Senior Health Care Problem

Health Care Reform is Now Law.  In all of the discussions about health care reform, everyone agrees that we need a method to rein in costs. 

Did this bill improve our health care system??? 

Seniors need to be concerned, The American Medical Association (AMA) does not like the 21% cut in Medicare payments. 

Such price controls have not worked in the past, and there is little evidence that those cuts will be beneficial.

Some seniors may lose Medicare benefits they now enjoy.

Many senior citizens worry about the effect that the health care reform bill may have on them. After all, they generally use the health care system more than do younger people. And those living on fixed incomes may have little leeway in their budgets to help if their health costs rise.

Why would anyone think they might lose benefits?

Could it be that the financing of the new Health Care law requires a $500 billion cut in Medicare over the next 10 years?

Could it be observers already see 21% cut in provider reimbursement this year alone? Only Congress stepping in with a 2.2% increase at the last minute stopped the pay cut in order to keep doctors in the program.

The enrollment in Medicare is set to sky rocket in the next 10 years. $500 billion is supposed to be cut from the program at the same time. The words rationing come to mind when asked to provide services to more people but with less money.

**One of the key points emphasized is better access to healthcare.  The opinion in the field is that you may have access, but the average wait to see your doctor will be 44 days.  Supporting this claim is a new trend that could have serious implications to access. 

The Mayo Clinic has announced a new program, (initially limited to 300 people) that guarantees access to their care facility.  The cost:  $5,000 per year for an individual and $8,000 for a couple. (Source:  National Underwriter By JACK BOBO  Pubished 6/21/2010)  A physician friend of Jack’s is instituting similar plans for immediate access to their services at costs around $1,500 dollars per year.  If this trend continues, then the wait time for those who cannot afford the access fee most certainly will be longer than 44 days. 

Can you imagine how this extra cost will affect retiree’s retirement plans???

The new Federal law requires insurers to accept anyone, regardless of insurability, now that is a good thing – but to suggest that can be done without increasing premiums or taxes is ludicrous.  The current proposals expand coverage, but do little to reduce cost, failing to heed any of health care’s management lessons from the last 25 years.

One challenge for seniors is when a patient’s drugs have reached the Medicare coverage limit, but don’t cost enough to qualify for catastrophic coverage. This problem is commonly referred to as a doughnut hole.  Right now, after a senior has spent $2,700 on drugs in a year, coverage stops until that same person has spent $6,154 on drugs, when it starts up again.

Beginning in 2010, people who fall into this hole will get $250 from the government to help.  WOW!  How much help is that?  It is obvious that the aim was misdirected insofar as improving our healthcare system.

More and more of your retirement dollars will have to be spent on health care than what most of us thought.  This places retirement income in jeopardy along with a lower standard of living in retirement. 

As with Seniors, Health care is also a huge concern for small businesses  — like the local diner, the hardware store down the street, the neighborhood repair shop –face special challenges in providing health care coverage for their employees. 

Health coverage is employers’ most unpredictable major cost, a threat to their businesses’ competitiveness, and they have increasingly offloaded costs onto employees. Small businesses typically pay more per worker for health care insurance, if they offer benefits at all. 

Premiums have jumped 15% per year on most small businesses.  Companies have been laying off people and/or cutting hours to make ends meet.  There is a tax credit for small businesses of up to 35% for small businesses with fewer than 25 employees, but with premiums at a level of $12,000 dollars a year per employee , the credit does not provide real help for a small business. 

This legislation did not deal at all with the real reasons access to healthcare is a struggle for so many – the astronomical costs.

When companies stopped providing pensions plans, people had to start do-it-yourself programs called 401k’s, IRA etc and it sure appears that now each one of us needs to set up a do-it-yourself health insurance program. You should be looking at a life annuity.

Annuities was and is a great product to help with the self-pension programs and we recommend that near retiree’s and retiree’s look at an annuity plan that will provide a guaranteed monthly income to be used to cover the extra costs of health insurance as you age.

You may be able to generate more income if you actively manage your income but this takes time and expertise. Or perhaps you are just fed up with worrying about the net return and want a life annuity to provide you with a guaranteed income.  The more risky is an investment, the more potential it holds to be profitable. It also has more potential for loss.

A fixed insurance annuity is an important piece of any retirement portfolio. It makes a small, guaranteed return, no matter what the rest of the economy is going through. It will never lose value (what is already earned, has become part of the asset).

It can reduce taxation problems either now or at time of withdrawal. It includes no purchase fees, management fees or termination fees. It provides quarterly statements, for confident knowledge of the plan’s status, with no continued study required to keep it current. Contributions can be one-time, whenever funds become available or regularly recurring.

An annuity allows the freedom to invest a portion of assets aggressively. It may be a great winner. If not, the annuity will still provide a secure future.