can have coverage start the month following when you sign up as long as you sign up before the 15th of the month. If you do not have a qualifying event, then we can still get you insurance, but there is a 90 day wait. This only applies to Nevada Residents though. The 90 day wait is calculated as 90 days from the first of the month following enrollment. That means if you sign up today (April) you can have your coverage start Aug 1.
Qualifying events are basically life events where you went through a change. You either lost your other coverage from work, lost your job, got divorced, or moved out of the service area. If you get married and want to enroll with your spouse or had a new baby, you also get a special enrollment. If you are a member of a Native American Tribe you can enroll anytime and get those special enrollments all year long!
Friday, April 4, 2014
ObamaCare Special Enrollments
ObamaCare
Special Enrollment Period
A special enrollment period time
outside of the open enrollment period when you and your family can sign up for
health insurance. You may qualify for a special enrollment period of 60 days
following certain life events that involve a change in family status (for
example, marriage or birth of a child) or loss of other health coverage.
If you don’t have a special
enrollment period, you can’t buy insurance inside or outside the Marketplace
until the next open enrollment period. Job-based plans generally allow special
enrollment periods of 30 days.
The following life events will
generally qualify you for a special enrollment period.
- Getting married
- Having, adopting, or placement of a child
- Permanently moving to a new area that offers different health plan options
- Losing other health coverage (for example due to a job loss, divorce, loss of eligibility for Medicaid or CHIP, expiration of COBRA coverage, or a health plan being decertified). Note: Voluntarily quitting other health coverage or being terminated for not paying your premiums are not considered loss of coverage. Losing coverage that is not minimum essential coverage is also not considered loss of coverage.)
- For people already enrolled in Marketplace coverage, having a change in income or household status that affects eligibility for tax credits or cost-sharing reductions
Source: "ObamaCare
Facts: Affordable Care Act, Health Insurance Marketplace." ObamaCare
Facts: Affordable Care Act, Health Insurance Marketplace. N.p., n.d. Web.
19 Mar. 2014.
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