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MoneyTimes - September 26, 2012

Posted by Jill Kerby on September 26 2012 @ 09:00

HEALTH CARE CRISIS REQUIRES A PERSONAL HEALTHCARE PLAN

 

Dr O’Reilly, the embattled health minister said last Friday in an RTE interview that he has a very “difficult job to do” but that he wouldn’t change the difficult choices and decisions he’s had to make, even if he was given such a chance.

Unfortunately, the minister is trying to do the impossible: squeezing an increasing number of square pegs (patients needs) into an increasingly diminishing number of holes (available funds.)

Only politicians with absolutely no training or experience to run the biggest business in the state with over 100,000 employees and a budget of €13 billion, would see any merit in such a futile exercise.

Since there is no chance that the politicians and bureaucrats will ever accept this, perhaps we should all be concentrating on what we can do ourselves to ensure the best possible outcome if we fall ill and need medical care.

Prevention

Nearly everyone agrees that once you get into the health care system, the treatment and care is very good. But non-life threatening and elective treatments too often come with appalling delays.

There are now 340,000 people and counting on referral lists for outpatient departments; 16,600 people have been waiting four years for their first appointment. Another 113,000 people have been waiting a year for treatment (which includes hip replacements and other ‘elective’ surgery).

With budgets tightening and the population ageing, if you are a younger person – say, anyone under 40 and you intend to keep living in this country – you start taking better care of yourself. Cut down on alcohol and cigarettes, lose weight and do more exercise. Encourage the entire family to eat less rubbish and exercise more.

If you work in a hazardous environment, take extra care. Be conscious of the cost of an accident to you and your family.

The same preventative measures should be taken by older people of course, but the genetic causes of many illnesses and conditions can’t be avoided once you hit a certain age.

The bulk of the health care budget (the 20%-30% of the €13 billion that doesn’t go on payroll costs) is already spent on the conditions and illnesses of older people in our society. And even if waiting lists were better managed, with older, more ill people always going to the top of every queue, the budget cuts are still going to be inadequate:  we are an ageing population with less, not more money to spend.

Funding

Is affordable, universal health insurance, devised, regulated and probably managed by the Department of Health mandarins a reasonable prospect in the near future?

I’m guessing that it won’t be. Top grade health care is expensive to deliver in every society. Technology helps bring costs down, but even universal insurance systems in ageing, well off countries (like Holland) carry huge costs. In our bankrupt state, where both the government and individuals are hugely indebted, it will be near impossibly to deliver in the near future.

Until then, there is still the option of private health insurance. Two million of us are still paying this way to beat the state queues and to get prompt diagnosis and treatment.

The cost of insurance has soared in recent years with high single or double digit increases. Popular family plans for two adults and two or three children costs can cost between €2,000-€3,000 a year. An adult plan is typically between €800-€1,000. About 66,000 dropped their insurance in 2011, most of them younger, healthier people and this will also drive the price of premiums up.

However costly, health insurance is still community rated, meaning that all plans must be available to all buyers, regardless of age, but many are now being designed to be suitable for some and not for all.  :  a young woman of child-bearing age might not get much benefit from a plan that doesn’t include extra maternity benefits; an older person, on the other hand isn’t going to get much use out of a basic plan with sports-injury cover but doesn’t meet the full cost of orthopaedic treatment in the private hospitals.

Is €800 a year too expensive for someone who is unemployed, living on minimum wage or on a state pension? Yes, of course, though many of these people will be eligible for a medical card. What the card doesn’t do, however, is ensure prompt care.

Is €800 too expensive for an extended family of earners to pay for an older relative, or the €200-€300 for a chronically ill child whose parents can no longer afford their policy?

Where there’s a will, there should be a way. Three or four working siblings should be able to afford to pay €15 or €20 each a month for their elderly relative’s health insurance plan (even if that person is entitled to a medical card) and far less for a child’s plan (which must be linked to an adult member.)

If you are concerned about what is happening in the health service and you want to ensure the good health and health care of yourself and your loved ones (then you need to think strategically.

Improving what you can –your life-style choices – and then putting aside some money regularly for future treatment or insurance is the obvious thing to do.  Being generous - if you can - with others who cannot afford to pay for their own treatment or insurance, should also be a consideration.

A number of insurance brokers now specialise in finding the best cost plansso shop around. (Check out healthinsurancesavings.ie, healthinsurance.ie and lyonsfinancial.ie and the Health Insurance Authority website  www.hia.ie). Health cash plans like www.hsf.ie are also worth investigating – a single premium covers the entire family and will pay tax-free cash benefits towards outpatient and hospital costs.

 

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MoneyTimes - September 12

Posted by Jill Kerby on September 12 2012 @ 09:06

HARD TIMES COMING ON THE ENERGY FRONT

 

My mother used to tell me a story of how, when she was child during the Great Depression, a well-spoken, respectable looking man and his little girl, about her age, used to come to the kitchen door of their house in Montreal every week and collect old newspapers and the stubs of candles from her mother.

These he would roll tightly, he explained, with the wax melted between the newspaper sheets, bundle them together into bigger rolls and use as fuel in their stove in their rented flat. She remembered this man in particular, “because he looked and sounded like my own father”, in other words, a man her father could have been if he too had lost his job and had to resort to seeking out the kindness and charity of strangers.

This economic depression is different in many ways to the one in the 1930s:  there was no state unemployment benefit back then or supplementary welfare payments to help meet his heating bill (or rent). There was only charity, and not always enough of that to ensure that everyone would come through those long, cold, hungry “Ten Lost Years” in Canada. (Also the title of a wonderful book about the Canadian depression by writer Barry Broadfoot.)

People may not be starving or freezing to death in this fourth year of our Great Recession, as many Irish people now call it, but according to the Society of St Vincent de Paul spokesperson John Mark McCafferty, the charity spent just under €3.4m in 2007 on fuel costs which then rose to €8.8m in 2010 (the last year in which statistics are available.).  That bill will no doubt be much higher for 2011-12 after Bord Gais’ price hike of 22% a year ago and the 8.5% price hike it has just had approved by the energy regulator in the coming year. 

Electricity prices are going up by at least 5% due to the gas price hike, says Simon Moynihan of www.bonkers.ie, the price comparison website that monitors all energy prices. This is because a considerable amount of Irish electricity is generated from gas-fired stations. (Since, hikes over 6% have been announced,)

Meanwhile, the National Consumer Association (NCA) has just published a survey on the cost of supply and delivery of 1,000 litres of home heating oil, based on quotes from 24 areas around the country.  The average price nationally was €964 with the highest price recorded in East Galway at €995 and the cheapest in Dundalk at €910. Kerry, Sligo and Ennis, Co Clare also recorded the lowest price variations. (This is also not far off what the average gas bill will be in 2012-2013, says Moynihan.)

A quarter of the areas surveyed had price variations of €40 or more between the lowest and highest quote. Prices in 50% of the areas had price variations from €20 to €40. 

Much of this year’s big price rise for gas (and soon electricity) is due to the fact that the euro/sterling weakness of c11% so far this year is forcing up the price of our gas imports from the UK.  There is nothing we can do about that.  But both Simon Moynihan and the NCA still recommend shopping around for the best gas/electricity tariff from the other energy providers and for home heating oil – the latter by calling distributors outside your area to see if they will deliver to your home at the same lower cost.

Cutting your fuel bill otherwise is all about conservation and keeping your boilers in good repair (replacing and old boiler costs money of course, but can save €250 a year in fuel use.) Turning off lights when a room is not in use, using long life bulbs and turning off electrical equipment (like TVs and computers) will cut your bills by 10%-20% says Electricity Ireland.

Open fireplaces, draughty doors and windows are all heat loss black spots. On my street of old Victorian terraced houses in Dublin, the neighbours who haven’t made an effort to cut heat loss by super-lagging their attics, double and triple glazing the windows, stopping up the 6-7 open fireplaces in these houses and properly insulating the walls and floors, either have spectacularly high heating bills or are the ones who heat one occupied room, keep heavy shutters and curtains closed a lot, keep the snake draught excluder manufacturers in business and wear a lot of woollies in the winter. (I’m embarrassed to say that we fall somewhere in the middle.)

I’m grateful that we can manage to pay our heat bill, but many people can’t.  Before they go cold, or end up sitting in the dark (or staying in bed under a pile of duvet’s) – even after doing everything they can to cut the cost of their bill - it would be nice to think that their loved ones or good neighbours who have an Ark under construction (see previous articles) will help them out, especially since state assistance will be increasingly limited as the Great Recession ploughs on. 

The wonderful “V de P” will, of course, do what they can.  They’ll do even more if you can manage to send them a donation (see www.svp.ie). 

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MoneyTimes - September 5, 2012

Posted by Jill Kerby on September 05 2012 @ 09:08

SUMMER’S OVER AND THE REALITY OF HEALTH CUTS AND PROPERTY TAX IS BACK

 

The end of summer signals the end of the respite from school for the nation’s youngsters. For the growns-ups – if they’re lucky there is a break from the unrelenting litany of bad news and bills (that will get paid after the holiday).

Let’s hope the nation has had a chance to recharge its batteries because there’s no escaping the reality of pre-Budget spending cuts and higher tax announcements. Expect a lot more of it in the coming weeks, especially now that the worst economic news of all is filtering through:  the great German industrial machine is slowing down. 

Even one of the world’s most powerful politicians, German Chancellor Angela Merkel, cannot force Germany’s trading partners to buy more German manufactured goods if they don’t believe future sales justify such investment. Consumers will not buy stuff anymore if they are paying off old debts, don’t have access to cheap and ready credit and want to preserve their savings because they are worried about the future.

This is the great conundrum of our age: global prosperity now depends on endless growth, which is impossible. Something has to give eventually:  raw materials, income, credit/capital…the laws of physics cannot be re-written, no matter how much politicians and central bankers want see only an upward line on a GDP growth chart.

Should Germany enter recession, all bets are off in terms of keeping the Greeks, Irish, Portuguese and Spanish on their current, let alone future life support packages that include guaranteeing the ECB’s purchase of their toxic sovereign bonds. Whatever about eurocrat central bankers who answer to no one clamouring for such purchases, private bond buyers, with clients to answer to, have shut the door on these bonds: their jobs are on the line if a default happens.)

The slowing down of Germany’s economy is going to also give a greater impetus to the EU/ECB/IMF troika to hurry us along in the spending reforms and tax widening promises we made in exchange for the €67 billion overdraft. That is the reason why health spending cuts, details about the property tax, upcoming cuts to unemployment benefits (“poverty traps”) have all been highlighted by government spokespersons and ministers this past week.

The softening up process that always happens before a Budget has begun in order that the impact of the cuts won’t seem quite so brutal on the day. But spin like this goes in both directions and carer and patient groups have been the first out of the traps to pledge their resistance to the c5% cuts in home help and disability services.

The other big announcement was about how the 2013 property taxes will be collected/deducted from PAYE earnings (such has been the difficulty in the collecting of the €100 self-assessment household charge.)

Resistance to the property tax will grow, but with mixed success if the size of the tax is small enough in year one and only amounts to €20 or €30 a month, as some commentators are suggesting (with very little to back up their predictions, it must be said.)

No matter how it is spun, health care cuts and property taxes are happening already or will come in early 2013.  Another two austerity budgets will follow the December one, each requiring another c€3 billion of cuts. We should all be working out personal coping strategies.

If you or someone close to you are at possibly at risk of HSE home care benefits being withdrawn, you need a contingency plan in place before it happens.

The reality is that ministers always opt for the easy cutting option (as argued by their civil servants) and target people who themselves cannot resist, like the ill and elderly poor and who pose the lease electoral threat. Until they are forced to reverse the decision and target something (or someone) else, the elderly/disabled/ill poor person suffers.

Anyone in your family, your circle of friends or your community who is disadvantaged needs to be protected until the other fight is won. This means finding the cost of hiring a private carer to make up the lost service, appealing to charities if possible, fund-raising or even setting a charity up to provide the service if that’s what it takes.

This is part of the Ark building process I’ve written about a number of times. Some people – who want to hand all responsibility for most of the way our lives are conducted to the state will say community action let’s the government off the hook. Until that mind-set can change (if ever), consider this just a form of short-term survival tactics that we will all increasingly have to resort to, as our country’s economic difficulties deepen.

As for the property tax, the best thing you can do between now and January 1 is to get an independent, impartial valuation of your residence, holiday home or investment property. Get the valuer to base it on the rental yield of the property, which multiplied by a factor of 12-14 will give a pretty accurate idea of its real value.

This kind of ‘evidence’ will give you some confidence to appeal any higher valuation the biased state assessors will come up with: they are reportedly going to use market values based on most recent sale prices. However, this pool of data is far too small – and the market is still falling – to provide any kind of a  clear and accurate picture of residential prices for tax purposes. 

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Women Mean Business - Sept/Oct 2012

Posted by Jill Kerby on September 01 2012 @ 09:00

Anything but Barney…and joint bank accounts

 

“Sharing is caring, mummy” The Child used to say to me in his sing-song little three year old voice.  He picked the phrase up from Barney, that hideous, purple, US children’s TV fur-bag that had a cult following amongst the under 5’s back in the 1990s and naughties. 

I couldn’t bear the sight of him or the chirpy American kids that were clearly pretending to be his playmates. They had to be in it only for the money. So I would encourage Jack to abandon Barney for just about any other programme, including his other favourite, unsuitable viewing  - Judge Judy - which he watched three afternoons a week with his beloved minder, Joanie. 

               *                                   *                              *

I was reminded of the ‘sharing-is-caring’ episode twice recently when asked my views about the merits of married couples having joint current and savings accounts and credit cards.  (Co-habiting couples don’t usually have such accounts, at least not right away.)

Marriage, of course, is all about sharing things: a life, a home, negative equity in that home. Respective families.  A big bed. And the children that often arrive after sharing that bed for long enough.  

Yet there are plenty of things married couples don’t usually share, quite correctly, like toothbrushes. And certain hygiene products. Nights out with the girls/boys. And the minutiae of menstruation and car engines.

Why then would you want to share a current account, or a credit card? 

I appreciate that free banking isn’t what it used to be – the only bank that provides a semblance of nil charges is Ulster Bank and I’m not sure that’s much of an advertisement for them anymore. But if you choose your bank account carefully and do most or all of your business on-line, then the fees are minimal and hardly an issue.

It never dawned on me, more than half a lifetime ago, to share a bank account with my husband.

We both worked. We both had periodic bank loans and overdrafts. We knew we had joint living expenses, like the rent (later the mortgage), food, utilities, our one one car and its expenses and all important holiday costs.

Separately, we had our own personal expenses, like clothes, healthcare, hobbies that we didn’t share (he doesn’t go to the opera or musicals; I don’t go to football or Leinster rugby matches). We don’t usually mix with each other’s work colleagues.

We do buy prodigious numbers of books and DVDs and in the days when we used to eat out a lot (pre-Barney years), who picked up the tab was often determined by who suggested the meal/take-away that night and the choice of restaurant.

Without making a huge song and dance of it, we worked out the cost of all the joint essential and discretionary expenses, like holiday/family anniversary spending. We could do this because we always knew how much money we collectively earned and the state of each other’s finances.

And there’s the rub.

Too many couples never bother to find this out.  I have known newly married couples that didn’t have a proper handle of what each other earned – let alone the size or their car loan or overdraft – until after the wedding.

Credit cards?  Sure, we all have them. But one groom was shocked to inadvertently discover - after he and his new wife got back from their honeymoon, that not only was the credit card he knew about, completely maxed out, but so were her other two - surprise! – cards.  She had total outstanding credit card debt of nearly €10,000 with c18% annual interest.

Detached

It isn’t just newlyweds who are stumble around each other in the financial dark.

Long time marrieds’ – usually the ones with the joint bank accounts – can often end up with one spouse being more detached than the other in their stewardship of the joint or family finances. 

Again, my experience is that couples who keep their banking arrangements separate, pay joint bills proportionately to their incomes (think golf handicaps) but have full regular reckoning of accounts, tend to experience fewer unwelcome surprises than those who leave their money matters almost exclusively to the main earner.

A professional couple, earning decent money with no children and each partner taking personal responsibility for their individual and joint expenses is always going to be able to cope best in this ‘sharing is caring’ experience.  Money, is literally, no object.

But they can have their pear-shaped moments too if latent stingy or spend-thrift impulses start appearing too often.

I once knew a couple where the husband decided that business/first-class travel was now essential every time he travelled when before, steerage was acceptable. She thought it was an extravagance that should only be reserved for really long haul, once-off sorts of flight.  It turned into a big row, but it was really a sign of a shaky marriage than about their joint finances or the difficult compromises about money that every couple – even well-off ones - experience now and again.

Having children, or a period of unemployment is where the pro-joint bank account argument needs careful teasing out. Women – mostly – are the ones who stop working at their jobs when a couple’s children arrive. She suddenly goes from having her own income to receiving a monthly €140 child benefit payment that she may feel guilty about spending on herself.

This is when the joint account really comes into its own, insist its supporters. 

“When you have a joint account or credit card, nothing changes when the baby arrives. The stay-at-home mum just continues to use that account, just like she did when she had an income and it was paid into the joint account,” I’ve been told.

Yeah, yeah. Except it doesn’t always work that way.

Husbands who are already feeling a bit neglected by the baby’s insatiable demands on his wife, adult meals that are very much on-the-go, or don’t happen at all; the sleep deprivation and dearth of sex can take it’s too. Now he’s seeing that there’s not a lot of money left in what he’d always treated, naturally, as his bank account as well as ‘their’ account once all the usual bills, the new baby’s bills and now his wife’s personal spending, is accounted for.  

Some husbands – normally the sweetest of blokes - have been known to question the size of grocery bill that she is running up – groceries that she still buys, loads into the car with the baby, unloads and cooks with.

I think if the joint account is to work, it should be opened only when the baby arrives and it is agreed that a direct debit is set up with an amount transferred every months into the stay-at-home spouse’s own account for their personal expenses.

That way, there is no debate abut how much or why they spent X-amount in a particular department store that he never frequents and no chance – ever - of her wondering if “the housekeeping” money in the joint account can possibly stretch to a new jumper (that doesn’t smell of baby sick) or a decent haircut.

Run Away Money

Every woman also needs ‘run away’ money. 

Once upon a time, in another century, the farmer’s wife kept hens and the pennies she got for selling the surplus eggs was ‘her’ money, that she kept in a biscuit tin or in the post office.

Those were the days when marriages were even more unequal than they are today and when the husband legally owned the farm, the farmhouse and pretty much everything in it. Wives were pretty much chattel and if they didn’t have their own money, in the hidden biscuit tin or post office account, there was no chance of ever running away.

Marriage is not a zero sum contract anymore. Every woman needs her own bank account. She needs her pension fund. A joint account with a spouse is just fine, but it’s a discretionary convenience. 

This is really about being your own person as well as being part of a couple. 

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