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.

Tuesday, September 16, 2008

Retirees: PBGC and what happens if a pension is terminated (as in a bankruptcy)

Given the financial turmoil of the recent days and the fears among employee and retirees of many companies (especially financial institutions) that their companies could fail or that their defined benefit pension plans could be terminated, it’s a good idea to review the “facts” about this issue.

The main source of information comes form the government itself, the Pension Benefit Guaranty Corporation, or PBGC, with website here.

If you go to the “Workers & Retirees” link and “What PGBC Guarantees” you will see a link at the bottom “see PGBC’s Publication, “Your Guaranteed Pension”. That page answers most of the “big” questions.

The most important question would concern when an employer can terminate a plan. PGBC says there are two circumstances (1) the employer provides enough money to fund the existing retirees with annuities purchased from an insurance company, (2) the employer shows financial distress (the usual cause) and can show a bankruptcy court that it must terminate the plan to stay in business; then the PGBC must take over the plan as a trustee, using the plan assets and PGBC funds. In some cases, the PGBC can initiate a distress termination. Generally, retirees are supposed to be notified at least 60 days in advance of a voluntary termination, but the rules get complicated with distress. Sometimes benefits may be substantially reduced. There are maximum statutory limits of benefits, which at age 65 would be about $4300 a month for an individual at age 65 (PGBC has a complex table giving this information) in 2008.

There are many media reports that PGBC is underfunded and might have to be bailed out by Congress should there be a continuing “domino-like” wave of major corporate failures.

An article in Benefits Link (from Nov. 29, 2007) maintains “Most PBGC Retirees Receive Full Earned Benefit, Study Shows.” About 84% received full benefits, according to the study from the 2006 edition of the Pension Benefit Guaranty Corporation's Pension Insurance Data Book. Of those who had a reduction in benefits. The average reduction was 28%. The link for this story is here.

There is a July 7, 2008 issue of Workforce Management that reports a study led by Barack Obama to investigate reported delays in PBGC resolutions of pension terminations, especially those involving “shutdown benefits”, an example being the Republic Technologies International in Akron, Ohio. PBGC maintains that often books are in poor shape when a company fails. The report (“Senators Seek Probe of PBGC Calculations”) is here.

Another important law is ERISA, the Employee Retirement Income Security Act of 1974, with a Department of Labor link here with discussion of the retiree’s legal rights. ERISA is a “federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.”

Saturday, September 13, 2008

Media covers high-end senior housing

The press tends to cover senior apartments from the viewpoint of high income retirees, with emphasis on the so-called “snob communities,” if the September 13, 2008 Washington Post Real Estate section (F) sets an example. The lead story is by Ann Cameron Siegal, “Restrictions on Age: Not on Options: Retirement Communities Come in Many Forms,” link here. The article does cover the three major kinds of facilities: (1) active adult (implying home ownership) (2) independent living (incorporating rental) (3) continuing care or life care, with access to assisted living and specialized care should the needs arise.

The article emphasizes high-end markets, with substantial (sometimes refundable) entrance fees and maintenance fees in ownership environments, or higher rents. Sometimes there are limits on guests and on how long they stay,

Another trend for rental assisted living communities is to rent rooms to visiting seniors (relatives of residents) but to require visitors to bring medical statements, living wills and powers of attorneys with them to used in case they have their own emergencies.

An entry on this blog Aug. 23 2008 covered the range of prices for senior apartments available, with links for listings and for HUD rules.

Friday, September 12, 2008

U.S. News: social security tips; do Baby Boomers "deserve" to retire?

U.S. News has a couple of interesting stories on retirement.

One of them is a short by strident article by Emily Brandon, pointing to an article by Robert Brokamp in The Motley Fool,” “You Don’t Deserve Retirement.” Brokamp says we don’t save enough, we don’t know how much we need, and we have “lousy portfolios.” The Scrooge-like article, dated Aug. 21, 2008, is here.

Another is a reprint on Yahoo! Finance (I couldn’t find it on the US News site) “ dated Sept 12, “Three Unusual Strategies for Claiming Social Security Benefits,” link here.

One basic idea for someone unemployed but with some long-term prospects for a second career is to file a claim at 62, and then, if possible, go back to work, return the money without paying interest, and become entitled again to the higher benefit amount at full retirement age or later. Married couples can use spousal benefits creatively: receiving a spousal benefit while working, and then claiming more later. An inverse of that technique is to “claim and suspend” so that the spouse gets benefits while you keep working.

Yahoo! Finance has a running series on social security with some other articles on strategy for manipulating benefits within the rules.

I’ll try to find a more permanent link.

Update: Aug. 20, 2009

Check this AARP link "Recouping ‘Lost’ Social Security Benefits After Going Back to Work: Recalculation can result in a bigger check for life", by Linda Stern, link here.

Tuesday, September 09, 2008

Alzheimer's caseload is multiplying rapidly worldwide, with major societal implications

An AP story from June 11, 2007, permanently published at MSNBC, states that 1 in 85 people worldwide will have Alzheimer’s disease by 2050, for a total of 104 million cases. 26 million have the disease now.

In the North America, there are 3.1 million cases, somewhat less than 1% of people, but the caseload in the US should reach 8.8 million in 2050. The link for the report is here.

One major reason for the large increase in cases is that other medical treatment (including drugs that prolong life in the case of cancer and heart disease) is prolonging life, and memory and cognition loss is occurring somewhat naturally with age in some populations, possibly because of genetics. It may be possible to design new medications to halt the memory loss much more effectively than now.

The Centers for Disease Control in Atlanta has a webpage for Alzheimer’s here.

The large number of cases suggest a huge future caregiving problem. It’s hardly clear that the long term care insurance industry would be able to take care of most of this, given issues like premiums and actuarial, the multiple criteria required to file a long term care claim, the number of facilities and beds available, and the number of employees.

Neither presidential candidate has paid much attention to eldercare in comparison to the general population health care insurance issues, because there is an impression that Medicare takes care of this. However, Medicare generally does not cover custodial care.

The recently tightened rules preventing Medicaid “givebacks” are well known, but less clear to people is that in many states adult children could be pursued for impoverished parents’ eldercare expenses even when there has been no inheritance, according to filial responsibility laws. States may start becoming more aggressive deploying these. Pennsylvania recently moved elder filial responsibility from the “welfare code” to “family code.” It’s particularly unclear how responsibilities could be enforced across state lines, or divided up among adult children. Childless adults may find that they have “mandatory family responsibility” regardless of the reproductive choices that they made (or didn’t make). One could actually be much better off in such a world if one does have children (as it was a century ago, well before social programs, when children were a necessary economic asset). This problem could have a profound affect on how we perceive “family values” and associated “moral values,” and the modern concept of “personal sovereignty.”

China, with its one-child-per-family policy, makes an interesting comparison, because of its Confucian value system ("filial piety") and general lack of government safety net since embracing “People’s capitalism.” In China, as Ted Koppel noted in his recent Discovery Channel series, young LGBT adults say that they are still expected to marry, form families, and have one child, and must “go back into the closet”. It’s interesting to make these connections

Saturday, September 06, 2008

Notes on reverse mortgages

An important financial device available to some seniors is the Reverse Mortgage. There are some variations on the theme, but generally they require age at least 62, can be used with a home only with significant equity, and do not require mortgage payments from the senior as long as he or she lives in the home. Generally, the mortgage debt would be the responsibility of the heirs.

The Bank of America, for example, offers two products. The Home Equity Conversion Mortgage (HECM) would be available for manufactured homes, but not for getting a loan for a new home or leaving an inheritance. For those two needs, the Senior Reverse Equity Mortgage Platinum is available. The site is here.

The Department of Housing and Urban Development (HUD) has a fact sheet of “ten things to know if you’re interested in a reverse mortgage”, link here. For example, there are five options for getting payments: tenure, term, line of credit, modified tenure, modified term.

Wednesday, September 03, 2008

Bob Barr on social security; Charles Millard on PBGC investments

The Washington Times on Tuesday, Sept. 2 ran two important op-eds about retirement income security, from a conservative to libertarian perspective. (This newspaper loves this topic!)

The first is from Georgia Congressman Bob Barr, Libertarian Party Presidential Candidate (link).

Barr’s op-ed appears on p A17 (Tuesday) and is titled “The dirty little secret about social security: The problem can be solved,” link here. Barr discusses several suggestions. One is to improve the ability to “deferred income” (social security taxes now) into vehicles that pay higher returns. Another is an observation that conversion to a privatized system (like Chile’s – admittedly an example of “disaster capitalism” according to Naomi Klein) has some costs up front to pay off retirees who didn’t contribute enough (that problems started with FDR) but over time the strain on the system reduces. Barr also, for that which remains under social security, talks about raising the retirement age, reducing the COLA formula or benefits altogether, especially for those who may not “need” them. Harry Browne had talked about the one time write-off of social security obligations in one of his books in the 1990s.

Charles E. F. Millard, director of the Pension Benefit Guaranty Corporation (PBGC) has an important commentary “safer investing for pensions,” on Tuesday, p A19, link here. The PBGC is supposed to be self-sufficient (although there is talk of eventual taxpayer assistance, just as for Fannie and Freddie) but to remain so, it must use much more “diversification” than it does now with its overly conservative investment strategy.

Tuesday, September 02, 2008

Kiplinger provides detailed report on home monitoring and alarm devices for elderly parents living alone

The subject of home monitoring devices for elderly living alone with adult children living away comes up in on Kiplinger, with the article “Keep Your Eye on Mom from Afar: Monitoring Technology Gives Peace of Mind.” The essays was posted July 23, 2008 but had been included in print in the May 2008 “Kiplinger’s Retirement Report.” The link is here.

The article supposes that a typical situation could be an elderly parent living in a less expensive senior apartment (or “age restricted apartment”) without attached assisted living facilities, and exposed to inattention should he or she fall. The particular product discussed is called QuiteCare. Another company mentioned is Alarm.

Some monitoring systems are more sophisticated, and detect motion and contact with specific household objects, like the medicine cabinet, to determine if the senior is taking medication. The article suggests that typical installation runs from $200 to $1000 and monthly monitoring from $40 to $90.

There are factors that make depending on monitoring devices more problematic. One is the senior’s having dementia or serious short-term memory problems. Another could be the size of the residence. A smaller unit, where the resident spends more time in common elements for socializing, may be safer than an original house, with stairs and less secure means of entry. In general, the public media is creating the appearance that in many smaller families with adult children (perhaps childless themselves) living in other cities, this is often a practical solution.