The Official Modest Needs Blog

More Workers Turning Down Employer-Subsidized Health Insurance

Millions of Americans are without adequate health insurance in the United States, often because they are unemployed, self-employed or underemployed. This is because the vast majority of those insured are covered because their employers offer health insurance packages as a benefit of their employment. 

But lately, some who are offered health insurance packages through their workplace are turning down the coverage because the cost of the plan is too expensive. This move, which was sometimes made by very young, healthy workers, is now becoming increasingly more common, despite the risks associated with it:

The rising cost of health insurance is pushing more South Florida employees to consider what had been unthinkable: Passing up medical coverage offered at work.

A strata of young, physically fit workers have always skipped employer health benefits they view as an unnecessary cost. But insurance agents say a growing number of older employees and even families are trying to save money by switching to low-priced health policies they buy on their own.

Insurance experts say employees can find credible, lower-cost coverage outside the workplace, through high-deductible plans. But they say it's a gamble because it takes a lot of work to find a good plan without big holes. Individual policies typically do not cover as much and often charge higher co-payments and deductibles. They also can raise your rates at will and drop you if you get sick.

"Dropping coverage at work? Generally a bad idea," said Carlos Castresana, South Florida unit leader at Wells Fargo Insurance Services, which designs health benefits for employers. "Even if you're healthy, you don't know if you'll get sick."

Yet more employees are thinking about it as they reach their open-enrollment period to sign up for 2012 coverage at work.

In a healthcare system where insurance plans are doled out by employers, but the nation is experiencing nearly 10% unemployment rates, there is bound to be a shift in how individuals choose to purchase insurance. However, the rising cost of insurance for employers is being passed along to employees, and more than ever before some workers are opting out of health coverage. Is it because they make less now? Is it because individual plans are cheaper? Is it because purchasing health insurance would mean not being able to afford the medications they provide, even at a discount?

You'd be hard pressed to argue that the health insurance system in the United States couldn't use some tweaking. But this trend in turning down employer-sponsored health insurance due to rising costs is unprecedented, and may be a sign of a shift in how Americans choose to take care of themselves.

Have you considered opting out of your employer's health insurance package? Know someone who has? Please tell us your stories of how you choose (or don't choose) to cover yourself and your family in case of medical emergency. Weigh in below.

[Photo by Quinn Dombrowski]

Layaway To Save the Day: Wal-Mart Brings It Back

Most of us remember layaway, the option many retailers gave to shoppers to set an item aside and pay for it over time, charging only a nominal fee for the service. People would put big ticket items like TVs or appliances on layaway, or use it for back to school clothes or holiday gift buying. It was a very popular option for those who didn't want or qualify for credit cards. But in the past decade, layaway became a relic of times past.

But in a sign of the times of economic recession, Wal-Mart, the country's largest discount retailer, is bringing back its layaway program:

Wal-Mart said on Thursday that it planned to bring back its layaway payment plan for the holidays, an indication that shoppers at the nation’s largest retailer were feeling more and more strapped.

Wal-Mart had scrapped layaway in 2006, saying that so many customers were using credit cards or gift cards that the program was obsolete. Now, though, consumers are demanding it, said Duncan Mac Naughton, chief merchandising officer for Wal-Mart’s United States stores.

“It just tells us the customer’s still struggling, as they tell us about their concerns with energy prices, housing prices, the job security, that 9.2 percent unemployment — it tells us that this is a fragile economy and the customer needs our help,” Mr. Mac Naughton said.

What do you think of the news? Will you use the layaway plan that Wal-Mart will offer? Is layaway something you used in the past and are excited to see emerge again? Share your opinion in the comments.

[Photo by J E Theriot]

Get Pricey Meds for Cheap or Even Free!

A few weeks ago here on the Modest Needs Blog, we talked about how twenty or so of the most prescribed medicines in the country are poised to go off patent, which means that there will be much cheaper generics available for pricey drugs like Lipitor, Plavix and Lexapro. This will be a enormous relief to a good number of Americans who rely on these drugs.

But there are other ways besides waiting for generics to save big on prescription medicine, and the terrific blog Get Rich Slowly has a fantastic post explaining easy ways to pay less for Rx:

You might not have to pay for meds at all. Once that strep throat is diagnosed, ask if the doc has any drug samples. Pharmaceutical reps drop off boxes of free meds along with those fabulous calendars, pens and tote bags. Your doctor might reserve these drugs for desperately broke patients — but maybe that’s you. It can’t hurt to ask.

Tip: Some drugs, such as prenatal vitamins and certain antibiotics, are free at Top Foods, Meijer and Publix supermarkets. 

If you’re living on a very low income, you might qualify for free medications through “patient assistance programs” offered by most pharmaceutical companies. Groups such as NeedyMeds, the Partnership for Prescription Assistance, theChronic Disease Fund and the Bureau of Prescription Help can tell you more.

Several drug companies also joined forces to create the Together Rx Access Program, designed for people under the age of 65 who have no prescription drug coverage. This free, income-based program makes it possible to save 25% to 40% on more than 300 medicines and medical products, and is accepted in most major pharmacies in the United States and Puerto Rico.

Read more tips and tricks for getting expensive prescription drugs for cheap or even free at Getting Rich Slowly.

Good News for Those Crippled by the Cost of Health Care

With health care being prohibitively expensive for this country's working poor, it's no surprise that a large number of Modest Needs applicants are in dire straits because of costly co-pays, medical exams and prescription drugs. But just because it is not shocking, doesn't mean it isn't disheartening all the same. In fact, the number of requests made that describe being forced to choose between food and medicine is absolutely heartbreaking.

However, there is some good news on the horizon for those who are crippled by the cost of health care:

In the next 14 months, seven of the world's 20 best-selling drugs are scheduled to go "off patent." As they do, the brand-name drugs will lose out to generic versions, cutting costs for patients and companies that provide health benefits.

Generic versions of big-selling drugs for high cholesterol, high blood pressure, asthma, diabetes, depression, high triglycerides, HIV/AIDS, and bipolar disorder also are on the way.

Generic medicines - chemically equivalent to the original brand-name drugs - typically cost 20 percent to 80 percent less than the brand names.

The flood of generics will continue for the next decade or so, as about 120 brand-name prescription drugs lose market exclusivity, according to prescription benefit manager Medco Health Solutions Inc.

"My estimation is at least 15 percent of the population is currently using one of the drugs whose patents will expire in 2011 or 2012," says Joel Owerbach, chief pharmacy officer for Excellus Blue Cross Blue Shield, which serves upstate New York.

The new generics will slice copayments of those with insurance. For the uninsured, who have been paying full price, the savings will be much bigger.

These changes to these common drugs won't wipe out the poverty problem in the United States, but let's hope it is at least a slight relief for a good portion of people who find themselves choosing between rent and medicine.

[Photo by Charles Williams]

It's Coming: Debit Card Fees for Hard-Working Consumers

These days, cash is no longer king. It's the debit card that rules the land. Banks have made it so easy to whip out a debit card to pay for items as small as a pack of gum, so keeping cash on hand is less and less of a necessity.

It's amazing the number of vendors who take debit cards. A dress made by a local designer selling at a roadside bazaar can be paid for with a debit card thanks to products you can now attach to your phone. A debit card is a single, waterproof, convenient method of payment that people pull from their wallets millions of times a day.

However, it is highly possible that in the very near future, many will be hesitant to swipe their debit card. Federal regulations are requiring banks to charge vendors less for each debit card transaction, which is currently a steep rate. But banks are unlikely to take this change lying down. Experts predict that, just as you might expect, banks will be passing this loss in revenue on to you, the consumer:

Already, JPMorgan Chase & Co., Wells Fargo & Co. and many other banks are reducing or phasing out rewards programs that gave users cash back for using debit cards. Chase has been testing a monthly $3 fee for debit cards in some states, and Bank of America Corp. and Citigroup Inc. have added new fees to some checking accounts.

At least one credit union has capped debit purchases at $300 a day, and most of the nation’s 7,534 banks and thrifts are testing or plan to test consumer reaction to new fees or limits on debit cards or the checking accounts to which they’re linked, said Richard Hunt of the Consumer Bankers Association.

Industry consultant Michael Moebs predicted the typical cost to consumers might approximate a Sam’s Club or Costco membership, about $36 a year on average.

With the economy showing little signs of improvement, Americans are still living paycheck to paycheck, cutting spending to the bone, and if using debit cards to buy necessities means a new line in the budget just for bank fees, how will the working poor fare? And will banks be transparent about new fees when using debit cards.

A lot of this is pure speculation, but banks do have a history of not being exactly forthcoming. They also have a history of bilking customers out of essential "nominal" fees.

Let's hear from you on this issue. Do you use your debit card often? Always? Rarely? And do you expect to see changes to your fees associated with that use? Just let us know in the comments below.

[Photo by Bryan Rosengrant]

Can You Afford Gas to Get to Your Job Interview?

When people say, as they often do, "People are poor because of the bad choices they make," I get irritated. Okay, fine, I get irate. The fact of the matter is that poverty is a trap, an almost irreversible one, and one that a vast majority of people are born into. As the saying goes, "It's expensive to be poor."

Take for instance this tale of an Illinois woman who, due to rising gas prices, sometimes literally cannot afford to drive to job interviews:

Before a recent job interview, Alicia Madison climbed into her 2001 Ford Explorer and realized her gas tank was empty, just like her bank account.

Unable to afford gas for the 25-mile round trip from her Glen Ellyn home to the Naperville business, Madison was forced to reschedule. She now relies on gas vouchers issued by a nonprofit agency to drive to interviews.

[...]

"If you have to work two hours just to pay for the gas to and from work, that's a big disincentive," Savage said. "It certainly narrows down your job search."

For people like Chicagoan Nicole Harris, 42, who lost her job more than a year ago, soaring fuel costs have changed the calculus of unemployment. Harris lives in Hyde Park, and when she sees job openings now, she asks herself a series of questions: How much am I going to make? How much will I spend on transportation? Can I commute, or will I need to relocate?

Most of the jobs in her field — instructional design — are located in suburbs. Since losing her job, she has subsisted on contract work, but her last short-term position barely covered the cost of the commute, she said.

This is what I mean by trap. Once you are without an income, behind on bills or struggling to make ends meet, it can be a vicious fight to get oneself out of the hole.

How about you? Have you been unable to afford the gas that would get you to a job interview? We want to hear from you below.

[Photo by Guy Haley]

Are Food Prices Rising Where You Live?

Browse the headlines on the web and you'll find the headlines often--food prices are going up around the world and drastically:

Food-producing countries must relax export controls and divert production away from biofuels to prevent millions more people being driven into poverty by higher food prices, the head of the World Bank, Robert Zoellick, said on Thursday in Washington.

Without action to increase the supply of food, an extra 10 million people could fall below the extreme poverty line of $1.25 (76p) a day over the next few months, in addition to the 44 million pushed into poverty by soaring food prices over the past year, he warned.

A report by the World Bank found prices had jumped by 36% since April 2010, driven in part by higher fuel costs connected to events in the Middle East and north Africa,

Higher transport and fertiliser costs have sent the price of wheat, maize and soya back to levels last seen in the price boom of 2008.

"More poor people are suffering and more people could become poor because of high and volatile food prices," said Zoellick. "We have to put food first and protect the poor and vulnerable, who spend most of their money on food."

And while this inflation situation is most dire for the poor in developing nations, the poor in the United States, who also spend a large percentage of their income on food, will also suffer.

How soon will we see prices rise on the shelves here in the states? You tell me. Have you seen food prices rise in your area? Which items are more costly now where you live?

If you've noticed high prices in the grocery store aisles where you live, tell us about it in the comments.

[Photo by Alyson Hurt]

As Food Prices Rise, Word of Mouth for Assistance is Crucial

Just as more and more people find jobs following a record-breaking period of unemployment, food prices are now on the rise. And sharply:

Consumers’ wallets continue to take the hit, as the latest batch of numbers from the Bureau of Labor Statistics shows that prices were up 0.5% in February on higher food and energy costs, while real average hourly earnings fell by the same amount, as the workweek and wages remained stagnant but suffered at the expense of rising inflation. Core inflation, which excludes food and energy costs and is thus preferable by the Federal Reserve, gained 0.2% on rising new vehicle, health care, and shelter costs. While the economic recovery in the US seems to be gaining traction, consumers seem to be lagging behind as an elevated 8.9% rate of unemployment and stagnant wages eat into the purchasing power of the country’s greatest contributor to growth.

The numbers, which reflect the evolution of prices through the month of February, was pushed up mainly by the expected rise in commodity prices, specifically food and energy. The food index gained 0.6% for the month, with the BLS’ food at home index up 0.8%, providing a direct hit to consumers and showing its greatest gains since July ’08. Fruits and vegetables up 2.2% and meats up 1.9% amount to a pickup in food-inflation that will affect consumers’ spending elsewhere, as they juggle stagnant wages and rising costs. [emphasis mine]

Food, as we all know, is a necessary basic. And as the cost of this necessary basic rises dramatically, the working poor will have fewer dollars left over for things like gas, which is also rising in price.

While Modest Needs does not help specifically with food costs, the foundation does help with other necessary basics like housing, transportation, medical bills and accessibility equipment. So when food costs eat giant holes into a family's budget, there is little left over for mortgage and car notes.

This means that now is a good a time as any to tell someone about Modest Needs. Whether it be someone who may need one time assistance or someone who would be happy to help someone else with one, getting the word out about Modest Needs is crucial. All too often we hear that someone had never heard of Modest Needs before turning to our charity.

You can help change that.

Spread the word.

[Photo by sporkist]

Cost Cutting Tips for a Blessed Thanksgiving

It's right around the corner. It will be here before you know it: Thanksgiving. That day of open appreciation and family feasting.

And, as many of you know, Thanksgiving preparation can be a budget buster. The sheer amount of food that shows up on Thanksgiving tables can be expensive, especially for those on a tight income.

But, today we will look at ways to have a frugal, lower cost Thanksgiving celebration, thanks to an article by the Chid Development Institute. It is a rather long piece, but full of good tips, so I will hit the highlights below:

1. Plan ahead. Way ahead. Look for items you know you will need on sale or use coupons to purchase them.
2. Have an accurate guest list count. No last minute surprises.
3. Suggest a pot luck-style meal to your guests.
4. Go through your fridge and pantry and try build recipes around items you already have.
5. Make items from scratch that can be made ahead of time to save on things like pie crusts (pies freeze very well).
6. Go veg. Turkeys, ham and other meat is expensive. Be kind to animals, kind to the planet, and make all your Thanksgiving meals cheaper and meat-free.
7. Look around your home for items that can be used to decorate rather than buying new, seasonal items.

The article is long, and sometimes repetitive, but there are some great ideas in there about how to keep costs down on the upcoming Thankgiving holiday. Check it out.

[Photo by D. Sharon Pruitt]

Example: Living on What You Make

How many of us live within our means? How many of us spend more money than we make?

Today we take a look at a family of six that brings in $41,000 a year. They found themselves in debt, spending as much as three times as was earned. They made some big changes in order to live within their budget, and they all seem pretty happy about it.

Watch below.