3433-vol. 6 issue 2-3.pmd - iarfc

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30 Journal of Personal Finance For all x > 4, such that x represents a quantitative value assigned to a client’s response to a survey item. Responses are valued as follows: definitely choice A = 1, very likely choice A = 2, likely choice A = 3, choices A&B are equal = 4, likely choice B = 5, very likely choice B = 6, and definitely choice B = 7 3 1 4 ⎛ x − 1 ⎞ ⎜ − 1⎟ 2 ⎝ 3 ⎠ + 1 2 = y ; 1—y = z Where y represents the amount used for the dimension corresponding to choice B and z represents the amount used for the dimension corresponding to choice A in the following summations. = Client Demand Score (m represents any value assigned by client to a recipient in the free-response question corresponding to the dimension being calculated) The above formula will be calculated for each dimension’s demand score. 3. To obtain a copy, contact the authors. Contact Information: Monroe “Roey” Diefendorf, Jr., MI, CLU, ChFC, CFP ® , RFC ® , CIMA ® , C3DWP ® , CEO, Diefendorf Capital Planning Associates, 152 Forest Ave., Locust Valley, NY 11560; Phone: 516-759-3900; E-mail: Roey@DiefendorfCapital.com. Jeremy Donovan, The Academy of the Pacific Rim, Boston, MA; E-mail: jerdonovan@gmail.com ©2008, IARFC All rights of reproduction in any form reserved.
Volume 6, Issue 2 & 3 31 TEN HEALTH FINANCE TOPICS THAT FINANCIAL PLANNERS NEED TO UNDERSTAND Barbara O’Neill, PhD, CFP Specialist in Financial Resource Management Rutgers Cooperative Extension ABSTRACT Health and personal finances are strongly related. In recent years, health care costs have consumed an increasingly larger share of household income. Even those with “good health insurance” are paying more out-of-pocket for premiums, co-payments, and deductibles than they were a decade ago. Health-care expenses force trade-offs in spending and affect financial decisions (e.g., job choices and retirement date). Dollars spent on medical expenses are also unavailable to invest for financial goals such as retirement. This article examines ten health finance topics that financial planners need to understand: 1. financial stress related to health care costs, 2. consumer driven health care, 3. health savings accounts, 4. the COBRA and HIPAA laws, 5. retiree health insurance and Medicare, 6. young adult health insurance, 7. state health insurance laws and benefit programs, 8. the financial cost of unhealthy behaviors, 9. primary and secondary health care expenses, and 10. health and wealth relationships. Implications for financial advisors are provided. Planning Strategies Health and personal finances affect one another in many ways. The philosopher Virgil stated this relationship simply: “The greatest wealth is health.” In other words, good health is a resource for wealth-building and poor health detracts from it. Having great riches also won’t matter very much if someone is sick with a life-threatening disease. Another health-wealth relationship is the sheer cost of health care. Everett & Anthony (2005, p. 70) note “prudent individuals who want optimum control over their health care decisions will face complex savings, insurance, and health behavior decisions in the future,” citing high deductible health insurance and long-term care insurance as examples. In a special <strong>issue</strong> on health care in Money magazine,
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