Money Matters: Financial Literacy for Healthcare

MoneyCounts:
A Financial Literacy Series
Financial Literacy: Healthcare Cost
Dr. Daad A. Rizk
Financial Literacy Manager
MoneyCounts: A Financial Literacy Series
240D Outreach Building
University Park PA 16802
dar39@psu.edu
814-863-0214

Agenda
• Overview of Financial Literacy
• Overview of Health Care Cost in USA
• Challenges and Barriers to Cost
• Personal Finance Issues and Tips to reduce cost
– Planning
– Tax effect
– Options for the un-insured

Financial Literacy
• To explore strange new worlds
• To seek out new life and new civilizations
• To boldly go where no one has gone before
– Topic is personal
– Topic is emotional
– Mission:
• To provide financial knowledge and skills to make informed decisions and take
effective actions regarding money management

Four Elements of Financial Well Being
• In summary, financial well-being can be defined as a state of being wherein a person
can fully meet current and ongoing financial obligations, can feel secure in their
financial future, and is able to make choices that allow enjoyment of life.
The four elements of financial well being (cfpb)
Present Future
Security Control over day-to-day Capacity to absorb financial shock
Month to month finances
Freedom of Choice Financial freedom to make On track to meet financial goals
Choices to enjoy life
Consumer Financial Protection Bureau (Jan 2015)

Knowledge Action/Behavior
 Gross versus net paycheck
 Benefits and taxes
 Education is important
 Understand your paycheck
 Verify and adjust your
exemptions and deductions on
your W4 (withholding)
 Learn about potential benefits
and taxes
 Invest in your future, plan for your
career through education –
search the market

 Saved money grows
 Banking – saving and checking
accounts
 Long-term financial planning
 Eliminate or reduce waste
 Start saving early, pay yourself
first
 Comparison shopping for a
financial institution – reconcile
your accounts
 Plan for retirement, child
education, renting versus owning
a home
 Replace waste with saving

 Difference between needs and
wants
 Develop a quantitative
awareness of your spending
habits
 Get the most/best value for your
money
 Develop a spending plan
 Track spending habits
 Live within your means
 Understand the social and
environment impact of your
spending decisions

 Distinguish net income from
loans
 Cost of borrowing – Penalty,
Interest, late fee, surcharge
(PILS)
 Amortization schedules
 Credit Score - FICO (Fair Isaac
&Company) Equifax, Experian,
TransUnion
 Credit cards
 Borrow only what you need not want
 Avoid high cost loans, avoid
penalties, late fees, and surcharge
 Minimize interest payments
 Get your free annual credit report,
check your financial grade, review
and correct if necessary
 Shop for low interest cards, use only
in emergencies, avoid paying (PILs)

 Risk management and insurance
coverage
 Identity theft
 Fraud and scam
 Shop for insurance, review and
update insurance, build up an
emergency fund
 Watch for your social security
number and card, your date of
birth and your banking
information
 If it is too good to be true, it most
certainly is

Healthcare Cost
• 31% of Americans have collection activities on their credit reports
• 50% of those are due to medical debt
– Translates into 64 million consumer
– Total Population in the USA 320 million
• 19.4% of all Americans
with credit reports have medical debt collection
Highest rate of medical bankruptcy in the world
Highest healthcare cost among 34 nations
WE spend 18% of our GDP on Healthcare cost
http://managinghealthcarecosts.blogspot.com/

Healthcare spending in USA
• https://www.youtube.com/watch?v=mdoWhOiY

Collections Tradeline Type

Bankruptcy – Medical
Age Range
% of Total
Bankruptcies
2013,
Estimated
US Medical-
Related
Bankruptcies
2013,
Estimated
Size of
Household
People Living
in Households
with medical-
Related
Bankruptcy
2013,
Estimated
18-24 2.3% 14,618 2.41 35,229
25-34 18.7% 120,708 2.86 344,622
35-44 28.9% 186,812 3.35 624,888
45-54 26.4% 170,875 2.81 480,159
55-64 15.8% 102,080 2.18 222,534
65+ 8.0% 51,719 1.76 90,767
Medical Bankruptcy by Age
Source: NerdWallet Health Analysis

Source: NerdWallet Health Analysis of EY’s 2014
report on third-party debt collection.

Life on the Edge

Health Insurance
– Assess Health and health needs
– Review Health Insurance
– Premium, deductible, network provider
– Co-payment, co-insurance
– Out of pocket
– Plan for the “unexpected”
– Risk tolerance

Prevention Care

Stay “Healthy”
– Participate in Wellness Programs
– Sign up for special health programs
– Practice preventive care
• Get free preventive care

Stay in “Network”
–Stay in network
–Assess super-preferred providers
–Ask Doctor about cheaper facilities
–Avoid the Emergency Room if possible
–Compare prices

Price range – Test or Treatment
Test or treatment Low Fair High
Brain MRI $ 504 $ 560 $ 2,520
Chest X-ray 40 44 255
Colonoscopy 800 1,110 3,160
Complete blood count 15 23 105
Hip replacement 19,500 21,148 43,875
Hysterectomy 8,000 8,546 16,480
Knee replacement 17,800 19,791 42,750
Knee arthroscopy 3,000 3,675 7,350
Laminectomy (spine surgery) 8,150 11,744 25,760
Laparoscopic gallbladder removal 5,000 6,459 12,480
Tubal ligation 2,865 3,183 5,729
Transurethral prostate removal 4,000 4,409 8,875
Ultrasound, fetal 120 169 480
Vasectomy 700 1,003 2,100

Source: Office of Inspector General,
Office of Audit Service Hospital Medicare Compliance
reviews released in 2013 (n=34).

Save on Meds
– Switch to generic drugs
– Keep an eye on new drugs and new generic
– Get to know your pharmacist
– Compare drugs prices (Walmart versus Costco)
– Get a prescription for over the counter drug
.

Generics Save - Facts
• Total U.S. health care spending in 2011 reached $2.7 trillion in
2011, or $8,680 per person
• Health spending continues to make up nearly 18 percent of the
Gross Domestic Product (GDP)
• In 2012, generics saved the U.S. health system $217 billion,
up from $188 billion in 2011
• Over the 10-year period 2003 through 2012, generic drug use
has generated more than $1.2 trillion in savings to the health
care system

How to budget for healthcare cost
• https://www.youtube.com/watch?
v=LxqCqahq98g

FSA
– Pre-tax Money
– Flexible spending accounts – FSA
• Include doctor visits, prescription drugs, hospital stay, eye exam,
glasses or contact
• Limited to $2,500 (2013)
• Amounts forfeited if not spent

HSA
– Pre-tax Money
– Health savings accounts – HSA
• High deductible
• Amounts not spent will roll over year to next

Educate yourself
Patient Protection and Affordable Care Act
Known as Obamacare
-Sign up for coverage through exchanges
-Affect Federal Income Tax (credit/penalty)
-7.3 million people signed up for it

Use Technology
– HealthCare.gov
• https://www.healthcare.gov/
– Healthpocket.com
• http://www.healthpocket.com/
• https://www.youtube.com/watch?v=FH2k7_P29es
– Healthcare Blue Book
• https://healthcarebluebook.com/
– GoodRX.com
• http://www.goodrx.com/

Use Reliable Sources
• HealthFinder.gov
– www.healthfinder.gov (Market place)
• Mayo Clinic
– www.mayoclinic.com (Index of Diseases)
• Medical Library Association
– www.mlanet.org (trusted med websites by librarians)
• Consumer Action Handbook (PDF or hard copy)
– www.USA.gov/consumer

Bank Sick Hours
– Save enough paid sick time
• At least 6-8 weeks
– Save paid vacation time
• carry over year to next

Save before you Spend
– Pay Yourself First
• Make Saving automatic
• Set SMART goals and work toward them
• Get the family involved
– Establish an emergency fund
• Expect the unexpected – EXIT Strategy
• 3 – 6 months

Save Medical Records
• Clean Medical file – No clutter
– Insurance Policy, cards
– Protect against identity theft
– Tax Saving Receipts

Career Planning
• Consider health benefits in career planning
• Pre-tax insurance premium = savings
• Coverage and Matching
• Sick days allowed – Family sick days
• FMLA
• Donated vacation for sick time

Credit Cards
– Get copies of your credit reports
– www.annualcreditreport.com
• Equifax
• Experian
• TransUnion
– Watch for Insurance fraud
– Watch for medical identity theft

Budgeting guide
• Earning 100%
– Saving 10%
– Housing 30%
– Meals 20%
– Loans 10%
– Car 10%
– All other 20%

Tax Forms
– http://www.irs.gov/pub/irs-pdf/f1040.pdf
– http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

The Affordable Care Act
– http://extension.psu.edu/health/insurance/affordable-care-act
• Overview
– On March 23, 2010, President Obama signed comprehensive health
reform, the Patient Protection and Affordable Care Act, into law. The
following summary of the law, and changes made to the law by
subsequent legislation, focuses on provisions to expand coverage,
control health care costs, and improve health care delivery system
• What's Happening in PA?
– In December 2012, Gov. Tom Corbett announced that Pennsylvania
would use the federal health insurance exchange rather than implement
a state-run exchange.

MoneyCounts:
A Financial Literacy Series
Thank You!
Comments and Questions
Dr. Daad A. Rizk
Financial Literacy Manager
240D Outreach Building
University Park PA 16802
dar39@psu.edu
814-863-0214

Money Matters: Financial Literacy for Healthcare

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Money Matters: Financial Literacy for Healthcare

Similar to Money Matters: Financial Literacy for Healthcare (20)

Recently uploaded

Recently uploaded (20)

Money Matters: Financial Literacy for Healthcare

Editor's Notes