...Medical Out-of-Pocket Expenses, Poverty, and the Uninsured∗ Kyle J. Caswell† and Brett O’Hara SEHSD Working Paper 2010-17‡ U.S. Census Bureau Washington, D.C. December 29, 2010 Abstract The National Academy of Sciences (NAS) Panel on Poverty and Family Assistance argued that the current official U.S. poverty measure should be updated to capture changes in the population’s healthcare costs and needs; families with sufficiently high medical out-ofpocket (MOOP) expenditures may be ‘poor’ even though they are not counted as such. This research offers three distinct advances toward achieving the NAS recommendations as they concern MOOP spending. Firstly, this paper uses the newly collected MOOP expenditure data from the CPS ASEC, and analyzes its quality vis-` -vis alternative sources. Secondly, a poverty estimates that incorporate the MOOP spending data from the CPS ASEC are produced in such a way as to be consistent with the NAS recommendations. These direct estimates are an improvement over previous estimates, conditional on obtaining high-quality data, because modeling MOOP expenditures from other surveys is not needed. Third, this paper investigates how the distribution of MOOP expenditures, and the poverty estimates, change when it is assumed that the uninsured have the spending patterns of the insured. The main results are: 1) the new MOOP expenditure data is high quality; 2) incorporating observed MOOP expenditures increases the incidence of poverty across the population...
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...Diane M. Comi, J.D., LL.M. From: Sam Smith Date: September 14, 2014 Re: Medical Expense Deduction under IRC 213 for Swimming Pool FACTS The taxpayer, Susan, suffers from severe osteoarthritis in both knees and has a hard time living comfortably. Susan has taken many precautions to better her health including: cortisone injections, painkillers, physical therapy, and arthroscopic surgery. Being that this is a hereditary disease, the doctors predict that it’s only going to get worse. The key to alleviate the pain is to keep moving, thus it is extremely painful for Susan to remain active. Swimming maintains good cardio with little to no impact; therefore her doctor prescribed her to swim daily. She is hesitant to go to the city pool because the pool is too far, too cold, and it’s extremely crowded. Her gym does not have a pool either. Susan would like to construct a heated pool in her backyard so she can swim at her own convenience without any annoyances. Her grandchildren can also use the pool when they come to visit. She just wants a basic swimming pool at the lowest price available. Yet she is still concerned about the price and would at least like to deduct the cost of maintaining and installing a pool in her backyard as a medical expense. ISSUE Can Susan deduct the cost of installing and maintaining a pool as a qualified medical expense? CONCLUSION Susan is allowed to claim a medical expense deduction for installing and maintaining a pool in her back yard under §213...
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...competition, the general economy, and overall medical trends. Using past changes and anticipated rates of medical inflation, they have also made a first attempt at setting their prices. Based on a thorough review and discussion of these data, they have projected that next year will have 240 patients. They expect 120 oncology patients, 80 cardiac patients, and 40 rhinoplasty patients. The charge, or list price, for Oncology patients will average $50,000. Cardiac patients will be charged an average of $40,000, and rhinoplasty, $25,000 per patient. However, those charges often are not the actual amount ultimately received. The amount the hospital receives depends on whether patients pay their own hospital bills or have health care insurance. Assume that private insurance companies pay the full charge or list price. However, Medicare and Medicaid have announced rates they will pay for the coming year as follows: Oncology patients $40,000, Cardiac patients, $30,000, Rhinoplasty $10,000. Self-pay patients are supposed to pay the full charge, but generally 25 percent of self-pay charges become a bad debt. Note that bad debts are treated as expense in health care. They may not be shown as a reduction lowering revenues. The full charge for self-pay patients is shown as revenue, and then the uncollectible amount is shown as an expense. No payment for charity care is ever received, and charity care is not shown as a revenue or expense. The...
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...refers to an expense recorded to allocate a tangible asset’s cost over its life. Because it is a non-cash expense, it increases free cash flow while decreasing reported earnings. Depletion: Is the gradual reduction of natural resources. Unlike depreciation which describes the deduction of expenses due to aging of equipment and property, depletion is the actual physical reduction of natural resources. Depletion is also refers to the allocation of the cost of natural resources over time. Amortization: It is cost of use of intangible assets. That is the deduction of capital expenses over a specific period of the assets life. 2/. Depreciation: If a company buys equipment for £10.00 and expects it to have a useful life of 5 years, it will be depreciated over 5 years. Every accounting year, the company expenses will be £50.00 which will be matched with the money that the equipment helps to make each year. A company’s ware house can be used for a number of years before it becomes run down and is sold. The cost of the ware house will be spread over the predicted life of the building with a portion of the cost being expensed each accounting year. Depletion: An Oil well has a finite life before all the oil is pumped out. The well’s setup costs are spread out over the predicted life of the oil well. Coal Mines is also an example of natural resources depleted and cost spread out over the predicted life of the mine. Amortization: A patent on a piece of medical equipment usually...
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...Simulation Review University of Phoenix HCS/405 Health care organizations, particularly hospitals face increasing problems managing cash flow due to changes in billing procedures and the economic climate. Research quoted in Fierce Healthcare Finance showed that hospitals are using investment cash flow, normally reserved for capital expenses, to pay for operating expenses. In a study quoted by Fierce Healthcare Finance (Ziegler, 2008) the depth of the problem becomes apparent “Between 2004 and 2007, the 170 hospitals studied by Best allocated a steadily greater portion of their invested assets to cash and short-term investments, climbing from 27 percent in 2005 to 31.1 percent in 2007.”With reduced funds available for capital expenses, it becomes difficult for hospitals to keep up with technology and to thrive. Elijah Heart Center is facing the financial dilemma common in specialized health care organizations, the combination of the need for improved technology, reduced income, and the demand for expansion. Without the needed technology and expansion, there little the hospital can do to improve income. The financial situation requires a combination of strategies to reduce costs and to make the wisest choices regarding acquiring needed technologies and expansion. Phase I: Capital Shortage The goal is to save $900,00 for the first year and to help improve the cash flow problem that Elijah Heart Center is experiencing. The hospital can select two cost cutting options...
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...CHAPTER 5 INTRODUCTION TO BUSINESS EXPENSES ------------------------------------------------- DISCUSSION QUESTIONS 1. All allowable deductions of individual taxpayers are classified as either for adjusted gross income or from adjusted gross income. Why are deductions for adjusted gross income usually more advantageous than deductions from adjusted gross income? Although both types of deductions reduce taxable income, deductions for adjusted gross income are always deductible. Taxpayers who incur allowable deductions from adjusted gross income may not receive the full advantage of the deduction. First, even though an allowable expense may be incurred, if the taxpayer’s total itemized deductions do not exceed the standard deduction amount, then the taxpayer will deduct the standard deduction and receive no benefit from the allowable expenses. Second, many of the deductions are subject to limitations based on the taxpayer’s adjusted gross income. For example, the deduction for medical expenses is reduced by 7 1/2% of the taxpayer’s adjusted gross income. Thus, many of the allowable deductions from adjusted gross income are not deductible in full. In addition, total itemized deductions are subject to a reduction rule when the taxpayer’s adjusted gross income exceeds a specified amount, further lowering the value of such deductions. Lastly, given the reductions based on adjusted gross income, any deductions for adjusted gross income have the effect of making...
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...3/26/09 Case 4 Better Care Clinic (Breakeven Analysis) Fairbanks Memorial Hospital, an acute care hospital with 300 beds and 160 staff physicians, is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. Although there are two other acute care hospitals serving the same general population, Fairbanks historically has been highly profitable because of its well-appointed facilities, fine medical staff, and reputation for quality care. In addition to inpatient services, Fairbanks operates an emergency room within the hospital complex and a stand-alone walk-in clinic, the Better Care Clinic, located about two miles from the hospital. Todd Greene, Fairbanks’s chief executive officer (CEO), is concerned about Better Care Clinic’s financial performance. About ten years ago, all three area hospitals jumped onto the walk-in-clinic bandwagon, and within a short time, there were five such clinics scattered around the city. Now, only three are left, and none of them appears to be a big money maker. Todd wonders whether Fairbanks should continue to operate its clinic or close it down. The clinic is currently handling a patient load of 45 visits per day, but it has the physical capacity to handle more visits—up to 60 per day. Todd has asked Jane Adams, Fairbanks’s chief financial officer, to look into the whole matter of the walk-in clinic. In their meeting, Todd stated that he visualizes two potential outcomes...
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...Week 3 Team A assignment How are the hospital’s revenues and expenses grouped for planning and control? The way of which a hospital’s revenues and expenses are grouped varies from hospital to hospital. The revenues and expenses are grouped will also vary depending upon the type of hospital, may it be for-profit or non-profit hospital. How the patient care is delivered in the hospital affects the flow of revenues and expenses. The different services offered to the patients, the number of patients and their insurance services, the types of services a hospital offers, and the frequency of use of different services are just a few factors that affect the hospital revenues and expenses. Most hospital revenue comes from billing for patient care services. In most cases, this means billing to private insurance companies as well as federal Medicare and state Medical programs. Hospitals maintain contracts with a broad selection of private health plans, with agreed schedules of reimbursement for basically every type of medical services. Also, supplies make up about 15 percent of the average community hospital's expenses. Of course, these costs are offset through billing to patients for supplies used in the course of their treatment. Capital expenditures can be a huge part of a hospital's expenses. However, the amount and percentage of the budget can vary dramatically by hospital. For example, when a hospital undergoing a major expansion or construction project...
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... 13. Ⓐ Ⓑ Ⓒ 14. Ⓐ Ⓑ Ⓒ 15. Ⓐ Ⓑ Ⓒ 16. Ⓐ Ⓑ Ⓒ 17. Ⓐ Ⓑ Ⓒ 18. Ⓐ Ⓑ Ⓒ 19. Ⓐ Ⓑ Ⓒ 20. Ⓐ Ⓑ Ⓒ 21. Ⓐ Ⓑ Ⓒ Part B. Exercises (60 marks) Transaction | Account Titles | Debit | Credit | 1. | Purchased lot | 225,000 | | | Old building | 120,000 | | | Cash | | 345,000 | | Tear down old building | 34,500 | | | Fill and level the lot | 51,000 | | | Construction cost | 1,140,000 | | | Cash | | 1,525,000 | | | | | 2. Ming Yue Co | Land | 154,665 | | | Land improvements | 55,440 | | | Building | 162,030 | | | Closing costs | 19,600 | | | Cash | | 387,850 | | | | | 3. Fineses Co | Depreciation (1 year) = 13,250 | | | | Depreciation expense | 59,625 | | | Accummulated depreciation | | 59,625 | | | | | 4. | Cash | 35,000 | | | Accummulated depreciation | 59,625 | | | Gain on sale | | 1,875 | | Machine (original cost) | | 92,750 | | | | | 5. | Purchased Macys Co | 3,750,000 | | | Cash | | 3,750,000 | | 6. | New machine | 125,125 | | | Discount on new machine | 31,850 | | | Accummulated depreciation | 58,500 | | | Tractor (original cost) | | 107,900 | | Salvage value | | 14,300 | | Cash | | 93,275 | |...
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...2015 – 2016 EXPENSE AND INCOME STATEMENT Provide expense and income information for the 2014 calendar year. Section A: MONTHLY INCOME Complete the following information below. Parent information is required for “dependent” students only. If a zero income is reported for the student, spouse and/or parents, please submit a letter explaining how you and your family meet expenses reported below. Student (include spouse, if applicable) Student Income: Spouse Income: Savings/Other Assets: Other Resources: $ $ $ $ Student’s Parent(s) (Dependents students only) Student ‘s Mother/Stepmother Income: Student ‘s Father/Stepfather Income: Savings/Other Assets: Other Resources: $ $ $ $ (include: financial aid, monetary gifts, interest income, parental allowance, free rent, etc. - List Resources Below) (include: financial aid, monetary gifts, interest income, rental income, etc. - List Resources Below) Total: $ Section B: MONTHLY EXPENSES Total: $ Complete the following information below. Parent information is required for “dependent” students only. If expenses exceed income, please include a letter explaining how you and your family meet your expenses (include other sources of support) with the income reported above. Student (Include spouse, if applicable) Rent/Mortgage: Food/Utilities: Transportation: Medical/Dental: Personal: $ $ $ $ $ Student’s Parent(s) (Dependents students only) Rent/Mortgage: Food/Utilities: Transportation: Medical/Dental: Personal:...
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... 13. Ⓐ Ⓑ Ⓒ 14. Ⓐ Ⓑ Ⓒ 15. Ⓐ Ⓑ Ⓒ 16. Ⓐ Ⓑ Ⓒ 17. Ⓐ Ⓑ Ⓒ 18. Ⓐ Ⓑ Ⓒ 19. Ⓐ Ⓑ Ⓒ 20. Ⓐ Ⓑ Ⓒ 21. Ⓐ Ⓑ Ⓒ Part B. Exercises (60 marks) Transaction | Account Titles | Debit | Credit | 1. | Purchased lot | 225,000 | | | Old building | 120,000 | | | Cash | | 345,000 | | Tear down old building | 34,500 | | | Fill and level the lot | 51,000 | | | Construction cost | 1,140,000 | | | Cash | | 1,525,000 | | | | | 2. Ming Yue Co | Land | 154,665 | | | Land improvements | 55,440 | | | Building | 162,030 | | | Closing costs | 19,600 | | | Cash | | 387,850 | | | | | 3. Fineses Co | Depreciation (1 year) = 13,250 | | | | Depreciation expense | 59,625 | | | Accummulated depreciation | | 59,625 | | | | | 4. | Cash | 35,000 | | | Accummulated depreciation | 59,625 | | | Gain on sale | | 1,875 | | Machine (original cost) | | 92,750 | | | | | 5. | Purchased Macys Co | 3,750,000 | | | Cash | | 3,750,000 | | 6. | New machine | 125,125 | | | Discount on new machine | 31,850 | | | Accummulated depreciation | 58,500 | | | Tractor (original cost) | | 107,900 | | Salvage value | | 14,300 | | Cash | | 93,275 | |...
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...Palm Oil Piracy Summary of the case: Palm Haul Sdn Bhd (PHSB) established in 2002 at Taiping Perak. It was a small and medium sized enterprise in crude palm oil (CPO) transportation business. PHSB was managed by En.H.Rossly and son in law of its founder, Datu S. Najeed. PHSB was facing the same problems likes others transportation companies which is drivers embroiling in oil piracy. The transportation companies will bear the responsibilities of compensation of the refineries if there any hijacking or piracy happened. The involved culprits most probably are the tankers’ driver, deport operators and the transporters. One of the major customer of PHSB, Oilene Refineries Sdn Bhd (Oilene) was complaining to Datuk Najeed on the poor quality of CPO delivered by PHSB and it has caused them in big losses in their business as failed to fulfill the requirement of their customers. Oilene will not renew the contract if PHSB does not improve the situation in one month. Besides that, Datuk S. Najeed has reviewed the first quarter result of 2009 and noticed that the profits has dropped significantly compared to the same period of last year. If Oilene could not placated and, as a consequence, decide to leave their custom, PHSB would run into the trouble to return profits for the coming financial year. Datuk Najeed was very happy and insisted Rn.Rossly to investigate on these matters and report to him within one week with possible solutions. En.Rossly invited his university’s friend, Mukhiz Mohd...
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...be paid in regards to their job responsibilities. All of these should be based fairly from the CEO’s down to the hourly workers. Employers should allocate pay fairly across the board. “If employees consider their pay rates unfair, they may seek employment elsewhere, put forth little effort in their jobs, or file lawsuits.”(Gasbarre, 2012) A CEO should not receive 200 times the amount of pay that the lowest paid employee receives. Many of the extras that the higher up management receives could be trimmed and still give them the compensations that they should receive as per their job title The reviewal of compensation packages is also necessary. Employees who travel for the company and have expense accounts must be reviewed as to the proper use of these funds. The use of these travel expenses should be watched carefully; it may be that not all of the travel out of state or out of country is really necessary and it may be done by video conference instead. The employees...
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...competition, the general economy, and overall medical trends. Using past changes and anticipated rates of medical inflation, they have also made a first attempt at setting their prices. Based on a thorough review and discussion of these data, they have projected that next year will have 240 patients. They expect 120 oncology patients, 80 cardiac patients, and 40 rhinoplasty patients. The charge, or list price, for Oncology patients will average $50,000. Cardiac patients will be charged an average of $40,000, and rhinoplasty, $25,000 per patient. However, those charges often are not the actual amount ultimately received. The amount the hospital receives depends on whether patients pay their own hospital bills or have health care insurance. Assume that private insurance companies pay the full charge or list price. However, Medicare and Medicaid have announced rates they will pay for the coming year as follows: Oncology patients $40,000, Cardiac patients, $30,000, Rhinoplasty $10,000. Self-pay patients are supposed to pay the full charge, but generally 25 percent of self-pay charges become a bad debt. Note that bad debts are treated as expense in health care. They may not be shown as a reduction lowering revenues. The full charge for self-pay patients is shown as revenue, and then the uncollectible amount is shown as an expense. No payment for charity care is ever received, and charity care is not shown as a revenue or expense. The...
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...According to (Sarah, Elizabeth and Victoria, 2001) the hospitals obtain revenue by providing medical services, non medical services, through donations sourced from individuals, institutions and other donors or through returns from investments. This can generally be categorized into three where firstly operating revenue is obtained for the care given to a patient. On the other hand, revenue is also obtained from non patient care activities (Sarah et al, 2001). Finally non operating revenue could be obtained from other business activities in which a heath care provider is involved. Services which can help a health care provider like a hospital to create operating revenue are the shops and other hospitality services-related businesses that may be within its premises. On the other hand the non operating revenue may be derived in investments made for instance in real estates, stock, securities and donations received. In studying the health care finances it may be necessary to study some terms synonymous with the environment. For instance, a charge is the price the hospital or any other heath care provider has determined for each type of care being provided. However, the sticker price is usually subject to negotiation. A payment on the other hand refers to the amount of money the heath care provider actually receives for the service provided. It is worth noting that, this amount varies among the insurers and the individuals who are not insured. Finally there is also the cost which...
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