Wednesday, April 28, 2010

Health Care Reform Part II

According to the National Women's Law Center whether women are insured or uninsured, they have many out-of-pocket costs that they are more likely to avoid health care or struggle paying for health care. Some startling statistics regarding women and health care:

1. 33% of insured women and 68% of uninsured women do not get the care they need because they cannot afford it

2. 23% of insured men and 49% of uninsured men avoid health care because of cost

3. 16% of women are considered underinsured, while only 9% of men are considered underinsured

4. 38% of women struggle with medical bills compared with 29% of men

5. Women have less access to employer-sponsored insurance because they are more likely than men to work part-time

6. Women's access to insurance is less stable because they are more than twice as likely as men to get employer-sponsored insurance through their spouse

7. Women are more likely than men to take prescription drugs

8. 52% of women did not fill a prescription, did not see a specialist when needed, skipped a recommended medical test or treatment, or had a medical problem but did not visit a doctor compared to 39% of men

9. 45% of women had medical debt or reported problems with medical bills compared to 36% of men

10. 45% delayed or did not receive a cancer screening or dental care because of costs compared to 36% of men
Women will also be able to receive preventative medical services like immunizations and mammograms that will be covered in full by private health insurance companies and Medicare. Medicaid will expand services to new mothers and pregnant women, they will offer more family planning services, postpartum support and education and home visiting programs. Employers will be required to give nursing mothers breaks and space to pump breast milk.
Children with pre-existing conditions will now be able to receive health care coverage which is a huge victory since approximately 9 million children are uninsured. Health insurance companies will now allow young adults to remain on their parent's health plan up to age 26.

Older Americans will also receive additional help with prescription drug costs. Small business owners, many who are women will be able to provide health insurance to their employees and will be able to receive business tax credits. Starting in 2010 small business owners can get a 35% tax credit if they have 10 or less employee that earn less than $25,000 a year.

Beginning January 1, 2011, health insurance companies are required to waive co-payments and deductibles on preventive care which includes regular mammograms. Prescription drug companies will be required to provide a 50% discount on brand-name drugs bought in the coverage gap. The federal subsidy for Part D premiums will be reduced for higher-income beneficiaries. Cost sharing for preventive-care services will be eliminated.

A new temporary health insurance program will pay health insurance premiums and is available for retirees ages 55 through 64 who were laid off during the recession. In addition, health insurance companies will no longer be able to impose individual spending limits and terminate patients who have high medical costs.

Sunday, April 25, 2010

Why Women Should Support Health Care Reform

Women should support the new health care reform for several reasons: 1) women usually make most of the decisions regarding family health care, 2) women usually live longer than men, 3) women usually require more medical care than men, 4) women have additional medical needs such as pregnancy, childbirth and childcare.

According to a report by the Commonwealth Fund, approximately 64 million women or 70%of Americans have no health insurance coverage, inadequate health care coverage, high medical bills or debt problems, or problems accessing health care because of the rising cost.

Many women have difficulty getting adequate health insurance because you usually need a full-time job which 52% of women versus 73% of men are likely to have. Many women continue to work full-time to continue receiving health care coverage but would prefer to work part-time or stay at home.

According to the Group Health Research Institute in Seattle victims of domestic violence have even higher health costs than other women for three years after the abuse ends totaling $1600 or more after the abuse ends.

According to a 2008 study by the National Law Center, prior to the health care reform, it was legal in most states for companies selling individual health policies to participate in gender rating by charging women more than men for the same coverage, even for policies that did not include maternity care. The health care premium differences ranged from 4% to 48%.

Health care reform will really help women because they can no longer be discriminated against and charged higher insurance premiums than men simply because they are a woman or for a pre-existing condition such as pregnancy, caesarian sections or other issues such as domestic violence and rape. Since women generally make only $.77 for every dollar men make, any reduction in health care costs is appreciated.

According to the National Women's Law Center whether women are insured or uninsured, they have many out-of-pocket costs that they are more likely to avoid health care or struggle paying for health care.

Thursday, April 22, 2010

5 Ways to Handle Collection Accounts

A collection account is a late account that has been forwarded to an agency (also known as asset recovery agency, debt buyers, collection agency or collection agent) for lack of payment. An account is forwarded to a collection agency usually when an account becomes 90 to 120 days late.

Collection accounts are purchased from the original creditors for a fraction of the original amount owed. Creditors send accounts to collection agencies to remove them from their accounts receivables records and then write-off the full debt owed as a loss. Creditors benefit in two ways, one for writing off the debt as a loss on their taxes and two when the money is collected which can be recorded as a profit or accounts receivable.

A paid or unpaid collection account remains on your credit report for seven years from the date of first delinquency. Unfortunately many collection agencies re-age the account changing the date of first delinquency to the date they received the account which extends the time the account remains on your credit report.

A collection agency holds a collection account for a few months, it they are unsuccessful in collecting on the debt owed, and the account is forwarded to another collection agency. This process continues until the account is paid or legal action is taken against the consumer.

Many times when you provide a date when the bill is paid they will ask you why, why not now or similar questions trying to use psychological tactics to get you to pay the bill while they are on the phone.

Remain calm throughout the conversion. A collection agent may ask you to repeat what you just said or write it down. These are all tactics to make you powerless and confused. Here are 5 tips to help you deal with collection accounts.

1. Keep all copies of your credit reports (current and old). If you have made any late payments or have neglected to pay any delinquent accounts compare you old credit reports with your current credit reports to verify all information on your credit report and pay close attention to the dates for collection accounts, bankruptcies, accounts included in bankruptcies and other delinquent accounts.

2. When you receive a letter from a collection agency verify the company is licensed to collect money or delinquent debts, verify the company is a reputable company and that the company has a legal right to collect money or your debt.

3. You may request that the collection agency contact my mail only (use the term cease and desist). A collection agency's goal is to get the money owed paid as soon as possible. They will continue to ask why you can’t make arrangement today.

4. If you setup payment arrangements and fall behind on your arrangement the collection agents are advised to refuse to extend time between payments, shorten the time between payments, and refuse to reduce the monthly account.

5. Whatever arrangements you make with a collection agency stick to it, don't let the collection agency change your mind about what you can afford, use emotions, or scare you into doing something you don't want to do.

Monday, April 19, 2010

Tax Refunds - Use It or Lose It

Many Americans get excited when they find out they are getting a tax refund. However, for many Americans in this economy getting a tax refund means it will be spent as soon as you get it. If you are struggling to pay bills or need to get out of debt your tax refund can be a lifesaver. But, it is up to you to determine how to spend it. Many Americans spend money frivolously and don't really think about their future. Here are 7 smart ways to spend your tax refund and improve your financial life.

1. Get current. If you are behind on your mortgage payment, use the money to catch up. Make sure you get current on all utility bills and car payments.

2. Downsize. If you are in a house that is upside or have a luxury car, downsize. If you are unable to downsize your home consider renting out one or two rooms. You can make a lot of extra money renting out a room in your home. Consider selling your car and buying a used car with no car payment or that costs $5,000 or less.

3. Borrow. Ask family or friends if you can borrow money to help get caught on your mortgage and utility bills. Your main focus is to keep a roof over your head and food on your table. Once you get current on household bills, then you can use any extra money to pay down debt and other bills.

4. Extras. Cancel your internet, long distance, cable service and magazine and newspaper subscriptions. If you absolutely have to have internet and cable service get the cheapest plan possible and call continually to ask about specials.
5. Eating. Skip eating out and buying fast food because you don't feel like cooking. Cooking at home can save you lots on your grocery bill. Buy more fresh fruits and vegetables instead of starches and processed food to save money. Also, use coupons, buy items on sale, buy in bulk or shop at wholesale stores. You can also change your eating habits. Meats are the most expensive items at the grocery store so consider buying cheaper meats, instead of steak buy pork, instead of pork buy turkey, seafood or chicken.

6. Sell. Go through your entire home and if you find anything in your home that has not been used by you or any of your family members in the past 6-12 months, donate the items to charity. You can later write the donations off on your taxes. You can also have a yard sale to get extra money.

7. Buy used. Many people believe the hype from advertisers that you can only get good quality items if they are bought new. Now true. You can visit websites such as and find items that are used for free. That's right free. You can also buy used items on eBay and Amazon.

I hope these tips help you slash your budget and work towards improving your financial life.

Friday, April 16, 2010

How Couples Can Improve Their Finances

Here are some tips on how couples can improve their finances. Small things really do add up.

Erase Debt and Improve Credit
1. Setup payment plans
2. Get current on late accounts
3. Pay more than the minimum monthly payment
4. Keep balances at 30% or below the credit limit
5. Don't use credit card for everyday purchases

Joint Accounts
1. Spending. Spread spending for large purchases over several months to ease the burden.
2. Reconcile. Reconcile bank accounts daily or weekly.
3. Comparison Shop. Shop around for the best price for the product or services you require to maintain your household. This increases your monthly household income and reduces expenses.
4. Shop Together. Go shopping together. This way both of you how much money is being spent and can encourage each other to improve spending habits.
5. Buy needs vs. wants. Prolong items that you want for special occasions or when you have extra money, don't include wants in your budget.

Planning for the Future
1. Create an Emergency Fund. Use an emergency fund to buy small purchases or pay for unexpected expenses and have enough to cover bills for 9-12 months.
2. Retirement. Sign up with your company's 401K especially if your company provides matching funds.
3. Diversify. Control your risks by investing in various mutual funds that are a combination or low, medium and high risk to limit your losses and focus on long-term growth.
4. Buy insurance. Buy health, life, disability. Many Americans go into debt due to medical bills and lack of insurance. Get at least basic health, life and disability coverage.

Tuesday, April 13, 2010

How the Inactivity Fee Affects You

In started back in late summer of 2009, credit card companies found another way to make money, charge consumers more fees. The credit card companies invented inactive or dormant fees. If you don't use your credit card within 6 to 12 months or more you will be charged an inactivity fee of $2-$5.

I belong to a credit union and thought I was shielded from some of the fall out of the credit card companies penalties to consumers after the CARD act became effective February 22, 2010. Wrong! Starting September 1, 2010, customers of my credit union will be charged an inactive fee for accounts that have not had any activity for 12 months and a dormant fee for accounts that have not had any activity for 2 years.

In a report by Bloomberg, customers of Fifth Third Bank are being charged a $19 inactivity fee for a credit card that had no fees associated with it for the past several years. Bank of America, JPMorgan Chase & Co., the Capital One Financial Corp. and Discover Financial Services currently do not have inactivity fees but have increased other fees associated with their credit cards.

Credit card companies have been warned about raising rates and establishing “inactivity fees” during the nine-month “grace period” that started with President Obama’s signing of the credit card reform legislation in May 2009 which ended with the CARD Act’s compliance on Feb. 22, 2010.

On March 3, 2010, the Federal Reserve proposed new rules that define penalty fees under credit card reform laws by prohibiting “inactivity fees”. Fees for “inactivity” are based on failure to use a credit card over a specific period of time or on a balance that is kept at zero for an extended period of time.

Closing an account to avoid paying an inactivity fee may lower your credit score if the account is less than 2 years old. Credit card companies don't want you to use your credit card to the maximum limit but they do want you to use your credit card and if you don't you are penalized because they can't make any money off of you.

Stick to paying for items with cash, that way you avoid paying any fees associated with the credit card, pay less money for the item because you don't have to pay interest and finance charges and you still help the economy because you are making a purchase.

Saturday, April 10, 2010

You Still Have Time to File Your Taxes

April 15 is D-Day, the day to file your federal taxes. If you don't file your taxes on April 15, ask for an extension. If you are getting a refund you can file your taxes at any time although the IRS prefers you do so by April 15 each year.

If you owe taxes it is best to work with the IRS as soon as your file your taxes to setup a payment plan. Be sure to keep all of your receipts for future reference. Here are 13 deductions you can claim on your 2009 taxes.

1. Uniforms, job supplies
2. Higher education expenses
3. Purchase of energy efficient appliances and vehicles in 2009
4. Tax preparation fees
5. Job related training
6. Home office business expenses
7. Mortgage refinance fees
8. Charitable donations (cash and non-cash)
9. State Sales Tax
10. Property and estate tax deductions
11. Earned Income Tax Credit
12. Job research expenses
13. Foreclosure tax relief

Take your time if you prepare your taxes yourself. If you use an automated tax preparation tool like Tax Cut or Turbo Tax most of the laws are already installed in the tool so it is less likely that you will make an error or get audited. If you got a refund in the past and never received it, contact the IRS to get your money. The IRS has billions of dollars in refunds that were never picked up by taxpayers. Good luck.

Wednesday, April 07, 2010

Help for Gift Card Buyers

This year we will see a lot of changes in the banking industry. We have seen the CARD act that became effective February 22, 2010. A new regulation for debit cards becomes effective July 1, 2010. Now as part of the CARD Act a new regulation by the Federal Reserve will begin on August 22, 2010 that affects gift cards sold on or after August 22, 2010.

The new regulation applies to gift cards, non-reloadable or promotional program prepaid gift cards and gift certificates. The new regulation puts restrictions on inactivity or service fees which caused many consumers to lose the value on gifts cards or gift certificate due to the outrageous inactivity or service fees charged.

Here are some of the major features of the new gift card regulation:

1. Inactivity or service fees will only be allowed for a gift certificate or gift card that has been inactive for at least one year.

2. Only one fee can be charged per month and the consumer is provided clear disclosures about the fees.

3. Additional fees that are restricted by the regulation include ATM fees, service fees, monthly maintenance fees, balance inquiry fees and transaction based fees.

4. Gift certificate, gifts cards or non-reloadable or promotional program prepaid cards can no longer be sold if the expiration date is less than 5 years from the date of issue or the date the funds are last loaded on the card.

5. Fees will no longer be charged for replacing an expired gift card or gift certificate or for refunding the remaining balance if funds are still available.

Although consumers will no longer be charged these fees you better believe that the banking industry will find other ways to earn the revenue they are losing with all the new regulations so make sure you read my blog for additional updates throughout the year.

Sunday, April 04, 2010

Celebrate Financial Literacy Month

President Obama declared April is National Financial Literacy Month. Start this month and make at least one small change to improve your financial life. By deciding to make at least one change you will be able to: pay down debt, create an emergency fund, and plan for your future.

Here are 9 easy ways to improve your financial life.

1. Create a budget or spending plan and track spending daily, weekly or monthly.

2. Get current on any late bills.

3. Negotiate or setup payment plans for large debts.

4. Buy more needs vs wants and pay cash or use lay-a-way.

5. Get a checking account with no fees.

6. Create an emergency fund by using automatic savings plans such as Bank of America's Keep the Change program or Wachovia's Way 2 Save program.

7. Buy in bulk, buy items on sale or at wholesale or discount stores.

8. Buy used instead of new.

9. Pay bills automatically using paycheck deduction or online bill payment.

Remember, every financial decision you make today affects your future tomorrow. It takes hard work, discipline and making sacrifices to get out of debt and improve your financial life but I know you can do it. Start today!

Thursday, April 01, 2010

A Slam Dunk for Student Loan Borrowers

On March 29, 2010, President Obama signed a bill to assist student loan legislation that goes into effect in 2014. One goal of the bill was to produce the most college graduates by 2020 . The bill will:

1. End subsidies to private banks that will no longer be allowed to make student loans with federal money, but may continue to earn income by servicing those loans.

2. Double funding for Pell Grants limits up to $5,550 in 2010 and up $5,975 per student by 2017. The Pell Grant will rise with inflation starting in 2013.

3. Cap a graduate's annual student-loan repayments at 10 percent of his or her income.

4. Help an additional 5 million Americans earn degrees and certificates over the next decade, by revitalizing programs community colleges across the country.

5. Expand Perkins Loan program.

6. Keep student loan interest rate at 3.4%.

7. Increase funding to College Access Challenge Grant Program to increase financial literacy and help retain graduate students.

8. Starting July 1, 2010, federal student loans will be originated through the Direct Loan program instead of through the federally guaranteed student loan program.

9. 100 percent of student loans will be serviced by private lenders who will have to compete for contracts to service federal student loans. Direct Loans can only be serviced by U.S. employees.

Under current legislation the government spends billions of dollars each year subsidizing financial institutions that make guaranteed federal student loans. This new legislation will generate approximately $68 billion in savings over the next 11 years.

The money saved will be used to expand the existing Income Based Repayment program for federal student loans. Under this program, student loan borrowers can have their monthly payments capped at 10 percent of income they have left over after covering basic needs, and any remaining debt will be forgiven after 20 years which will make it easier to pay back student loan debt. The current limit is capped at 15 percent of income left over.

This is great for public service workers such as nurses, teachers, military, etc. who will have their remaining debt forgiven after 10 years. Loans taken out in after July 1, 2014 will have to devote 10 percent of their income to paying back their student loans.

The Pell Grants will now provide $40 billion to eligible students to receive financial aid to help defer college costs including historically black colleges and universities. The legislation also provides new funding for community colleges to develop online courses, build partnerships with local employers, and help students obtain skills to ensure they succeed in the workforce.

Sallie Mae and many other lenders fought hard against the legislation but lost.