We began our financial services practice 15 years ago as a natural outgrowth of the insurance services we were already providing. Explains managing partner Bill Morrison, "Insurance is still one of the major financial decisions a person or business makes. We offer holistic financial planning through ING Financial Partners for individuals and businesses to help ensure that decisions are not made in isolation."

Financial security is the goal for each client. "Financial planning requires a disciplined approach so I work through a very specific process with each of my clients," says Bill. The relationship begins by developing an understanding of each client's financial situation and cash flow, along with their unique goals and dreams. From this understanding, we work to help put together a long-term strategy and recommended ways of potentially meeting and exceeding expectations. "I value my clients' trust and am honored when they seek my advice. It's a special joy to help a husband and wife determine their next financial steps."

Many of our current clients are couples either planning for retirement, or currently retired and seeking income strategies in a highly volatile environment. We also focus on serving local businesses with their insurance and financial services needs. Helping both individual and business clients navigate the ever-changing health insurance landscape continues to be a priority, with an emphasis on helping to find the best ways to put our clients back in control of their health dollars.

Securities and investment research services are offered through ING Financial Partners, but Middle Peninsula is completely independent and unbiased by corporate affiliations. We also offer fee-based financial planning through ING Financial Partners for those clients who are looking for independent advice.

New Math in Health Insurance 

The results may surprise you! 

 by Bill Morrison

There's an old story of a poor businessman who made widgets for a dollar per widget and sold them for 90 cents. When told he was losing money his reply was, "That's ok, we will just have to sell twice as many." That businessman learned what many of us realize when we buy a feature-rich health insurance plan: the more we send to our health insurance company the less we get in return. Our health carrier would not have that big shiny building if it were in the business of sending us more back in benefits than we send them in premium. If you step back and look at it that way, you may see why adding features to your policy may yield the same results as our wayward businessman.

Back in the day some thirty years ago we were all to happy to buy a feature rich plan with $5 copays and $2 prescriptions. The cost for these items was minimal per unit and we were tired of paying that nasty deductible. As the years went on however that $5 copay turned to $10, then $15 and now typically hovers at $25, and the premiums have soared. You pay a $25 copay for what would be a $70 visit to an urgent care, but you pay $150 per month extra premium for that privilege. It's starting to sound like widget math isn't it?   

At Middle Peninsula, health insurance is no longer a sidebar in our financial planning process but an item we address before moving onto retirement planning or investments. If your health insurance is out of control it can take a major role in spoiling your financial plans.

Simple math is a good place to start. Multiply your monthly premium by twelve to get your annual cost and add it to your out-of-pocket cost (OOP) for the year to calculate your total annual health cost. Our clients often find their annual premium alone alarming, but the out of pocket expenses are also an important part of the equation.

Recently we worked with a family paying $964 per month for their plan. Yes...that's $11,468 per year out of their checking account before their first doctor visit. After prescriptions, physicals and other visits they tacked on another $1,450 of OOP.   $12,918 is a big chunk out of anyone's finances, and when they received their 11% increase at renewal they were exhausted! Hadn't they paid enough?

By putting their numbers on paper our clients took the first step in finding a solution. What if we could go back to the good old days of the  boring deductible plans? Does their present plan have too many widgets weighing it down? In this case a High Deductible Health Plan (HDHP) with a $3,000 deductible for the entire five-person family would carry a $453 monthly premium,or $5,436 per year. Yes, they will have to pay the first $3,000 in medical costs the family incurs (not per family member), but they would save $6,032 during the year to cover those expenses. Now they can wrest control of their healthcare and over $6,000 of their healthcare dollars away from their health insurance company. And why not keep some from the IRS too?

In 2003, a tax law was passed containing a provision allowing for tax-deductible Health Savings Accounts (HSA). It says that those owning qualified HDHP plans can open an HSA and all contributions up to annual limit ($3,150 individual/$6,150 family) are tax-deductible going in, and money used to pay health expenses from HSA's are tax free coming out. Think of it as a health IRA with tax-free withdrawal for health and dental expenses.

So if you are on the health insurance merry-go-round you may want add your health coverage to your planning process and take a look at HSA qualified plans. In recent years they have been improved to allow preventative care costs to avoid the deductible. Like our poor businessman, continuing to pour good money after bad can affect your health.