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How Much Health Care Reform Will We See By 2014?

July 22nd, 2013 | Comments Off on How Much Health Care Reform Will We See By 2014? | Posted in Financial News

Can the federal government follow through on its ambitions?


In 2014, we were supposed to see profound health care reform per the 2011 Affordable Care Act – but how much of that reform will roll out on time?

The federal government has already conceded that it can’t enforce the employer mandate portion of the Affordable Care Act by 2014. On July 2, the Obama administration gave businesses with 50 or more employees a 1-year reprieve from having to provide affordable health insurance to full-time employees (people working 30 or more hours weekly).1,2

So how about the state health insurance exchanges that are scheduled to be up and running by October 1? How about the planned expansion of Medicaid? Will these reforms also be delayed? The House of Representatives has scheduled a mid-July vote to attempt to do just that. Lastly, do small businesses have any enthusiasm about health care reform?3

What’s the progress on the state exchanges? The progress report isn’t good. As the Wall Street Journal noted last month, even the Government Accountability Office thinks that a “timely and smooth implementation of the exchanges by October 2013 cannot yet be determined.”4

Small businesses and the self-employed are supposed to be able to find affordable coverage through these online marketplaces. The small business exchange rollout has already encountered glitches. In some states, only one insurance carrier has shown interest in them; the state of Washington is simply postponing its exchange because no carrier wanted to provide small business plans statewide. In 2014, businesses will be asked to select and offer one insurance plan from the exchanges to their workers. In the initial conception, they could elect to offer employees multiple insurance options. The federal Centers for Medicare & Medicaid Services are overseeing the implementation of the individual exchanges in 33 states; 17 other states and the District of Columbia are setting up their own exchanges.4

Individual exchanges in 34 states will be created via the federal government – but on July 5, it quietly granted another concession. The Department of Health and Human Services relaxed a requirement for the 16 other states and the District of Columbia to verify the income and health coverage status of applicants to those individual exchanges. These 17 exchanges will only check the income eligibility of applicants at random next year, and they will wait until 2015 to check if applicants are getting employer-sponsored health benefits.5

The WSJ learned that states running their own exchanges had missed, on average, 44% of the interim deadlines for these projects through the end of March. Still, DHHS chief technology officer Todd Park told CNBC that the state exchanges are “on track” and will allow open enrollment beginning October 1.4,6

Where do things stand state-by-state with the Medicaid expansion? Just 23 states and the District of Columbia have signed up for it. (You’ll recall that the Supreme Court allowed states to opt out of it when it ruled that the ACA was constitutional in 2012.) In these states and in Washington D.C., those with earnings of up to 138% of the federal poverty level may qualify for Medicaid (that works out to earnings of $15,856 for an individual and $32,499 for a family of four). The expansion of Medicaid in these states doesn’t require the federal government to recreate the wheel, but delays could happen in other ways. In Michigan, for example, state legislators have passed their own version of a Medicaid expansion requiring a 90-day federal review process, which will put Michigan weeks behind in enrolling participants in expanded Medicaid coverage.6,7

Do employers even care about the ACA’s incentives? The ACA opens the door for employers to markedly increase the percentage of employee benefits represented by wellness incentives. Yet in a survey of 1,000+ employers conducted by Virgin HealthMiles and Workforce Magazine, just 25.8% of companies surveyed said they intended to draw on wellness provisions of the ACA to enhance employee health benefit offerings. A lack of information about such incentives may be a factor here for both employers and employees. In fact, the survey also polled almost 10,000 workers at these companies and found that while 87.2% looked at health and wellness packages when considering a job, half of the respondents said they were “not aware of, or need to know more about, health and wellness programs offered by employers.”8

Frankly, what’s to get excited about? An analysis from insurance consulting firm Millman says that individual premiums could grow 25-40% costlier due to the ACA with small market group premiums rising 6-12%. On the other hand, Humana estimates that by renewing individual and group health plans before 2014, a workplace with predominantly younger and healthier employees could see rates rise by 15% or less. Unsurprisingly, a number of major carriers are expected to offer early renewals.9

President Obama noted the possibility of “glitches and bumps” along the way to the ACA’s full implementation. They are evident now.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – [7/3/13]
2 – [7/3/13]
3 – [7/11/13]
4 – [6/19/13]
5 – [7/8/13]
6 – [7/11/13]
7 – [7/7/13]
8 – [6/3/13]
9 – [5/31/13]

How Impatience Hurts Retirement Saving

July 22nd, 2013 | Comments Off on How Impatience Hurts Retirement Saving | Posted in Financial News

Keep calm & carry on – it may be good for your portfolio.


Why do so many retirement savers underperform the market? From 1993-2012, the S&P 500 achieved a (compound) annual return of 8.2%. Across the same period, the average investor in U.S. stock funds got only a 4.3% return. What accounts for the difference?1,2

One big factor is impatience. It is expressed in emotional investment decisions. Too many people trade themselves into mediocrity – they react to the headlines of the moment, buy high and sell low. Dalbar, the noted investing research firm, estimates this accounts for 2.0% of the above-mentioned 3.9% difference. (It attributes another 1.3% of the gap to mutual fund operating costs and the remaining 0.6% to portfolio turnover within funds.)2

Impatience encourages market timing. Some investors consider “buy and hold” passé, but it has certainly worked well since 2009. How did market timing work in comparison? Citing Investment Company Institute calculations of equity fund asset inflows and outflows from January 2007 to August 2012, U.S. News & World Report notes that it didn’t work very well. During that stretch, mutual fund investors either sold market declines or bought after market ascents 57.4% of the time. In addition, while the total return of the S&P 500 (i.e., including dividends) was -0.13% in this time frame, equity mutual fund investors lost 35.8% (adjusted for dividends). 3

Most of us don’t “buy and hold” for very long. Dalbar’s latest report notes that the average equity fund investor owned his or her shares for 3.3 years during 1993-2012. Investors in balanced funds (a mix of stocks and bonds), held on a bit longer, an average of about 4.5 years. They didn’t come out any better – the report notes that while the Barclays Aggregate Bond Index notched a 6.3% annual return over the 20-year period studied, the average balanced fund investor’s annual return was only 2.3% .2

What’s the takeaway here for retirement savers? This amounts to a decent argument for dollar cost averaging – the slow and steady investment method by which you buy shares over time, a little at a time. When the market sinks, you are buying more shares as they have become cheaper – meaning you will own more (quality) shares when they regain value.

It also shows you the value of thinking long-term. When you save for retirement, you are saving with a time horizon in mind. A distant horizon. Consistent saving from a (relatively) early age and the power of compounding can potentially have much greater effect on the outcome of your retirement savings effort than investment selection.

Keep your eyes on your long-term retirement planning objectives, not the short-term volatility highlighted in the headlines of the moment.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

1 – [5/3/13]
2 – [6/26/13]
3 – [11/5/12]

Stafford Loan Changes

July 22nd, 2013 | Comments Off on Stafford Loan Changes | Posted in Financial News

Stafford Loan Changes

Subsidized Stafford loans used to be a sweet deal for aid-eligible college students. Payments were deferred during the college years at a 0% interest rate, and repayment after college carried a fixed interest rate of only 3.4%.

Well, the deal isn’t so sweet any more. As of July 1 the post-college interest rate jumped from 3.4% to 6.8%. Here’s what you need to know when talking to clients wondering about what’s going on and how the rate change will affect them.

  • Pre-existing student loans are not affected by the rate hike. The new interest rate of 6.8% applies to subsidized Stafford loans taken out for the 2013-14 school year. It’s interesting to note that unsubsidized Stafford loans (for students who cannot demonstrate financial need through the FAFSA) also carry a 6.8% interest rate. The primary advantage of being need-eligible is that interest is effectively waived until after graduation.
  • Something will probably be done to change the situation. Several different proposals were advanced in Washington prior to the rate hike taking effect. Although partisan politics make it difficult to reach consensus, intense pressure directed at Congress and the President to come up with a “solution” will likely result in a new interest-rate formula. Any such law will likely be made retroactive to July 1, 2013.
  • Stafford loans are not as important in financing college as many people believe. For instance, the most that a dependent student can get in subsidized Stafford loans for the freshman year in college is $3,500. Another $2,000 in unsubsidized Stafford loans can be taken out. Many parents use federal PLUS loans to pay the college expenses that are not financed with Stafford loans, and PLUS loans carry an interest rate of 7.9%. How attractive is a PLUS loan at 7.9% when home equity loans can be obtained by many families at lower cost? I recommend the article “The Federal Parent Rip-Off Loan” by Kevin Carey for further insight into PLUS loans.
  • If they can avoid it, your clients should not want to see their children or themselves taking on massive debt for college. For most, avoiding loans during the college years requires that they save for college now, while the child is still young. If you want to demonstrate this concept to your clients, try out the 529 Savings Vs. Loans Calculator on I just did, running the numbers for a 5-year old, and using all the calculator’s other default settings. It tells me that the total amount of monthly contributions needed to pay for a four-year degree is $114,973. But if I had no college savings, and paid for college completely through loans, my total loan repayment would come to $257,360. How’s that for a persuasive argument in favor of saving for college?
Posted: 2013-07-10

July – Monthly Economic Update

July 22nd, 2013 | Comments Off on July – Monthly Economic Update | Posted in Monthly Economic Update

Weekly Economic Update

7 Weekend Trips You Should Take This Summer

July 22nd, 2013 | Comments Off on 7 Weekend Trips You Should Take This Summer | Posted in Lifestyle

Here’s the secret to having the best summer ever: Put an amazing weekend trip (or three) on your to-do list. You’ll have extraordinary travel adventures without using precious vacation days. And your friends will be totally jealous when they see your Facebook photos of beautiful canyons, sprightly harbor seals and Gilded Age mansions. Here are seven ideas for easy, unforgettable weekend trips that are within a day’s drive of major U.S. metropolitan areas.

Blast off in a space shuttle


Get up close and personal with one of the most sophisticated pieces of machinery built by humankind. The space shuttle that logged 125,935,769 miles and spent 307 days in orbit is on display at its new home in the Kennedy Space Center Visitor Complex. The Space Shuttle Atlantis features fun interactive exhibits, including one that NASA astronauts call “the world’s most realistic simulation of a vertical space shuttle launch.” Strap in, count down and experience the ascension into space. (Watch a video of the experience below.)

Plan Your Trip: The Space Center is a roughly 75-minute drive from Orlando, the “Theme Park Capital of the World”; a 3.5-hour drive from Fort Lauderdale; and a 2.5-hour drive from Jacksonville. This excursion is also a nice option for cruisers sailing out of Cape Canaveral, as it’s just a short drive from the cruise terminal.

Go wine surfing


This isn’t what you might think. Unlike the water sport, “wine surfing” is perfect for the sedentary, uncoordinated, thirsty set. At Gourmet au Bay in Bodega Bay, Calif. — the only waterfront wine bar on the Sonoma Coast — customers can order a flight of three wines (of their choice) presented on a plate-sized surfboard. Ideally, the wine is consumed on the deck while gazing at the Pacific. A harbor seal or two might even make an appearance.

Wine surfing encapsulates what’s so special about the Sonoma Coast: the combination of brine and wine. Spot gray whales from Bodega Head in Sonoma Coast State Park. (More than 20,000 gray whales migrate through the area annually.) Take in some actual surfing (or kayaking, or paddleboarding) with rentals and lessons from Bodega Bay Surf Shack. And when you’re done frolicking with sea creatures, you can relax in front of one of those famous California sunsets with a locally sourced vintage.

Plan Your Trip: At the well-reviewed Bodega Bay Lodge, almost all rooms have bay views and much of the food comes from local family farms. It’s easy to get to Bodega Bay (known as the gateway to the Sonoma Coast) from major metropolitan areas such as San Francisco and Sacramento; it takes less than three hours to drive from either city to Bodega Bay.

Climb giant sand dunes


“You must do the Dune Climb,” says everyone who’s ever been to Sleeping Bear Dunes National Lakeshore. It’s the thing to do here. Towering sand dunes, which loom about 400 feet above Lake Michigan, afford beautiful views and a butt-kicking workout.

Once you’ve scaled the dunes and snapped a few selfies in front of the vista, take advantage of the picnic area at the base. Or cool off with a dip in Lake Michigan’s clear waters — the dunes are terrific, but many people come here for the beaches. There are numerous beautiful ones at Sleeping Bear Dunes. Scuba diving opportunities abound as well. The Manitou Passage Underwater Preserve, right next to Sleeping Bear, is one of the best places to explore underwater shipwrecks in Lake Michigan.

Plan Your Trip: Sleeping Bear Dunes National Lakeshore is a 5.5-hour drive from Chicago. Alternately, you can get there via short direct flights from Detroit, Chicago, or Minneapolis to nearby Traverse City Cherry Capital Airport. A good lodging choice is The Homestead, which offers various budget options (including Grand, Classic, or Simple accommodations) and views of Sleeping Bear Dunes or Lake Michigan from select rooms.

Learn the secrets of Gilded Age servants


Behold the fabulous homes on the craggy coast of Newport, R.I. from the Gilded Age era featured in trending films and television shows such as “The Great Gatsby” and “Downton Abbey.” In fact, scenes from the 1974 Gatsby film were shot at Rosecliff, one of Newport’s 11 American palaces.

While much historical light has been shed on the lives of Newport’s wealthy barons and heirs, a quieter yet perhaps more interesting social history is that of the many servants who lived and worked in Newport. For a behind-the-scenes look at what daily life was like for the common people of the early 20th century, take the new Servant Life Tour at The Elms, a dazzling mansion modeled after a French chateau. The tour will take you through the bowels of the manse: in servant entrances, up hidden staircases, and through boiler rooms. You’ll hear true stories of the butlers, chefs, and maids who kept Newport’s mansions cooking. Advance reservations are required for this popular tour, which frequently sells out.

Plan Your Trip: Newport is within driving distance of many major northeastern cities: It’s a 90-minute drive from Boston and a 3.5-hour drive from New York City. Newport accommodations are notoriously expensive, but you can save quite a bit of money by staying in a guesthouse. Summer rates at the William Gyles Guesthouse start at $39 per night — an incredible bargain for the area. It’s not fancy, but it’s comfortable.

Visit an island in the sky


Utah’s lyrically named Island in the Sky sits 1,000 feet above the otherworldly terrain of Canyonlands National Park. The “island” is the most visited spot in Canyonlands — probably due to the extensive views of the park afforded from this towering mesa. A camera is key: In this extraordinary place you’ll undoubtedly snap the most beautiful photographs you’ll take all summer.

The site’s heavenly elevation belies its ease of access. Explore the Island via the Grand View Point Trail, a painless two-mile round-trip trek. (More challenging trails are available, too. See the trail map here.) Paved roads with scenic pullout areas — at which you can stop to view the colorful canyon landscape — snake through the Island.

Plan Your Trip: The Canyonlands National Park Visitor Center is a 5-hour drive from Salt Lake City and a 40-minute drive from Moab, Utah. Since Utah is blessed with national parks aplenty, you’ll probably want to visit a few other natural wonders during your weekend trip. Find a three-day itinerary from Salt Lake City to Arches and Canyonlands national parks on the Utah Office of Tourism website.

Explore New York City by bike


You may have already heard the news: This spring, a bike-share program was finally established in the Big Apple. It’s called Citi Bike, and it features 6,000 bikes available for instant use at docking stations in Manhattan and Brooklyn. So if you haven’t yet biked the streets of New York, now is the time to try. The program offers a very fast and fun way to get from, say, your Brooklyn pizza shop to your Manhattan deli, especially when you’re faced with a route that requires complicated subway transfers and a lot of walking. Sometimes it’s just easier to hop on a bike — and it’s far cheaper than taking a cab.

Plan Your Trip: Although airfares for round-trip flights departing on a Friday and returning on a Sunday or Monday can be expensive, it’s possible to find deals. At the time of publication, I spotted weekend flights from Nashville to New York’s LaGuardia on American for $217 round-trip.

Or take the train. Amtrak is offering a 25 percent discount on Northeast Regional fares to New York when you book at least 14 days in advance.

Go on a weekend cruise


Afraid you might feel claustrophobic or seasick on a sailing? Embarking on a two- or three-night cruise is a smart strategy for testing the cruising waters. Take a “cruise to nowhere,” which is essentially one that sails out into the open ocean, turns around and then comes back; or take a repositioning cruise, which is when a ship moves from one port to another and takes passengers along. Some short cruises include one or two port visits, as well.

Though they may sound ho-hum, cruises to nowhere can be a lot of fun, especially if you’re on a new ship with innovative attractions. One of my favorite cruises ever was a round-trip voyage to nowhere and back on Norwegian Epic out of New York.

Plan Your Trip: You have lots of options here. In August, Carnival Glory is sailing a two-night cruise to nowhere out of New York. Onboard, you can imbibe at one of 22 bars and lounges, endure a massive caloric onslaught at Guy’s Burger Joint, or simply sit on your balcony with a good book and gaze at the ocean. Rates start at $279 for an inside cabin and $449 for a balcony.

Also this summer, Disney Dream and Royal Caribbean‘s Enchantment of the Seas are sailing three-night Bahamian cruises out of Port Canaveral. Norwegian Sky is doing three-night Bahamas sailings out of Miami. There are also a few three- and four-night Carnival cruises going round-trip from Florida ports.

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Getting The Most Out Of A Gallon Of Gas

July 22nd, 2013 | Comments Off on Getting The Most Out Of A Gallon Of Gas | Posted in Lifestyle

Have We Been Brainwashed By Diet Soda?

July 22nd, 2013 | Comments Off on Have We Been Brainwashed By Diet Soda? | Posted in Lifestyle

sodaFrosty and fizzy diet soda may seem refreshing when the weather is hot, but diet drinks have been tied to weight gain, heart disease, stroke, diabetes, metabolic syndrome, and high blood pressure, according to an article published by a Purdue professor and researcher in the journal Trends in Endocrinology & Metabolism, this week.

Artificial sweeteners (such as aspartame, sucralose, and saccharin) present in trendy zero-calorie drinks, energy drinks, and diet sodas might seem like a smart alternative when compared to their sugary counterparts, but that’s often a false perception. “We’re taught that diet beverages are tools to help prevent health conditions such as obesity and diabetes, but the reality is, people who drink full-calorie soda have about the same health outcome of people who drink diet soda,” lead author Susan E. Swithers, PhD, professor of behavioral neuroscience at Purdue University, told Yahoo! Shine.

Based her review of recent scientific studies, Swithers sees a ‘health halo effect,’ or an unhealthy pattern of thinking, in regular soda drinkers. “People often give themselves permission to indulge in fatty foods because they’ve consumed a diet beverage,” said Swithers. “But if they do it enough, they’ll develop consistent unhealthy eating habits.”

Artificial sugar also pulls a bait-and-switch on the body that changes the way it processes food. “Sugar isn’t always bad for you—for example, there are natural sugars in fruit and vegetables that benefit your body,” says Swithers. “When you eat real sugar, the body releases hormones that activate the metabolism, creating feelings of satiation, regulating blood sugar, and protecting the heart. However, when you consume artificial sweeteners, your body initially recognizes their sweet taste, then quickly gets confused, suppressing those hormones your body needs to function.”

What’s more, people who consume lots of artificial sweeteners actually alter patterns in their brain’s “pleasure centers” in response to them. According to Swither’s paper, that process suggests that artificial sweeteners may not even satisfy one’s sweet tooth.

The takeaway, she said, is that public health campaigns for limiting sugar in soda and packaged foods should also extend to limiting artificial sugars. Recently, diet soda has been linked to a slew of health problems—the Journal of General Internal Medicine found that daily consumption of the stuff was linked to an increased risk for heart attack and stroke; also, the American Journal of Clinical Nutrition found that drinking artificially sweetened beverages raises one’s risk of type 2 diabetes.

But what if you can’t envision powering through the day without your afternoon diet soda? You would be in good company—according to an article published in the New York Times, Bill Clinton, Harvey Weinstein, and Elton John have all professed their love for Diet Coke. Victoria Beckham even reportedly told Newsweek that she drinks it all the time because she doesn’t like the taste of water. “The good news is, you don’t have to quit artificial sweeteners cold turkey,” Patricia Bannan, registered dietician and author of Eat Right When Time is Tight told Yahoo! Shine.

“It’s true: There’s nothing like the feeling of that first sip of diet soda, but when you taper off your consumption, you’ll be surprised at how many chemicals you taste if you even have one sip,” said Bannan.

If you’re drinking one soda per day, Bannan suggests slashing your intake to one every two days, and then one every three days and so forth. “You’ll feel uncomfortable at first but you can try various substitutes for diet soda,” said Bannan.

For example, carbonated water offers the fizzy kick of soda but without the chemicals. “Adding a splash of 100 percent fruit juice or a lemon or lime wedge can also satisfy your sweet tooth,” she said.

Another option: Brew tea. “People are often drawn to diet soda because of the caffeine, not necessarily the taste,” she says. “Black, green, white, and oolong tea all contain an amino acid called ‘L-theanine’ which sends the body into a calming yet alert state.”

Also, be aware that many habits are formed when people associate behaviors with their activities. If you  hit the vending machine daily for your diet soda fix, you could break your dependency by simply rejiggering your schedule: When the urge strikes, swap the vending machine visit for a walk around the block (walking releases feel-good endorphins that may quell your craving) or make a point to schedule a meeting during that time so your mind is otherwise occupied.

Also, try this mind trick: “The next time you reach for a diet beverage, take a look at the list of ingredients on the back,” says Bannan. “The more ingredients a product has, the more artificial it probably is. If you can’t pronounce it, do you really want to drink it?”

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