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I just learned something new (to me).

Recently, one of my small group clients had to let a long-time employee go. The plan itself is HSA-compliant, and the employer (very generously) funds each employees account with $750 a year. He also covers the lion's share of the premium.

The unfortunate employee reached out to me to see what his options were. The group wasn't large enough to be subject to COBRA, but here in Ohio we have a so-called "mini-COBRA" law that guarantees (in specific circumstances) that the employee can continue his group plan for up to a year (paying the full freight, of course). One can imagine that this gets, as my dear departed sister used to say, "spendy:" in this case, upwards of $1,000 a month for the employee and dependents, all while he's between jobs.

Ouch.

One option we explored was a short-term medical plan, which would be much less expensive (under $300 a month) but which has its own limitations.

Here's where it gets interesting: I recalled that one could use HSA funds to pay for COBRA premiums, but wasn't sure if that would also include "mini-COBRA" state continuation plans.

So I reached out to our gurus of all things HSA (and FSA, and HRA) at FlexBank, who assured me that:

"HSA funds can be used to pay for Cobra and State continuation premiums.  See attached list of qualifying expenses for the HSA under eligible expenses." [emphasis added]

[ed: that list is available to interested readers, just drop us a line]

Interesting!

So, I don't know yet which way the former employee will go (if at all), but at least he has another funding options.

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A few months back, we considered the case of the gentleman who had passed away after he'd let a policy lapse, and the implications thereof:

"I asked for the policy number to which it referred, and advised him that when the policy lapsed last year it created a taxable event, and that the balance due is being treated as taxable income (which would have also been the case if my client was still with us)."

That is, letting a policy with a substantial loan against it lapse is a sure-fire way to trigger a potentially hefty tax bill.

Flash forward to earlier this week, and I field a call from another agency client who had some questions about his life insurance policy. In this case, the policy was still in force, but also one he had bought from another agent long ago (and with a carrier we don't represent). So I of course offered to help as best I could (because he is an agency client) but that my answers would of necessity have to be pretty generic.

The facts were these: the gentleman, now in his late 70's, had purchased a whole life plan from XYZ Life while in his 30's. Over the intervening years, the policy's cash values had grown (substantially), and he had borrowed heavily against them, such that his original $200,000 death benefit is now reduced to about $20,000 (yikes). The problem is that the loan keeps growing, and if he doesn't at least freeze it, the policy will lapse.

Okay, so what? If he no longer needs that policy, what's the big deal with just letting it go?

Well, as mentioned above, that will trigger a pretty sizeable tax bill, one that he may well wish to avoid (being on a fixed income and all). So by paying the interest, in addition to the premiums, that should freeze the loan. The goal, I explained, was for him to die before the policy does. In that case, the loan, and potential tax bill, die with him.

Morbid, I know, but also honest.

He asked if he should pay all the interest, and I said that would be ideal, but even just paying some of it will help to forestall the inevitable.

To which he replied: "oh, I get it, paying some of the interest shows my good faith effort to the IRS."

Um, no: the IRS (and the carrier) couldn't care less about "good faith efforts," it's all about the Benjamins.

Pretty simple, that.

The lesson here? Consider *all* the long term implications, and ask questions, before stripping the cash out of a policy.

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Back in 'Aught 12, we noted that the Norwegian national health care scheme was starting to buckle:

"[T]he E.R. is simply not open at this hour ... What? There’s not always a doctor at the E.R.?"

That would be a 'no.'

And even that model of competence Sweden had begin feeling the pain:

"Swedes also complain about not being able to see their own regular general practitioner"

Life under government-run health "care."

But things are changing; co-blogger Mike alerts us to the newest developments:

"It’s intriguing that while socialists in America would rush to nationalize the health care system, Norwegians, Swedes, and Danes are all gradually increasing their use of private health insurance."

Wait, what?

How could this be?

Well, the numbers tell a very interesting tale:

"Between 2006 and 2016, the portion of the population covered by private insurance increased by 4% in Sweden, 7% in Norway, and 22% in Denmark."

Remember that when Medicaid4All proponents here tout the wonders of government-run health "care."

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One of the bullet points in yesterday's order focused on the use of HSA's for Direct Primary Care and Health Sharing Ministries. To those in these types of arrangements, you might want to dial back your enthusiasm.

Why do we say this?

One first must remember the requirements to fund an actual Health Savings Account. Straight from the IRS website...

To be an eligible individual and qualify for an HSA, you must meet the following requirements.

• You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.

So, to fund an HSA to pay for DPC or HSM you must pay premiums and purchase an insurance plan. Nothing like paying premiums for insurance so that you can set up an account to draw funds from said account to pay for more "insurance."

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Via FoIB Holly R, this latest from the rascals at the MVNHS©:

"Coroner demands NHS 111 changes after six-year-old Sebastian Hibberd's death "

And what, you may ask, is the context here?

Well:

"Sebastian Hibberd died after staff failed to spot warning signs that part of his bowel had collapsed."

After which he experienced cardiac arrest while, and sit down for this, he awaited medical attention.

You don't say?

But what could possibly have led to this tragic outcome?

Would you believe ... math?

"[C]all handlers were not being "adequately assisted" by the algorithm used to assess patients over the phone."

Those darned algorithms will get you every time.

Cannot wait for us to implement that here.

#Medicaid4All

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Medicare Hospital benefit Part A covers medically necessary inpatient charges incurred and billed by the hospital. GA Medicare expert Bob Vineyard explains.

Original Medicare has a PER ADMISSION deductible. In 2019 the amount is $1364. Charges incurred during the next 60 days are covered by Medicare.

Most Medicare supplement plans, also known as Medigap, pay that deductible for you.

You may also incur OUTPATIENT charges in the ER and treatment or consult by medical personnel who are not on staff. These charges are applied to your Medicare Part B coverage.

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We've written before about (so-called) Grandfathered Plans, most recently here:

"... as frustrating as it is, their current policy is the least bad alternative (at least until the next Open Enrollment period)."

A good blog-friend of mine recently wrote about her experience with her own grandfathered plan. She's a long-time MS patient, and had this to say:

"I finally received the hospital bill for my Feb 4th Rituxan infusion. That was my 36th infusion since Nov 2009. At first we tried stretching out the time between infusions, but I was still relapsing. After a relapse in Nov 2011, we went to the every-6-month schedule. I didn't relapse again until Feb 2016.

That's amazing!

So back to the bills. I'm a number cruncher and keep track of all sorts of things. For those 36 infusions, the hospitals have charged $539K in total. More than half a million dollars, folks! Insurance okayed charges of $458K of which $399K was for the Rituxan itself. Because of having a grandfathered individual insurance policy, my copay for infusions/drug has been limited to $22,857.24.

This is what I need to remember to appreciate my current monthly insurance premiums of $1028 (which will certainly go up again after my annual renewal in September). So from 2009-2019 (11 years), I will have paid at least $87,732 in insurance premiums, BUT my out-of-pocket maximum has been limited to $27,500, the most of which has been allotted to Rituxan infusions. (Vision, dental, and other prescriptions not included.)

So..... for $115,232, I have received half a million dollars worth of medical care for a single pharmaceutical treatment and have spent only about $5000 OOP for doctors, MRIs, or ER visits.

MOST IMPORTANTLY.......I'M STABLE!!

That's my gratitude thought of the day. The same day I worked outside in the yard for at least 4.5 hours this morning and experienced difficulty walking and gripping at times and really only want to sleep right now. Stable does not mean no symptoms or never any problems."

Well first: Baruch HaShem that she's not getting worse (which is always a danger with MS).

It also puts into perspective something that doesn't always get much play regarding ACA plans: not only do they tend to have very narrow provider networks, they also typically include restrictive formulary benefits for meds. As we've long noted:

"The stated reason for this business model is that it helps carriers to rein in the cost of medications, which make up a disproportionate percentage of claims."

But it presents a major challenge to folks with, for example, MS (let alone cancer or diabetes).

My friend continues:

"I'm very fortunate that my current treatment is an infusion therapy, otherwise it would be a very different story.

It does support the extra cost of keeping that grandfathered PPO plan tight within my grasp for as long as possible. The $100 deductible, 10% co-insurance, and $2500/year OOP max (for med coverage) are priceless. Good thing I'm not taking any expensive oral or self-injectable drugs; $1500 max coverage for pharmacy drugs doesn't go very far. All generics for me."

Bottom line: keep that legacy plan for as long as you can.

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