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.