Friday, December 20, 2013

How to Cut Umbilical Cord Stem Cell Costs

Cord blood is the stem cell rich blood that remains in the umbilical cord and placenta immediately after the cord is cut and the baby is born. Umbilical cord blood could be used as part of a therapy associated with many cancers and blood disorders.

Approximately 10,000 patients annually are in need of stem cell therapy. But 70% of these are unable to find a donor that matches their blood. Your child's cord blood would provide a perfect match. It could also benefit a sibling, grandparent, relative or even you, as the odds for finding a match are much higher.

Freezing these cells provides a form of life insurance for your child and your extended family. You may be asking, how much does this life insurance cost, will we benefit, and can I reduce costs in any way?

How Much Does Stem Cell Storage Cost?

The average cost quoted by the leading blood banking companies combines an upfront fee, along with smaller annual storage fees, and other miscellaneous charges. The average upfront fee ranges from $1,000 to $2,000, and the annual storage costs range from $100 to $150.

Will We Benefit From Stem Cell Storage?

Banking your baby's stem cells gives you a sense of security. If your child or family member becomes seriously ill, the stem cells may help them get well again. For many couples, this amounts to pure guesswork: will somebody get sick, and will the science advance enough to make a difference? Nobody knows for sure.

Couples with a family history of cancer and/or blood disorders are most likely to benefit. Their family history suggests that one or more family members may face this in the future. Stem cells show the most promise in treating these disorders.

How You Reduce Costs

For couples who want to freeze their baby's stem cells "just in case", the answer is: shop around. For couples whose child, and/or immediate family member is currently battling cancer or a blood disorder, the answer is: take a tax deduction. The IRS allows cord blood banking fees to be deducted as a medical expense, provided the banking is needed to treat a specific medical condition.

The same rules apply for your Flexible Spending Account as well. Only there are three distinct advantages to using your FSA, rather than a deduction on your 1040.

  1. The IRS imposes a medical deduction hurdle of 7.5% of your Adjusted Gross Income (AGI). A couple with an AGI of $100,000 gets no tax savings on their first $7,500 of medical expenses. A Flexible Spending Account has no such hurdle. You get tax savings on your first dollar of expenses.

  2. A Flexible Spending Account allows you to avoid FICA (7.65%) tax on your stem cell storage fees. That translates into $150 in extra savings on a $2,000 fee.

  3. A Flexible Spending Account allows you to pay your entire stem cell storage set up fee on the first day of your Flex plan year. You have 52 weeks to pay your employer back by payroll deduction. It's like getting an interest free loan from your employer!

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