How Much "Skin in the Game" Is Enough? The Financial Burden of Health Spending for People on Medicare

Examines trends in the financial burden of out-of-pocket healthcare expenses relative to income among Medicare beneficiaries between 1997 and 2006, including the composition of expenses and contributing factors. Includes projections for 2025

Hispanic Poverty Rate Highest in New Supplemental Census Measure

Compares poverty rates by race/ethnicity, nativity, age, and location according to the official measure and the Census Bureau's alternative measure, which reflects cost-of-living expenses, medical expenses, tax credits, and non-cash government benefits

Retirement Savings Accounts: Fees, Expenses, and Account Balances

According to the U.S. Department of Labor, 43% of private-sector employees participated in defined contribution retirement plans, such as those authorized under §401(k) of the Internal Revenue Code, in March 2007. The amount that these workers will have accumulated in their retirement accounts by the time they retire will depend on a number of factors, including the extent to which the expenses incurred to administer the plans are borne by plan participants. For this reason, it is important for participants in 401(k) plans to understand the fees and expenses that they pay and the services that they receive in exchange for paying these expenses. Whether participants in 401(k) plans are able to identify the fees and expenses that they pay has become a topic of interest both to Congress and the Department of Labor. On March 6, 2007, the House Committee on Education and Labor held a hearing on the subject of fees paid by participants in 401(k) plans. On April 30, 2007, the Department of Labor published a notice of its intent to propose regulations that will require plan sponsors to provide clearer and more detailed information about fees and expenses to plan participants. According to the Investment Company Institute (ICI), the average asset-weighted expense ratio for stock mutual funds in 401(k) plans in 2006 was 0.76%. For this report, CRS estimated the effect of expenses ranging from 0.4% to 2.0% of assets on the amounts accumulated in retirement accounts over a thirty-year period by married couples and single persons with high, median, and low earnings who contribute 6%, 8%, or 10% of earnings each year to a retirement account invested in a mix of stocks and bonds. We compared annual expenses of 0.8%, 1.2%, 1.6%, and 2.0% of plan assets to a low-cost “base case” in which annual expenses were equal to 0.4% of assets in the account. The results of the analysis indicate that expenses paid by plan participants can substantially reduce their retirement account balances. Based on the distribution of rates of return in U.S. stock and bond markets over the 80-year period from 1926 through 2005, a median-earning couple who contribute 6% of family earnings each year for 30 years to a retirement account that is invested two-thirds in stocks and one-third in bonds could expect to accumulate $356,434 in constant 2004 dollars if investment rates of return are at the historical median over the investment period and annual expenses are equal to 0.4$263,663, or 26.0% less than under the low-cost plan. A median-earning single person who contributes 6% of earnings each year for 30 years to a retirement account that is invested two-thirds in stocks and one-third in bonds could expect to accumulate $187,738 in constant 2004 dollars if investment rates of return are at the historical median over the investment period and annual expenses are equal to 0.4$138,344, or 26.3% less than under the low-cost plan. This report will not be updated

Understanding Foundation Expenses: Focus on Illinois

Understanding Foundation Expenses: Focus on Illinois defines and delineates charitable (programrelated) administrative and operating expenses, which are those that count toward a foundation's payout requirement. The report addresses specific questions such as: Which foundation costs are included in charitable administrative expenses? What are the limitations of Form 990-PF for reporting expenditures? How are charitable administrative expense levels measured? What are the most important factors driving expense levels? It also offers first-ever multi-year trend information (2008– 2010) detailing the expense practices of large Illinois independent foundations and compares them to the national experience.Intended for foundation leaders, policymakers, advocates, journalists, and the general public, this brief serves as a key resource for understanding foundation operating and administrative expenses and as an unbiased source of facts on actual practice in Illinois

Readmission Rates and Their Impact on Hospital Financial Performance: A Study of Washington Hospitals

This longitudinal study examines whether readmission rates, made transparent through Hospital Compare, affect hospital financial performance by examining 98 hospitals in the State of Washington from 2012 to 2014. Readmission rates for acute myocardial infarction (AMI), pneumonia (PN), and heart failure (HF) were examined against operating revenues per patient, operating expenses per patient, and operating margin. Using hospital-level fixed effects regression on 276 hospital year observations, the analysis indicated that a reduction in AMI readmission rates is related with increased operating revenues as expenses associated with costly treatments related with unnecessary readmissions are avoided. Additionally, reducing readmission rates is related with an increase in operating expenses. As a net effect, increased PN readmission rates may show marginal increase in operating margin because of the higher operating revenues due to readmissions. However, as readmissions continue to happen, a gradual increase in expenses due to greater use of resources may lead to decreased profitability

The Determinants of Management Expenses

This paper develops a model which explains the determinants of the management expenses charged by U.S. equity funds. The study shows that for high quality managers, an increase in quality is associated with higher fees. In contrast, as the quality of the lower quality managers deteriorates, their fees increase. A non-linear negative relationship is found between the size of a fund and its management expenses. Economies of scope are also shown to exist between the number of funds within a mutual fund complex and the management expenses charged investors. Finally, while 12b-1 fees have been thought of as a substitute for load charges, this paper suggests that they are complements.