NOVEMBER/DECEMBER 2016

A PUBLICATION FROM COMPREHENSIVE FINANCIAL SERVICES VOLUME XXVII • NUMBER 6

From Ken’s Desk

Obamacare

Exchanges Send Insurers, Consumers Running

The views expressed within are of Ken Marinace not National Planning Corporation, and should not be construed as investment advice. All information is believed to be fromreliable sources; however National Planning Corporation (NPC) makes no representation as to its completeness or accuracy. NPC is not to be held responsible for and may not beheld liable for the accuracy of information available.

Kenneth A. Marinace California Insurance License #0545122Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Advisor. Additional advisory services offeredthrough Comprehensive Financial Services (CFS), a Registered Investment Advisor. CFS, NPC and all other entities mentioned are separate and unrelated companies. NPC doesnot provide tax advice.

As Women Age, FinancialChallenges Increase

Get ready for the Electric Car surge

Financial Anxiety TakingIts Toll

Protect client assetsfrom aggressiveunclaimed property rules

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A Clemson University official stopped a man from prayingon campus because he was not in one of the school’s “freespeech areas.” Student Kyra Palange saw the man sittingnext to a sign that said “Prayer” and joined him, only to betold by a college administrator to stop. Palange said she wasappalled that Clemson limits public prayer and opinions to“a designated area.”

Source: The Week magazine.

Only inAmerica

FINANCIAL INSIGHTS PAGE 2 NOVEMBER/DECEMBER 2016

Recently President Obama hits the roadregularly to defend his healthcarereform law. Speaking in Milwaukee,President Obama bragged about thelaw’s enrollment figures and pointed tothose in attendance as “proof the

Affordable Care Act works.” His proclamation of victory maybe premature. There’s much more contradictory “proof ” thatthe law’s exchanges one of the chief ways it aims to expandaccess to coverage are failing to work at all.

The policies available on the exchange have been nowhere nearas popular with consumers as federal officials predicted. Only12.7 million people signed up during the open enrollment periodthat ended January 31. That number is expected to fall to 10million by the end of the year, as Americans drop coverage orfail to pay their premiums.

Last summer, the Congressional Budget Office predicted thatroughly 21 million Americans would enroll in exchange plansthis year. Younger Americans have been especially reluctant topurchase coverage through the exchanges. This year, less thanone-quarter of exchange enrollees are 18 to 34. That’s bad newsfor Obamacare’s solvency. According to some analysts, for theexchange to be financially workable, 40% of enrollees need tocome from this younger, healthier population. An insurancepool that’s comprised mainly of older, sicker patients will driveup costs for insurers and, in turn, consumers.

These underwhelming enrollment figures have caused insurersto take significant losses on their exchange business. That’sprompting many to consider exiting the marketplacesaltogether. Consider United Health Group, the country’sbiggest health insurer and provider of some 500,000 exchangepolicies in 34 states. The company lost $720 million on itsexchange plans in 2015 and expects to lose another $500 millionin 2016. Understandably, the company has signaled itsintention to get out of the ACA – exchange business. As thecompany’s chief executive Stephen J. Hemsley put it, “We can’treally subsidize a marketplace that doesn’t appear at themoment to be sustaining itself.”

Other major insurers have expressed similar concernsincluding Aetna, which lost $100 million on its exchange planslast year, and Cigna Aetna CEO Mark Bertolini said, “Wecontinue to have serious concerns about the sustainability ofthe public exchanges.” Of course, Obamacare’s architects sawthis problem coming. That’s why they created the law’sindividual mandate, which requires all Americans to purchasecoverage or pay a fine.

Obamacare Exchanges Send Insurers, Consumers Running

From Ken’s Desk

But for many Americans especially the young the mandate is asmall price to pay to avoid the considerable cost of an exchangeplan. This remains true even in 2016 when the individualmandate will rise to the greater of $695 per person or 2.5% ofincome. Compare that one-time penalty to the $307 averagemonthly premium for a med-level silver exchange plan in 2015.

Premiums are even higher this year. And that’s madecomplying with the mandate less attractive to healthierAmericans. In Utah and Illinois, for instance, many consumersare facing increases of more than 40%. The rates of the plansoffered by the largest insurer on Minnesota’s exchange rose byan average of nearly 50%. Deductibles have also been tickingupward. In many states, most exchange plans carry adeductible of more than $3,000. In some cities including Miamiand Jackson, Mississippi residents face median deductibles of$5,000 or more.

The ACA’s exchanges now have a three year record ofdysfunction ever – higher premiums, enrollment numbersconsistently below projections, and hundreds of millions ofdollars in losses. Consumers and insurers alike are looking fora way out. President Obama won’t be around to celebrate thefourth anniversary of the Affordable Care Act’s exchanges thatopen for enrollment in 2013 for 2014 coverage. The same mightbe true for the exchanges themselves.

Information compiled by Ken Marinace, Sources: Kiplinger Letter; California

Broker Magazine; Wall Street Journal

“As we express our GRATITUDE we must never forget that the highest APPRECIATION is not to utter words, but to LIVE by them.”

– John F. Kennedy

Financial Anxiety Taking Its Toll

“Electric cars will be here soonerthan you think,” said ChristopherMims. Only one in every 150 cars sold inthe U.S. last year had a plug and a battery. But as with other technological shifts, it might look like nothing is changing “until it seems as if everything is changing at once.” Consider batteries. A typicalelectric vehicle today costs $30,000, about $3,000 less than the average new gasoline-powered car, and goes about 100 miles per charge. Next year, “you’ll be able to getdouble that range for just a little more money.” And as the battle heats up betweenelectric vehicles and plug-in hybrids, Volkswagen and BMW have promised that alltheir models will be available in hybrids by 2025, prices will inevitably be driven down.The steady proliferation of charging station should also make electric vehicles moretempting to drivers who worry about running out of juice on the road. ChargePoint,the world’s largest maker of electric-car charging stations, already has 30,000 stationsin its network, compared with about 90,000 public gas stations in the U.S. Americanstypically keep their cars for 11 years, so consumers won’t switch en masse to electriccars as rapidly as they adopted smartphones. But if you head to a showroom in a fewyears’ time, expect to be invited to test-drive a shiny new plug-in.

Source: Insurance NewsNet Magazine

America used to be known as the “land ofthe free and the home of the brave.” Nowit seems as if we have become the “land ofthe anxious and the home of the worried.”

A study from Northwestern Mutualseems to bear that out, finding that anincreasing number of Americans aregripped with financial anxiety. The largemajority of American (85 percent)reported feeling financial anxiety today,and it’s getting worse: 36 percent saidtheir anxiety has gone up in the past threeyears, versus only 14 percent who said ithas gone down. More than a quarter ofAmericans (28 percent) worry about theirfinances every day.

Among those feeling financial anxiety, 67percent said it is negatively impactingtheir health, 70 percent said it isnegatively impacting their happiness and61 percent said it is negatively impactingtheir home life.

And the biggest financial fear? Having anunplanned financial emergency, accordingto 38 percent of those polled.

Source: Insurance NewsNet Magazine

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Just 2 percent of the world’spopulation and 5 percent ofwhite people in the U.S. haveblond hair, but 35 percent of femaleU.S. senators and 48 percent of femaleCEO’s at S&P 500 companies are blond,according to new research. A 2005, studyfound that only about 2 percent of maleForbes 500 CEOs are blond.

Source: Slate.com

The Bottom Line

Get ready for the Electric Car surge

FINANCIAL INSIGHTS PAGE 3 NOVEMBER/DECEMBER 2016

FINANCIAL INSIGHTS PAGE 4 NOVEMBER/DECEMBER 2016

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Anna’s Recent Read: Protect client assets from aggressive unclaimed property rules

Who doesn't like a good treasure hunt?State governments have claimed more than$41 billion in lost property from U.S.taxpayers over the past few decades. Allyou have to do is prove that the property isyours — assuming you even knew it wasmissing. The bulk of the money is neverreturned.

In the meantime, the bounty serves as a huge source of revenue forcash-strapped states. Unclaimed property includes bank accounts,insurance policies, stocks and other securities. States usually sell thesecurities and hold the cash in perpetuity for the owner. The cashassets, and any earnings on those assets, are used as part of states'general revenue funds.

Over the years, states have adopted more aggressive definitions oflost or abandoned property that could help separate unwittinginvestors from their assets, including mutual funds and individualretirement accounts. In many cases, the time frame for when suchproperty is considered abandoned has been reduced from seven yearsto five years, and in about half of the states, to just three years.

States are able to claim such property under escheatment laws thatoriginally were enacted so states could use their greater resources,such as tax and property records, to find lost owners and reunite themwith their property. Property is turned over to the state of residenceof the owner's last known address, or in the case of an unknownaddress to the state where the financial institution is incorporated.Many mutual funds are incorporated in Delaware, Massachusetts andMaryland because of favorable corporate tax laws.

If it seems as though you are seeing an increasing number ofolder women on the job, you are not just seeing things. The fearof not having enough retirement income has been enough to keepolder American women in the workplace.

That fear has sparked an unusual spike in employment amongolder American women, AARP reported. These older womenworkers are staying on the job because they will live to older agesthan men while at the same time having less accumulated wealth.

In fact, older women are the only category of people whosenumbers in the workforce haven’t declined or remained flat.Looking at either age or gender alone shows no similar increase.

As Women Age, Financial Challenges Increase

AARP has reported that in 1992, only one in every 12 womenin the United States worked past age 65. Today, that numberis one in seven. In another eight years, one in every fivewomen over 65 will still be in the workforce.

It’s a huge change in workforce demographics, and it may bedue to a number of factors. Women find themselvesapproaching retirement age with more debt, less savings andfewer pensions than workers in previous generations. Inaddition, older women were one of the hardest-hit groupsduring the recent recession; many lost jobs, and fewer wereable to regain employment.

Source: Insurance NewsNet Magazine

Last month, the Uniform Law Commission adopted arecommendation to make it harder for states to claim so-calledlost or abandoned assets held in mutual fund accounts. It wouldpreserve the definition of unclaimed property as being based onthe return of undeliverable mail, rather than on a no-contactstandard.

Under the more aggressive no-contact definition, adopted by 18states so far, the account holder is deemed lost if the owner of theproperty doesn't contact the financial institution holding theaccount for a certain period of time. Even if the account owner isreceiving account statements or other mail from the institution,the account could be deemed abandoned and turned over to thestate because the owner hasn't contacted the institution.

The Investment Company Institute has created a resource centerand outreach program to help investors find lost assets and toprotect existing assets. The most important thing a mutual fundshareholder can do to protect an account is to contact the financialinstitution holding the shares at least once every three years.Contact generally means calling, emailing or sendingcorrespondence, such as voting a proxy, to the mutual fund.

You can visit the National Association of Unclaimed PropertyAdministrators or go to MissingMoney.com to discover whethera state is holding any of your financial assets or other property.

At Comprehensive Financial Services all investment accountsassociated firms are contacted periodically on behalf of our valuedclients.

Information compiled by Anna LukeSource: Investment News

Kenneth A. MarinaceComprehensive Financial Services3811 W. Burbank Blvd.Burbank, CA 91505-2116

In This Issue� From Ken’s Desk: Obamacare Exchanges

Send Insurers, Consumers Running� As Women Age, Financial Challenges Increase� Get ready for the Electric Car surge� Anna’s Recent Read: Protect client assets

from aggressive unclaimed property rules� Teaser #90, Answers to Teaser #89

PRSRT STDU.S. POSTAGE

PAID

PACIFIC RIMMAILERS

Brain Teaser #90 – “Missing Links”

Use your smartphoneto visit our website!

Brain Teaser #89– Answers

Symbolism:

The first person with the correct answer was Phil Efland. Congratulations, Phil!

FINANCIAL INSIGHTS PAGE 6 NOVEMBER/DECEMBER 2016

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Tel: 818.846.8092 • Fax: 818.845.2010

Comprehensive Financial Services is a diversified financial services and planningcompany. The firm offers investment counseling, financial planning, moneymanagement services, investments, life and health insurance and annuities.

Material discussed is meant for general illustration and/or informational purposesonly and is not to be construed as tax, legal, or investment advice. Although theinformation has been gathered from sources deemed reliable, no representation ismade to its accuracy or completeness. Please note that individual situations can vary,therefore, you should consult your qualified financial professional before taking action.This material is not an offer to sell, nor is it a solicitation of an offer to buy any security.The publisher is not engaged in rendering legal, tax or accounting advice.

Which word links the one on the left with the one on the right? We’vedone the first one, and when you’ve finished them all, the first lettersof the link words will spell another word.

fence post dated band worker fishing ball duck hearted right poise

=2 =7

=3 =9

Casket savings. The median price of a metalcasket sold by a funeral home is about $2,400 andthe price can run into five figures. But you may beable to save money by purchasing a casketelsewhere, including online. Costco sells casketsstarting at $950, and online sellers includeOverstock.com and BestPriceCaskets.com. Formore tips on saving on funeral costs, go toKiplinger.com/links/funerals

Source: Kiplinger Retirement Report

Estate Planning

The first person with the correct answers will receive an American Express gift card. Please email your answers to Martha atMartha@cfsburbank.com or call her at 818-846-8092 ext.4.