Tuesday, December 31, 2013

Shop for Medications by Phone to Pay Less for Drugs

Squirrel investigates before he buries a nut
Explore the Cost of your Medications
Your health insurance is changing, and you can be better prepared if you learn from others who have already experienced some of the changes. If your medical insurance now has a high deductible, you may find that you'll pay for many of your prescription drugs before the insurance pays at all.
We've ordered our medications from an insurer-approved mail-order pharmacy, but they did not carry one drug we needed. That's when things got interesting. I asked the doctor to write a prescription for the medication so I could shop for the best price. I've never done that before, so I had no idea what to expect. Surprise, surprise!
When you shop for a drug, you have to ask for the cash price. Many pharmacies want to know your insurer and are reluctant to give you a cash price until you hand over the prescription. Make telephone calls to shop for the drug you need, but have the prescription in hand, since you'll need to give the exact dosage and quantity to the pharmacy tech. You may also get a better price with the generic drug, not a name brand -- if the drug is no longer under the original patent protection.
I started with Walgreen, since I expected this well-known pharmacy would carry the medication. Imagine my surprise that the cash price was $700. The local WalMart had the drug for $12.08, and a WalMart in the next town had the drug for $165. I finally found the medication at a local hospital pharmacy for $7 with some unknown portion charged to my insurance.
I was so curious about the different prices that I called the FDA -- The U.S. Food and Drug Administration. A consumer contact person told me that the FDA does not regulate the prices of any drugs, and that they have no control over pricing.
If your medication is still high after shopping, you may inquire about the cost of a 90-day supply or even a prescription for a different dosage. Surprisingly, some medications are the same price if you buy 25mg or 50mg pills. You can get your physician to write the prescription for the larger dose and break the pills in half to get twice as much for the same cost.
If your health insurance has a large deductible this year and your prescription drugs are not covered until you meet the deductible, it's time to wise up and shop for your medications. You, too, may find that local prices range from $7 to $700 for 30 pills of the same drug. 
See you soon!

Sunday, November 24, 2013

Read Your Health Insurance Policy Before You Visit Your Doctor

Coins representing money saved by reading your health insurance policy
Save Money on Health Insurance -- Read Your Policy
When we talked about health insurance last month, I told you I owed $325 on lab work on a well visit to the doctor. If I had been alert and done my homework before going to the doctor, I could have saved about $260 of that amount -- but I didn't realize that until I got the bill.
You probably know that the codes on your medical records give a diagnosis of your condition as well as the purpose for any tests. The ICD is the International Classification of Diseases and the HCPCS is the Healthcare Common Procedure Coding System. You can read more about coding on the National Institutes of Health website.
My health insurance covers 80 percent of preventive care lab work without applying the deductible, but doesn't cover diagnostic lab work until the deductible is met. My doctor coded the lab work as diagnostic, and I came out with a $325 charge because I hadn't met the deductible for the year ($1,000 in personal expenses).
If the lab had been coded as preventive, I would have paid 20 percent, or $65 instead of $325.
If I had known this from the outset, I could have mentioned to my doctor that this was a well visit and that the blood work was not diagnostic. Doctors usually think all blood work is diagnostic, since they use it to diagnose your medical condition. However, if you get bloodwork before you go to the doctor, he isn't diagnosing anything -- it's a checkup.
Insurance is ever evolving, and some big changes are ahead of us. However, this is one change that has already taken place. A few years back, if medical care was preventive, it wasn't likely to be covered by your insurance. Now, preventive care is usually covered by insurance. 
The Affordable Care Act requires health plans to cover specific injections and screening tests without consideration of your deductible. You don't pay a copayment or coinsurance for covered preventive services. A list of the covered services for adults are shown on the healthcare.gov website.
Specific preventive services are free for women and children as well, as shown on the link on that page.
Lesson learned. If you go to the doctor for a checkup or well visit, tell the doctor you are there for a well visit for preventive care. The coding can matter to your financial health.

Sunday, October 27, 2013

Health Insurance -- Maybe You Need It

We're all hearing about health insurance with the Affordable Care Act -- good news, bad news and all the politics, but if you're an American consumer, you're smart to listen to some of the chatter. 
Green anole on green leaf visible in Texas front yard
You're exposed if you don't have health insurance

If you don't have health insurance through your employer, you probably don't have health insurance. Even if you have health insurance through your employer, you may not feel like you have health insurance, as most employers are going to high deductible plans similar to major medical. Maybe you pay the first $2,000 or the first $3,500. That includes prescription drugs, office visits, medical diagnostic tests and everything that isn't preventive medicine.
That's the kind of medical insurance you need even if you aren't insured through your work, particularly if you're young and healthy. You need a major medical policy that pays only if you have an expense greater than a few thousand dollars. That's what you can get with the Affordable Care Act, at a lower price than you'd pay for an individual policy. Check out catastrophic medical coverage for high deductibles and low rates. ACA also has the Platinum, Gold, Silver and Bronze plans, all with more coverage and higher premiums.
Why do you need medical insurance? You're young, healthy, haven't been to the doctor in years, and have someone in the family who can give you medical advice -- or you can find it online.
You need medical insurance for your future. You have plans, dreams and future earnings. If you have a medical expense that you can't pay right away, it will follow you until it's paid. That may be the remainder of your life.
Having medical debt is a little like having a child, but even children make a contribution while costing money. You have the expense of children from before birth until at least age 18, but they give joy and pleasure along the way. You won't get that from a medical expense that isn't covered by health insurance. You'll get to pay every month with no visible result. It's a drain on your future.
You're smarter than that. It's better to pay for major medical insurance at a low cost than to risk your future without it.
I went for a well visit last month, and just got the bills. My doctor's charge was about $300 and the blood work was $560. I can't even afford to be well without insurance. With my insurance coverage, I'll only pay about $325 of the total charges. My cousin recently told me it cost $25,000 to LifeFlight her about 100 miles to a large hospital for treatment. Fortunately, she has Medicare and Medicare Supplement, with little of that cost coming out of her bank account. Can you afford to be without health insurance?
You can go to healthcare.gov and shop for insurance, based on your state and county. Your shopping figures don't include credits you may get on your federal income taxes or subsidies from the federal government. A catastrophic insurance policy will probably cost under $200 a month, and protect your future if you have to be life flighted, or if you are hospitalized for a few days. You may get a credit or federal subsidy if your income is below about $45,000 as an individual or about $62,000 for two. The break in pricing seems to be at age 50, so if you're under 50, your insurance will be less than those over age 50. The insurers for each state are different, but you'll recognize names like Blue Cross Blue Shield and Aetna.
Health insurance may also protect your family, if you have assets. Generally, your debts get paid before your family gets any assets -- and this includes medical debts. You may be gone, but your failure to have health insurance lives on.
As a savvy consumer, keep an open mind and consider the risk of not having health insurance. Take a look at the website and see the cost of a catastrophic policy without any subsidy. Then, create an account and compare the cost with the subsidy. You may find it's  a deal you can't refuse -- when you consider your future without it.
See you soon!

Wednesday, August 7, 2013

Conducting an Estate Sale for Your Family

Amber bottle with red glass stopper from Christian LaCroix
Christian LaCroix and Other Perfume Bottles are Collectible
When someone in your family needs to shuffle to a retirement center or assisted living, or dies, a lifetime of collections and maybe collectibles needs a new home. Family members often have an estate or yard sale to "get rid" of some of Grandma's "stuff." As an estate sale buyer and appraiser for more than 20 years, I can share a few ideas with you.
In general, you need to save everything and try to sell it. Don't cull for the American public, especially at a first sale. Well, maybe you can pitch the butter tubs and foil pie tins. Few estate salers are looking for a matched set of butter tubs.
I see families save National Geographic magazines from the 1960s forward. Unless you have a hologram issue, give these to some grade school or middle school students to read. The libraries won't take them, because there is an abundance. Nat Geo before 1960 may have a Coke ad on the back cover that has some value. Recent magazines may sell for cheap, but they aren't really collectible. Magazines from the first half of the 20th Century are collectible, and many through the 1950s interest collectors because of advertising, styles and history.
Sometimes I'm asked to come look over an estate before the items are put out for sale. When I arrive at the location, there is usually a large stack of rubble at the street. The family has tried to clean up before I arrive, and they have relegated these items to the curb:
perfume bottles
ladies hats
fishing lures
wooden boxes
ashtrays and old lighters
smoking pipes
gag gifts and miniatures
old toys like dollhouse furniture
junk drawer items
old postcards and envelopes with stamps
fountain pens
wall hangings and art
old photographs
20s furniture and other items "out of style", including vintage clothing
Here's what they leave inside for the sale:
Clothes that aren't old enough to be collectible
Kitchen items in current use
Plastic and wooden baskets and bowls
Everyday dishes and glasses with dishwasher etching
Prints on cardboard with plastic frames from the 60s
Pressboard furniture
You get the idea. Everything of value got pitched before I arrived. We've gone through stuff at the curb and tried to revive some of the items, but often they've been rained on and it's more effort than they want to exert. 
Six smoking pipes from various makers, all used and collectible
Smoking Pipes are Collectible, Even USED Ones
Don't make this mistake. Someone will go through the items at the curb and take your valuables while you're selling the cheap stuff in the house. If you don't know what you have, look online or ask someone who deals with antiques or collectibles. I look at photos for free and go to homes for an hourly rate. What you think is junk may make a collector's day. Pass it on to someone who appreciates it, and make some money while you're at it. But, please don't put it out at the curb until you've tried to sell it first.
Have some fun, make some money, and give collectors the pleasure of shopping with you.
See you next time!

Sunday, May 12, 2013

Frugal Family Entertainment in Northwest Arkansas

Terra Studios entrance with clay sculptures
Terra Studios near Elkins, Arkansas
Sometimes we shop in Arkansas for antiques and collectibles, particularly pottery and glass. We're also interested in contemporary Arkansas artists working in pottery and glass. We didn't have to go to Arkansas to see the Bluebird of Happiness that has sold so well that it's in homes and shops all over America, but we were thrilled to see a demonstration of how they're made.
We found directions to Terra Studios and decided we would trek over there and watch them make a bird or two. We spent the night in Fayetteville and antiqued in Rogers at one of the best smalls malls in the state -- The Rose. We stopped at a couple of other shops and dropped down past Elkins to locate Terra Studios, the home of the Bluebird of Happiness and the Pink Bird of Hope. We have no affiliation with Terra Studios, The Rose or any of the artisans. We're sharing our experience with you because it is free entertainment suitable for the whole family.
Handmade and blown glass from Arkansas glass artisans on display
Inside the Gift Shop at Terra Studios
The Terra Studios grounds are beautiful, with a fairy-like atmosphere of gnomes with clay and glass sculptures to create an enchanted village. We were pleasantly surprised that the gift shop at Terra Studios has exceptional work of contemporary potters and glass blowers from all over Arkansas. We knew a few of the artisans from other trips and from shows, but we don't know of anywhere that you'll find so much contemporary Arkansas pottery and glass in one place. And most of it is for sale.
Entrance to Gift Shop with Tile Art and Large Vase
We love the colored clay work of Siegele and Haley, and there was a display and several pieces for sale at Terra Studios. We also saw the work of Klay-Hawk Studios and local Elkins artisan, Chad E. Van Brunt. Other glass and pottery artists were equally impressive, and we spent lots of time soaking in the beauty. We watched how the birds are made and bought a few for friends. There is also a pottery shop onsite.
Sliced pottery bowl from Siegele and Haley colored clay
Siegele and Haley Colored Clay Bowl
Terra Studios has a picnic area and activities for children as well as adults. If you like to watch artistry in action or to take the kids for an outing, this is a pleasant out-of-the-way place you can enjoy without waiting in line or competing for tickets. It's free entertainment for the whole family not far from Fayetteville and it's worth your time. It's open every day, and you can see the hours and location at the Terra Studios website.

Thursday, March 28, 2013

Using Your Tax Refund Wisely

Swallowtail butterfly on dianthus flowers March 2013
Tax Time in Texas is Also Spring
Spending Your Tax Refund To Give You the Best Return on Your Investment
You probably have a hundred ways to spend your tax refund, but savvy money managers are always interested in another point of view or someone else's input. If you haven't filed your taxes yet, consider U.S. Savings Bonds for your refund. You file Form 8888 with your tax return to get the bonds. Here's the information from the IRS if you're interested.  
Tax refunds are later this year because most of us had to wait for forms and figures to file a tax return for 2012. Some of the delay was from the Internal Revenue Service as a result of a slow Congress, but employers and contractors don't always get the W-2 or Form 1099-Misc out early. Banks send 1099-Int forms if you've made enough interest on your accounts. If you filed with H&R Block software and used Form 8863 between February 14 and February 22, your refund may also be delayed.
If you are waiting for your tax refund, you're probably making plans for the use of the money. You could go out to eat or buy something you want and the refund would be gone forever. Or you could make good use of your refund and add to your net worth. Here are some ways you could make your tax refund last longer than a few minutes.
Add your refund to your retirement plan
This is windfall money, a refund you didn't expect to get. Treat it as if you didn't receive it by putting it away for the future. I never understood Ben Franklin and "A penny saved is a penny earned" until I learned the benefits of saving money. Interest, although minimal at this time, is money you don't have to work for. You can fund an Individual Retirement Account or Roth IRA at your local bank. Ask for advice. An IRA is funded with pre-tax funds and you pay tax when you withdraw the money. You pay taxes on the money before you fund a Roth IRA and you can withdraw qualifying funds without taxation (including earned interest).
Put Money in Savings
If you don't have 6 to 8 months of expenses saved for an emergency fund, you're living on the edge. Build your emergency fund with your tax refund and regular additions to your savings account until you have a comfort zone of at least six months of expenses. If it costs you $3,000 for basics (rent, food, payments) each month, then you need a minimum of $18,000 in a savings account.
Pay Off Credit Card Debt
You may think there's no reason to save money with interest rates low, and if you're paying interest on credit card debt, you may use your tax refund wisely by paying down or paying off credit card debt. The interest saved is money you don't have to pay, but if you're just clearing your credit card to charge more, you're not accomplishing anything. The only time it's smart to use your windfall tax refund to pay credit card debt is if you don't incur more credit card debt.
Make a Purchase
If a purchase can save you money over the long run and you really need the item, consider making the purchase with your tax refund. Choose an item within the refund amount -- don't add to your debt by using the tax refund as a down payment. If you need a washing machine, for example, and it will save the cost of taking your laundry to the laundromat, you may consider a washing machine as a wise purchase.
If you pay for the washer with your tax refund and save the money you would spend every week at the laundromat, you can make your tax refund work double for you. Take the money you allocated each week for laundry to develop a cushion for repairs or other potential emergency expenses.

Watch for Specials at Your Bank

Banks often have specials for savings accounts, and some pay a premium at the end of a savings program. Build My Savings is one of those. You commit to adding an amount to the account a certain day every month for a year or so and at the end of the time period, the bank adds a bonus to your account. Some of these average about 3 percent on your money. Ask at your bank, and also ask at the credit union near you. Sometimes credit unions have specials and higher rates. 
Remember that while interest is low, put your money into a long-term certificate of deposit only if the penalty for early withdrawal is low. You may want to withdraw the funds to get a higher rate if interest rates increase. For example, if the withdrawal penalty is 1 percent and the difference in the interest rate for a 5-year certificate of deposit over a 1-year certificate of deposit is more than 1 percent, you may come out ahead with the 5-year certificate, even if you withdraw some funds early to get a higher interest rate.
You can use your tax refund wisely and prepare for the years ahead. Don't let your immediate desires burn a hole in your future.

Friday, January 18, 2013

A Reverse Mortgage May Not Be Your Best Option

picture of American flag outside home in USA
You and the lender may own your home

When you listen to Fred Thompson, Robert Wagner or Henry Winkler telling you the benefits of reverse mortgages, remember that they are actors. They’ve been acting for years --and continue to act in advertisements for reverse mortgages. Reverse mortgages have a limited place in the lives of some seniors, but they should be a last resort choice. Instead, reverse mortgages are on the rise, and so are repayments of reverse mortgages to avoid foreclosure.

You’ve already heard about the advantages of a reverse mortgage -- you can get cash to pay bills, you won’t have to pay the money back, you don’t have to make a mortgage payment, and it’s backed by the federal government. The backing by the federal government doesn’t help you. It provides mortgage insurance to the lender so the lender doesn’t lose money in the event of default and keeps your heirs from having to pay outstanding indebtedness.

Here are some of the disadvantages that you may not know. I’m not an actor and have nothing to gain from this advice -- but remember that a smart consumer is one who has searched for both advantages and disadvantages:

  • A reverse mortgage is a LOAN, and the loan company bases the amount you can borrow on your age and the equity in your home. You must be at least 62, and the older you are, the larger loan available to you. Because you won’t live as long at 80 as you would at 62, the lender won’t have to pay for as many years if you wait until late in life to take a reverse mortgage. The older spouse can get the largest amount, so many couples choose to have one person take out the reverse mortgage. This works well until the older spouse dies and the lender looks for repayment. HUD has included a provision in the mortgage to protect the surviving spouse, but some lenders ignore the provision. Make certain that any reverse mortgage is in both names if you’re married. You can read about the problem here: AARP Reverse Mortgages Increasing

  • You must live in your home to continue with a reverse mortgage. If you choose to move, or even if you are in a nursing home for more than a year, you aren’t compliant with the reverse mortgage terms and may lose your home to foreclosure.

  • You’ve heard that you still own your home. That’s true on paper, but you can’t sell your home without paying the reverse mortgage and all fees associated with the mortgage. Fees accumulate every year and will take most of the equity you have beyond the payment or payments you receive.

  • You’ll still have the expenses of owning a home, and you are responsible for the property taxes and maintenance. You can’t let it deteriorate, even if you can’t afford repairs. You own the property and home  when it comes time to pay taxes or make repairs, but the LOAN and LIEN on the house keeps you from selling or moving without repayment of the loan. You can die without repayment, but your heirs won’t own the house without repaying the reverse mortgage and all associated expenses. In most instances, the cost exceeds the value of the home, so don’t expect your children or relatives to benefit. You are basically giving away the house for the money you receive. You get to live there and maintain the property for the mortgage company.

Reverse mortgages are an expensive way to get some cash. The upfront costs are high for the Home Equity Conversion Mortgage unless you get the HECM Saver, and what it saves in upfront costs is added to the percentage rate for the loan. The yearly costs are high as well, and while you’re not making payments, you’re still accumulating costs.

Here’s what AARP says about the things you should know before taking out a reverse mortgage:

AARP Questions Answered About Reverse Mortgages 

What are the alternatives? You’ll probably be better off selling your home and moving to less expensive housing. If you’re a senior, a sale will likely free up the equity you need to relocate. You can downsize and prepare for retirement years instead of holding on to your house that you can no longer afford or maintain. AARP suggests that you might get a roommate if you are alone. Before you make any decisions, ask your children. You might choose to sell the property to a child and use the money you receive to make payments on the child’s loan -- all while you continue to live in the home.  

Who could benefit from a reverse mortgage? If you have no heirs and really need the money to pay for food and medicine, a reverse mortgage may be the answer for you. Consider whether you’ll be in the same position after you spend the money you get from the mortgage. If that’s the case, it won’t help for long, and isn’t the right answer for you.

What else can you do?

  • Inquire about public services available for seniors. You may qualify for help from your state or county, or from the federal government. Some drug companies reduce prescription costs for low-income individuals as well. 
  • Make some telephone calls. Check with the nearest Social Security office for benefits available. Call the state and county offices, and the Council on Aging in your area.
  •  Ask for help before you make any decisions involving the roof over your head.

Here’s some information from the federal Housing and Urban Development website: 

Housing and Urban Development Reverse Mortgage Information 

AARP warns of some of the dangers of reverse mortgages on its website.   

AARP Reverse Mortgage Information 

See you next time!