5 Tips to Help 20-Somethings Manage Health Care Costs

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When you're young, a lot of things seem relatively far-off and not worth thinking about now -- things such as managing health care costs, for instance.

But while you're still in your 20s it's the ideal time to consider your future health care needs so you're financially ready to tackle health issues when they arise. Health care needs in retirement can be considerable. Understand that while you might hope that your employer will give you some healthcare coverage in retirement, that's increasingly hard to come by and many folks who've been promised coverage have had it reduced or outright canceled.

And remember, too, that youth doesn't guarantee good health and low health costs. A University of Southern California study notes that cancer, heart disease, and mental disorders are "among the top five causes of mortality in young adults." Accidents, too, as well as drug or alcohol use, can lead to health care need.

Here are a few tips to consider:
  1. Go with a high deductible. When you sign up for health insurance, if you're in good health as most young folks are, consider opting for a plan with a high deductible, if possible. That's a good way to lower your costs.
  2. Talk to your doctor about less-pricey prescriptions. Thus, when you're prescribed any medication, ask about less expensive alternatives. There may be a much cheaper generic version of the same drug, or a different (but also effective) drug treating the same condition that's less costly. Shop around with pharmacies, too, as costs can vary widely between them.
  3. Keep tabs on what you're being charged. Read your bills carefully, as there's a not-insignificant chance that you're being overcharged. According Medical Billing Advocates of America, as many as 80 percent of medical services bills contain errors. Make sure the bills you get are itemized and reflect services you actually received. An incorrect code on a bill could lead to an incorrect charge and perhaps one rejected by your insurer. The bill might even be sent to the wrong insurer! The more you know about your coverage and your care, the more money you might save. Online, you may be able to look up estimated costs for various services at particular hospitals, or for particular services.
  4. Learn what to expect under "Obamacare." President Obama's signature Patient Protection and Affordable Care Act, or "Obamacare," has a lot to offer most Americans, including young and healthy ones. For starters, those up to age 26 will be able to remain covered by parental health insurance plans. This has already benefited 3.4 million people between the age of 19 and 25. Many young folks (and older ones) work for employers who don't offer health insurance. Under the Affordable Care Act, you'll be able to buy insurance for yourself, and you may also qualify for subsidies to help you afford it, if necessary. If you're unlucky enough to have some pre-existing condition (such as diabetes or high blood pressure), insurers won't be able to use that to raise premiums on your or, worse, deny you coverage.
  5. Get and stay healthy. Your health isn't entirely under your control, but much of it is. If you get fit, get regular checkups and preventative care, and develop good habits such as exercising and not smoking, you can set yourself up for a longer life, and one that can cost you less over time, too.
Don't take your health for granted, and don't assume that you needn't plan for your health needs if you're still young and healthy. You can save a lot of money, headaches, and even heartaches by managing your health care well.

President Obama's Weirdest New Taxes
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5 Tips to Help 20-Somethings Manage Health Care Costs

President Obama wants to tax your Stoli Razberi.

Distilled spirits currently get a tax break if they include flavors, but the president's budget proposal does away with that. Spirits are taxed at $13.50 per proof-gallon (a gallon of 100-proof liquor), but if distillers add flavorings, they can roll back some of that tax: Up to 2.5 percent of the alcohol in those flavoring mixtures is exempt from the spirits tax.

It doesn't sound like much, but the Treasury claims this tax break gives an unfair advantage to flavored liquors, particularly foreign producers whose flavor quotients aren't restricted, as they are for U.S. producers. Heavily-flavored, foreign-made spirits can be sold cheaper, and consumers might be more likely to buy them than they otherwise would, Treasury argues.

The new rule would be good for Jack Daniel's, bad for Absolut Citron.

In a creative tax maneuver, an Alabama land developer was able to deduct part of his golf course.

E.A. Drummond bought real estate on a Gulf Coast peninsula in the 1990s, created a business to build a golf course on it, and developed the land around the golf course. In 2002, he had the business place a conservation easement - a partial restriction of what can be done with a piece of land, for the purpose of conserving it or preserving "recreational amenities," golf among them as the tax code is written - donated that easement to a conservation land trust, and claimed the value of the easement as a charitable-giving tax deduction.

Under Obama's budget proposal, that couldn't be done.

In explaining the proposed change, Treasury protests that such moves have "raised concerns" that the deductions, often claimed by the developers of homes around golf courses, "are excessive," and that they mainly advance "the private interests of donors" not "bona fide conservation activities."

President Obama smokes from time to time, but he proposes hiking the tax on cigarettes to pay for early-childhood education.

Cigarettes have been taxed at just under $1.01 per pack, to help pay for the 2009 expansion of the Children's Health Insurance Program (CHIP). In his budget proposal, Obama suggests raising that to $1.95 per pack.

The administration's rationale is, essentially, that cigarettes are harmful.

Citing statistics on smoking-related deaths, Treasury writes, "Excise taxes, levied on manufacturers and importers of tobacco products, are one of the main ways that policymakers can affect tobacco production and consumption."

Perhaps a dead horse by now, Obama is still beating it.

The so-called "loophole for corporate jets" works like this: Companies can write off the value of their equipment as it depreciates - to encourage investment, the government lets businesses recoup some cost of buying equipment by letting them count its depreciation against their income. The IRS has a schedule for how fast different kinds of equipment "depreciate," and how much of their value can be written off when.

When it comes to airplanes owned by businesses, commercial and freight-carrying planes can be written off in full after seven years. Planes that aren't used for those purposes - corporate jets, crop-dusters, and planes used for firefighting, for instance - can be written off after five years.

Under Obama's budget proposal, noncommercial passenger aircraft are lumped in with commercial and freight planes, meaning businesses can deduct the value of their corporate jets after seven years, not five.

Say you're a business, someone wins a lawsuit against you, and you're required to pay damages. You can write them off.

Not so, under Obama's budget proposal.

The White House plan would not only prevent businesses from deducting punitive damages from their taxable income, it would tax damages paid out by insurers, too: If a business takes out an insurance policy for some kind of liability, and that insurer ends up paying out damages on behalf of the company under its policy, those damages would be added to the business's taxable income.

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