New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Rising Healthcare Costs: What USG Corporation Employees Need to Know About Managing Financial Strain in Retirement

As Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group, points out, 'It is crucial for all employees, especially those in the USG Corporation sector, to proactively plan their finances to avoid the unexpected costs of health crises.

According to Michael Corgiat of The Retirement Group, a division of Wealth Enhancement Group, 'It is important for USG Corporation employees to understand the bigger economic implications of health issues as reported in this article to have robust financial plans to manage the risks of healthcare adverse events.

In this article, we will discuss:

1. The Economic Impact of Cancer: Examining the direct and indirect financial challenges faced by patients, including increased medical costs and loss of income.

2. Personal Stories of Financial Struggle: Highlighting individual cases, such as Gwendolyn Jackson, to illustrate the broader financial implications of a cancer diagnosis.

3. Solutions and Support Systems: Exploring available resources and potential strategies to alleviate the financial burdens on patients and their families.

When one is diagnosed with cancer, it is not only a life-threatening disease that affects the patient’s health but also their finances. Many patients are faced with the financial challenges of higher out-of-pocket costs, reduced income and higher cost of drugs. This article looks at the huge financial impact that cancer has on Americans and USG Corporation employees, using cases, numbers and the overall trend of this new epidemic.

The Story of Gwendolyn Jackson and the Personal Toll of Cancer Gwendolyn Jackson had no problems paying her bills before being diagnosed with cervical cancer. She owned her house, had insurance and had a job. But when she was 53 years old, her life changed drastically when she was told she had cervical cancer. Jackson lost her work as a housing coordinator due to the physical toll of chemotherapy and a subsequent stroke, and she is already facing tens of thousands of dollars in medical debt.

Her vehicle was repossessed, and she received an eviction notice. Jackson recalls, 'I woke up one morning, and I was a top case manager. Then I was losing everything.' Increasing Prices and Economic Difficulties Cancer is becoming an increasingly expensive disease in the United States due to the rising prices of drugs and medical care. Iqvia’s Institute for Human Data Science predicts that 55% of cancer medications launched between 2019 and 2023 will cost more than $200,000 a year.

Those of working age, like those at USG Corporation, have several difficulties and are more likely to report financial hardship after diagnosis. Sixty percent of cancer survivors of working age have money problems, according to the study. Many struggle to pay for medical care, and this often results in debt accumulation — payday loans, credit card debt, and so on. About 40 percent of medical GoFundMe campaigns are for cancer. Radiation oncologist Dr. Reshma Jagsi of Emory University School of Medicine and the Winship Cancer Institute says, “We do not want to believe that people with cancer in this country have to cut back on medications, doctor visits, lose their home, or cut back on food.” The Financial Toxicity Concept Financial toxicity is the term used to describe the financial burden of cancer and its treatment. It is not just the cost of treatment and the expensive drugs but there are many other costs as well.

Patients who receive chemotherapy and other treatments may not have enough energy to work, thus, losing their employer-sponsored health insurance and income. The financial consequences may last for many years. It is always a shock. As USG Corporation Employees planning for these unexpected expenses is crucial. Dr. Fumiko Chino, a radiation oncologist at Memorial Sloan Kettering Cancer Center adds, “It can cause this wealth shock that can ripple on.” Her husband died of cancer more than 10 years ago and she still gets phone calls from debt collectors about his debts. She faced the financial burden personally.

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The Growing Price of Anticancer Drugs The chief problem facing USG Corporation employees is the rising cost of healthcare and cancer medications. These costs are either rising at the rate of inflation or have very high initial prices. The prices of common cancer medications can be as high as six digits. For example, Medicare beneficiaries will have to pay $5,247 out-of-pocket for the leukemia therapy Imbruvica in 2022, which is more than $213,000 per year. Tagrisso lung cancer medication is approximately $208,000 per year.

Some employer-based plans have patients pay a portion of the drug costs, shifting the burden of rising healthcare costs to patients. Cancer patients of working age with private insurance had out-of-pocket expenses rise 15% between 2009 and 2016. Many patients have to pay for parking, hotel, child care, and transportation, among other costs. The Broader Effect on Earnings Besides the cost of treatment, cancer has a major negative impact on the financial well-being of the affected individuals. It is still a serious matter that makes many have to leave their workplaces or even quit their jobs altogether. Chemotherapy patients are four times more likely to quit than patients who do not receive the treatment within the first four years.

This burden usually affects families as a whole since relatives may have to take care of the patient or financially support the family. The hardship faced by Erica Olenski is illustrative. Olenski’s young son August was diagnosed with brain cancer in 2019. She cut back drastically on her working hours, spending time traveling back and forth between McKinney, Texas, and Dallas for August’s treatments, which entailed weekly hospital stays.

The family’s income was lowered even though Medicaid paid for the medical expenses. “It was the transport, gas, tolls, food at the hospital because you can’t buy groceries like you would at home,” says Olenski. “There’s a pragmatic reality of living that lifestyle that carries an enormous cost.” Financial Repercussions and Insolvency Financial strain may have serious implications for USG Corporation employees and may include bankruptcy. Olenski had to liquidate most of her 401(k) to pay off the debts. She later got divorced and lost $20,000 during the divorce process. In 2023, August’s illness returned, and she had to use her credit cards to pay for things like car and mortgage. She finally filed for bankruptcy, and was over $100,000 in debt.

Cancer’s Wider Financial Effects Dr. Scott Ramsey, the director of the Hutchinson Institute for Cancer Outcomes Research at Fred Hutchinson Cancer Center, and his team found that cancer patients have more credit card late payments, mortgage defaults, and other financial issues than non-cancer patients. According to Ramsey, patients who incur more out-of-pocket expenses are more likely to delay starting their prescriptions or stop taking them altogether.

According to his research, cancer patients who file for bankruptcy have an 80 percent higher chance of dying than those who do not. “It was actually kind of bad for the survival,” he said. Gwendolyn Jackson’s Persistent Battle When Jackson’s father was diagnosed with lung cancer 10 years ago, she saw for herself how cancer affects people’s finances. Inspired by families who had to sell their jewelry and savings to pay for treatment, she started a charity organization to help cancer patients and their families. She is currently in a comparable situation. Her diagnosis has greatly impacted Jackson’s life. She has gone from a social person who used to jog daily to a person with a very busy schedule of doctor’s appointments.

Her 83-year-old mother had to pay $800 a month for her health insurance until it became unaffordable after she quit her job in 2022. Jackson then chose a less expensive insurance plan, but the costs for tests, chemotherapy, and physical therapy kept on rising. While waiting for long-term disability, she used her credit cards and received money from friends and relatives. She moved in with her daughter and shared a room with her grandson after losing her house and car. “It broke me,” Jackson claims. Looking for Guidance and Assistance Despite substantial holes in the safety net, campaigners and doctors are looking for patchwork solutions to the increasing problems.

More cancer facilities are now able to help patients who have financial problems and other needs like food and transportation. The problem is that there is not much funding and not many people are aware of these options. Only a few patients who turn to crowdfunding platforms like GoFundMe can raise the needed amount through the platform. Cancer Care Kansas had not considered Jackson for aid because she earned too much money.

She was able to avoid using cash from her nonprofit because she had to. She could not manage the demands and her efforts to work remotely were in vain. Jackson is now on disability, so she helps pay for groceries, gas, utilities, and prescription drugs. She has just been informed that she would be eligible for Medicare in a few months’ time, but this will leave her with around $38,000 of medical debt that she has no way of paying after monthly expenses are covered.

Jackson’s cancer has not responded to chemotherapy, so she is still undergoing treatment through a clinical trial. Despite the fact that she has less than 18 months to live, debt collectors are still after her for the medical bills. “They’ll give you calls and letters,” she continues. “But I can’t pay for what I don’t have.” In Summary Cancer impacts the lives of American households in a real and significant way. The costs of prescription drugs, the out-of-pocket costs, and the lower incomes are a financial burden that many patients and their families cannot bear.

The stories of people like Gwendolyn Jackson and Erica Olenski show that there is a need for better financial support and ways to help people cope with the economic impact of cancer. This is becoming more important as the cost of cancer treatment rises, so patients can focus on their health without worrying about the financial impact. It is important for USG Corporation employees to always be prepared for any unexpected medical expenses.

Medicare enrollees paid $5,460 on average out-of-pocket for healthcare in 2021, according to a recent Kaiser Family Foundation report released in May 2023. Healthcare costs were substantially higher for people with serious diseases like cancer. Such costs can strip retirement funds quickly, and it is crucial to understand and prepare for healthcare expenses in later years. Older retirees may struggle with financial issues that threaten their financial well-being and quality of life as healthcare costs rise (KFF, 2023). Disclosure: This information is not intended as recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investing involves risk, including possible loss of principal.

Sources:

1. 'Financial Hardship.' American Cancer Society. www.cancer.org. The following is a reference from the American Cancer Society on financial difficulties encountered by cancer patients and the need for support and resources.

2. 'The Economic Burden of Cancer.' The Cancer Atlas. canceratlas.cancer.org. This article presents the costs of cancer in the US and EU and shows that the costs are high.

3. 'The Financial Impact of Cancer: How to Manage the Costs.' Cancer Survivors Network. csn.cancer.org. This narrative focuses on financial assistance and community resources for cancer patients with a focus on long-term financial planning.

4. 'CRFT Brings Distress, Bankruptcy, and Mortality.' Family Reach. www.familyreach.org. This article explores the financial devastation that cancer can cause and the consequences of heightened chances of bankruptcy and death.

5. 'Legal & Financial Impacts of Cancer.' MD Anderson Cancer Center. www.mdanderson.org. This source provides information on the legal and financial challenges of cancer patients, including information on managing health insurance and healthcare costs.

How does the retirement plan structure at USG Corporation impact both final average earnings participants and cash balance participants, especially regarding their eligibility and benefits accrued over time? In what ways does the differentiation between these two categories influence the retirement outcomes for employees of USG Corporation?

Retirement Plan Structure: USG Corporation's retirement plan differentiates between Final Average Earnings Participants and Cash Balance Participants. Final Average Earnings participants, who joined before January 1, 2011, accrue benefits based on their final average earnings and years of service, which can result in higher benefits for longer-serving employees. Cash Balance participants, who joined after January 1, 2011, have their benefits calculated based on a cash balance account, which grows with contributions and interest credits. These differences affect retirement outcomes, as Final Average Earnings participants may see higher pension payments if they have longer service or higher wages, while Cash Balance participants have more predictable but potentially lower benefits based on their account balance(USG Corporation_Retirem…).

USG Corporation's Retirement Plan allows for different age-specific rules regarding early retirement. How do the "Rule of 90" and "Rule of 82" affect the financial planning of employees considering an early retirement option, and what should they consider regarding their long-term financial security?

Rule of 90 and Rule of 82: The "Rule of 90" allows employees to retire early without a reduction in benefits if their age plus years of service total 90, provided they retire at or after age 62. The "Rule of 82" permits early retirement with reduced benefits for those whose age and years of service total 82. Employees planning early retirement must consider these rules as they directly affect the amount of benefits they receive, making it important to assess how long-term financial security will be impacted, especially if they retire before age 62(USG Corporation_Retirem…).

Could you elaborate on the process through which employees at USG Corporation can change their beneficiaries within the retirement plan? What steps need to be taken, and what are the implications of these changes on the benefits received upon the participant's death?

Changing Beneficiaries: To change beneficiaries, USG Corporation employees must contact Your Benefits Resources™, where they can designate a primary and contingent beneficiary. If married, the spouse must provide notarized consent to name a different primary beneficiary. The process involves completing a form, and any changes affect who receives benefits upon the participant's death. Failing to update the beneficiary could result in benefits being paid to unintended individuals(USG Corporation_Retirem…).

As part of the retirement process at USG Corporation, how are pensionable earnings calculated? What factors are included in this determination, and how might they vary among different employees based on their roles within the organization?

Pensionable Earnings Calculation: Pensionable earnings at USG Corporation include regular pay, shift differentials, and bonuses but exclude items like nonqualified deferred compensation, severance, and stock awards. These earnings are used to calculate benefits based on formulas that take into account an employee’s service years and earnings over the 36 highest consecutive months of the last 15 years of participation(USG Corporation_Retirem…).

How does the automatic enrollment in the USG Corporation Retirement Plan work, and what options do employees have if they initially chose not to participate? What implications might this have for their retirement savings strategy?

Automatic Enrollment and Opting In: Employees at USG Corporation are automatically enrolled in the retirement plan unless they choose to opt out. If employees decide not to participate initially, they can enroll later by contacting Your Benefits Resources™. Failure to participate from the start could result in lower retirement savings due to fewer years of contributions(USG Corporation_Retirem…).

In the context of USG Corporation, what are the potential tax consequences for employees withdrawing their retirement benefits, especially regarding the mandatory withholdings? How might employees effectively manage these tax liabilities when planning for retirement?

Tax Consequences of Withdrawals: Employees withdrawing their retirement benefits from USG Corporation will face mandatory federal income tax withholdings, typically 20% for lump sum distributions, unless the distribution is rolled over into an IRA. Employees must plan for these taxes when withdrawing to avoid unexpected liabilities and ensure they maximize their after-tax retirement income(USG Corporation_Retirem…).

How do employees at USG Corporation access the necessary documents related to their retirement benefits, and what is the process for obtaining copies of these documents if needed? What are the responsibilities of the Plan Administrator in this process?

Accessing Retirement Documents: Employees can access documents related to their retirement benefits through Your Benefits Resources™ online or via phone. If additional copies are needed, employees can request them from the Plan Administrator for a small fee. The Plan Administrator oversees ensuring these documents are provided to participants as required by ERISA(USG Corporation_Retirem…).

What unique provisions exist for USG Corporation employees who experience a break in service? How do these provisions impact their accumulated benefit service and overall benefits upon reemployment?

Break in Service Provisions: USG Corporation allows employees who experience a break in service to retain their accumulated benefits if they are reemployed within one year. If reemployed after one year, their previous service may not count toward future benefits unless they were vested prior to termination. This can affect the total benefits an employee accrues if they leave and later return(USG Corporation_Retirem…).

What options do employees of USG Corporation have for managing their benefits if they return to work after retirement? How does this affect their pension benefits and the overall strategy for maximizing retirement income?

Returning to Work After Retirement: Employees returning to work after retirement at USG Corporation will have their pension payments suspended and recalculated based on additional years of service. This recalculation takes into account prior payments, meaning employees should consider the impact of returning to work on their long-term pension strategy(USG Corporation_Retirem…)(USG Corporation_Retirem…).

How can employees of USG Corporation contact their Benefits Resourcesâ„¢ for more information on their retirement plan options? Are there specific channels preferred for different types of inquiries, and what resources are available to assist them?

Contacting Benefits Resources™: Employees can contact Your Benefits Resources™ via the web or a toll-free number to inquire about retirement plan options. Different inquiries, such as changes to beneficiaries or requesting benefit estimates, can be handled through these channels. Resources such as detailed benefit estimates are available to help employees plan for retirement(USG Corporation_Retirem…).