The Motley Fool : There are ways to cut health costs
It’s no secret — health care costs are skyrocketing, with little relief in sight. Here are some ways to ease your health-bill blues:
“Shop around for the best prices on prescriptions. Pharmacy prices aren’t all uniform. If you’re elderly or low-income, look into drug company discounts.
“Two-income couples should coordinate health insurance benefits. Consider opting out of one plan and choosing the family option on another. Maintaining coverage with two providers can make sense if one fills the other’s gaps.
“Minimize your vices. Habits such as smoking, overeating and overdrinking endanger your health and can be expensive, too. Healthy people can save on premiums and reduce the risk of being turned down later for pre-existing conditions.
“Contribute to a flexible spending account (FSA). It allows you to use pretax money to pay for medical costs not covered by a health plan, such as deductibles, co-payments and even eyeglasses. This could shave a few hundred dollars off your tax bill. These plans generally require you to use the money within a year or lose it, so plan carefully.
“Choose the best health plan for yourself. Health maintenance organizations, or HMOs, are less expensive but also less flexible. Plans such as preferred provider organizations (PPOs) offer more flexibility but sport higher costs. For many of us, HMOs are the best bet financially.
“If you incur extraordinary medical expenses in one year, you can deduct the medical costs exceeding 7.5 percent of your adjusted gross income from your taxable income. This can include out-of-pocket insurance premiums and a host of other expenses. See IRS Publication 502 or a tax pro for more information.
“Take advantage of free and discounted services offered by your health plan. Many will subsidize flu shots, gym memberships, nutrition classes and other preventive care.
“Finally, check your bills. According to a Consumer Reports survey, 5 percent of patients found serious errors in their hospital bills.
Ask the Fool
Q: Why don’t stocks begin trading in the morning at the same price they closed at the day before? — G.B., Beaumont, Texas
A: If a stock’s price is markedly different in the morning, some news or rumors may have come out since the stock closed. Perhaps the company’s CEO is resigning, or the firm is buying another firm, or is being bought out itself. Maybe surprisingly good or bad earnings were reported. Such developments can cause buy or sell orders to pile up all night long, resulting in big overnight price moves. Stock prices simply reflect supply and demand. If many are selling, the price drops — and vice versa.
Q: Can you recommend any investment newsletters? — G.K., Saratoga Springs, N.Y.
A: Be careful. Many investing newsletters don’t sport such hot track records — so be sure to do some digging before forking over a lot of money for one. You’re often best served by finding your own stock ideas within industries you understand well. Still, there are some pretty good newsletters out there.
One that we at Fool Headquarters have enjoyed is Outstanding Investor Digest. Published sporadically, it runs interviews with investing greats such as Warren Buffett, Charlie Munger and top mutual fund managers, who offer timeless wisdom and comments on attractive companies ( www.oid.com, 212-925-3885). Two newsletters earning high marks from the newsletter-evaluating Hulbert Financial Digest include Investment Quality Trends ( www.iqtrends.com, 858-459-3818) and NoLoad Fund*X ( www.fundx.com, 800-763-8639).
We offer some investing newsletters, too — focused on topics such as income investing, retirement planning and promising stocks that have yet to hit Wall Street’s radar. Check out our impressive track records (and sign up for free trials) at www.fool.com/shop/newsletters.
My dumbest investment
My investment group and I began buying a penny stock at around 20 cents per share. Its high-tech chips were promising, and I’d even met with the CEO. I kept buying until I had thousands of shares. The stock eventually soared to $19 per share. Intoxicated with excitement, I was sitting on a paper profit of almost half a million in nine months. But I could not sell, because our investing group was convinced it would eventually hit $100. Today that stock is trading for 3 or 4 cents per share, and I still own it. — J.F., Rochester, Minn.
The Fool Responds: The stock exhibited extreme volatility, as many penny stocks do, trading in the teens for just a few days. It may well have been manipulated fraudulently. You should hang on only if you expect strong growth. If you have higher expectations from other stocks, your money should be there. This investment might at least provide you with a tax loss to offset some gains. We strongly advise investors to avoid stocks trading for less than $5 per share.