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Ballooning Nest Eggs Hatches!

Rally your family and friends: it takes a "flock" to build your youngsters' nest eggs
  • Explore "out of the nest" ways to spur meaningful gifts to
    your kids and other youngsters
  • Gifts with purpose ... gifts that make a difference

Gifts to Stock Up On
Shares in the company that makes your kids’ favorite things is a gift that keeps giving and it’s a great way to connect kids and money throughout the year.   Scotty Serafin loves video games. He’s built the ultimate football franchise in Madden, is downright unbeatable at Fruit Ninja and this nine-year-old will take you down in a game of Minecraft. At the top of his birthday wish list is, you guessed it, video games. But his father, Scott, has another idea. “I think every parent worries that their kids are spending too much time staring at a screen,” says the Kinnelon, NJ dad. “And I was spending so much money at GameStop feeding the need for the latest xBox, Wii or [Nintendo] DS game that I thought ‘I should buy stock in this company.’ ” So he did—for Scotty. Last year, he gifted his son shares of the Grapeville, TX video game retailer, Game Stop.   For parents looking to add meaning to the gifts they give, buying stock in companies their kids adore can be a fun—maybe even profitable—solution. “I figure this is a great way to invest in my child’s future while teaching him about how the market works,” says Serafin. “We can track [the stock] the whole year and hopefully Super Mario Brothers will mean something else to him on his next birthday.” A little research into the company yielded yet another bonus. GameStop [GME] partners with the non-profit Make-A-Wish Foundation to give sick kids shopping sprees in their local stores. Investing in a company that gives back and has strong roots in the communities it serves gives Scott and his son one more reason to feel good about this year’s present.   Want to match your child’s passion with a business that balances profit margins and social responsibility? Here’s a sampling of some public companies that do well by doing good.    If your child is a foodie … … how about Whole Foods Market Inc. (WFM), the organic and natural grocery store choice for many health conscious parents and families?   Whole Foods promotes issues involving the environment, and placed third on the Environmental Protection Agency’s list of the "Top 25 Green Power Partners.”  WFM was the first U.S. supermarket to completely eliminate disposable plastic grocery bags.  In addition, community giving is a must at all individual stores. In total, such giving exceeds 5% of net company profits each year.  Each store may donate food, labor or dollars to local not-for-profit organizations.  Each store also holds “5% Days” during which they donate 5% of that day's net sales to local non-profit or educational organizations. The company created two foundations – (1) Animal Compassion Foundation to improve the quality of life for farm animals and (2) Whole Planet Foundation to combat poverty in rural communities around the world through microlending.     If your child has built more bears than can fill a zoo … … check out Build-A-Bear Workshop Inc. [BBW], the retailer that welcomes kids to stuff and dress a fury friend.   You’ll find a list of 12 charitable causes supported by Build-A-Bear—everything from “Furbulous Donations” to “Grants for Pawsome Causes.” Our favorite is Huggable Heroes, a salute all the young people who are making the world a better place through generosity and kindness. Each year the company rewards young people who have devoted countless hours to raising funds and awareness for community causes. Each hero wins $10,000 (a $7,500 educational scholarship and $2,500 from the Build-A-Bear Workshop Foundation to be donated to charity of the Huggable Hero’s choice).   If you have Nerf darts in every nook and cranny of your house… … consider Hasbro [HAS], the multinational toy and board game company responsible for bring squishy Nerf balls (and lots of other toys) into our homes.   Some of the honors touted on this company’s site include being named “One of America’s Top Ten Most Community-Minded Companies” by Bloomberg News. The toy maker supports kids all over the world though financial grants, product donations, employee volunteerism and an initiative called generationOne, which empowers kids to make a difference by awarding five children (between 5 and 18) $1,000 educational scholarships. The company is also big on sustainable packaging: It’s eliminating PVC (a plastic that’s not recyclable and is thought to be a health hazard); as of last year 75 percent of its packing was derived of recyclable materials and by 2015 it hopes to get that number up to 90 percent.   If your little daughter is a “girly-girl” who is all about Barbie… …think about Mattel [MAT], the world’s largest toy company.   In 2013, Mattel was named as one of FORTUNE Magazine’s “100 Best Companies to Work For” for the sixth year in a row. Mattel also is ranked among Corporate Responsibility Magazine’s “100 Best Corporate Citizens.” The company’s biggest give-back program centers around “breaking down the barriers to play” via the Mattel Children’s Foundation. With volunteer efforts, product donations and corporate contributions, the company grants children access to play globally. It does this by donating Barbie dolls, Hot Wheels cars and American Girl dolls to children confined to hospital beds; supporting the Special Olympics Young Athletes Program; and through the global employee volunteer effort called Mattel PLAYers. In 2012, the company donated $1.5 million of toys globally and by 2015 it hopes to bring play opportunities to 10 million children in need.   If your child splashes the swoosh from head to sneaker… … then Nike Inc. [NKE] is a natural.   Nike believes in the power of unleashing human potential—on the field, on the court, and in life. It’s got a slew of give-back programs to back that belief including a program to get kids more physically active, Nike Better World (which aims to do things like stomp out war through sports). It also has a massive recycling effort. But our favorite is the Nike Foundation, which takes on global poverty.   When the Nike Foundation started in 2004, it sought the best investments with the highest returns. The company traced the symptoms of poverty back to their roots, and it led to an unexpected solution: adolescent girls. When a girl in the developing world realizes her potential, she isn’t the only one who escapes poverty—she brings her family, community, and country with her. Investing in a girl stops poverty before it starts. That’s the girl effect. And the Nike Foundation has become a big backer. Read more about it at www.girleffect.org.   If your child loves animals (in the home and the wild)… …then he or she would be proud to own a piece of PetSmart Inc. [PETM].   PetSmart Charities is on the hunt for lifelong, loving homes for every pet. Whether it’s saving the lives of homeless puppies, providing emergency relief (think: aid for animals that were victims of Super Storm Sandy), raising awareness of companion animal-welfare issues or promoting healthy relationships between pets and people, the company is dedicated to its pet-loving mission.   If your kids are big fans of Pokemon and Princesses… … they might want to become a shareholder of the toymaker JAKKS Pacific, Inc. [JAKK].   Home to brands such as Spy Net, Disney Princess and Hello Kitty, the company has a division dedicated to philanthropic endeavors called JAKKS Cares. A combo of resources and inspired employees assist needy children, families and even pets around the world. JAKKS Cares activities also implement ways to “Reduce, Reuse and Recycle” to help preserve our planet.   If your teen dresses like an A+F model… … you might want to outfit him or her with shares of Abercrombie & Fitch [ANF].   The company has hosted the The A&F Challenge for 11 years now to raise money for various organizations and charities in central Ohio and communities in which A&F operates throughout the U.S. The Challenge is open to anyone, attracts about 3,000 participants, and donates 100 percent of entry fees to charity organizations. The Challenge includes activities such as a 5K Run, 20-mile Bike tour, and the Kid’s Challenge—raising more than $9.5 million for charities.   The apparel company also supports hundreds of charitable institutions annually. Contributions to these organizations range from $100 donations to gifts in excess of $1,000,000. The beneficiaries of these donations include The American Red Cross, American Heart Association, Big Brothers Big Sisters, Directions for Youth and Families and the Juvenile Diabetes Research Foundation.    
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13 Books for Young Entrepreneurs
It's all about kids and money. Whether you know an enterprising five-year-old or a resourceful teen entrepreneur, these books will inspire them to start a business, invest or just save a little. Ballooning Nest Eggs contributor Jillian Gatcheco suggests these 10 books.  We just updated the list with 3 more terrific books since we first published this list.   Kidpreneurs: Young Entrepreneurs with Big Ideas! by Adam Toren and Matthew Toren - $11.66 (ages 9 and up) Brothers Adam and Matthew, co-founders of YoungEntrepreneur.com, started this book as a means to pass on their business savvy to their children. It’s filled with illustrations, trivia, quizzes, and easy-to-digest entrepreneurial ideas to simplify complex concepts of the business world. They say “it’s never too late,” but with this book, the mindset is “it’s never too early!”     Better Than a Lemonade StandBetter Than a Lemonade Stand!: Small Business Ideas for Kids by Daryl Bernstein - $8.99 (ages 9 and up) Daryl Bernstein wrote the first version of this book when he was only 15 years old to help kids like him earn through creative small businesses. Now an adult and father, he has polished and updated this resource for a new generation of budding entrepreneurs. With unexpected ideas for youngsters like “Wake Up Caller” and “Seedling Grower,” the businesses featured here have virtually no start-up costs and contain helpful suggestions for what to charge and how to advertise.   Read More: Great apps for young investors   
The Richest Kids in America
The Richest Kids In America: How They Earn It, How They Spend It, How You Can Too by Victor Hansen - $12.21 (all ages) We all know celebrity entrepreneurs who started young and made it big, but this is another group of kids that are just as newsworthy. They’re kids just like yours, and their stories will inspire, teach, and show how their curiosity led to creativity, and ultimately, to cash!         The Everything Kids' Money BookThe Everything Kids' Money Book: Earn it, save it, and watch it grow! (Everything Kids Series) by Brette McWhorter Sember – $8.20 (ages 9 and up) Through this book, tweens will learn about online banking, stocks, budgeting, and giving back to charity. How do they save up for a new bike or invest their allowance to make it grow? How do credit cards work? It isn’t just about having a piggy bank anymore, and this read covers everything your children need to know to be financially savvy in an ever-changing economic world.     Once Upon a CompanyOnce Upon a Company by Wendy Anderson Halperin - $2.33 (ages 5 and up) When seven-year-old Joel and his sisters Kale and Lane were at a loss for “something to do,” their mother suggested that they make and sell Christmas wreaths so they can start earning money for college. With the help of family and neighbors, the College Fund Wreath Company was born and eventually branched off into another thriving business. This true story is narrated by Joel himself and chronicles what he and his siblings went through to get their business from start-up to success.       Common Sense Business For KidsCommon Sense Business for Kids by Kathryn Daniels – $8.06 (ages 10 and up) In a hilarious take on how essential common sense is for entrepreneurs, the book’s cover shows a kid selling ice-cold lemonade in the middle of winter. As expected, nobody is buying. The chapters are filled with stories and illustrations, including topics like what types of businesses are likely to be successful and dealing with employee relationships.       Cool Jobs for Kids Who Like KidsCool Jobs for Kids Who Like Kids: Ways to Make Money Working With Children by Pam Scheunemann - $25.65 (ages 8 and up) This is one of the books in a series of “Cool Jobs” for kid entrepreneurs with various hobbies. Other titles include cool jobs for: “Young Entertainers,” “Yard-Working Kids,” “Young Pet Lovers,” and more. All projects have been kid-tested, complete with a step-by-step guide. This is ideal for younger children who want to keep busy for the summer.       One Cent, Two Cent, Old Cent, New CentOne Cent, Two Cents, Old Cent, New Cent: All About Money (Cat in the Hat's Learning Library) by Bonnie Worth - $8.09 (ages 5 and up) “I’m the Cat in the Hat and you know something funny? We’re about to have fun learning all about money! Where does it come from? Can you answer that, please? I will give you a hint: It does not grow on trees!” This is a trivia-infused introduction to the history and value of money that kids as young as five will be able to grasp. Among topics covered are bartering, forms of money in different cultures, and the minting of coins.       Jackie and the DreamstalkJackie and The Dreamstalk by Duane C. Wilson - $9.80 (all ages) Jackie is a young girl whose family has fallen on difficult times. When she steals a can of beans for their supper, she sets off a string of events that will change all of their lives for the better. This inspirational tale will show children the power of turning a dream into a reality, one step at a time—exactly what an entrepreneur needs to start a business.       Alexander, Who Used to Be Rich Last SundayAlexander, Who Used to Be Rich Last Sunday by Judith Viorst – $7.94 (ages 4 and up) When Alexander’s grandparents gave him a dollar last Sunday, he discovered that there were so many things he could buy with it. But uh-oh! His money began to disappear sooner than he could keep track of. This is a wonderful tale to read to your little ones so they’ll understand the concept of saving and self-control, so next time you’re at the toy store, it will be a different conversation (wink!).     Ballooning Nest Eggs contributor Alpa Patel found three more books to add to your must-read list!   Lemonade in Winter: A Book About Two Kids Counting Money by Emily Jenkins – $13.23 (ages 2-7) Two siblings, Pauline and John-John, decide to start a lemonade stand in the middle of winter.  Despite the cold weather, the brother-sister duo forge ahead with their plans and set up and sell their product on the snowy sidewalk outside of their home. Follow along and help your own kids count the money after each sale and determine profitability.       The Toothpaste Millionaire  by Jean Merrill  – $6.29 (ages 10 and up) Sixth-grader Rufus Mayflower decides that toothpaste costs too much, so he starts his own toothpaste making business with the help of his friend.  Soon, he’s developed a million dollar business.  On top of entrepreneurship, kids find primers on math, finance, and even advertising.  And you’ll enjoy it as much as your kids.       Even Aliens Need Snacks Hardcover by Matthew McElligott – $6.29 (ages 4-8) A young chef with unique recipe concoctions discovers that his food is more popular with aliens than with humans.  The weirder the ingredients, the better.  This book offers colorful illustrations for the younger kids to explore the basics of starting a business and finding the right customers.
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Giving Inc. Vs Getting Inc.
When kids go into business together—and actually turn a profit—do you encourage them to keep it or give it to charity? Here’s how two 8-year-old friends decided what to do with the cha-ching from their T-shirt business.    Most times, when kids start a business, you don’t need to give much thought to the money they make. After all, roadside lemonade stands aren’t putting Pepsi out of business and backyard puppet shows don’t have the Man of Steel quaking in his cape at the box office. But when young entrepreneurs do launch a business that pulls down some serious cash, do you let them pocket it or urge them to do good by giving the money to a deserving charity?   Such was the quandary for Hank Whalen and his best friend, fellow 8-year-old Evan Eberle. The pair’s T-shirt company—which featured the positive message, “Don’t Go Below Zero”—was founded when their respective families were dealing with serious illnesses at the same time. Hank wanted to donate all proceeds to pancreatic cancer because his grandfather was diagnosed with the disease last year. Evan, on the other hand, wanted to deposit the funds and build wealth.   Both are respectable, important objectives, so for a solution we turned to Cindy Senning, EdD, great-granddaughter of Emily Post and the director of the Emily Post Institute in Burlington, Vt. “Similar to what adults do, it’s okay for kids to donate a percentage of their business income to charity and use the rest to pay expenses, put into their savings account or spend on something special.”   In the end, Evan came around to thinking that donating a portion of the profits to charity was the thing to do. But the initial impasse pointed to what time has proven:  Hank and Evan make good business partners because they complement one another. Hank has a generous heart, while Evan has the instincts to turn a profit and build a successful T-shirt empire.

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If your little money-makers are still resistant to giving some of their hard earned ba-bling away, try getting them involved in picking the organization they want to support, suggests Senning. “Encourage kids to go online and explore places that are relevant to what is happening in their life,” she says. “Teach kids how to research groups that aid children who want to play soccer in third world countries, for instance, or point them toward animal shelters if they love and can relate to animals.” Or tell them about World Bicycle Relief, a group that provides bikes to people in rural areas of Africa where two-wheeled transportation is a lifeline to clean water, education, healthcare, markets and jobs.  Kids get  the benefits of “bike riding” because it’s fun and something they do every day.   Convincing children they should give back has life-long benefits, says Katy Shamitz, partner, Skills for Living in Norwell, MA. “The amount you teach kids to give to charity varies from family to family, but it’s important to build in the concept of giving from an early age,” says Shamitz.  “In the long run, kids feel like they’ve contribute something meaningful.  It also sets up a positive habit for life.  Kids are natural helpers, and teaching them to help financially empowers them.”   Philanthropic work is also the basis for building character, something parents want to instill in their children.  “The act of giving from your business teaches kids to respect for others, which, in turn, builds self-respect,” says Senning.  “It also gives kids a chance to create non face-to-face relationships with other people across the nation and the world, which is the foundation of good manners and etiquette, and being a good person.”   Here are more tips for getting your budding business executive to give:   1.  Break it Down.  Suggesting that kids donate 10 percent of net profits to charity is a great place to start. Use simple math, such as $10 for every $100 earned goes to a charity of choice.  Increase or decrease as the business grows or declines.   2.  Guide by Age Younger kids will do better with limited, action-oriented choices.   For example, set aside a certain amount of the profits to buy groceries and then drop off those groceries together at a food pantry.  “This way, kids can ‘see’ and then ‘do,’” says Shamitz.  “Make donations a regular part of your family routine versus a big ‘hurrah’ moment of self-congratulation.”   3.  Point to Other Successful Entrepreneurs.  Show kids how billionaire Bill Gates donates his time and money to the Bill and Melinda Gates Foundation, which believes every person deserves the chance to live a healthy, productive life.  This could also inspire kids to create their own fund to support different causes each year or a single mission that’s a personal passion, such as rescuing endangered species.

  4.  Suss out Charities.  In addition to letting kids pick their favorite charity, encourage them to research different organizations and determine if they are legitimate.  Kids can link to CharityNavigator.com to find trustworthy philanthropic groups.     5.  Make it Timely.  If an ongoing effort is too much, help with natural disaster relief efforts like those for Hurricane Sandy.  Or, determine “all proceeds this month” go to certain current events, such the One Fund in Boston to support the Boston Marathon bombing victims.  “Kids can be bothered by what they hear on the radio or see on television, and rather than be bothered by something, take action,” says Shamitz.     6.  Instill Business Acumen. Even though kids are giving money away or fundraising for a cause, they still have a business to run and expenses to pay.  Teach kids the nuts and bolts of running a successful business, so in the end, they have more to give.   How do you teach your kids to give?  Join the conversation at Facebook....      
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Kids & Money Confessions
As parents and relatives, we say some pretty wacky things to our kids about personal finance and economics.   In many families, when it comes to kids and money, the dissembling starts early on. We say: Stash a tooth under your pillow and a fairy will leave you cash. Go ahead and pick up a penny found on heads, but shun one that’s on tails. Behave, and Mommy will come back to the store to buy you that eight-foot stuffed giraffe, but for now, stop whining.   If you’re guilty of similar untruths, you’re not alone. In fact, 84 percent of parents in the United States lie to their children, according to a study published in the International Journal of Psychology. The top three things parents lie to their kids about: food, misbehavior and, you guessed it, money.   When adults stretch the truth, we land in some funny situations. “I’m constantly telling crazy stories to my kids about money,” says Terry Oller, a mom of four and a nurse in Wayne, NJ. “They have no concept of what it is, how you get it or why I’m not wiling to spend it on every little thing that catches their eyes at the mall. So I’ve said you can’t pay for things like ice cream, candy, Legos or Pokemon cards with a credit card—only cash. And, darn, Mom has no cash.” Which worked just fine until Grandpa took everybody to Dairy Queen and took out his Visa to pay the bill for a round of Sundaes. “My oldest, who was five at the time, starting crying and said, ‘Oh no, Pop-pop, you can’t pay with that. What are we going to do?’,” says Oller. “I was totally busted—by both my kids and my dad.”   When talking to kids about personal finance, their nest eggs or other money matters gets tricky—or you simply get sick and tired of explaining the perpetual “Why?”—it might ease your mind to hear funny tales from others who haven’t exactly been upfront about money matters. So we asked staffers, family and friends to share.   Here’s a roundup of their confessions:   Airing the dirty laundry.  Justin Lyons, founder of the blog Why Is Daddy Crying, has spent a fair amount of time instilling the value of saving in his son and daughter. “I guess like any good parent does,” says Lyons. But when he accidentally washed his son’s iPod Touch while doing the laundry, he used the you-should’ve-taken-better-care-of-it line. “You can imagine how this crushed the 10-year-old’s world,” he says. Regardless, Lyons told his son he wouldn’t buy him another. Fortunately, his son had money at the ready to replace it and he was savvy enough not to pay full-price; he bought a refurbished used iPod, saving more than half of what a new one costs. And  Lyons is willing to own that fact. He takes full credit for his son’s impressive financial independence.   Piggy bank; what piggy bank? When the 4- and 7-year-old sons of Sara Eberle, host of the weekly radio show MommaJam and Ballooning Nest Eggs contributing writer, receive cash gifts (whether $1 or $20 bills), she confesses, “I stash the bills in my top desk drawer and recycle the money to pay for their chores or for things like the vending machine at their sports activities. I've even been known to tip the pizza delivery guy with it.”  The  busy mom feels like she’s getting twice as much out of the money this way. The kids don’t ask where the cash goes, so I don’t tell.” At least for now. “Shhh,” she says, “don’t give my secret away!”   It’s not on the list. Denise Davis, the mother of 4- and 1-year-old daughters, who blogs about living frugally at Go Cheap Or Go Home  plans weekly menus for family meals by starting with what’s available in the pantry. Then she makes a grocery list and takes her kids to the store. She makes fast work of the shopping by whizzing through the shop with her prompting: “What’s next on our list?” Unlike other moms who spend more than planned on the extras that kids toss in the cart, Davis gets only what she set out to buy. Her secret? When the kids ask for whatever they crave, she just says to them “It’s not on our list, honey.” Now her eldest daugher doesn’t ask her to buy things; instead, she asks, “Mommy, can we put this on our list next time?” At least until they learn to write, her list is safe.   It’s illegal to buy Play-Doh on Tuesdays. “When my son was a toddler, he was obsessed with Play-Doh,” says Teresa Palagano, editor of Ballooning Nest Eggs. “Which was great creatively, but not so great when I started finding magenta-colored mounds of it smashed into the carpet, matted into the dog’s fur or dried clumps of it on cloths pulled from the dryer. So when we were at a store and he spied some, I explained that we couldn’t buy it because it was against the law to purchase Play-Doh on Tuesdays. And today was Tuesday—every time he asked for more.” Several years later, the phase had passed, but his memory of the law hadn’t. Palagano and her son were shopping for a cousin’s birthday present. “I had totally forgotten about my little white lie,” she says. “‘Hey Mom,’ he reminded me, ‘We can’t buy Erica Play-Doh. It’s Tuesday.’”   “Sure I could’ve come clean about the whole thing, but I just said, ‘Thanks for reminding me’ and bought a paint set instead.   Mommy needs a manicure. When Mary O’Rourke, a nurse based in Wyckoff, NY, was raising six teenagers, she did all she could to teach them to be respectful and responsible. Any time one of her teens broke a house rule, he or she had to take money from their allowance and pay a “fine” by placing money in a large vase O’Rourke kept on the dinning room table. Once the vase was filled to the brim with their fine fees, she told the kids she donated the funds to a worthy charity that helped the needy. The anonymous charity? A session at the nail salon for O’Rourke and her friends.   What are some your best money “confessions” when it comes to your kids?   Don’t worry, we won’t tell! Join the conversation on our Facebook page
 
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What is Health Care Reform
The Affordable Care Act or "Obamacare" kicked into full gear earlier this year.  With all the often conflicting news coverage surrounding it, even the most up-to-date adults are having a hard time keeping up with developments.  While it’s still too early to determine its success or failure, it’s not too early to explain to your kids how this affects their lives.   Here Ballooning Nest Eggs contributor Helen Jonsen explains how to provide simple answers to complicated questions:   You might think big concepts such as “affordable health care” and “constitutionality” wouldn’t weigh heavy on little people. But kids are sponges and they absorb all sorts of media headlines—often worrying about what they don’t fully understand. Health care reform has been in the headlines since Congress passed the Affordable Care Act in 2010.  Now that coverage has begun and health care is all over the news again, kids may have more questions or concerns than ever.   Being insured means a lot to families. It affects family finances both in planning for insurance and in dealing with an unexpected health crisis. What can you tell kids if they ask what’s the flap about? Or, more importantly, how can you put their enquiring minds at ease?   What is health insurance? Before you get sick, you buy what is called insurance. You pay a company that collects a big pool of money from lots of people to help pay your doctor’s bills for check ups, medical tests and hospital stays. Insurance is a way of preparing for the what-ifs in life: What if you break your arm? What if your sister needs an operation? Since not everyone gets sick at the same time, the pool of money from everyone covers the costs of those who need it without the sick person having to pay the full cost of that bill.   Still too complicated? Try this analogy: We’ll call it The First Aid Kit example. You and your friends are going on a hike. Sometimes, when you are in the woods someone gets a cut or a scrape and may need to use a first aid kit. But, you have no idea which one of you will get hurt. Instead of everyone carrying their own stuff, you all chip in a dollar to buy what you need—Band-Aids, first aid cream and bug spray. You now have a box of 100 sticky bandages that each of you chipped in for. Not everyone will need something from the kit but you’ll have it ready for those who do.   How is our family insured? America has two kinds of health insurance: Public, where families who don’t have much money and the elderly are covered; and Private, in which companies or individuals buy insurance coverage. A lot of insurance is part of someone’s job benefits. You pay for it out of your paycheck. It’s the most affordable insurance you can have for your family. Other families buy insurance directly from big companies. This can be very expensive. Because it costs so much money, some people can’t afford insurance and don’t buy it. They hope nothing will go wrong. In that case, if they get sick or hurt they either go into debt, can’t get the help they need or they have to depend on the government for help. That can make the cost of health care more expensive for everyone.   What is the Affordable Health Care Act? On March 23, 2010, the Affordable Care Act became law. The hope was this would help everyone have health insurance. There are a bunch of rules that would make it easier for families and people to pay for insurance so that they wouldn’t have to take a risk and hope they don’t get sick.   However, opponents of the Act turned to the United States Supreme Court to challenge its constitutionality.  On June 28, 2012, the federal courts upheld the constitutionality of the law under Congress's taxation powers.  Of note, the Court determined that states could not be forced to participate in the Medicaid expansion.   Phase in of coverage began in January 2014.   Many of the changes will take place over time.  (For a complete timeline of those changes click here at healthcare.gov.)   Can everyone get insurance? Before the Affordable Health Care Act, every state had its own laws allowing insurance companies to decide who could be insured. Here’s an example: Mom or dad were working for a company and used their insurance plan. One of the kids in the family had asthma. But mom lost her job with “Company A” and got a new one at “Company B.” In some states,“Company B’s” insurance might not cover a “pre-existing condition”–meaning a person who was already sick could not get insurance money to pay their bills. So the child with asthma would be left out of the plan. That can cost a family a lot of money because they are already paying for insurance, plus they have to pay for the doctor bills for their child who has to get medicine and extra doctor visits to take care of the asthma.   But isn’t that what insurance is for? Yes, and that’s why under the Affordable Health Care Act insurance companies can no longer do that.   How does insurance affect family finances? Each month, a family needs to pay a certain amount for insurance and set aside money for what else health care might cost that month. They may consider how many kids are in their family or how often they may get sick with strep throat or something else. That will cost money, even though the family has insurance. It may help pay for the doctors and x-rays but mom or dad will have to pay what is called a co-pay right then and there. For an emergency room visit it can be as much as $100. Now, $100 is not much when the x-rays and all may cost as much as $1,000, but it’s still $100. That might mean the family can’t afford to throw a birthday party for one of their children that month or they have to cut back on the groceries they buy.   Who has to buy insurance under this new reform? According to the government’s official web site (health care.gov) “starting in 2014 most individuals who can afford to do so must be enrolled in a health insurance plan. If you don’t enroll, you may be required to pay an assessment. You won’t have to pay an assessment if coverage is unaffordable to you, or for other reasons including religious beliefs.” This is one part that The Supreme Court is thinking about.   Why did the Supreme Court get involved? Under the Affordable Health Care Act, every adult who can take care of his or her self must be insured. It’s called the “individual mandate.” The reason: It goes back to that first-aid kit. If everyone chips in, you have enough money to make sure there are bandages and cream for anyone who gets hurt. If one hiker says he won’t pay but ends up needing bandages, what do you do? If you let him on the hike, does he get a bandage when he gets cut? Is that fair?   Well, right now, some people are willing to take that same risk. They don’t buy insurance. But when they wind up in the emergency room, they expect to be cared for anyway. Sometimes they can’t afford to pay the bills. Then, in a sense, we all pay because our insurance rates go higher so there is more money in the pool to cover everyone. Sometimes, our taxes go up to pay for these costs.   Still, some states and lawyers believed that according to the Unites States Constitution we cannot be forced to buy services from private companies (like insurance companies). This is a “free country.” And as a country we believe in many individual rights. As citizens, however, there are things we have to do: We must pay taxes to the government on our paychecks, on many of the things we buy, and on much of the property we own.   What’s next? After early website woes last October, enrollment numbers are steadily climbing.  At the end of January, almost 3.3 million people were enrolled in private health insurance under Obamacare.  This reflects a January gain of 800,000 enrollees, or 36%.  Approximately 2.2 million had enrolled during the initial October 1 through December 31 time period.   A challenge to Obamacare is to get large numbers of healthy people and young people paying into the system to offset the medical costs of the sick and elderly.  The penalty for skipping coverage this year is just $95 and many healthy people might forego the monthly premiums and pay this nominal fee.   Also, since states are not required to expand their Medicaid coverage, twenty-four states have not done so, thus creating a coverage gap where nearly five million people ages 18 to 64 earn too little for subsidies and are ineligible for Medicaid.  This will create added costs for the federal government or/and individual states to subsidy this gap.       Do More: Big ideas like these playing on your child’s mind may require a don’t-worry hug from mom or dad. But the conversation can open all sorts of doors for on-going learning together. * What is the Supreme Court? Find out more about the Supreme Court here. * Why not track this decision—and maybe others—before the Supreme Court? Ask your child how he or she would solve this problem. * Act out a mock trial with your family over the issues. Just don’t fight over who gets to play the Chief Justice. * Discuss: Should the government/hospitals be required to cover everyone who comes to an emergency room, even if that person doesn’t have insurance coverage? * Discuss: Do you think it’s fair for the government to require adults to buy health insurance, even if they don’t think they’ll ever need the insurance?
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