Tuesday, May 29, 2012

Raise Social Security retirement age according to means?

New York Times Opinionator Ezekiel J. Emanuel (complete with prophetic Biblical spaceships) offers as missive on May 21, 2012, “Entitlement Reform for the Entitled”, and suggests that the eligibility age for Social Security benefits (and maybe Medicare) be increased with lifetime earnings.  Richer people live longer and probably have worked in less risky jobs, he writes.  The link is here.

This is not quite the same as "conventional" means testing, because wealthier beneficiaries would eventually collect their amounts, just later, if they lived long enough. 

Emanuel wants Congress to consider his proposal by no later than 2013, preferably even in 2012's lame duck session.

Letters to the Times today suggest that we need a fundamental debate on what “fairness” means.  Is it recoupment of “annuity premiums” you’ve paid in, or is it “need”? 

I remember the potshots taken at Marxism in the barracks, by generally well-educated men, when I was in the Army in the late 60s.  But what is “war” about, anyway?

The New York Times is also reporting about the overdependence on "Wall Street performance" by public pension fund managers.  

Thursday, May 24, 2012

Filial responsibility laws have sudden attention from the media, lawyers, maybe policy makers

When I wrote some blog posts on filial responsibility laws in July 2007 on this blog (which see),  it was hard to find a lot of material about them online.  I had written a similar piece on my doaskdotell.com site for the “Controversial Issues” page in 2005.

Today, it seems there is a lot of buzz (with a few references going back to 2008 or so), in the wake of the story about Mr. Pittas in Pennsylvania (May 22, 2012 here).  I found about the case Tuesday morning, around 7 AM  PDT or so in a motel in Mammoth Lakes, CA, ten minutes or so after turning on the cable TV to CNN upon getting up and bringing up my travel netbook for a little blogging.  I thought, in this remote place, what an irony to hear the media discuss a dangerous but almost totally ignored and forgotten topic, and how lucky it was that telecommunications here at the motel were pretty good.  I was supposed to be “on vacation” and away from civilization, handling the 8600 feet elevation.  The night before, at a local pizza place and bar, I could fantasize about being a real-life Nolan Ross (after a time-machine transformation to make me 35 years younger).  No, I’m not.  I’m lucky that this didn’t happen to me.  My own mother did have enough assets to pay for all her care, because my father had saved very conservatively for decades, and compound interest really works.

There’s a passionate piece about the case on Forbes by Carolyn Rosenblatt (“Could this happen to you?”), here  The writer notes the way the nursing home took it upon itself to determine which adult child should pay, and to bypass the wait for Medicaid, which the court said it had every right to do.  In fact, if the son pays, it would seem that perhaps he would not have the right to sue Medicaid unless he was himself indigent later and needed medical attention himself.  The writer also correctly notes that this problem will only increase as medicine keeps people alive longer.

The Forbes article gets invoked by a short missive by Drew Nichols on “LTC Tree” (for long term care),  called “Pennsylvania’s ‘Filial Responsibility Law’”, and Nichols writes “it seems kids want to reap the benefits of their parents and drop them at a government-paid nursing home when times get tough.”
That link is here. The comments are provocative.  A reaction called “Responsibility vs. autonomy” by Robert Seed rather expresses a lot of my thinking. “In a society where autonomy rules, we need to take responsibility not only for ourselves, but for our family.”

True, but what is striking here is the role of choice (or “The Axiom of Choice”, for mathematicians).  You can “choose” whether to have children (or have sexual acts that can produce children), or whether to get married.  (The recent legal and political debate about gay marriage only intensifies these points.)  You can’t choose your parents, or siblings.  (In a few states, filial responsibility even extends to siblings).  You can’t really “choose” your family completely. 

There are other parallels to this sort of idea that the current generation has forgotten.  A few decades ago, men couldn’t legally “choose” to avoid the risk of military service, either.
Back in 2007, a couple people warned me that my blogging about this issue might even tempt nursing homes and states into trying to enforce the laws!  Then, almost nobody talked about it.  Like a forgotten law on the books is going to be overlooked forever until somebody says “I told you so.”  (Remember that aspect of sodomy laws?)    But that’s one aspect of the “open” Internet, even the pre-Facebook Web 1.0 world.  One person can call attention to an issue, and it can go viral and blast off.

Another friend told me that if the problem comes up,  appeals courts, and maybe the Supreme Court, would find filial responsibility laws unconstitutional, as violations of the “takings clause” or of due process.   But if that’s so, why was the military draft allowable?

Of course, the life insurance and financial planning industry will say that filial responsibility laws make the case for buying Long Term Care insurance, when the parents are young and healthy enough for reasonable premiums.  But what if they are frail for some reason when relatively young?  Imagine how the rapid increase in Alzheimer's disease, expected to skyrocket with longevity, would interact with filial responsibility laws.

Overseas, China is wrestling with all this, and ponders similar laws, including a provision that adult children actually visit their parents.  (In oriental countries, the notion is called “filial piety”.)

Actually, there have been some other cases in Pennsylvania, such as one in 2009 with case of Don Grant in Haverton, PA,  such as in a column by Grimes Legal (“Legally Speaking”) here.  

Elder-law Lawyers has a summary column, posted in the summer of 2011, giving legislative references to filial responsibility laws in Pennsylvania, Indiana, Ohio, California, Rhode Island, and Utah. In Utah, people can be pursued for siblings’ bills, possibly because of the procreation-friendly Mormon influence in the state.  The title of the column is “You May Have to Pay for Your Parents’ Care”, link 

Generally, adult children get powers of attorney assigned to them to give them the authority they need. Even with money, tricky legal issues can come up, such as with negligence (Adult Protective Services), and the way caregivers are hired and handled.  It’s likely that the practice of home health agencies in hiring caregivers as “independent contractors” will soon face legal challenge.  That could further complicate the legal obligations of adult children. 

Philosophically, elder care and filial responsibility as a lot about the way our culture defines choice and personal responsibility.  The concept of filial responsibility could be seen as penalizing childlessness and encouraging the Catholic idea of openness to having children or being prepared to help raise other people’s children as a part of a more general, universal idea of family responsibility. (In fact, you could make a corollary argument that a childless person should be required to carry Long Term Care insurance.) It certainly should be significant in the gay marriage debate.  Yet, fifty years ago (before Medicare) nobody would have questioned all this!

Will Obama and Romney take up this issue in the 2012 presidential campaign?  True, it's up to the states, legally.  But it's a national problem. 

Tuesday, May 22, 2012

PA nursing home sues son under filial responsibility law for mom's nursing home care, and wins in court

A nursing home sued a man, John Pittas, for $93000 for his mother's rehab care in Pennsylvania, according to a story on CNN, which calls the "filial responsibility law" in Pennsylvania and 29 other states "obscure".

His mother has gone back to Greece.  She had applied for Medicaid, which has not come through yet.

The attorney says there was no "mischief" on this part, no spending down of assets.  He has other siblings in Greece.

In 2005, Pennsylvania moved the filial responsibility law from the welfare code to the family code.

The nursing home says it did not get proper paper work form the nursing home.

WTAE in Pittsburgh has this account here. The story says that the nursing home won in court, under the little-known law. 

Tuesday, May 15, 2012

Alzheimers changes to brain may occur 20 years before symptoms; new NIH study

NBC Nightly News presented a report about a long term study to make progress in Alzheimer's disease, particularly with families in Iowa and Colombia.

The latest medicine suggests that changes in the brain that lead to Alzheimer's occur 20 years before symptoms.

Right now there are 5.4 million people in the US with Alzheimer's, with a total cost of $200 billion; there will he, at this rate, 16 million by2050 with a total cost of $1.1 trillion, much born by families and caregivers.

NBC gave the standard  .gov source here.

Monday, May 14, 2012

AARP had called a secret meeting to consider Social Security cuts

The Huffington Post reported in March that the AARP had invited some high rollers to a secret "salon" on considering the possibility of Social Security cuts, with a long article here.

There's no question that the numbers keep looking worse every time they are computed.  Allowing a temporary FICA tax holiday makes no sense during these circumstances.

Social Security is planning a Webinar to "ask the experts" on May 17, link here. Unfortunately, to look at the announcement you have to look at a members only contest and back-browse out of it (there isn't even an x-button to close.     

Sunday, May 13, 2012

Companies test "pension buyouts" with lump sum offers

Daily Finance provides some discussion on “pension buyouts” with the example of a recent offer to former salaried employees of Ford with $90000 cash in exchange for remaining pension payments.

This sort of offer may not be good for people with longer life expectancies, including most women, the article says.

It says that with “take the money and run” arrangements, you usually can roll it over into an IRA and shelter it from taxes.

The article was featured on AOL today.

The link is here

Monday, May 07, 2012

Social Security offers online access to individual account records

Social Security now provides online access to account holder’s information. The link to set up and account and use it is here

You can’t use the spelling of your last name anywhere in the user name.  That will make it harder to remember even the user name.

The site also offers 2-step verification by cell phone, the same way Google does.

The main information that I found available on line was my complete (in backwards chronological order) earnings history, back to the time I started working. 

This facility may be of greatest use to recent (or "early") beneficiaries 

Friday, May 04, 2012

Retirement communities sometimes help seniors with upsidedown homes

NBC News is reporting that retirement communities are sometimes helping senior sell upsidedown homes so that theory will be able to afford to purchase or rent retirement condos or CCRC units.

The Nightly News story was here.

Sometimes the retirement community allows the customer to keep the difference if it can actually sell the customer's home for a profit, and will "eat" the loss.

CCRC's often have high "entry fees" (instead of purchase prices) as well as rent.

Wednesday, May 02, 2012

Social Security was a "windfall" for older people, a stiff for the young, relative to amount collected in FICA "taxes"

The May 2012 American Spectator has some stern lectures on Social Security.

On p. 22, David N. Bass gives us “The Millennial Perspective”.  The caption is “Social Security won’t be there for today’s twentysomethings. Yet their piggy banks – and 401(k)s – remain empty”.

His terminology for Generations X and Y may not be standard, but he makes an interesting point I haven’t contemplated.  Baby boomers who started working before 1970 paid only 6.5% of their earnings into the Social Security “entitlement”, are retiring now and are, according to politicians, promised full benefits, delayed only slightly.  Today, young people surrender 12.4% of earnings, and will see little or none of it.

Do Bass’s numbers include employer contributions?  Self-employment tax?  It appears so. Do the numbers include the current “Social Security Tax Holiday” of 2%?  Unclear. 

But here’s a point. If Social Security is regarded as a “tax”, there’s more legal or constitutional heft into the idea of reducing benefits for current beneficiaries (or means testing them) and giving them to younger future beneficiaries.

Bass points out that young people aren’t saving much on their own.  With increasing student loan debt and weaker job markets, is it any wonder?  They do have some ability to build their own social capital.

The link is here.  Bass's article was written before the Social Security compressed its life expectancy by three years;  he gives the end-date as 2037, and it's now 2033. 

The issue has similar coverage of the Social Security and Medicare decline by James Pierson (p. 10, “A Time for Choosing”) and Rep. Paul Ryan (p. 14, “Empowering Individuals or Bureaucrats”?)

Like these observers, I’d love to see people have accounts that they “own” and that can’t be confiscated by politicians.  But you have to stiff people to set that up.