THE DOWNLOAD MONEY MATTERS
The result is that we often choose a pricey, low-deductible plan that seems to cover every contingency.
the birth of a child. But our ability to predict the unexpected is, frankly, terrible. It is all too easy to rely on a
mental shortcut where we visualize a nasty medical condition — a rare cancer or a birth that requires a level 4 NICU — that would require expensive coverage. Maybe we saw something similar in a movie, read about it in a story, or heard it from somebody else. These emotional choices are
known as the availability heuristic in economics. Most of us believe that the likelihood of being bitten by a shark exceeds the odds of being hit by a falling airplane part, but the risk of the latter is about 30 times greater. The result is that we often choose
a pricey, low-deductible plan that seems to cover every contingency. Such a plan may be worth the
extra spending — often about $800 a year more for a family — if you need broad access, but most of us don’t. It is also important to remember
that a less expensive, high-deductible plan will cover contingencies that we fear, like shark bites, being hit by falling airplane parts, level 4 NICUs, and rare cancer treatments. What it won’t cover is every
provider in your city, and that isn’t a bad thing if some of these providers are expensive without being better. Sometimes we don’t even get the
benefi ts we assume we will with an expensive plan. In one famous study, economists examined how consumers chose between one of those pricey plans and a lower-cost option. Enrollees thought that the expensive plan had broader access to providers than the lower-cost one — when in reality, the latter option off ered the same providers and treatments.
AVOIDING MISTAKES There is a very simple strategy for getting around these errors. The fi rst step is obvious: Choose a plan instead of succumbing to inertia. The second step is to realize that
for most people, there is one type of plan that will work just fi ne. Say you are covered by your
employer and are relatively healthy — you have no chronic conditions and don’t anticipate needing a medical procedure that exposes you to high out-of-pocket spending, like a joint replacement, in the next year. In this case, the best choice
is a high-deductible health plan (HDHP) paired with a health savings account (HSA). High-deductible plans come
with high deductibles — typically around $4,500 for a family. But the premiums might run $3,000 lower for a family than a preferred provider organization (PPO) plan, which carries lower deductibles. The high deductible often scares
people away, as does the prospect of shopping for in-network healthcare. But the number to focus on isn’t
the deductible — it’s the premiums. Remember, an HDHP might well
save a family as much as $3,000 a year in premiums relative to a PPO plan, so that is $3,000 toward the $4,500 deductible right there. Then there is the health savings
account, a fund that lets you contribute pretax money that can be used for healthcare costs and withdrawn without a tax penalty. Employees and employers
can contribute up to $7,750 to an account annually. That money can go toward
meeting the deductible. You have already gotten $3,000 closer
PASSPORT BACKLOG
Passport applications are up 40% over last year, and it’s taking much longer to process routine applications — about 13 weeks for routine passports and nine weeks for expedited passports, plus four weeks for mailing, according to the U.S. Department of State. If your passport is nearing expiration, experts recommend renewing six months in advance. If you’re
crunched for time, make an appointment for an urgent travel passport — within two weeks of your trip. You must bring proof of travel, such as airline or hotel reservations.
HIDDEN CHARGE You may have noticed your
restaurant bills ticking up recently. But if you assumed it was inflation and higher food prices, you could be wrong. Rather, it may be a new type of service charge called an automatic gratuity. Some restaurants are working the new fee into their business models and if you don’t
look closely, you’re likely to miss it. Tasting Table found that the fee can range from 3% to 20% of your total bill, and it’s tacked on toward the bottom, where it could appear as sales tax.
FLIGHT RELIEF More than 2% of all commercial
flights were canceled in 2022 — the highest rate in a decade — and Transportation Secretary Pete Buttigieg and President Joe Biden want to do something about that. Currently, airlines reimburse passengers only for the cost of the ticket when they cancel a flight. But the Biden administration thinks they should also pay for meals, hotels, taxis or rideshares, and rebooking fees. For now, it’s only a proposal; a ruling should come later this year.
AUGUST 2023 | NEWSMAX MAXLIFE 75
PASSPORT/ DIGITAL STORM/SHUTTERSTOCK / RECEIPT/MALCOLM©ISTOCK
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