JUST PLAIN TALK: Healthcare and finances

Buz Livingston
Buz Livingston

My good friend, Dr. Carolyn McClanahan, CFP, frequently writes on the intersection between healthcare and finance. Earlier this month, she posted 10 healthcare questions on CNBC.com; I passed, but it was tough. Take your chances here, https://cnb.cx/2GqYN45.

I started on a roll, answering the first two correctly. Over 100 million Americans with high blood pressure pay almost $2,000 annually ($1,920) for care. Simple lifestyle changes, like modest exercise, diet, and not smoking, can help.

Also, while being poor causes health problems, the converse is true, too. Poor health can lead to impoverishment, as well. I should have answered Q3 correctly; obesity does not make life insurance difficult to obtain. With America's obesity epidemic, companies rate overweight applicants accordingly.

Since I listen to Dr. McClanahan, I knew following a doctor's orders is not the best way to lower costs. Always ask for more cost-effective options. Insist on in-network (insurance) providers, too.

I was shocked to learn the economic cost of depression exceeds $200 billion annually. I also learned neck and back pains cost Americans more than diabetes, lung disease, or heart disease. As with high blood pressure, simple steps like regular exercise and maintaining ideal weight helps.

I nailed the pre-existing conditions question. Insurance coverage that covers pre-existing conditions but allows an insurance company to price the coverage based on your health makes as much sense as a screen door on a submarine. Under the Affordable Care Act (ACA), all policies are guaranteed issue, which means an insurer cannot charge higher premiums based on your health. If the ACA goes away, people with pre-existing conditions will be in high-risk pools, just like drivers with bad driving records. Pre-existing conditions can be lifestyle-oriented but are often lousy luck on the healthcare spin of the wheel. The three women I admire the most, my wife, my daughter, and daughter-in-law, all have pre-existing conditions; it's personal for me.

Don't confuse health savings accounts (HSA) with flexible spending accounts; both are tax-advantaged, but a flexible spending account has to be spent annually. Since an HSA doesn't have an expiration date, funds can be invested, grow tax-free, and be used for future medical needs.

Chemotherapy and nursing home costs don't cause the most end-of-life healthcare costs; lack of communication about healthcare wishes does. Unlike previous generations, American families are often isolated from older relatives, and separation leads to misunderstanding. When people can no longer groom themselves, interact with others, feed themselves, or communicate, many prefer to die if they have a severe illness. Without explicit instructions, providers often initiate unnecessary and expensive procedures.

The best way to reduce healthcare costs in the United States is not to increase the number of physicians or lower prescription drug costs but to expand primary care. Currently, we only spend between 5% and 7% on primary care. The data is clear; other countries spend more on primary care and end up with better outcomes.

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by, masked, 2050 West County Highway 30A, M1 Suite 230.