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Where looking good is understood!
NOVEMBER NEWSLETTER
The holiday season is just around the corner and what a welcome relief it will be from the mid-term elections. It seems that U.S. citizens now only have a choice of the lesser of two evils instead of the better candidate! Because the purpose of our newsletter is to educate and stimulate, it will not always cover skin diseases.
Accordingly, the topic for November and December is Plans to Pay for Healthcare. This month’s installment will discuss options to pay for healthcare expenses. Next month we will discuss which healthcare expenses are actually deductible on your taxes.
The following five basic options exist to pay for healthcare expenses: 1) Cash, 2) Insurance, 3) Medical Savings Accounts, 4) Flexible spending accounts, and 5) Government programs e.g., Medicare, Medicaid, Prescription Benefit Plan for Seniors, Veterans Administration, etc. All of these programs have advantages and disadvantages. Keep in mind that ultimately you pay for healthcare. There is no free lunch. It is to your advantage to pay for your healthcare expenditures with pre-tax dollars and try to get the biggest bang for your buck.
Cash is King! Paying for healthcare expenditures with cash offers the following:
Advantages:
§ No gatekeeper- you purchase the services you want.
§ Administrative costs are reduced because there aren’t insurance company administrative expenses to consume your healthcare dollar. There is reduced overhead cost for physicians, as employees aren’t needed to fight the insurance company for payment.
§ You don’t get reported to insurance data banks.
Disadvantages:
§ Catastrophic illness/injury can ruin you financially
§ You can only deduct healthcare expenses that total more than 2% of your adjusted gross income.
§ You don’t have the bargaining power to negotiate fees like a large insurance company.
Medical insurance is a way to spread risk. The costs vary with your age, health history and amount of deductible. The cost goes up with increasing age, increasing health problems, and lower deductibles. Actuaries have access to all the risk data so you never know if you are getting a good deal.
Advantages:
§ Premium is basically tax deductible if you are an employee of a company or self employed
§ Risk is spread among all people in the plan so a catastrophic illness/injury doesn’t bankrupt you.
Disadvantages:
§ Premiums paid are lost if you never have any claims.
§ Costs can be significant if you have a major illness/surgery. A medical bill of $100,000 would leave you with a $20,000 bill in a standard 80/20 plan.
§ The insurance company determines who and what will be paid. A good example is a motorcycle rider being denied medical coverage for injuries suffered in an accident. Make sure you know exactly what the policy covers.
§ Administrative costs and dividends being paid to shareholders eat into your healthcare dollars.
Medical Savings Accounts (MSAs) offer the best of both worlds. MSAs are like IRAs. You set aside a certain amount of money that is tax deductible in most cases (Apparently this year our wonderful elected officials have not renewed the deductibility of MSAs in sessions before the mid-term elections). The monies are applied to medical costs up to $2700 for a single individual and $5450 for a family (IRS Publication 969). Additional medical coverage is through a high deductible insurance policy to cover catastrophic illness/injury.
Advantages:
§ No gatekeeper
§ No reporting to an insurance data bank for services paid through the MSA
§ Medical bills are paid with pre-tax dollars. This is in contrast to the payment of co-pays with after-tax dollars with standard medical insurance. You still have high deductible insurance plan to cover catastrophic illness/injury.
§ This is the best plan if started early in life i.e., less than age 30.
§ The money in the account rolls over year to year and goes with you. Not all of your money is lost through premiums.
§ Good plan to pay for dental and eye care
Disadvantages:
§ Administrative costs may be higher
§ Not a good plan for individuals who don’t take care of their health or have bad genetics
Flexible Spending Accounts are offered through employers. These plans require you to estimate your medical expenses for the upcoming year. This amount of money is then withdrawn from your paycheck on a regular basis. The limit is $5000 per year. You pay for medical expenses at the time of service, then submit receipts to the plan administrator for reimbursement. It is important that you use up all the money in this account as the plan determines what happens to the left over money at the end of the year. The left over funds usually don’t come back to you and payments for the benefit year can only be carried over 2 months and 15 days into the next year. You have traditional medical insurance as backup coverage for catastrophic illness/injury.
Advantages:
§ Medical bills are paid with pre-tax dollars.
§ Good way to pay recurring medical costs i.e., eye and dental care not covered by traditional medical insurance.
§ No gatekeeper
Disadvantages:
§ Can be difficult to estimate yearly medical expenses.
§ Monies that aren’t used are lost.
§ Administrative costs may be higher.
Government programs are highly influenced by politics. These systems will go broke, severely ration care, and/or result in astronomical taxes in the future. Not much else to say about these programs.
That is a brief summary on common Plans to Pay for Healthcare. Other options do exist. If in doubt seek expert accounting and legal advice. We hope that the information will stimulate you to think about the ways you pay for healthcare expenditures. Run the numbers and estimate your health risk to see what plan might benefit you. Next month the newsletter will discuss healthcare expense deductions.
Get Rid of Unwanted Fat!
Lipotherapy, often called lipodissolve, was started in Brazil and has more recently been successfully used in the United States. Lipodissolve involves the injection of small amounts of Phosphatidylcholine and Deoxycholate under the skin to break down localized fat collections, which are later eliminated by the body.
Our colleague, Michael Nelson, MD, is offering lipotherapy appointments at Integrated Skin Solutions. You will be evaluated and treated by a physician utilizing standard mesotherapy and lipotherapy techniques and formulas. Please call Dr. Nelson at 816-522-2051 for more information.
Our monthly newsletter has drawn to a close. Check out our website at www.integratedskin.com. If you would like to be removed from our mailing list notify us at info@integratedskin.com (send your email address in a separate message- a reply to this Newsletter will not contain your email address).
Sincerely,
The Staff at Integrated Skin Solutions- “Where looking good is understood!”
7424 NW River Park Drive (Hwy 9)
Parkville, MO 64152-5028
816.505.5550 Fax 816.505.4550
www.integratedskin.com
Questions or comments- info@integratedskin.com
