Wednesday, December 31, 2008

So, what if Bush had gotten to "privatize" social security?

So, where would we be now if we (as American society) had taken up George W. Bush and the “neoconservatives” on social security reform?

I won’t get into the debate on when the trust fund runs out, other than to say that there could be future pressures to means test benefits and reduce benefits, even for some existing beneficiaries. It’s even possible that family law revisions could reduced benefits for retirees, although, ironically, the “conservative” movement in many states to limit the definition of marriage and particularly hinder the concept of domestic partnerships or economic sharing (however detrimental to LGBT families) could (very ironically, again) actually protect the financial independence and even benefits of some people. This (as I think John McCain once said) is more complicated and trickier than people think.

But what if we really had converted part of social security to private accounts? Besides the accounting bridge problem, we would have, according to naysayers, had a catastrophe because of the financial collapse in the markets this fall. Well, not so fast. Had this been done starting with younger workers only, they could use dollar-cost averaging and in the long run should be fine. Furthermore, the investments allowed in private accounts for social security replacement could have been regulated (the big bad R word). Many riskier investments could have been prohibited, but it’s still true that many reputable companies that would normally belong in a privatized retirement portfolio have been hammered and are getting government bailouts.

Monday, December 29, 2008

More references on home health, hospice; introduction to "OASIS"

Today, I’ve looked through some more of the informal Internet literature on both hospices and home health.

Some visitors may want to take a look at the “Hospice Blog” for stories about the complicated ethical and financial issues within the hospice industry (there’s not too much names-naming). One particularly interesting story appeared back in March 2006, to the effect that players in the hospice industry distance themselves from “home care”, which the article says is a totally different “mind-set”. The story makes an interesting comparison between “The National Hospice and Palliative Care Organization” and “The National Association for Home Care and Hospice”, blog entry is here and the visitor can judge for the self.

Visitors may want to explore the arcane legal cases on the “Home Care Law Blog” run by Gilliland and Markette, LLP in Indianapolis.

There is a site “Home Health Care Tips” that has a sobering article on the impact of eldercare on other family members. For example, “Many family members take loans, skip vacations and often ignore their own health. Government must start providing tax deductions and tax credits to family caregivers.” That’s true, but we’ve been delving into the little understood problem of filial responsibility on this blog for two years. This question cuts all the way to the bone on our society’s assumptions about interpersonal responsibility and how it gets generated. The article gives a link to another article on the same site, “how to find the right home health care agency.”

An RN (BSN PHN) named Kathy Quan has a primer site on home health care here.

Users will want to become familiar with a concept called “the Outcome and Information Information Set” (OASIS) that is used to assess adult home care patients and evaluate the success of care (“outcome-based quality improvement”, OBQI). A good place to start is a Health and Human Services, here.

Sunday, December 28, 2008

Seniors often remain unmarried to keep social securtiy, pensions intact; new "amendments" in FL, VA could hurt them

The Jan. 13 2009 issue of the gay magazine, The Advocate, points out an interest observation for all seniors in the article on p 36 by Julie Bolcer, “The Long Arm of the New Laws”. In Florida, where voters passed a state constitutional amendment buttressing the ban on gay marriage, the constitution contains a provision that bans arrangements among unmarried people that simulate the benefits of marriage. The same concept was passed in Virginia in 2006.

The problem is that many heterosexual elderly couples meet in Florida and would marry, but do not for fear of loosing deceased spouse’s pensions and, particularly, social security benefits. This could happen when there was only one “number holder” in the marriage (often where the wife was a stay-at-home mom, which was more common in earlier generations than it is now). That could lead to serious issues, for example, with hospital visitations and many other situations later.

Generally, law firms and responsible financial service companies have been critical of “social engineering” laws or amendments which often have unintended consequences for populations not targeted by the law or constitutional amendment.

Thursday, December 25, 2008

Teen nursing home volunteer communicates what is needed

I thought I would pass along a reference to a story on Good Morning America this morning (Christmas Day) about a 14 year old girl who volunteers in a nursing home in upstate New York. The story, “Teen Brings Pajamas, Caring to Elderly; To These Nusing Home Residents, 'Christmas Is Corissa'”, by Brian O’Keefe, has this link. The young woman refers to the fact that many of the residents’ “whole lives revolve around what is happening now” because of dementia, which may result from Alzheimers or from heart-related problems. The story says “she brings happiness to the moment.”

I did volunteer as a “baby buddy” during the HIV epidemic in the gay community in the 1980s, but the explosion of needs this time, twenty years later, takes on a totally different aspect that is very difficult to deal with.

Wednesday, December 24, 2008

ING takes on major contract administering Minnesota retirement plans

Many international financial institutions have taken huge losses in capital and stock prices and had to get capital infusions from governments. But some are getting back to more like business as usual.

The Dutch financial giant ING, which accepted an investment from the Dutch government in October and posted its first ever quarterly loss, has been selected by the State of Minnesota to manage its 457 deferred compensation plans, mainly to provide retirement income and health care for state employees. ING will also administer the State Health Care Savings Plan, the Unclassified Employees Retirement Plan and the Hennepin County Supplemental Retirement Plan. The specific division is the ING Institutional Plan Services Group, of ING-USA. The press release was made on Nov. 25, 2008, link here.

Tuesday, December 23, 2008

Home health, assisted living companies are very pro-active

Here is a general note on eldercare facilities. There are a number of companies (like “A Place for Mom”) that facilitate arranging of services for the elderly or disabled, including home health visits and placement in assisted living or nursing homes.

Typically these companies are fairly pro-active. They do call back, and the associated home health or assisted living providers do referred clients back fairly quickly. Probably some commissions are involved, and a job in placing services with clients certainly requires unusual empathy and listening skills in telephone conversations. That’s well to bear in mind, as there may be more of these jobs available in the future in an economy that as a whole is shrinking. Personal care jobs (and the business associated with them) cannot be offshored or outsourced.

Many home health companies have weekly hour minimums (and minimum length visits, often four hours), but some have no minimums.

As noted yesterday, the financial health and labor supply for these industries are going to remain significant issues for those facing eldercare responsibilities. The incoming Obama administration ought to pay attention to eldercare as part of health care reform, even though custodial care is usually self-paid (or sometimes Medicaid paid).

Monday, December 22, 2008

Assisted living centers feel financial crisis; Sunrise downsizes

Assisted living facilities are feeling financial pressures, largely because seniors may be having more trouble selling their homes for acceptable prices in order to move in. They may have to lower rental prices, and take on more debt to keep operating.

Similar pressures may be affecting other family members, who may need to live with seniors who have a harder time selling.

Normally, one would expect tremendous demand for assisted living facilities, given demographics. But because they are “self-pay” and cost so much to operate (especially since they are labor intensive) they are having difficulties nevertheless.

The Washington Post Business section today (Dec. 22 2008, section D) has a story about Sunrise, a large company with many assisted living apartment communities and even condos, and some overseas operations. Major accounting problems have occurred. A story by Michael S. Rosenwald, “Sunrise Hopes Dawn is Near: Firm’s troubles grow as economy outs pressure on assisted living”, link here. The article indicates that a bankruptcy filing could happen, but some other form of debt restructuring is more likely.

I have seen the inside of a Sunrise facility (back in 2000). The apartments, which may go up to two bedrooms, still are very small, with the emphasis on public areas. Some properties have signs offering a special units cluster or place for Alzheimers patients.

May 4 2009

Sunrise offered a report on its downsizing (or restructuring) plan, here.

Update: Oct. 16, 2009

Media sources report that Sunrise Senior Living has sold some properties to an affiliate of Brookdale Senior Living. A typical story is in the St. Louis Business Journal, Oct. 9, 2009, link here.

Friday, December 19, 2008

Employers reduce 401K matches: even defined contribution programs are in some peril

Many employers are cutting back on their 401K matches during this latest recession, according to an ABC News story by Scott Mayerowitz, ABC News Business Unit. The title is “Companies Cut Employee Retirement Plans: In This Recession, Some Companies Eliminate Their 401(k) Matches”, the link is here.

Employers have stopped or terminated defined benefit pension plans and replaced them with 401K plans with matches. Now, many of them are eliminating the matches to save money, at a time when demographers say that people need to save 18% (including 401K matches) of their income in order to be able to retire reasonably, including social security.

Some of the news has come from the Vanguard Center for Retirement Research. While I could not find the latest item on 401K matches there, I did find a PDF testimony by Managing Director R. Gregory Brown submitted Oct. 21, 2008, submitted to the House Education and Labor Committee, “The Impact of the Financial Crisis on Workers’ Retirement Security,” here, which makes the point that defined contribution programs have become a cornerstone of American retirement security, and now even these are threatened.

Tuesday, December 16, 2008

Pension Plan Funding Relief passes both houses of Congress

Both houses of Congress have passed the Pension Plan Funding Relief Act of 2008 (also called the Worker, Retiree and Recovery Act of 2008, HR 7327, here). The law will reduce penalties for premature withdrawals from IRAs and 401Ks during 2009, and will relax the funding requirements for pension fund sponsors. The earlier concern was that stricter accounting standards could push some defined benefit pension plans into default and place greater strain on the Pension Benefit Guaranty Corporation (PBGC).

The Society for Human Resource Management (SHRM) has a story by Bill Leonard on the passage of this bill today, here.

A report by by Alicia H. Munnell, Jean-Pierre Aubry, and Dan Muldoon IB#8-18 of the Center for Retirement Research at Boston College “The Financial Crisis and Private Defined Benefit Plans” reports “Between October 9, 2007 and October 9, 2008, the value of equities in retirement plans dropped by about $4 trillion, with the decline divided equally between defined benefit and 401(k)/Individual Retirement Accounts (IRAs).” The link (leading to a full PDF report) is here. According to Leonard, the loss in corporate pension plans during this period was $900 million (but looking at the report, it might be as high as $2 trillion). Many plans had actually made money in 2007, as the crisis started to unravel.

There is an earlier story on this Act on this blog Nov. 12, 2008.

There is a detailed posting on this blog dated Sept. 16, 2008 explaining how PBGC really works.

Monday, December 15, 2008

AARP has stories on senior employment, unemployment

The American Association of Retired Persons has at least two major articles on senior employment and unemployment in Dec. 2008.

Cathie Gandel has a story in the print version, p 19, “May I Help You?” about the employment of seniors in retail, and that retail employers tend to like older workers because of their social skills. One person worked just as a greeter.

But Danielle Holland and Alejandra Owens have an article “Consistently Growing Number of Unemployed Workers Heightens Need For Immediate Response To Dire Economic Times”, dated Dec. 5. In 2008 workers 45 and older have seen a 55% increase in unemployment as usually counted, and workers over 55 have a 65% increase. Older workers may be perceived as “overqualified”. But as baby boomers retire, there could be sudden shortages in many niche areas of expertise, like mainframe programming. Socially, seniors in the workplace, particularly in education, can help provide a sense of historical continuity and perspective for younger people, bringing real world perspective into the classroom. The link is here.

Thursday, December 11, 2008

Bailout culture, entitlements, and filial piety

Ken Blackwell, of the Family Research Council (yup!) has a no-holds-barred commentary on p A21 of the Washington Times today (Dec. 11), “The looming retirement meltdown: On the road to bankruptcy”. The link is here.

He describes the “bailout culture” as “completely out of hand”, having added an average $15000 debt to every American. And he warns that all “long term entitlements” – Social Security, Medicare, and Medicaid” are underfunded by $40 trillion and that eventually huge benefit cuts even to existing retirees are inevitable.

Of course, look at the source. The writer looks forward to the return of a culture where people are circumscribed by the opportunities within their own biological families. A collapse in entitlements (most of all Medicaid) would likely return to the enforcement of filial responsibility laws or the Chinese concept of “filial piety” which would hit the people who did not have their own children particularly hard. I’ll just connect the remaining dots, Ken.

Wednesday, December 10, 2008

PBS Frontline: Baby boomers can't retire (we've defined retirement out of existence)

Some PBS stations are rerunning a stinging segment “Can You Afford to Retire?” They’re saying at the end, “the baby boomers will keep their standard of living if they keep working.” Then they ask, what does retirement mean? We’ve defined retirement out of existence (just like marriage).

What's particularly disheartening is that boomers might expect to work at their passion in retirement, but have to give it up to make ends meet of their "passion" doesn't pay returns quickly enough.

The earlier part of the program showed the United Airlines bankruptcy, and how much of its pension obligations were put on the government, specifically the Pension Benefit Guaranty Corporation, or PBGC. A worker who had retired at 53 was facing a drop in his pension from $3000 to $2000. Bankruptcy judges have the authority to take it out on employees and sometimes retirees, who may not get their full amount from the PBGC. Many companies have underfunded pensions, and have counted on stock market advances (no longer) and accounting tricks to get away with.

The show went on to discuss the shift from defined benefit pensions to defined contribution programs, notably 401K’s, which became popular by accident. 401K’s were originally envisioned as a technicality in tax law for executives. No one imagined that employers would use the 401K, even the match, as a way to terminate defined benefit pensions. No one imagined that employers would expect employees to manage their own 401Ks (the ownership society). So some employers were starting to make attendance at HR 401K sessions mandatory.

The average contribution would need to be about 18%, including employer match, to provide the same standard of living in retirement. Most people have a contribution of 10% or less.

Tuesday, December 09, 2008

Faith-based communities are available to seniors, but with more rules

The Health Section (F) of the Tuesday, Dec. 9, 2008 Washington Post is titled “Aging Well.” A banner underneath says the percentage of the population 65 and older will increase from 12.4% in 2000 to 19.6% in 2030. But the section talks about keeping independence.

A couple of stories really do catch the eye.

A story by Benjamin Opipari, “Fast Mom Faster” tells about a 30 year old man who trains his 60 year old mother to become a competitive runner.

But the most interesting story from my perspective was by Emily Langer, “Home but Not Alone”. This concerned a senior residential community called ElderSpirit in Abington VA. The link, with online slideshow, is here.

The mixed ownership and rental community had an origin with a group of Catholic nuns after World War II. What’s interesting is the rules. Some of them sound familiar. Each residential unit must have an independent person over 55 and no one under 40. But what’s interesting are these provisions: “Residents should be committed to following the ‘values’ spirituality, mutual support, service, simple lifestyle,…” and “Residents must not pose excessive risk to themselves or to others.”

It’s understandable that a faith-based group will be more selective about who lives in a community and the behaviors allowed than the general commercial market. I don’t know what the “excessive risk” refers to, but it might include Internet self-promotion, which sounds like a disturbing precedent. The values of the people who live there are quite communal, according to the report.

Monday, December 08, 2008

Red wine, even marijuana, may help delay Alzheimer's

Atlernet has an important story this morning (Dec 8) about Alzheimer’s Disease by Tim Jacobs in Miller-McCune, “Attacking Alzheimer’s with Red Wine and Marijuana,” link here. The Ohio State study quoted in the article is here.

The Alternet article also discusses the benefits of polyphenols in red wine.

So there is some reason to think that vices, maybe even illegal ones, could be good for you, especially during aging. Is this any surprise?

I couldn’t find the “maryjane” or “reefer madness” article in Miller-McCune. But Mary Palmquist has an article Dec 2, 2008 in Miller-McCune, “Vitamin B3 Shows Potential as Alzeheimer’s Treatment,” link here, citing a study at the University of California at Irvine. .

Wednesday, December 03, 2008

Church ministries seem effective with Alzheimers: Duke University study

ABC World News Tonight has a story Dec. 3, 2008 about a community effort and ministry from the First Baptist Church at Jacksonville NC to counter Alzheimer’s Disease. The news story is by Steve Osunsami, “Church Community Fights Alzheimer's Disease: First Baptist Church Members Embrace Activities to Keep Mind and Heart Healthy”. The link is here. The church, looking modern, is heavily African American with an aging congregation.
The story discusses an emphasis on outdoor group activities and extending social contact and interaction. There is a lot of charismatic singing. Another measure has been learning Spanish or foreign languages. It seems that both structured intellectual activity (like language learning) and connective social activity may help stave off the development of disease. The church has worked with Duke University Medical Center on a five year project, and the program seems to be very successful.

The ABC story has some interesting sublinks to earlier stories, such as to one that babytalk is resisted by Alzheimer’s patients.

Tuesday, December 02, 2008

Disputes at MA senior housing complex: seniors need same lifestyle freedoms as everyone else

Some seniors (especially in “active senior” apartments or dedicated housing) are finding restrictions placed on their lives, incurring definite resentment. On the front page of the Wall Street Journal today, (Dec. 2, 2008) Philip Shishkin has an article “Crab-Apple Clash, Birdhouse Ban Pushed Seniors to Take a Stand; Rules at Housing Complex Created Activists; Fighting for Wind Chimes”, link here.

Much of the dispute concerned the desire for residents, in relatively small and cramped apartments, to keep some items on their patios, where the local (Shrewsbury, MA) fire department claimed that that residents were blocking safety access. However, management soon prohibited almost all items on outdoor areas, leading to resistance and attempted evictions, before management and fire departments backed down a bit.

Active seniors need the same amenities of their younger friends. This includes such items as reliable broadband, security, and full normal autonomy as tenants or residents in how they lead their lives, even publicly. It's a way of saying, everyone still needs "personal sovereignty." The article suggests that there were political battles over who determines the "rules" by which society protects seniors (from themselves). I can imagine more battles like this in the future.

Sunday, November 30, 2008

Some companies phase in retirement

The December 2008 issue of Kiplinger reports that some companies are offering “gradual” retirement. For example, Abbott Laboratories near Chicago has started a program allowing employees over 55 with ten or more years of service migrate to a four day week or take five extra weeks of vacation. They keep benefits (especially health_ but cannot start defined benefit pensions. They may be expected to mentor younger workers.

The story also appeared today on p F3, Personal Finance, in the Business Section of The Washington Post, Nov. 30, 2008, and is authored by Anne Kates Smith from Kiplinger Personal Finance.

The Kiplinger blog entry is here.

It has been common for some companies to allow retirees to come back and work part-time as consultants, sometimes but always allowed to draw pensions. Sometimes, in some organizations, receipt of pensions have been predicated on complying with non-compete clauses, such as those required for employment to begin with.

It's also possible for employees who have "retired" full time, which can mean stopping a pension. Curiously, in bad economic times, sometimes there are specialized projects that only previous employees (often seniors) understand well enough to do efficiently.

Saturday, November 29, 2008

Smart Money offers online reference guide on Alzheimers

Smart Money has a special report (online) on Alzheimer’s Disease, with the main link here. One of the major concerns in the report is that people who are gradually losing cognitive functions make poor investment decisions or fall for scams. The report contains a link to a story of a financial trader who actually suffered early onset Alzheimer’s and whose first symptoms were the inability to keep up with face-paced financial trading work.

The report contains a reference to a brief quiz of symptoms, which can include having trouble with “referencing time” and forgetting major tasks.

The site also offers a 5 minute video where managing editor Jonathan Dahl interviews CFP David A. Schneider (his "Wealth Management Solution" site is here) about managing the finances of someone with Alzheimer’s. Eventually over 11 million baby boomers could have Alzheimer’s. The law does not currently have a lot of recourse for bad decisions made because of dementia. Financial planners and tax preparers have to manage their interpersonal skills carefully when working with such clients.

Although the video does not say so directly, when a family member manages a patient’s finances, sometimes it is desirable to place the patient’s money in a protected trust. The visitor should speak to an attorney about his possibility.

Wednesday, November 26, 2008

More retirees have living parents; some risk their own retirement; a new crisis? Look at Blue Zones!

AARP Magazine has an online article “Are you risking your own retirement to care for a parent?”, by Martha Hamilton in “Your Financial Future” column, Sept. 24, 2008, here.

The article mentions a study by the National Alliance for Caregiving (NAC "Life Care") indicating an average of $5530 a year from adult child caregivers, with proportional burdens much greater in lower income families.

Increasingly, adults in their 60s, already able to retire (or at least start early retirement with Social Security) are caring for parents in their 90s, because longevity has radically and rapidly increased with medical advances (especially prescription medications and some surgeries) that notably prolong life but don’t always prevent clinical deterioration (such as frailness or particularly memory loss). This could cause a quickly ballooning financial crisis for retirees in the future that policymakers seem unprepared for now.

NAC has an interesting position paper on caregiving and the workplace, here.

Oprah Winfrey, on a show Nov. 24, examined “Blue Zones” including one around Loma Linda CA where seniors live even past 100 in good health with little loss of vitality or little need for care. One male surgeon was still practicing medicine at age 94, and Barbara Walters had earlier introduced a financial planner who was 94. In Loma Linda, many people were Seventh Day Adventists, who eat plant-food diets and who have very strong social ties compared to many mainstream Americans. The Blue Zones Community website has an article on the importance of social ties by Kathryn Savage, “
Love, Marriage, Friendship, & Your Brain", link here.

This is not good news for introverts.

Monday, November 24, 2008

Health Affairs study questions effectiveness of Medicare Advantage plans

The New York Times today (Nov. 24, 2008) has an important story on p B2 about “private Medicare” plans, generally called Medicare Advantage plans. The story is “Studies say private Medicare plans add cost, for little gain”, link here. The publication “Health Affairs: The Policy Journal of the Health Sphere”, has a three-part study with various authors called “Medicare Advantage Report Card,” link here (containing only abstracts; paid subscription is required).
The components are Medicare Advanatage Plans At A Crossroads--Yet Again by Robert A. Berenson and Bryan E. Dowd; Medicare's Private Plans: A Report Card On Medicare Advantage ; by Marsha Gold; Payment Policy And The Growth Of Medicare Advantage, by Carlos Zarabozo and Scott Harrison

The plans seem to have increased payments for enrollees without producing any savings for the Medicare programs. Many insurance agents are paid commissions to sell these plans.

See related story on this blog Nov. 19, 2008.

Saturday, November 22, 2008

Housing crisis slows ability of elderly to move into assisted living

Jack Healy has a front page story on the Nov. 22, 2008 New York Times, “Unable to Sell Homes, Elderly Forgo Move to Assisted Living,” link here. The article was references in a Times blog entry by Jane Gross, “Stuck at Home”. Many elderly people who want to move into assisted living are unable to sell their homes for enough money to afford assisted living, especially the entry fees. There doesn’t seem to be an accurate idea of the effect of the foreclosure crisis. They may remain in homes that are too large to maintain or dangerous to navigate without expensive retrofitting. That could cause other relatives, especially adult children and especially childless or unmarried adult children, to be pressured to move in with them, even of these adult children have suitable homes of their own, as I’ve pointed out before.

Assisted living centers find their waiting lists disappearing and sometimes have to return deposits when applicants are unable to sell.

Wednesday, November 19, 2008

SecureHorizons of United Health Care offers MedicareDirect

Secure Horizons of United Health Care recently did a mailing offering certain seniors. It lists the product as a MedicareDirect plan (with a service mark). The features include no additional premium beyond normal Medicare Part B, no annual deductible, no copay for a routine annual physical. The patient can choose doctors. But there is a caveat: not all doctors that the patient currently uses have to accept this coverage, except in emergencies.

I cannot find much about MedicareDirect on the web. What I do find is Medicare Advantage, discussed before, which is pretty much a replacement for Medicare plus the usual addons. For some people, Medicare Advantage, sometimes touted by sales persons from some companies, has not covered everything that Medicare would have covered.

The SecureHorizons plan for Medicare is as follows.

Wednesday, November 12, 2008

Employers want Congress to back off on Pension Protection Act of 2006

Major employers will lobby the lame duck Congress session coming up after Thanksgiving to roll back some of the provisions of the Pension Protection Act of 2006 (Department of Labor link, which would require employers to strengthen reserves over the next several years with existing earnings or cash. Companies say that such a requirement could lead to job losses or layoffs of regular employees. Companies might have to terminate current defined benefit pension plans or even 401K matching. On the other hand, the law probably makes current pensioners safer.

AP Business reporter Stephen Manning has a story here. The story appears on p A2 of the Washington Post Nov. 12.

Update: Nov. 20, 2008

The New York Times has a story by Mary Williams Walsh, "Hit by Losses: Pension Funds Criticize Rules", or (online) "After Losses, Pensions Ask for a Change," link here. Pensions have lost over $250 billion this year.

Tuesday, November 11, 2008

Coronary Bypass Surgery in the aged is now very successful

An AP story by Mary Marchione today (printed on A23 of the Nov. 11 New York Times) reports that patients in their 80s are typically surviving open heart surgery, including coronary bypass surgery and valve replacement, for at least six years, as long as people who did not need surgery. The link is here.

The American Heart Association held a conference in New Orleans Sunday and presented studies by Paul A. Kurlansky from Mount Sinai Medical Center in Miami Beach, and by Donald S. Litosky at Dartmouth.

Some patients now have coronary bypass surgery at an age as late as 90. The viability of late age surgery has been a rapid development in the past fifteen years. This is a major reason for rapidly increasing life spans, now demographically and economically significant. It used to be unusual to attempt bypass surgery past the mid 70s.

Bypass surgery has become more publicly known since David Letterman joined the “zipper club” in 2000 with emergency surgery. Sometimes bypass surgery is performed laproscopically with little invasion. But usually it requires a heart-lung machine and extensive and carefully managed recovery period to prevent injury to the area, often with time in a skilled nursing facility (which Medicare does pay for, up to certain limits). Personnel in SNF’s are often not as careful as necessary with certain risks as they need to be without the involvement of immediate family.

Sunday, November 09, 2008

Capital Hospice in Virginia explains how hospice care in Medicare works

Today (Sunday November 9) Capital Hospice in Arlington Virginia made a brief presentation of hospice services at Trinity Presbyterian Church in Arlington.

There are a lot of myths about Medicare and hospice care, and Capital Hospice has a valuable web reference, listing the four misconceptions, here.

Generally hospice services become Medicare entitled when the (Part A covered) patient is certified by a physician as having less than six months to live. The entitlement does not end if the patient lives more than those six months.

However, most hospice care is administered out-of-house, in nursing homes or at home. In such cases, the hospice services can be covered by Medicare. However room and board are still the patient’s responsibility (since custodial care is not covered by Medicare) in most cases, although sometimes that is covered by Medicaid. In many cases the patients own family members are still having to cover the cost.

In cases where inpatient hospice care can be justified, the inpatient room and board is covered by Medicare (when the six month rule is met), but the patient may be “discharged” from inpatient care when an acute medical crisis has been resolved. Hospice beds are usually very limited.

Some states, like New York, allow only one hospice provider per county; others, like Virginia, encourage competition.

Saturday, November 08, 2008

Adult children need to monitor finances of aging parents, but may lack "authority" to do so

AARP Magazine, for November-December 2008, has a particularly sobering “Money” article “When Your Parents’ Money Is Your Problem,” link here.

The article cites a case where an adult child bought his parent’s car to keep them from driving and paid their moving expenses to get them into assisted living.

The article also mentions a study saying that half of those caring for an elderly loved one (a total of 17 million) spend 10% of their income or more on caregiving expenses. Adult children may be placing their own situations in serious peril, and eldercare problems may explode into the public view as the next shocker for the economy as a whole.

Adult children are in the potential legal bind of becoming legally responsible for supporting their parents (and in a few cases, other relatives) in up to 28 states, according to filial responsibility laws, while lacking the authority or right to be informed about their parents’ situation. This is a serious flaw that should be addressed as a public policy (and public health) problem by the new administration. Neither candidate said very much about eldercare during the campaign. Remember, custodial care is normally not covered by Medicare (are some allowance for short term skilled nursing care or hospice care).

The article gives some practical advice on how to approach parents. Adult children who believe they will be impacted should “take ownership” of the problem and possibly consider having the capability of accepting their parents to move in with them (and having enough space to do so).

Friday, November 07, 2008

Longevity insurance provides an annuity if you live long enough, could protect adult children

The AARP Magazine for November/December 2008 has a “Short Answer” column on p. 20 about longevity insurance. I couldn’t find the online version yet, but there is a similar piece by Jim Miller in Consumer Affairs here.

Longevity insurance, now available from some companies like Met Life, will pay an annuity starting at a certain age. The annuity, if you live long enough, is much greater than a normal annuity. The trouble is you have to pay premiums the whole time until you reach that age, which is normally just beyond your life expectancy for the age you are at when you start it. If you don’t live long enough to collect, you’ve paid premiums “for nothing”, just as with term life or with auto or casualty insurance.

A policy like this could help protect adult children if states start enforcing filial responsibility laws in the future. A senior living longer than expected and unfortunate enough to develop Alzheimer’s Disease might collect, in the annuity, a considerable portion of what custodial care could cost.

Wednesday, November 05, 2008

Obama could want to index or "means test" social security benefits to pay for health care, debt

Futurist and economics writer Tom Barlow as an alarming prediction on AOL’s “walletpop” today for retirees.

He has a story called “Crystal Ball Time: Where Will You Be in Four Years,” with a black-and-white crystal ball that looks like it came from the Coen Brothers’ movie “The Man Who Wasn’t There.” Barack Obama (and Joe Biden) won’t be able to fix everything and will have to call for more sacrifice, from retirees, in order to deal with the scarcity. And Obama, because of personal left-wing beliefs, may be more inclined to do so openly than John McCain and Sarah Palin would have been.

He predicts that money to pay for minimal universal health care for the insured and to deal with the escalating national debt will come from retirees receiving both social security and other income. He predicts that social security benefits will be indexed down and reduced for retirees who have pensions or other income from annuities or various investments. This sounds like a reiteration of libertarian warnings that social security will not be there forever even for current retirees.

One trouble with this idea is that defined benefit pensions often are reduced by “social security offsets” already.

Social security benefits, at least for persons already retired, have always been a third rail; but maybe not forever.

But he thinks that the issue of spending v. need will become very pressing by 2012 and will force more socialistic “shared sacrifice” thinking. Remember, social security has changed to a partially self-funded annuity already, and proposals like Barlow’s will only lead to renewed “Cato Institute-like” calls for privatization.

He also thinks that stock portfolios will recover but that interest rates will rise.

The Walletpop article appears on AOL here. And the article will pop your wallet open.

The personal website for “doppelganger” Tom Barlow (himself a retiree) is this, and it indexes to other publications. Check also his "Blogging Stocks" column here.

Sunday, November 02, 2008

Some groups advocate the well-being of caregivers

Today, in a local Sunday school class, the pastor presented and the group discussed several items concerning caregiver well being.

The most controversial was probably the “Caregiver’s Bill of Rights” by Jo Horne, link here.

A couple of the rights bear repeating here:

“To maintain facets of my own life that do not include the person I care for, just as I would if he or she were healthy. I know that I do everything that I reasonably can for this person, and I have the right to do some things just for myself.

“To protect my individuality and my right to make a life for myself that will sustain me in the time when my loved one no longer need my full-time help.”

Another resources was “Caregiving Risks, Dangers and Rewards”, link here. One of the significant listed rewards is “a new relationship with person being cared for”.

Then there is “Caregiver Stress – Indicators”, link here.

Then there is the list “Are You an Overachieving Caregiver?” from “The Alzheimer’s Sourcebook for Caregivers,” books link here.

Various points came out in discussion. Caregivers can face risks, such as in managing medication (without medical training), or sometimes with appearances of conflicts with legal consequences, such as in the film 1998 “One True Thing.” One discussion participant reacted to the idea that the caregiver maintains components of a separate life. She felt that it is important to face the fact that some sacrifice is inevitable and part of life in any civilization, even if it is, in some sense, life-course altering sacrifice, for the concrete needs of another person or especially a parent.

There was discussion of the moral aspect, that caregiving involves responsibilities one cannot “choose” or avoid the way one makes decisions about having children (with the following responsibilities). In some families, adult children without their own children are expected to do most of the caregiving, an observation that again commands a deeper interpretation of the moral relationship between “choice” and family responsibility or responsibility for other people. Our modern civilization does not like to discuss this, but it will have to as demographics force the issue.

Medicare has a subsite for caregivers, with this link.

Wednesday, October 29, 2008

Leading economist says we will have to slash benefits for seniors, especially by "means testing" social security

In a feature called “The Big Idea” in Money Magazine, for November 2008, p. 28, Isabell Sawhill maintains that social security benefits for many Americans should be cut, now. The interview is authored by Goerge Mannes and is called “Why we have to cut benefits for seniors: Economist Isabell Sawhill says America’s elderly are getting too big a slice of taxpayers’ money.” Online, the story appears on CNN’s money site here.

She says, “Right now the benefit formula provides a pretty good retirement income to those who make more than $100000 a year. I don’t think that the working-age population should continue to fund benefits for those who are so well off.” That certainly sounds like a call for "means testing" of social security benefits, or possibly even revising the whole "number holder" concept.

Well, today, most retirees collect social security benefits based on what they contributed. Generally, the more they contributed in FICA taxes (and sometimes, the more their spouses contributed), the more they collect. It’s true that in an sense the income to SSA comes from current taxes. But current retirees have already contributed. The people who started the system in the 1930s as FDR developed it had not contributed, however.

She also refers to “the fact that every individual, every generation, should expect more from their government when they’re young and less when they’re old.”

Does this mean we cap the age at which we offer certain Medicare treatments?

Social conservatives want to see adult children (especially the childless and unmarried) take more generational responsibility for the elderly. As I noted, twenty eight states have filial responsibility laws and are going to come under pressure to try to use them.

Monday, October 27, 2008

ING (US subsidiary of Dutch insurer) offers retirement planning site for public and non-profit employees

ING Life Insurance and Annuity Company (a US subsidiary in Atlanta, of the Dutch insurer and bank ING Groep NV) has made a new service available to employers in deploying their retirement plans, whether contributory and matched or defined benefit (pensions). The service is called “Plan With Ease”, link here. The service is especially target-marketed for certain non-profits, local governments, school districts, colleges and universities, and some other 501C3’s, and emphasizes 403 and 457 plans. The site has both sponsor and participant logins. It also has a number of calculator tools for employees and retirees.

403(b) plans are tax-sheltered annuities operated by public schools and other tax-exempt employers (often for teachers). 457A(b) plans are operated by state and local governments for employees. Generally employees have to buy these plans through employers.

Yahoo! Business has the Press Release here “ING introduces New Service Helps 403(b) Plan Sponsors Meet IRS Requirements”. The site appears to cover other subjects however. I think it is likely to expand in content scope. The press release will probably appear on the ING US site very soon.

The ING subsidiary ReliaStar used to operate a somewhat similar site called “I Hate Financial Planning”, which aimed at the financial planning needs of the entire general public.

ING fell below 8.00 a share for a while this morning. Like all major financial companies in the US and Europe, its stock has been battered by investor fears in the wake of the credit and financial crisis. It has also accepted a cash infusion by the Netherlands government (infusions from European governments have become common in the past few weeks for banks insurers, in the wake of the American bailout.) My issues blog has a major story about it dated Oct. 19, here.

Sunday, October 26, 2008

Pension Benefit Guaranty Corporation and pension reporting system (and ERISA) need subtantial reform; $100 billion bailout looms

A University of Illinois finance professor, Jeffrey R. Brown, warns that the next big bailout could be of our whole pension system. The Pension Benefit Guaranty Corporation (PBGC) is underfunded. The amount of underfunding was $14 billion a year ago, and is likely much higher now. Brown thinks a taxpayer bailout could amount to $100 billion in a short time.

The article appeared Oct. 15, 2008 in the University of Illinois New Bulletin (from Champaign-Urbana). The link is here.

This blog covered the way PGBC works with a Sept. 16, 2008 blog entry, right after the Lehman Brothers crash. PGBC can force an employer to terminate a plan, but normally it requires employers who want to terminate to set up replacement annuities for pensiorers.

The experience of retirees after PGBC takeovers has been mixed. There are maximums that will be paid, but some retirees have been fortunate enough to continue receiving close to all of what they received before. Common sense says that could go south during the current crisis.

The problem is that pension funds invest in stocks and bonds and various instruments the way other institutions do. Pension fund managers are under pressure at work to show short term returns. That could have encouraged risky investments, just as it did in the securities industry as a whole. The plain truth is that “professional investors” invest other people’s money in a short-term, quota-driven environment and make investments that individuals probably would not make on their own. Would you invest your own money on buying mortgages for unqualified applicants? Probably not. But if you did it for a living (with other people’s money) you might feel pressured to. That’s part of the tremendous crisis in business ethics in our society, that David Callahan wrote about in “The Cheating Culture.”

So pension funds have seen their assets go down, probably more than “Joe the Plumber’s” own 401K. That means that companies have to make up the difference, which, in some cases, could drive them into bankruptcy and either voluntary or forced termination of the plan. That could be another reason why stock market valuations have sunk so much recently.

Pension plans are often set up based on the constituent businesses that larger holding companies (as they are traded on exchanges) have combined. Life insurance holding company stocks may be tanking because of the credit crunch, but individual companies would be all right, except for the fact that individual companies themselves were investors in the market. While there are regulations that provide some safety, it seems as they were not adequate. So one way another, the companies (or their holding companies) will have to buttress their pensions for possibly face terminations. If this happens enough, the PGBC itself will need a bailout.

Brown suggests reforming the system, requiring employers to purchase private insurance for their funds, based on rated risk, rather than flat fees. He believes that reporting to retirees of fund health needs to be much more transparent, and possibly be available online rather than just in once-a-year statements that are usually badly outdated.

Thursday, October 23, 2008

Company offers employers major compliance tool for 401K plans

A somewhat obscure topic is 401K compliance testing. These have to do with government and IRS rules that are supposed to prevent employers from favoring “highly compensated employees” unfairly. In view of the concerns over CEO pay during the financial crisis, it’s possible to debate how effective these are. A typical source on the subject is CPAS, “401K Compliance Testing Rules,” link here.

There are "discrimination tests" called ACP and ADP regarding qualified non-elective contributions (QNEC’s) or qualified matching contributions (QMAC’s), described, for example, at Benefits Link, “Safe Harbor Corrections for ACP and ADP test failures”, link here.

Today I got an email from a company called Peachtree LBP which offers a product LBP 401(k) Plus, which it says eliminates non-discrimination testing issues with methods alternative to safe harbor. The link is here.

There is a Reuters story Oct 23 that GM has suspended 401K contributions, link here.

Friday, October 17, 2008

Social Security retirement benefits to increase 5.8% in 2009

Some good news for many retirees came out today. The Social Security Administration, starting in January 2009, will increase social security retirement benefits by 5.8%, the largest cost of living increase since 1982.

The increase is significant. It will help retirees with living expense and with maintaining principal in their retirement assets (by adding more to it). I believe this occurs with the January 2009 payment, even though in theory that payment represents December’s benefits. It may help retirees living alone on social security qualify for senior apartments in many parts of the country (generally, the south or midwest and regions away from the largest cities have the more affordable apartments).

Retirees with Internet access can check their benefits online after setting up a free SSA account with password. Retirees can order proof-of-income letters from SSA through the Internet. SSA personal information access is often unavailable at night or on many weekends during system maintenance.

The AARP bulletin story is here.

Sunday, October 12, 2008

Northern VA church presents series on eldercare and senior housing; adult child responsibilities discussed

Today I attended a Sunday school presentation on eldercare in northern Virginia.

The presenter reviewed the “Senior Housing Options” from this website. The main opportunities listed were “independent living communities” (country average $1000-$2500 a month, discussed here before; sometimes less in less populated parts of the country, sometimes regulated by HUD or local laws), assisted living (average $1800-$3500 a month), nursing homes ($4000 to $8000 a month), residential care homes ($1500-$3000 a month, like private homes), respite care (to break from a caregiver), $75-$150 a day, and home care with home health aides ($16 to $20 an hour, weekly minimums).

An alternate website is this.

I told the class that filial responsibility laws in 28 states are likely to become controversial as states, pressed by the financial crisis, might be more likely to enforce them soon, although they could meet multiple legal challenges. These laws could hit childless adults very hard, especially in families where there was sibling disagreement resulting in legal mediation. This could provide a future economic shock.

Saturday, October 11, 2008

Is term life the best choice for everyone? Or is this just sales manipulation?

In 2003, while still in Minnesota, I was invited to interview for a role in Citibank’s Primevest. The company, which recruited at job fairs in a down economy then, was seeking to set up an operation to get people to convert their life insurance to term from any other form (whole life, interest-sensitive universal life, or even variable life). During the sales pitch, the presenter said that this is a potential $40 trillion market. That was five years ago.

You often hear financial people say on television today that the only kind of life insurance someone should have is term (with no residual cash value), because it is far cheaper for the same level of protection.

Not all agents agree with the idea that everyone should race for the exits from other products. But if you have substantial dependent responsibility and if their financial well being needs to be insured, then term makes the most sense for a lot of people.

Other forms of life make sense when parents buy them for kids. Over a lifetime, the cash value or investment portion can accumulate a lot of value, which could come in handy should there be some calamity.

When I was 35 and had just moved to Dallas from New York, I got a call from somebody from AAA about a whole life policy. Yes, he came to my apartment and I let him manipulate me into buying a whole life policy from Standard Life of Indiana (back in 1979). I eventually surrendered it and got some money back out. I wouldn’t let anyone do that today.

It seems that so much of our workforce is committed to manipulating people into buying things that ought to be more transparent to start with. If term is right for you, it should be simple and there's no reason that you need to pay an agent commission, it would seem. No wonder we are living beyond our means.

Friday, October 10, 2008

McCain proposes allowing seniors to delay withdrawals of deflated IRA assets

John McCain has suggested that, if he were elected, he would urge repeal of tax rules that require mandatory distribution from IRA’s (or 401K's) on a schedule starting at age 70-1/2. Or it might be delayed at least one year. The point is to protect the retiree from having to sell deflated assets until they have time to recover their value, as well as to avoid burdening the retiree with income taxes on the distribution.

SmartMoney has a page “Understanding the IRA Withdrawal Rules” here.

The “First Read” column on MSNBC quotes him directly:

My friends, we have to protect investors, especially those relying on their investments for retirement," McCain said five minutes into his remarks. "Current rules mandate that investors must beginning to sell off their IRAs and 401ks when they reach age 70 and a half. To spare investors from being forced to sell their stocks at just the time when the market is hurting the most, those rules should be suspended”

And columnist Adam Aigner-Treworgy notes that McCain gave no other explanation.

Since Obama says that seniors making less than $50000 a year would pay no taxes at all, Obama may be making a similar "promise." It was Gerald Ford in the 1970s who warned about Jimmy Carter's "promises."

Thursday, October 09, 2008

Retirees feel pressure to dump stocks immediately, given fiscal crisis

One of the most disturbing aspects of the financial crisis is indeed that senior citizens, as a class of people, may feel pressured to pull all of their money out of stocks into cash-like, insured instruments. If all seniors did this at once, the pressure on the equity markets would be enormous, perhaps pressing it down another 15%, the Dow to below 8000.

Young and middle aged people, everyone says, have the luxury of dollar-cost averaging. They can simply buy more shares while equity markets are down and take advantage of the rebound in some number of years. The one hooker is that unemployed people (or those on low-wage jobs, the “Nickel and Dimed” class that Barbara Ehrenreich talks about) can’t very easily, and young adults with huge college loan debts also feel similar pressure.

There is, in the way equity markets behave, an unavoidable aspect of financial Darwinism. That is to say, people go through life cycles, just like in biology class. When people reach a certain age, they no longer have the same opportunities, just because of mathematical demographics. The opportunities reside in younger generations. It’s supposed to be their turn. But this essentially mathematical fact can put even more pressure on the markets.

And then, if you will, think about the demographics of longer life span. We are creating a new class of dependents, the long-lived elderly, who in many cases may no longer have the capability of returning to work and expanding their own time horizons for investment strategy. At the same time, their adult children, some of whom are childless, are finding that they will have dependents in circumstances that go beyond the scope of their own “choices.” States with filial responsibility laws could (ironically and unintentionally) suddenly exacerbate the fiscal crisis if they start enforcing them at once! A critical economic issue is keeping seniors able to work, and keeping employers interested in employing them longer. That doesn’t sound easy given the distractions of the current crisis.

Wednesday, October 08, 2008

Retirement accounts have lost $2 trillion during fiscal crisis

The Washington Post is reporting (on Oct. 8 2008) that Individual Retirement Accounts (IRA’s) have lost $2 trillion during this current fiscal crisis (actually, during the past fifteen months). The story is by Julie Hirschfeld Davis of the Associated Press, reprinted today in The Washington Post on the front page of today’s print version (Wednesday, Oct. 8), link here or here on the AP site.

By way of comparison, I recall being told in 2003 in a sales pitch (for a job) by Citigroup PrimeVest that the potential market of converting ordinary life insurance to term life was $40 trillion. That comparison sticks in my mind.

The Bailout will cost $1 trillion (some of which could be recouped), and the stock market loss on Sept 29 when the first Bailout failed as about $1 trillion.

Our national debt is about $10 trillion, or about $33000 per person. Imagine if that could be confiscated (accounting for minors, those with less than that amount, the poor, etc).

Generally, many people approaching retirement seemed to have had 401K’s with some portion of financial stocks often connected to the faulty mortgage market.

The loss of wealth by retirees could present issues for their adult children, as noted earlier on this page (as with Monday’s posting). Families, not always by willing choice, are returning to live under the same house again.

This morning (Oct. 8), on ABC "Good Morning America", Sherry Parrish offered advice on how adult children could help parents exposed to financial losses.

Monday, October 06, 2008

Filial Responsibility: do we need a new concept of "household head" in the law?

This column has discussed the topic of filial responsibility laws (particularly in July 2007), on the books in 28 states in the U.S.m and more recently the notion of Confucian “filial piety” accepted to as an inherent part of culture in much of China.

I’ve noted that states rarely so far have enforced them outside of giveback situations, but that might change quickly with the fiscal crisis. It’s been suggested (here on July 24, 2008) that their constitutionality could be challenged, particularly on "takings clause" and due process grounds.

One other aspect of the problem strikes me. A parent is responsible for his or her minor children, but he or she (or the couple) has the right to control the behavior of the minor children. In contrast, an adult child is potentially responsible for an indigent parent, in at least 28 states, but he or she does not have legal control over the behavior of the parent that could lead to the indigence. This could well affect an adult child who did not have the experience of having or raising his or her own children, or never made the behavioral “choices” that lead to that responsibility.

As a societal matter, such an observation seems to comport with the calls from social conservatives and religious groups for more emotional “solidarity” within. Nevertheless, the legal system would have to deal with this observation. In 2005, Pennsylvania, with some measure of stealth, moved filial responsibility from the welfare code to the family code. The intention could have been to convey the idea that every extended family, when it has impoverished or disabled adult members, should have a “head” who takes responsibility for them but who has some authority that goes with the responsibility. If so, that would be a novel concept in the law, but it is worthy of exploration. The "power of attorney" concept(s) only partially addresses the problem. Such a responsibility (to "play family") can fall on the shoulders who never became a household head by marrying and/or having children. There would occur other questions about how such a concept works in many areas (obviously tax policy and maybe social security policy, as Nancy Polikoff’s book “Beyond (Straight and Gay) Marriage: Valuing all Families under the Law” (reviewed on my Books blog Sept. 21), as well as how the household head is expected to behave, socially and with public expression. Again, that’s why writers like Jennifer Roback Morse (reviewed on the same blog Sept 25) argue that there is too much “laissez-faire” in American families and that more solidarity should be expected among relatives, apparently even among those without children. In past generations, it had been the childless who were expected to stay home with the elderly parents.

Sunday, October 05, 2008

Fiscal Crisis: Assessment for Retirees: Go back to work?

So, what does all of this fiscal crisis mean for retirees? Oh, please—we’ve heard about dwindling IRA’s and 401K’s for the past two weeks. I dread the opening tomorrow, because underneath the emergency credit flow rescue, the fundamentals are bad. We don’t have an anchor on how to maintain our standard of living in a sustainable manner. Yes, we need a Pickens Plan and a number of them. Yet, that, to many seniors, seems like the next generation’s problem. But those are “our” kids and grandkids. I do recall, as I write this, the best students when I substitute taught. They’re going to have to solve this problem. They’re going to remember calculus test problems when they have to solve real ones.

And there is another reason to worry. The banking system is in disarray because the whole system that tells banks how much they can safely lend has broken down. That system resides in artificial financial instruments that no one understood. What happens is that the real economy comes back to real value in the products and work of real people.

So, some seniors are faced with going back to work. Maybe I am. There is a perception that employers won’t want us, because we will “cost” too much. I can imagine a future of night shifts at 7/11’s, “paying my dues” again, bringing back the mood of the military draft.

The best chance for employment is some scenario that takes advantage of a particular “wisdom” that a senior has accumulated. One looks for opportunities where intellectual or job disciplines need to be combined in unusual ways, analytical jobs involving “connecting the dots” that sometimes only older people will have enough life experiences to be able to see.

One observation is that a lot of senior employment opportunities have involved selling things. Thankfully, perhaps, the pressure to go to work selling cheesy financial products or lifestyle amenities might go away as the economic crisis exposes the folly of the “always be closing” sales mentality. On the other hand, employment in areas requiring “intimate” contact with others – something many people find unwelcome in our individualistic world – is likely to increase because of eldercare demographics.

It's important to remember that the almost exponential increase in the demand for end-of-life care could become a major component of the next major economic shock and public policy challenge.

The worst thing that could happen for the economy Monday morning (tomorrow!) might be if every retiree sold all of his or her stocks out of fear. You could have a run on equities just like a run on the banks or money market funds. Then the market would tailspin into an immediate depression dwarfing the size of the federal bailout on Friday.

The Metro section of the Sunday Washington Post has a story by Pamela Constable, “Struggling Seniors: A Fiscal Lesson for the Ages: For Some, the Economic Turmoil Is a Grim Reminder of Past Crises. For Others, It Marks a New Fear. Across the Region and Across the Spectrum, Residents Are Adjusting to Changes in Their Fortunes, link here.

Ther AARP links for job-finding for retirees are here and especially ("2008 Best Employers For Workers Over 50") this.

Tuesday, September 30, 2008

HHS, ABC, NYTimes report major nursing home neglect

ABC World News Tonight aired a brief report on substandard care in nursing homes, especially in the New York area. The report stressed the difficulties nursing homes encounter in hiring staff, resulting in long periods of patient neglect. One patient with bedsores had not been turned for over 48 hours. Another had severe facial bruises that the nursing home maintained came from falls. In some communities, families can have video monitoring installed of care, but that might interfere with hiring. More than 90% of nursing homes violate at least one federal standard.

The ABC link for the Sept. 30 story is here.

The New York Times story (Sept. 30, p A20) is by Robert Pear and actually quotes a percentage of 94%, link here.

Sadly, many nursing homes tend to become lax with care if family members do not keep close tabs on them.

The Department of Health and Human Services has announced a $36 million grant program in 28 states to help older Americans, especially those with Alzheimers, stay in their homes. The link is here.

Nursing home performance is a critical issue for adult children. Even if parents have the money to pay for the care, adult children living in other areas may be disrupted if nursing homes fail and cause patients to be injured. And some states could start enforcing filial responsibility laws and compel adult children to pay for the care for indigent parents.

Monday, September 29, 2008

Is a "National Insurance Trust" a good concept for LTC insurance? What about CCRC's?

The New York Times has a major blog article today (Sept 29) by Jane Gross, “Choosing Long-Term Care: Advice from an Expert,” link here. It comes from a series called "The New Old Age."

The article mentions another resource which may be less expensive than some others, continuing care retirement communities (CCRC’s). The article presents a conversation with Larry Minnix, president of the American Association of Homes and Services for the Aging (link). He advocates a National Insurance Trust described at “The Long Term Care Solution” with at a website starting with a Flash video, link here. The concept seems to be broadly mirrored after “cash and counseling” in the Medicaid programs in some states. The Moran company has a more detailed discussion on how this should work on the same site as a PDF document here. There are several controlling principles, such as that everyone in the program pays into the system until receiving benefits, and that everyone, in any age group, starts out healthy and not disabled. These seem to require special study to sort out and I welcome constructive comments. .

Saturday, September 27, 2008

Could tentative bailout program affect retirees 401K's, pensions, or social security?

Theresa Guiladducci has an important op-ed on p A35 of The New York Times today (Saturday, Sept. 27), “Save Pensions”, link here. She writes that the new bailout plan, still in contentious negotiation, should allow retirees to clean out “junk” from their 401K accounts.

She also suggests a new kind of government-protected individual retirement annuity, which would supplement (not replace) social security, funded by individual contributions into a “sovereign wealth fund” of more carefully structured investments, although they could include some risky issues. She says the government should guarantee a minimum deposit of $600 for those who earn little.

CNN discussions are asking if the bailout could affect social security. I don’t see how, since the Trust Fund is supposed to be separate, but it isn’t, quite. However, it’s conceivable that a deal could affect when the trust fund goes into deficit, and make the subsequent issue of reforming social security even more urgent.

Monday, September 22, 2008

Anticipating eldcercare responsibilities, should single people buy more "house" than they need?

Yesterday (Sept 21, 2008) I reviewed a book about marriage and social dependencies by an American University law professor (see my books blog) that, three-fourths the way into the book, made a bald statement that definitely can affect single and childless people (straight or gay). She suggested that in many families, an unmarried adult without his (or her) own children might be persuaded by other family members to move in with and support aging parents. There are obvious variations on this situation: what about an only child, for example?

As I noted before, demographics are making eldercare a pressing issue. While some seniors live into their 90s or even past 100 with few problems (one featured on ABC actually still works as a financial planner), many others live longer but could face years of dependency and frailty, and Alzheimer’s disease is growing exponentially into a public health problem that may match HIV in scale, even if for totally different reasons. This may explode into the next big public policy shock, and suddenly. The ability of the long term care insurance industry and nursing home and assisted living business to manage this problem is certainly in question, even more so given the current international financial crisis.

So the availability to give intimate personal care may become a real expectation for some single people who have, for whatever reasons related to their own psychological diversity, pursued “separate” lives, often in urban areas, or sometimes in unusual occupations requiring a great deal of travel (try astronaut). In human society, there is more to life than baby making, and yet sometimes priorities seem to come calling.

One strategy that a single person who believes that he or she could wind up in this position could follow is, wherever he or she lives, to purchase a home large enough to house a parent(s) with some separate privacy. This gets to be an interesting question if the individual has chosen to rent in a large city in order to save time and commuting costs and have more time for personal pursuits outside of family. But by buying a house large enough to house a dependent family member he or she will keep “sovereignty” over his or her own life, social and political loyalties, career, and even the ability to speak individually about things without possibly imperiling others who have now become dependent. This could be a good time to do that, given the lower home prices and foreclosures available (as awful as it sounds to take advantage of what has become an economic tragedy for many people).

The author (Nancy D. Polikoff) mentions earlier work by Martha Albertson Fineman in which the concepts of “inevitable dependency” and “derivative dependency” are defined. Someone who is essentially forced into a caregiving role becomes a “derivative dependent” because he or she is in turn forced to depend on others in ways that she or she previously would have found objectionable. Fineman points out that we are all “subsidized”, whether we like to admit is or not.

Having more housing than one needs (which sounds risky in an environment of falling home prices, but the fall will not go on forever) raises another question in some areas of the country. In inland southern cities 200-300 miles or more from water (Dallas, Austin and Atlanta come to mind immediately) persons may, through their own church or community connections, find they are encouraged to take on “guests” after natural disasters, particularly Gulf hurricanes that are becoming increasingly destructive.

It seems that we are less sovereign individually than we were before the current millennium started.

Update: Sept. 23

The front page of USA Today has a story by Greg Toppo and Anthony DeBarros, "More parents move in with kids: In-laws, too, and others," link here.

Saturday, September 20, 2008

Medicare Part B Premiums will remain the same

Health Day News reports that the Medicare Part B Premium will remain the same in 2009, $96.40. The premium may be higher for high-income individuals in some cases. The Part B Deductible will remain $135.

But the Part A hospital stay deductible will rise by $44 to $1068 on 2009. It is common for Medicare Supplementary policies offered by the AARP and many private companies to cover this deductible.

The Health Day link is here. There are other tricky details included in the link.

The Medicare beneficiaries gain from an auditing anomaly. The Part B trust fund was reimbursed $9.3 billion in early 2008 with funds mistakenly used by Part A.

The Washington Post carried the story online on Sept. 19, and the Sept. 20 paper has a brief summary on p A20 under the "Around the Nation" column.

Thursday, September 18, 2008

Local and state government pensions could be in trouble, according to "Pension Tsunami"

Despite the relatively comforting facts about the intentions, at least of the Pension Benefit Guaranty Corporation (previous post), Jack Dean, of Pension Watch, lists a huge number of municipal and other government pension funds for public workers that may be in trouble, on a website called “Pension Tsunami”. Many of the problems are in California. Around the world there are problems. Lehman Brothers workers in the UK will lose pensions.

There is also a “Fundmastery Blog” that has a Sept 12 entry “The Pension Time Bomb” by Kurt Brouwer, link here (with a great picture of the San Francisco Golden Gate). Conservative Columnist George F. Will (incidentally a great baseball fan) has an op-ed by the same name in The Washington Post on Sept 11, 2008, where he starts his discussion with Vallejo CA, link here.