Country Indices Flash Report – July 2024
Macron’s gamble may have worked out after all, with the French election delivering a surprise defeat to the far right and a victory to the left-wing alliance. However, with no single alliance of parties having won a majority, the shape of its future government remains unclear.
Quarterly International Equity Strategy Q2 2024
Elections came into focus during the second quarter, with mixed impact thus far on global equities. Japanese intervention in response to yen weakness and a rebound in the Chinese equity market were among the quarter’s other short-lived events. Longer-lasting: a global monetary loosening cycle began to take shape, though the US Federal Reserve has not yet joined in. Amid these gripping but perhaps confusing headlines, we continue to emphasize company, industry, and country fundamentals—which are strong across many foreign market segments. We remain optimistic in a range of opportunities both in developed and emerging equities.
Quarterly Small Value ESG Equity Strategy Q2 2024
The equity markets continued to narrow in Q2. Large growth was the only winning style, and even that was deceptive as large growth returns were concentrated in the usual handful of mega caps perceived to be artificial intelligence (AI) beneficiaries. While showing some signs of weakness, economic growth remained positive while inflation continued to roughly moderate through the period. Interest rates rose in April, fell in May and were largely flat in June, ending the quarter very close to where they started.
Quarterly Technology Equity Strategy Q2 2024
The Bailard Technology Strategy posted a 2Q24 total return of 9.75% net of fees, ahead of both the cap-heavy benchmark index (S&P North American Technology Index) as well as the competitor-comprised benchmarks. The Morningstar U.S. Open End Technology Category returned 3.24% and the Lipper Science and Technology Fund Index returned 5.10%, while the S&P North American Technology Index generated 9.36% and the Nasdaq-100 Index returned 8.05%. Over longer time periods of 3, 5, and 10 years, the Strategy’s net returns continued to lead the competitor peer benchmarks.
The Bailard Foundation Distributes $1M in its First Five Years
Through the Foundation and volunteer events, Bailard, Inc. continues to prioritize and support community impact
SAN FRANCISCO – July 17, 2024 – Bailard, Inc., an independent wealth and asset management firm in the San Francisco Bay Area, proudly announces that its Bailard Foundation reached $1 million in grants and donations distributed in just its first five years. As of June 30, 2024, the Bailard Foundation has distributed $1,008,037 since its inception in June 2019, over 90% of which has directly benefited the local Bay Area community.
“Reaching the $1 million mark is such a momentous milestone for the Foundation and the firm,” said Sonya Mughal, CEO of Bailard. “Through the Foundation, we’ve been able to make a real impact on the local community through causes that are dear to the hearts of our firm and employees. Bailard, for decades, has been devoted to bettering the community around us and giving back to those less fortunate, and the Foundation serves as a pillar of that commitment. I’m thrilled to see the good that it has already accomplished and look forward to all that it will accomplish in the future.”
The Bailard Foundation focuses on three core areas—affordable housing, homelessness & poverty, and financial literacy— which, to date, the Foundation has given $617,185. Beyond this focus, the Foundation offers an employee charitable matching program and continues to support long-standing community partnerships that pre-date its creation. Bailard also organizes frequent employee volunteer opportunities in the community, a practice that also pre-dates the Foundation’s creation.
Bailard launched the Foundation to formalize the firm’s decades-long dedication to giving back and to correspond with the 50th anniversary of the company’s founding in 2019.
“During my nearly 30 years at Bailard, I’ve seen how important giving back has been to the firm and its employees,” said Kim Aquino, CFP®, a Senior Vice President with Bailard and a member of the Foundation’s board of directors. “Launching the Foundation was such a natural step for Bailard and its values-driven, compassionate culture. Achieving the $1M mark shows how deeply Bailard and our employees care, not just about one another and our clients, but also the greater community. It’s been a real honor to serve on the board and act as a catalyst on behalf of the firm.”
Earlier this year, Bailard, Inc. announced its certification as a B Corporation™. Bailard, Inc. has also been named a Top 100 Corporate Bay Area Corporate Philanthropist by the San Francisco Business Times each of the last four years, from 2021 – 2024.
About Bailard, Inc.
Founded in 1969, Bailard is an independent, value-driven asset and wealth management firm serving individuals, families, and institutions alike. Bailard has built a long-term asset management track record across domestic and international equities, fixed income, and private real estate, as well as robust, in-house sustainable, responsible, and impact investing expertise. Through it all, Bailard works with clients to align their financial goals with their values. Based in the San Francisco Bay Area with over $6.2 billion in assets under management as of 6/30/2024, Bailard is a majority employee-owned and women-led firm, a Certified B Corporation™, and a Principles of Responsible Investing signatory.
On the Foundation board of directors are friends of Bailard—including chairwoman Terri Bailard, widow of firm co-founder Tom Bailard—and current employees.
About the Corporate Philanthropy Awards: For 24 years, the San Francisco Business Times has published the Corporate Philanthropists List. The list features 100 top corporate philanthropists in the Bay Area ranked by local cash giving. It includes for-profit companies and nonprofit health care organizations that made contributions to Bay Area-based charitable organizations in the following counties: San Francisco, San Mateo, Alameda, Contra Costa, Marin, Napa, Santa Clara, Solano, and Sonoma. The Corporate Philanthropy Awards program was founded in partnership with Northern California Grantmakers. A portion of the proceeds goes to NCG to fund the Corporate Philanthropy Institute, with the mission to educate more companies about effective giving and best philanthropy practices. The aim is to honor those who give the most and in doing so to help raise the bar and inspire more giving. This achievement does not evaluate the quality of services provided to clients and is not indicative of Bailard’s future performance. The San Francisco Business Times Top 100 Bay Area Corporate Philanthropists is an annual award, given to Bailard, Inc. by the San Francisco Business Times in July 2023, July 2022, and July 2021. Each year, 100 firms appeared in the San Francisco Business Times list. Bailard ranked #79 in 2023; #82 in 2022; and #89 in 2021. The 2024 rankings list has not yet been announced but will be announced by the publication later this month. There was no fee to enter. Bailard, Inc. received this award; almost all donations from Bailard are given through the Bailard Foundation, except for 4% in 2023; 2% in 2022; and 4% in 2021.
All investments have the risk of loss. This is not a recommendation of, or an offer to sell, or solicitation of an offer to buy any particular security, strategy, or investment product.
How the Corporate Transparency Act (Surprisingly) Might Impact You
Dave Jones, JD, LLM, CFP® Senior Vice President and Director of Estate Strategy, explains the Corporate Transparency Act, the types of entities impacted but often overlooked, and pragmatic steps for compliance by year-end to avoid penalties.
If the Corporate Transparency Act sounds unfamiliar, you are not alone. It’s a somewhat obscure—but significant—piece of legislation that took effect on January 1, 2024. The law’s purpose is to curb illicit finance, such as money laundering and tax evasion, by requiring corporate entities to identify the individuals who ultimately own or control said entities to the Financial Crimes Enforcement Network (FinCEN). Given the law’s intent, it may be surprising that it could apply to you!
To accomplish its objectives, the Corporate Transparency Act (CTA) applies broadly to domestic and foreign entities, including some you might not expect, such as single-member LLCs and consulting entities. For entities created prior to 2024, the first deadline is the end of this year. As a result, many law firms across the country have spent the last six months notifying their clients about the new law and their clients’ responsibility to report what is called beneficial ownership information to FinCEN. You may have already received a notification from your attorney.
This article provides an overview of the Corporate Transparency Act, highlights some common examples of affected but often overlooked entities, and outlines practical steps for compliance before the end of the year to avoid penalties.
Overview of the Corporate Transparency Act
While there are certain exceptions—such as for larger companies and regulated entities—corporations, limited liability companies (LLCs), limited liability partnerships (LLPS), and other entities created by filing a document with a secretary of state or any similar office in the United States, are required to report beneficial ownership information to FinCEN.
Information Required to Report
Fortunately, beneficial ownership information is relatively easy information to locate and report to FinCEN. It includes the following for each beneficial owner:
- Full legal name;
- Birthdate;
- Residential or business address; and
- Unique identifying number (such as via a passport or driver’s license)
Deadline
Reporting deadlines depend on when the entity was created.
For entities created before January 1, 2024—the most common scenario—there is a one-year grace period. For those entities, the beneficial ownership information report (BOIR) must be filed to FinCEN by January 1, 2025.
For entities created between January 1, 2024 and December 31, 2024, the BOIR must be filed within 90 days of receiving public or actual notice of their formation, whichever is earlier. For entities formed on or after January 1, 2025, the BOIR must be filed within 30 days of formation.
Hefty Penalties for Non-Compliance
Importantly, it should be noted that there are penalties for non-compliance, which include $500 per day and criminal penalties, including fines up to $10,000 and imprisonment for up to two years.
Common Examples of Overlooked Entities
Many of our clients have business entities that fall under the CTA’s reporting requirements that could easily be overlooked. Here are some common examples.
- Single-Member LLCs: Many clients use single-member LLCs to hold real estate or operate businesses. These entities, while disregarded for federal income tax purposes, are not disregarded for CTA purposes. They generally need to comply with the CTA by reporting the beneficial owner.
- Corporations for Consulting Services: Clients who operate consulting businesses often use corporations to manage their operations. These entities may need to report the ownership details of the individual, or individuals, who control or own significant shares of the business.
- Holding Companies: Certain holding companies used to manage family assets or investments may also fall under the CTA. The beneficial owners, often family members, of such holding companies are required to be disclosed.
Less Than Six Months Left for Compliance: Three Steps to Take
With the compliance deadline less than six months away, we encourage you to take the time this summer to complete your reporting. Follow these steps to ensure you meet the CTA requirements:
- Assessment of Entities: A good place to start is to list all of your business entities, and then determine which ones fall under the CTA reporting requirements. If you need assistance assessing whether the CTA applies to an entity, we recommend you contact your attorney or another trusted advisor who helped you create the entity. Note that larger companies or those already subject to significant regulatory oversight will likely be exempt from CTA reporting requirements.
- Gather Beneficial Ownership Information: For each entity that must report, identify all beneficial owners. A beneficial owner is anyone who owns or controls at least 25% of the entity or has significant control over its operations. Collect the beneficial ownership information for each beneficial owner of the entity.If ownership is held through a trust, the following individuals are deemed to be beneficial owners: the settlor with revocation rights, a sole beneficiry of the trust’s income and principal, a beneficiary with rights to withdraw most of the trust’s assets, the trustee, and any individual with authority to dispose of trust assets. Other individuals, like distribution or investment advisers, trust protectors, or beneficiaries of multi-beneficiary trusts, may also need to be reported based on specific circumstances.
- Submission Process: Once you’ve obtained all of the relevant information, prepare the BOIR using the standardized forms provided by FinCEN on their website. Double-check details to avoid mistakes. You can submit the report to FinCEN through their secure online portal, and save a copy of the confirmation of your submission with your related records.
Reporting to FinCEN will be an ongoing process. It’s important to update FinCEN as ownership or control of an entity changes over time. This can happen in a number of ways, such as when an owner dies or an interest in an entity is gifted or sold to a family member. We recommend reviewing the FinCEN reporting requirements as estate planning or other events impact a reporting entity, and to generally review the reporting requirements on a regular basis.
A Note About Corporate Transparency Act Scams
As the deadline for compliance nears, scams related to the CTA may become more prevalent. Scammers often exploit the urgency and complexity of new regulations to defraud businesses and individuals. To protect yourself, first be cautious of unsolicited communications about the CTA. Legitimate information and notices will come from your trusted advisors and recognized government agencies like FinCEN. They can provide accurate guidance and help you avoid fraudulent schemes. And, as always, verify the source before responding to requests for information or payments, and ensure that sensitive information is only shared through secure channels.
Next Steps
The Corporate Transparency Act is a significant change in reporting for those who own or control business entities. We encourage you to take steps to comply with the CTA in the next few months if you have not already done so. Make sure to not overlook some of the entities that are not as obvious, such as single-member LLCs, and work with your attorney and other trusted advisors to answer questions. By taking proactive steps, you can ensure compliance with the CTA.
Economic Brief: Tyranny of the Few
Jon Manchester, CFA, CFP® (Senior Vice President, Chief Strategist – Wealth Management, and Portfolio Manager – Sustainable, Responsible and Impact Investing) charismatically threads how high food prices and the AI boomlet have produced a “K-shaped” economy and stock market, creating the opposite impact on two populations.
Value Ingesting
Civility, alas, has its limits. This is perhaps nowhere more evident than in the cesspools of politics and social media, both playgrounds for the civility-challenged. The discourse devolution predates the pandemic, of course, but stressors have emerged in Covid’s shadow. Some clearly fall in the life-or-death category, while others are decidedly less consequential: “Why does Zoom need to update now?” One old and nearly forgotten nemesis, inflation, made an entirely unwelcome return after roughly four decades of dormancy. At its recent peak in mid-2022, the Consumer Price Index (CPI) reached a 9.1% year-over-year (y/y) growth rate. Following rapid improvement over the next 12 months, CPI readings have since settled into the still elevated 3.0% to 3.7% range. This wearying bout with inflation has not been particularly well-received by consumers, nor policymakers. The University of Michigan’s Consumer Sentiment Index plunged to an all-time low of 50 in June 2022, half of its pre-pandemic level. In releasing the survey results at that time, University of Michigan’s Chief Economist Joanne Hsu noted that, “Inflation continued to be of paramount concern to consumers.”1
While it is obviously a stretch to blame rising prices for the ongoing bear market in civility, they do seem to be a piece of the gloominess puzzle. In the 1970s, economist Arthur Okun created the “Misery Index,” which simply adds together the inflation and unemployment rates. The higher the combined number, the greater the misery felt by citizens. To this point, the U.S. unemployment level has remained rather subdued, at 4% or below since late 2021. To the extent there is misery, it has come via inflation. From a populist perspective, a key source of the inflation angst seems to be elevated food costs. The CPI Food Index crested north of 11% y/y growth in summer 2022 (see chart below), and despite its y/y growth rate decelerating to 2% by May 2024, consumers remain troubled by the unrelenting price hikes.
Although consumer spending has held up in aggregate —Personal Consumption Expenditures (PCE) rose 2.4% y/y, inflation-adjusted in May 2024—companies are sounding cautious, particularly regarding less affluent customers. When Dine Brands Global, the parent company of Applebee’s and IHOP, reported earnings in early May, chief executive John Peyton said that lower-income consumers are, “more aggressively managing their check, finding our value-oriented items.”2
That mentality is very familiar to McDonald’s, long embroiled in the Burger Wars. Chris Kempczinski, CEO of the Golden Arches, noted in late April that its customers were being, “more discriminating with every dollar” they spent. According to the company, the average price of all of its menu items increased 40% over the last five years, matching the rise in the cost of labor, paper, and food.3
In June, McDonald’s announced their “Summer of Value” campaign, including a $5 meal deal. Joe Erlinger, President of McDonald’s USA, acknowledged, “We heard our fans loud and clear—they’re looking for even more great value from us…”4
These are not isolated price rollbacks. Target announced they would cut prices on approximately 5,000 frequently shopped items, and Walgreens said they would slash prices on 1,300 items. Even upscale Whole Foods lowered prices. This has some analysts convinced a “K-shaped” economy persists, in which the higher-income cohort is on an upwards trajectory, while the lower-income segment struggles to absorb higher costs. Per U.S. Department of Agriculture (USDA) data, consumers spent more than 11% of their disposable income on food in 2022, the highest percentage since 1991.5
The tide is now turning, and it has impacted certain pockets of the equity markets. Over the first half of 2024, the Standard & Poor’s 500 (S&P 500) Food, Beverage & Tobacco industry group returned just 0.1% on a price-only basis.6
A more cautious consumer is apparent in other areas as well. The S&P 500 Consumer Durables & Apparel group posted a -14.4% price-only return, dragged down by subpar results from retailers Lululemon and Nike.
On Repeat
In theory, the first two quarters of 2024 should have been challenging for growth stocks. The Federal Reserve (“the Fed”), contrary to expectations, did not reduce its Fed Funds target range. At the outset of the year, holding rates steady was assigned a 0% probability for the June 2024 meeting, according to the CME FedWatch Tool. Instead, the futures market expected 75 basis points of rate cuts by now, which would have taken the upper end of the target range down to 4.75%. In addition, the 10-year U.S. Treasury Note yield rose 52 basis points to 4.40%, although it did ease from an April high of 4.70%. Lacking support from lower rates, the sharply higher valuations for growth stocks could have proved problematic. Investors shrugged off these headwinds, however, and continued to bid up any equities deemed a direct or indirect beneficiary of the artificial intelligence (AI) boomlet.
Within the tech-heavy S&P 500 Index, the song remains the same. After comfortably leading the Index last year, the Technology and Communication Services sectors assumed the same positions over the first half of 2024. Similar to last year, a relatively small group of Tech oligarchs are running the show. Chipmaker Nvidia, the current AI kingpin, saw its stock price soar 149%, accounting for approximately 30% of the S&P 500 Index’s return alone. The market-cap weighted S&P 500’s other five largest stocks (Microsoft, Apple, Amazon, Alphabet, and Meta) contributed another 32%, meaning the top six names generated ~62% of the Index’s total first half of the 2024 return. This is a concentrated market, with a K-shaped element of its own—a widening gap between the haves (Tech/AI) and the have-nots (nearly everything else). The S&P 500 Equal Weighted Index returned just 4.1% price-only over the first half of 2024, far in the rearview mirror compared to the S&P 500’s arguably artificially inflated 14.5% price increase. According to Bloomberg, that is the widest underperformance margin ever for the first six months of the year.7
One of the most famous Saturday Night Live skits, More Cowbell, aired in April 2000. The actor Christopher Walken played a fictional music producer, directing a band that included actor Will Ferrell on the cowbell. Walken’s character insists the band’s song needs one thing: “I’ve got a fever, and the only prescription is more cowbell!” The market’s fixation on AI feels a bit the same, where the intensifying ring of the AI cowbell drowns out nearly all other sound. It has, however, provided a growth story for the equity markets, and investors continue to funnel capital into the theme. By the end of Q2, the S&P 500 hadn’t experienced a 2% or worse down day in 340 trading sessions, dating back to February 2023. Expected volatility, as measured by the Chicago Board Options Exchange (CBOE) Volatility Index, continued to drift at a low level in the second quarter. The main complaint might be that more stocks aren’t enjoying index-type returns. Equality, admittedly, has never been a strength of the stock market, and probably not a fair aspiration. Yet, with the S&P 600 SmallCap Index down 1.6% price-only year to date, there is a sense that not all engines are firing.
Tea Leaves
In the waning days of the second quarter, the Bureau of Economic Analysis (BEA) reported encouraging inflation data. The core PCE price index, which excludes food and energy prices, increased just 2.6% y/y, its slowest growth rate since March 2021. This may provide some fuel for stocks in the coming months, as traders impatiently await Fed rate cuts. The degree to which this is already reflected in the stock market’s overall valuation remains a concern. The so-called (Warren) Buffett indicator tracks the ratio of the market’s total capitalization to Gross Domestic Product (GDP). As a variation on that, the chart below looks at the S&P 1500 Index’s total capitalization relative to the Corporate Profits After Tax series.8
Over the last 20 years, this ratio has averaged roughly 11x, but reached nearly 16x at the end of Q1 2024—very close to its high for this timeframe.
This suggests stocks, in aggregate, remain richly-priced, but obscures underlying pockets of value. Indeed, it could be time for the long-awaited rotation into lower-valued industry groups. One such area, Banks, returned 15% price-only over the first half of 2024—one of just five S&P 500 industry groups (out of 25 total) to outperform the overall Index. Near quarter-end, the Fed announced a passing grade for all 31 large banks included in their annual “stress test” meant to assess how the banks are likely to perform in a severe recession scenario. The scenario assumed a 10% unemployment rate, a 36% drop in home prices, and a 55% decline in equity prices, among other variables. Despite those challenging conditions, the Fed concluded the 31 banks could absorb approximately $685 billion in losses and continue lending to households and businesses. With more than enough capital to survive adverse economic conditions, the banks can return more capital to shareholders via increased buybacks and dividends. JPMorgan Chase immediately announced their third dividend hike within the past year, a cumulative 25% increase, and said the Board also authorized a new $30 billion share repurchase program.
Savita Subramanian, Bank of America equity and quant strategist, published a piece in mid-June titled, “How do bull markets end?” Her research identified 10 indicators that have typically preceded market peaks, and produced few false positives during bull markets. They include valuation metrics, an inverted yield curve, lofty sentiment readings, tighter lending, and what she categorized as “late cycle hubris” indicators. As of May 2024, only four of the 10 indicators suggested a market peak—compared to an average of seven ahead of prior bull market peaks. Not surprisingly, Subramanian notes there is no single holy grail. As for what to do, she reminds us that remaining invested is generally superior to emotional selling, so trying to sell early or late around market peaks is not advised.
1 “Survey of Consumers,” www.sca.isr.umich.edu, University of Michigan. 6/24/22
2 “Why Companies Are Nervous About the Consumer,” www.nytimes.com, 5/10/24
3 “McDonald’s says $18 Big Mac meal was an ‘exception’ and news reports overstated its price increases,” www.apnews.com, 5/29/24
4 “McDonald’s Kicks Off Summer of Value Across the US,” www.mcdonalds.com, 6/20/24
5 “It’s Been 30 Years Since Food Ate Up This Much of Your Income,” www.wsj.com, 2/21/24
6 Price-only returns do not include dividend income, only the price changes.
7 “Where Stock Market Is Headed After Wild First Half: Five Charts,” www.bloomberg.com, 6/29/24
8 Corporate Profits After Tax (without IVA and CCAdj), www.fred.stlouisfed.org
9 “2024 Federal Reserve Stress Test Results,” www.federalreserve.gov, June 2024
10 “2024 Federal Reserve Stress Test Results,” www.federalreserve.gov, June 2024
Corporate Engagement Update Q3 2024
Bailard’s approach to corporate engagement focuses on both the shareholder process and supporting other stakeholders working to improve disclosures on important environmental, social, and governance (ESG) issues.
How to Pick a Health Insurance Plan During Open Enrollment
Lena McQuillen, CFP® Director of Financial Planning, delves into why not reviewing your health insurance coverage each year could be costing you, as well as various considerations for picking a health insurance plan. Plus, sign up for a Medicare or a Marketplace Open Enrollment webinar.
Do you review your health coverage each year? Most people don’t. In fact, 90% of Medicare beneficiaries don’t review their drug coverage, and 95% are on a plan that isn’t optimized for their needs.
As for Marketplace insurance, enrollees who automatically renewed their plans paid 62% more than enrollees who compared plan options and picked the optimal option for their needs.
No one wants to pay more than is necessary for health coverage, and most would more than likely prefer to be on a plan that’s optimized to their needs, but with many different options available, choosing health coverage can be overwhelming—if you’re not equipped with the information and tools needed.
Selecting the right health insurance plan involves careful consideration of several key factors. As we approach the open enrollment season1, it’s important to start thinking now about the healthcare you’ve needed so far2 and what you might expect to want or need in the coming year. Identifying and prioritizing your personal preferences when looking at each plan will be crucial to optimal decision-making.
Below are other key considerations to explore that will help you make an informed decision during open enrollment.
When selecting a health insurance plan, consider whether your current doctors, pharmacies, and hospitals are part of the plan’s network. Insurance companies establish networks with healthcare providers to offer better rates for services within the network. It’s important to verify if your preferred doctors participate in-network to maximize your plan’s benefits and minimize out-of-pocket costs. (Covered plan providers can change every year, so you will want to confirm if your current providers are still covered for the upcoming year.)
Some plans require a referral from your primary care physician to see a specialist, while others offer direct access to specialists. If you anticipate needing services of a specialist such as dermatologists, cardiologists, neurologists, etc., considering a plan without referral requirements may be preferable for easier access to specialized care. (It should be noted that a referral by your primary care physician does not guarantee coverage under your plan, and you should always check with your insurance before you attend an appointment.)
You will also want to consider your travel habits within the United States. Plans may offer a regional or a nationwide network of doctors. Regional networks are limited to a specific geographic area and are often more cost-effective, while nationwide networks allow flexibility to see in-network doctors in any of the U.S. states and territories. For frequent travelers, nationwide coverage can give you access to in-network care outside your home region if you need treatment for a cold or to refill a prescription. (In an emergency, ambulances and medical treatment at the emergency room will be covered even if you go outside the network, based on your plan deductibles and co-pay.)
When deciding on a health insurance plan from a financial perspective, consider your approach to upfront costs. Would you prefer a plan with higher monthly premiums but lower out-of-pocket expenses for each medical service? This option can be advantageous if you prioritize predictable budgeting and prefer minimal financial surprises when accessing healthcare. Conversely, opting for a plan with lower monthly premiums and higher costs at time of service might appeal to you if you’re generally healthy and have the financial flexibility to manage occasional higher expenses.
Another financial consideration is your preference regarding the payment structure for doctor visits. Some plans offer a flat-rate copayment per visit, which simplifies budgeting and is ideal for frequent visits to in-network doctors. These plans typically come with higher premiums or fixed costs. Alternatively, plans with percentage-based coinsurance on medical bills provide flexibility, potentially lowering monthly expenses if you’re comfortable with varying costs per visit based on services rendered. Choosing between copayments and coinsurance largely depends on your healthcare usage patterns and financial comfort level with fluctuating out-of-pocket costs.
Go Beyond Healthcare Premiums
The out-of-pocket maximum is the most you will pay out of your pocket for covered health services in a given year and includes your deductible, any copayments, and coinsurance that you pay for medical care. Because out-of-pocket expenses are variable, it’s important that you understand your total potential healthcare expenses: your “worst-case scenario.”
If you have a sense of what your healthcare needs are in the next 12 months (such as having a baby or surgery, etc.), you can proactively plan for these healthcare events when selecting your health insurance plan. You’ll want to understand your deductible and potential out-of-pocket costs, and have this information saved where it can be easily accessible.
Optimize Your Health Plan
Health insurance plans change every year which can impact your premiums, in-network doctors and pharmacies, drug costs, and more. Proactive planning during open enrollment is especially important to evaluate new health plan options that fit your budget, personal preferences, and health needs. Even if your current needs have not changed (no change in health, doctors, prescriptions, etc.), it’s possible that the plans available to you have changed, including the one you are currently enrolled in. There may even be a better suited plan for you. Prioritize your preferences and choose a plan that is going to suit your needs for the upcoming year. You can always make a new election during the next open enrollment period.
Upcoming Webinar on Medicare and Marketplace Open Enrollment
To assist our clients with healthcare planning, we have partnered with Caribou, a healthcare planning company that works exclusively with financial advisors to help their clients plan for current and future healthcare costs. We will be hosting the two webinars listed on the right with Caribou to go over the fundamentals of Medicare and The Marketplace, so that you can make an informed decision that meets your health needs, preferences, and financial goals. Bailard Wealth Management clients can register for either, or both, by clicking on the titles of either in the box below.
Complete a Health Planning Analysis, at No Extra Cost to Bailard Wealth Management Clients
If you would like to take it a step further, ask your Investment Counselor about completing a Health Planning Analysis. Caribou can provide support in this complex decision process by finding health plan options tailored to your needs and preferences at no extra cost to you.
1 Insurance plans cannot be changed outside of the annual open enrollment period, except for qualifying life events that can trigger unique enrollment opportunities. Changes to your current health status may not align with either of these timeframes, so it’s important you have a plan that covers you, your spouse, and your dependents for any eventuality.
2 Most doctor offices now offer a mobile app where you can look up your past medical history, past and upcoming medical appointments, and current medications in one location. .