Medicare beneficiaries can decide in November about prescription drug coverage.

By Michelle Andrews Monday, November 1, 2010; 3:26 PM 

This month marks the beginning of the annual enrollment time for the Medicare Part D program, when beneficiaries can try to pick the plan that provides the best coverage for their prescription drugs. But even though switching plans may sometimes be a smart move, says Dan Mendelson, chief executive of Avalere Health, a consulting firm based in Washington, "seniors are remarkably passive when it comes to changing plans." 

Don't be. In part because of the health-care overhaul law, there are some changes in the Part D program that may affect your out-of-pocket costs and coverage for 2011. By investing time during the enrollment period - Nov. 15 to Dec. 31 - to evaluate your options on the Medicare Web site (www.medicare.gov), you can make sure you're signed up for the plan that's best for you. 

Analyses by health-policy experts indicate that Part D premiums are going up an average of 10 percent, to $40.72 monthly. But plans may depart significantly from that average, depending on such factors as deductibles, coinsurance and whether they cover prescription drugs while a beneficiary is in the so-called doughnut hole. 

There will be some new plan options as well, including Humana's Walmart-Preferred Rx Plan, which carries a $14.80 premium in every region of the country. That bargain price may well attract many seniors, but premiums are only part of the equation. By Nov. 15 each plan's formulary - the list of covered drugs - and cost details will be available. It's important to plug your drug information into the Medicare plan finder and compare costs. 

"Even in a low-premium plan, someone could have relatively high spending depending on the drugs they take," says Tricia Neuman, director of the Medicare Policy Project for the Kaiser Family Foundation. (KHN is a program of the foundation.) 

It's also important to investigate other plan features that might limit your coverage, says Joe Baker, president of the Medicare Rights Center, a consumer advocacy organization. In particular, beneficiaries should keep an eye out for limits on how much of a drug can be prescribed over a certain period and restrictions that require providers to explain why a particular drug is medically necessary. "It might be better to pick the plan without the restrictions, even if costs a bit more, because you're going to have an easier time," he says. 

As a result of regulations aimed at getting rid of plans that were duplicative or had low enrollment, there will be nearly one-third fewer drug plans offered in the coming year, according to a Kaiser Family Foundation analysis. Seniors will still have an average of 33 plans to choose from, however. 

If your plan is being eliminated in 2011, you'll be automatically assigned to another plan in your area. Don't assume that this replacement is the most cost-effective choice for you, say experts. Run the numbers for plans in your area to make sure you're getting the best deal. 

For Medicare beneficiaries with high drug costs, 2011 will bring some relief, as the federal health overhaul law continues to close the doughnut hole - the gap in coverage that occurs when a senior reaches $2,840 in total drug spending by himself and his health plan, and continues until the total exceeds $6,448. Under the overhaul law, seniors will get a 50 percent discount on brand-name drugs while in the doughnut hole, and a 7 percent discount on the cost of generics. 

These discounts will be important to Claudette and Richard Therriault. Until last summer, the couple was insured through Claudette Therriault's job at a senior housing facility near the couple's home in Sabattus, Maine. But when she turned 66 last May, Therriault says her company cut back her hours and she could no longer afford to keep her husband on her plan. 

Richard Therriault, 67, takes a number of brand-name drugs, including NovoLog for diabetes, OxyContin for chronic pain and Nexium for gastric problems. He enrolled in Medicare in May, and in June was already in the doughnut hole. After three months paying 100 percent of his bills, he reached the maximum and the plan started paying 95 percent of his costs. But by then he'd spent $4,550 out-of-pocket (his share of the $6,448). 

"It was devastating," says Claudette Therriault, adding that the couple almost lost their house. Now they're chipping away at a $3,500 loan from a local charity that got them through that stretch. 

Next year, they'll both be on Medicare. After another cutback in her hours, Claudette is leaving her job in December. She takes the anti-inflammatory drug Celebrex for her knees and Singulair for asthma; she estimates she'll probably enter the doughnut hole in November. The 50 percent discount will make a big difference for both of them. "You have no idea what a relief that will be," she says. "We'll probably pay $2,000 less than last year." 


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6 Tax Breaks That Anyone Can Claim.

By Annie Mueller Monday, November 15, 2010 
provided by INVESTOPEDIA

If the thought of doing taxes makes you break into a cold sweat, you're probably like many of us; fearful of making a mistake and having the IRS show up at your door. Tax forms can be complicated, but don't let the complexity scare you away from tax credits that are legally yours to claim. Tax deductions and credits aren't just for big companies and finance-savvy folks. Look over the list below; you might be surprised how many tax breaks -- in the form of both credits and deductions -- can be applied to your tax return.

1. Charitable Donations

Most cash donations made to charity in the tax year can be claimed as an itemized deduction on your tax return, but many folks don't realize that non-cash contributions can be claimed as well. If you've donated to a charity or non-profit organization using your credit card, you can claim that donation. If you've donated material goods or services, be sure that you have a receipt from the charity stating the value of the goods or services you donated. You can claim that value as a charitable deduction.

2. Child Care Credit

If you pay for child care regularly while you are at work, you may be eligible for a tax credit. The amount of care covered can be up to $6,000 for the care of two or more children, according to Kevin McCormally, the Editorial Director of Kiplinger.com. Be sure to keep clear records; paying your child care provider in cash while keeping no traceable record of the payment will make it extremely difficult to claim the amount on your tax return.

[Click here to check savings products and rates in your area.]
http://finance.yahoo.com/rates/query?t=s

3. Home Energy Efficiency Improvements

If you have to make any home improvements, go with the energy efficient options. Consumers can claim 30% of the cost, up to $1,500, of energy efficient home improvement items, such as "energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes," according to the Department of Energy. So replace those doors and windows by the end of the year and get a break on your taxes.

4. Residential Renewable Energy Tax Credits

Another "green" tax break is for renewable energy additions made to your home. The Department of Energy includes "solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems". Home owners can get a tax credit of up to 30% of the cost of these improvements. When you consider how much money this type of renewable energy will save you in lower electric bills over the years and combine that with the 30% tax credit, greening your home begins to look like a pretty smart move.

5. Automobile Tax Credits

Get green on your commute and you could see more green on your tax return. Purchase a hybrid gas-electric or alternative fuel vehicle before the end of 2010, and you can get a credit on your taxes. Amounts vary according to what type of vehicle you purchase and some credits are phased out as dealers sell a certain amount of cars, so be sure to ask your car dealer before you purchase. If you're a DIY person, you can also get a tax credit for 10% of the cost of a plug-in hybrid conversion kit.

6. Relocating for Work

Whether you're moving for your very first job, for a new job or for relocation with your current employer, you can recover some of your relocation expenses. You have to validate your move by passing a couple of "tests". The first test involves the distance. The distance from your new work location to your former home has to be at least 50 miles longer than your previous commute. The second test is just a way of proving that you actually moved for the job; you have to be employed for at least 39 weeks out of the 12 months immediately following your move, in the vicinity of your new job. You don't have to actually be employed with the same company, just in the same general area.

Bottom Line

Don't be fooled into thinking that tax credits and deductions are for everybody but you. Simply donating, working and improving your home can add up to significant savings on your taxes, so start getting out those receipts and adding up the numbers. Document what you claim on the deductions and ask your tax professional if you have any questions about what you can claim. Then go for it; you might be getting a much bigger refund than you thought. 

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How Couples Can Maximize Their Social Security Income.

James Montreuil, On Monday November 15, 2010.

*Note: This was written by a Yahoo! contributor. 

As an independent financial advisor, I have been helping couples maximize their retirement income for over 15 years now. Part of this total retirement income is the monthly retirement benefit received from the Social Security Administration. There is one particular strategy that is a simple and effective way to increase the amount of income received each and every month from Social Security. The thing is, most couples don't ever learn about it. It is called the "Claim some now, Claim more later" strategy.

The way that it works is pretty straightforward. The ideal situation is when the older spouse is in a strong financial position that allows them to defer receiving their SS benefit in order to claim the highest possible benefit amount at age 70. Currently, the monthly SS benefit goes up 8% for each year it's deferred from age 65 to age 70, and there are also periodic "Cost of Living Adjustments" (COLA) that would also increase the older spouses' benefit amount. This means that at age 70, the older spouse would be able to claim 135% of their Full Retirement Benefit, plus any COLA increases.

The strategy entails that the older spouse files for their SS Benefit at age 66, which is currently the Full Retirement Age (FRA), and then suspends the receiving of the benefit (a/k/a "File and Suspend"). Then the younger spouse can file to receive a spousal benefit based on the older spouses work record. The earliest the youngest spouse could file and receive this spousal benefit would be at age 62, in which case they would receive 35% of the older spouses' Full Retirement Benefit (FRB). If they waited to age 65, they would receive 50% of the spouses' FRB, which would be the maximum spousal benefit amount.

Now when the older spouse reaches age 70, they could start to receive the maximum benefit of 135% of their FRB and then when the younger spouse reaches age 70 they could file on their own record and now receive 135% of their own FRB also. This situation maximizes the amount the couple could collect from SS while also allowing the younger spouse to collect a spousal benefit potentially from age 62 to age 70. After approximately 7 years, the couple would have recouped the income that they didn't receive by deferring their own benefits until age 70. From that point forward, the couple will end up collecting much more money (potentially hundreds of thousands) out of the SSA system that if they filed earlier than at age 70, especially if they live a nice long life into their nineties and beyond. A nice way to plan your SS Benefits if you have the right knowledge. 
 

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A.M. Best Reaffirms HCSC’s A+ Financial Rating [All Markets].

November 10, 2010

A.M. Best Co. continues to rate the financial strength of Health Care Service Corporation, a Mutual Legal Reserve Company (HCSC), as one of the strongest in the health insurance industry. On Oct. 19, 2010, A.M. Best again affirmed the A+ (Superior) rating for HCSC, as well as several lines of business and affiliates. HCSC operates Blue Cross and Blue Shield of Illinois, as well as the Blue Plans in New Mexico, Oklahoma and Texas.

Also per A.M. Best, the outlook is stable. The rating determination is based on HCSC’s established market presence and market share, diversified product offerings and strong capitalization. 

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The U.S. government's Medicare program has ordered three health insurers--Universal American Corp. (UAM), Health Net Inc. (HNT) and Arcadian Health--to stop marketing to and enrolling new members in their Medicare Advantage health and prescription-drug plans, saying the companies violated regulations. 

The moves come at a critical time, the midst of the 2011 Medicare open-enrollment season, when seniors choose their plans for Medicare health and drug coverage for next year. Open enrollment runs from Nov. 15 through Dec. 31. While seniors can select the traditional, government-run Medicare program, insurance companies offer government-funded Medicare Advantage plans that ...  

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By WALECIA KONRAD Published: November 26, 2010  

IF you are like most people, you have probably used a credit card to pay some of your medical bills. With rising health costs and gaps in insurance coverage, it’s almost unavoidable. 

Mark Rukavina, executive director of the Access Project, said medical cards might not be suited to people with limited financial resources. “But it’s usually people with limited resources who sign up,” he said. 

Patients pay about $45 billion worth of health care costs with plastic, according to a report from McKinsey & Company. By 2015, that number could more than triple to an estimated $150 billion. And big finance companies and medical providers have taken note. 

Companies like GE Money, Citibank and JPMorgan Chase have issued medical credit cards or lines of credit intended to be used specifically for elective health care expenses not covered by insurance, including certain dental procedures, Lasik surgery, some cosmetic surgery and even veterinary care. The cards are not used for continuing medical care or emergency room visits. 

The issuers market these cards not so much to consumers but to doctors, dentists and other health care providers, who in turn offer them to patients as a payment option. Patients like medical credit cards because payments for care can be spread out over many months and the cards can be used at multiple providers. The providers have embraced them as a way of offloading billing headaches and expenses. 

But even as medical credit cards become increasingly popular, they are getting more scrutiny — not much of it flattering. Critics and patient advocates claim that aggressive and misleading marketing tactics can lead to serious headaches for consumers. 

In extreme cases, medical providers and associations marketing the cards have been accused of receiving financial incentives for signing up patients or of falsifying financial information to make it easier for patients to qualify for cards. 

More commonly, critics say, patients may be led to assume that their providers are simply offering payment plans, not a credit card with all the potential fees, interest rate increases and the impact on credit scores that can entail. 

“Ironically, these cards may be best suited to people who already have financial resources," said Mark Rukavina, executive director of the Access Project, a consumer advocacy group in Boston, and co-author of a study on medical debt. “But it’s usually people with limited resources who sign up.” 

Consumer complaints concerning aggressive marketing tactics prompted the New York attorney general, Andrew M. Cuomo, to start an investigation into medical credit cards earlier this year. In Minnesota, the state attorney general, Lori Swanson, has filed lawsuits against two chiropractors whose staff is accused of signing up patients for medical credit cards without their knowledge. 

A medical credit card is “one payment option among several a provider may offer and represents a very small component of health care financing for elective procedures,” said Stephen White, a spokesman for CareCredit, a medical credit card issued by GE Money. “Benefits to consumers include the ability to plan, budget and pay for certain elective health care procedures over time.” 

Whether you view these cards as a convenient way to pay medical expenses or just another way for credit card companies to collect interest and fees, here are some things to consider if your provider approaches you. 

ASK FOR ALTERNATIVES First, try to negotiate a lower fee with your provider; he may be more flexible than you think. Then ask about payment options. Your doctor may well offer a payment plan of his or her own, without the high interest rates often charged by a medical credit card company. 

“I encourage people to negotiate with their provider, then get an extended payment plan directly from that office with a monthly payment and time period you are comfortable with,” said Mr. Rukavina. “I think most providers are willing to work for patients in this way.” 

If you do opt for a payment plan, ask whether you will be paying the provider directly or a third party. If there’s a third party involved, you may well wind up with a medical credit card. If you choose to sign up for it, be sure you’ve read through the terms carefully and that you understand the interest rates and late payment fees. 

If your income is low enough, be aware that you may qualify for a public assistance program, especially for dental costs. 

DODGE THE HARD SELL “Some patients report feeling pressured by their clinics to use the card to pay for procedures or treatments they may not need or can’t afford,” Ms. Swanson said. That’s no surprise, since these cards are intended, at least in part, to drive more business to dentists, chiropractors, cosmetic and eye surgeons, weight loss programs, hearing aid dispensers and other providers. 

But the intense marketing can lead to unethical behavior, according to Ms. Swanson. 

One of the lawsuits filed by her office claims that staff members at a chiropractic office told patients they were not signing up for a credit card but rather just going through a credit check. Instead, Ms. Swanson charges, the staff members submitted applications in the patients’ names and falsified patient’s yearly income information to make sure they qualified. 

If you sense you’re being pushed, that things are moving too quickly, remember that you don’t have to sign up for anything on the spot. Take a day or two to read through materials thoroughly and research your options. 

BEWARE THOSE TEASER RATES Almost all medical credit cards claim zero percent financing. This is what makes them attractive: you can spread out your payments and pay no interest. 

But it is important to read the fine print. As with most credit cards marketed this way, the zero percent rate lasts only for an initial promotional period, usually from six to 24 months. Once that time is up, you will start to pay interest — sometimes high interest. 

For GE’s CareCredit, for instance, rates jump to 26.99 percent. (The company does offer a fixed rate of 14.9 percent for extended periods up to 60 months.) 

High interest isn’t your only concern. Be sure to check your minimum payment, advised Ms. Swanson. If you pay only the minimum, your payments may extend beyond the zero percent financing period, and you’ll end up with the higher rate. 

What’s more, if you make just one late payment or go over the initial promotion period, some cards will charge you a high interest rate retroactively on the original balance, Ms. Swanson noted. That can suddenly add hundreds of dollars to your bill. 

PAY AS YOU GO Some providers will charge your medical card for an entire multivisit procedure, like a dental implant, all at once. If you change providers midway through, or do not go through the entire procedure for some other reason, it can be difficult and time-consuming to get a refund, warned Mr. Rukavina. 

If you are entering into a treatment or procedure that will take more than one visit, make sure your provider is billing you by the visit, not in a lump sum. 

You can find more background on medical credit cards from the Minnesota attorney general’s office at www.ag.state.mn.us/Consumer/Publications/HealthCareCreditCards.asp. 

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How the new food safety bill might affect you.

By Brett Michael Dykes Tue Nov 30, 2010

 
Today -- a year and half after it was passed by the House of Representatives --the Senate passed the Food Safety and Modernization Act (SB 510) by a 73-25 margin. The bill still has to be brought into line with the House's version before President Obama can sign it into law, but its basic provisions have already won praise from safe-food advocates as "the most important food-safety legislation in a generation."

The bill would produce a major shift of regulatory power, granting the Food and Drug Administration (FDA) sweeping new powers to oversee farming and track and recall food products -- while also giving the agency the authority to conduct more safety inspections on farms, slaughterhouses, processing plants, etc.

So what does the legislation mean to the average American consumer? Here's a rundown of the direct effects it may have on all of us:

Slightly higher food costs: Critics of the bill, both on the left and the right, have argued that food producers will pass on the higher costs of stricter regulation to consumers, and there's a chance that could happen. However, the bill does exempt farms making less than $500,000 per year -- and supporters of the bill contend that the FDA's enhanced oversight will likely save food makers the higher costs associated with removing contaminated food from the marketplace after the fact.

Selling and sharing from your small garden: Opponents have also suggested that the bill would basically outlaw the sale and distribution of fruits and vegetables grown in backyard gardens. This is not the case. As SB 510 is currently worded, small growers who sell their goods at food co-ops, farmer's markets, roadside stands, etc., wouldn't have to register with the FDA -- though they would still have to comply with whatever state and local food laws are in effect in their area.

Enhanced public health: According to Democratic Illinois Sen. Dick Durbin, who co-sponsored the bill, 76 million Americans are stricken with some sort of preventable food-borne illness each year, resulting in more than 325,000 hospitalizations and 5,000 deaths. Advocates of the new bill say that eliminating these outbreaks would save lives -- as well as millions in health-care costs -- each year.

Peace of mind: In the wake of recent recalls of eggs, spinach, pistachios, peanut butter and milk, many Americans are increasingly worried about serious health risks from large-scale corporate agriculture. Of all the world's industrialized nations, the United States has been among the most resistant to making changes to its food safety laws. Sen. Tom Harkin of Iowa, one of the bill's co-sponsors, recently argued that the bill "couldn't be more urgent or absurdly overdue," adding, "It is shocking to think that the last comprehensive overhaul of America's food-safety system was in 1938 -- more than seven decades ago."

A functional Congress: For the first time in recent memory, the bill fostered a strong bipartisan effort between Republicans and Democrats to do something about a problem that touches just about every American. According to New York Times reporters Gardiner Harris and William Neuman, some of the Senate staffers from both parties involved in the negotiations had never even met previous to working on SB 510.

"The group bonded over snacks: specifically, Starburst candies from a staff member of Senator Mike Enzi, a Wyoming Republican, and jelly beans from a staff member of Senator Richard Durbin, an Illinois Democrat," Harris and Neuman write. "And in the midst of negotiations, the negotiators -- nearly all women -- took a field trip to a nearby food market so that a Republican staff member could teach the Democrats how to buy high-quality steaks."

So safer food makes for happier, healthy bodies -- and greater bipartisanship. Perhaps the next Slurpee Summit in Washington should feature wheatgrass smoothies.  

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Social Security cuts are part of deficit plan.

By ANDREW TAYLOR, Associated Press

AP – President Barack Obama's Debt Commission co-chairmen, Erskine Bowles takes part in a news conference WASHINGTON – Divisions remain within President Barack Obama's deficit commission on politically explosive budget cuts and slashes in Social Security benefits, even as the panel's co-chairmen go public with a revised plan to tame the runaway national debt.

The new plan by co-chairmen Erskine Bowles and Alan Simpson, unveiled Wednesday, faces an uphill slog. Resistance is certain, not only because of the idea of raising the Social Security retirement age, but also because of proposed cuts to Medicare, curtailment of tax breaks and a doubling of the federal tax on a gallon of gasoline.

Though the plan appears unlikely to win enough bipartisan support from the panel to be approved for a vote in Congress this year or next, Bowles has already declared victory, saying he and Simpson have at least succeeded in initiating an "adult conversation" in the country about the pain it will take to cut the deficit.

The plan faces opposition from many commission members. House Republicans appear uniformly against tax increases, while liberal Democrats like Jan Schakowsky of Illinois appear unlikely to be able to accept big cuts in federal programs for seniors.

Obama named the commission in hopes of bringing a deficit-fighting plan up for a vote in Congress this year, but it appears to be falling well short of the 14-vote bipartisan supermajority needed.

A new version of the plan makes mostly minor changes to a draft that whipped up enormous controversy when unveiled earlier this month. Some domestic spending cuts are modestly higher than previously proposed, and health care savings from overhauling the medical malpractice system would reap less than proposed earlier this month.

Even with all of the sacrifices, the plan would fail to balance the budget — leaving a deficit of $421 billion in 2015 — but would stabilize the national debt at a economically sustainable level compared to the size of the economy.

Unlike their original proposal, Bowles and Simpson stop short of calling for caps on medical malpractice awards. Instead they recommend changes in how awards are made.

But other proposals remain the same. Among them are a gradual increase in the Social Security retirement age to 68 by 2050 and 69 by 2075, using a less generous cost-of-living adjustment for the programs and increasing the cap on income subject to Social Security taxes. The early retirement age would increase from 62 to 64 along the same timetable.

The plan also retains a 15-cent-a-gallon increase on gasoline, a three-year freeze on federal worker pay and the elimination of 200,000 workers from the federal payroll through attrition.

Other recommendations:

• Impose tight "caps" on the agency budgets adopted by Congress each year, including a near-freeze on the Pentagon's budget.

• Eliminate congressional pet spending projects known as "earmarks."

• Reduce the corporate income tax rate to 28 percent from 35 percent and stop taxing the overseas profits of U.S.-based multinational corporations.

• Overhaul individual income taxes and corporate taxes, giving Congress the choice of reducing the top rate to as low as 23 percent and no higher than 29 percent. The lower the rate, the fewer the tax credits and deductions that would be available to taxpayers.

Under one scenario proposed by Bowles and Simpson, taxpayers would face three tax brackets of 12 percent, 21 percent and 28 percent. Taxpayers would still be able to claim an earned income tax credit and child tax credit as well as all standard deductions and exemptions. Capital gains and dividends would be taxed at ordinary income tax rates. Taxpayers could claim a mortgage interest deduction up to $500,000, but only on their primary residence.

If Congress does not undertake a comprehensive overhaul of the tax system by 2013, the plan calls for a "fail-safe" provision that would trigger across-the-board reductions in tax breaks, designed to raise revenue by $80 billion in 2015 and $180 billion in 2020.

Bowles was White House chief of staff when former President Bill Clinton negotiated a balanced budget plan in 1997; Simpson is a former GOP senator from Wyoming. 

Only Bowles and Simpson are guaranteed to support the plan when the panel votes. None of the 12 House members and senators named by Obama have committed to the proposals, though Bowles and Simpson could pick up support from nonelected deficit hawks like Democrat Alice Rivlin and Honeywell International's chief executive, David Cote, a Republican, who won't have to defend themselves to voters. Republican senators seem more likely to vote for the plan than their rigidly anti-tax increase House counterparts. 

"I don't know if we're going to get two votes or five votes or 10 votes or 14 votes," Bowles told reporters. "There are enough reasons to vote 'no' in this plan for anybody to vote 'no.'" 

A supermajority of 14 of the 18 panel members would have to approve recommendations for a possible vote in the lame-duck session of Congress. That seems out of reach, but Bowles says it's just as important to have jump-started a national debate on what it'll really take to bring the deficit under control. 

"Our goal in this whole process has been really simple," Bowles said. "It's basically been to start an adult conversation here in Washington about the dangers of this debt and the deficits we are running." 

He added, "The era of deficit denial in Washington is over."

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