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Trust Department Quarterly Newsletter 1st Quarter 2010
Patient Protection and Affordable Care Act (PPAC) The new healthcare plan (PPAC) is now law having been signed by President Obama on March 30, 2010. We now need to try and understand how the 2,000 plus pages of legislation that was passed by a vote of 219 to 212 in the house is really going to change healthcare and the cost of administering it in the U.S. The majority of the changes in mandated insurance care do not come into effect until 2014. The bill basically mandates that most individuals are to have at least a minimum level of healthcare coverage. The main source of making the insurance available will be through providing incentives and/or imposing penalties through employers. The Act is not designed to eliminate insurance plans that employers now have in existence (although that may happen in some cases). It is intended to provide healthcare coverage to the 32 million uninsured Americans who currently do not have coverage. Some of the major parts of the Act are:
The Following is an Excerpt from a Supposed Letter That was Forwarded to President Obama by a Medical Doctor The doctor states, “I contend that our nation’s healthcare crisis is not the result of a shortage of quality hospitals, doctors, or nurses. Rather it is a result of a crisis of culture, a culture in which it is perfectly acceptable to spend money on luxuries and vices while refusing to take care of oneself or, heaven forbid, purchase health insurance. It is a culture based on the irresponsible credo that, “I can do whatever I want to because someone else will always take care of me”. Once you fix this cultural crisis that rewards irresponsibility and dependency, you’ll be amazed at how quickly our nation’s healthcare difficulties will disappear.” The Stock Market After an early January slight downturn in the market we have seen fairly steady increases in the market on a week-to-week basis. The S & P Index is up approximately 73% since it hit a bottom in March of 2009. This is a very significant increase in the market without at least a moderate pull back. With the summer months coming up and a look in history, a 10% to 15% decline by September certainly would not be unprecedented. This would build a good base for the market to reach a higher point than the 11,000 mark on the Dow Jones Industrial Average by the end of this year. The Fixed Income Market Interest rates have inched up slightly during the last quarter. We feel this trend will continue as the economy shows some expansion and the demand for more borrowed dollars rises. The Federal Reserve has continued to keep interest rates low, but we feel that trend will change as the year 2010 heads into the fall and winter quarter. Roth IRA Conversions One Final Reminder: Starting in 2010, taxpayers with modified adjusted gross income of more than $100,000 will be allowed to convert a traditional IRA to a Roth IRA. This change applies to all years beyond 2010 - with income taxes due on the 2010 conversion payable over two years. The 2010 conversion amount may be included as taxable income in 2011 and 2012. Conversions in subsequent years are included in income during the tax year in which the conversion is completed. Removing the Roth IRA conversion cap doesn't mean anyone can fund a Roth IRA, but it does mean that anyone can convert an existing IRA to a Roth IRA. It’s a good idea to consult with a tax professional before deciding if taking advantage of the rule change in 2010 is right for you. As always, please let us know if we can be of any assistance in the process. |
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