hands holding a picture of a family

Good Health Insurance is What Counts

Having health insurance is no guarantee that medical care is affordable.

Some families, despite being covered by the Affordable Care Act (ACA) or employer policies, say that high premiums and deductibles mean they can’t afford to see a doctor. This distinction – between having insurance and receiving care – will be crucial as Congress considers proposals for ACA’s replacement.

One comprehensive 2003 study demonstrates how individual medical decisions change when they receive one longstanding, and what the researchers called “generous,” type of insurance: Medicare. Their study focused on changes in the use of the health care system – more so than improved health – by comparing people who’ve recently gone on Medicare with people a couple years away from turning 65 and becoming eligible. The analysis adjusts for the fact that some, though not all, people under 65 have employer coverage and that many people also retire around this age, sometimes receiving special retiree health benefits.

Once people turn 65 and are on Medicare, the researchers found that:

  • The probability of seeing a doctor at least once a year increased, based on data from the National Health Interview Surveys, which track the frequency of routine medical care.
  • Medicare eligibility led to a “surprisingly large” 5-10 percent increase in hospitalizations in California and Florida, particularly among white Americans. The increase was driven by elective surgeries such as joint replacements and heart bypass surgeries.
  • There were large increases in preventive care for less-educated whites, such as getting flu shots and cholesterol tests, based on analyses of the Behavioral Risk Factor Surveillance System, which tracks preventive care use.
  • Minorities, who are at much higher risk of untreated high blood pressure, were more likely to receive this diagnosis after going on Medicare. …
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The Late-1950s Boomers: Hit by Divorce

Middle Boomers chartIt’s old news that the many baby boomers who did not get married and stay married are worse off financially than those who did. Unfortunately, the financial damage to one segment of this generation has broken new ground.

Only 44 percent of “middle boomers” – those born in the late 1950s – have remained married to their original spouses, down from 52 percent of their parents’ generation. Middle boomers are also far more likely to have lived with partners without marrying, remained single all their lives, or even to have divorced twice.

The heart of a study is determining which of middle boomers’ choices were most likely to have led to financial distress when they reached their pre-retirement years.

About 11 percent of middle boomers had negative net worth by the time they were in their early 50s – more than double the share for the generation born during the Great Depression when they reached this age. Negative net worth means that middle boomers’ mortgages and other debts exceed the value of their assets; in this study, assets included everything from retirement plans and taxable bank accounts to primary and vacation homes.

To understand why, the researchers culled marital histories from a survey of older Americans. They found that four lifestyles are most strongly linked to middle boomers’ negative net worth: never marrying, going through one divorce and becoming single again, separating from a second marriage, and divorcing from a second marriage.

In all of these situations, the individuals were about three times more likely to have negative net worth than were the continually married middle boomers. The study controlled for age, gender, race, education, health, household income, and the number of offspring.

Middle boomers are the “least prepared for retirement” out of four groups studied, the researchers concluded, and their choices around marriage have been important contributing factors.Learn More

web of connections

Can Work Enhance Seniors’ Social Lives?

Callout boxMaintaining a network of family, friends, or even golfing buddies is critical to cognitive and physical health in old age, research has shown.

What wasn’t known is how work affects the social lives of older people. Does work foster social ties or limit the time one has to socialize?

A new study by Eleonora Patacchini at Cornell University and Gary Engelhardt at Syracuse University finds that those who continue to work have larger social networks.

They analyzed responses to the following question by more than 1,300 survey participants in the National Social Life, Health and Aging Project. The participants were ages 57 to 85 in 2005 and answered the following question then and again in 2010:

“Most people discuss things that are important to them with others. For example, these may include good or bad things that happen to you, problems you are having, or important concerns you may have. Looking back over the last 12 months, who are the people with whom you most often discussed things that were important to you?” …Learn More

People Lack Emergency Funds, Tap 401ks

Emergency Uses of retirement savings chartWhen between 45 percent and 60 percent of Americans don’t have enough money for retirement, encouraging saving is a national priority.

A related issue is preserving the funds once they’re set aside.

A survey released last month by Transamerica indicates that workers frequently resort to hardship withdrawals and loans from their 401(k)s, because they lack the cash required in emergencies. The survey bolsters the argument made by some retirement experts and employers that until workers’ cash-flow problems are addressed, many will continue to view retirement funds as their best option in an emergency.

More than one in four U.S. workers in the survey said they have taken premature withdrawals from their 401(k) or IRA retirement funds.  Catherine Collinson, president of the Transamerica Center for Retirement Studies, connected this “alarmingly high share” to a shortage of cash: 21 percent of workers reported having less than $1,000 saved for emergencies and another 14 percent have saved just $1,000 to $5,000. …Learn More

piggy bank

2.8 Million Seniors Have College Debt

The number of Americans over age 60 who are paying back federal or private student loans has reached a critical mass, quadrupling to 2.8 million over the past decade, a new report finds.

These older borrowers owe $23,500, on average, and two-thirds of them also have mortgages and credit card bills at a time their medical expenses are typically increasing, according to the report issued this month by the Consumer Financial Protection Bureau (CFPB). Separately, nearly 40 percent of those with federal loans have defaulted on their payments.

The response of many older student loan borrowers, the CFPB said, is to “skip necessary health care needs such as prescription medicines, doctor’s visits, and dental care because they could not afford it.”

Suzanne Martindale, a staff attorney at Consumer Reports, said CFPB’s report illuminates the link between the country’s college debt crisis and the retirement crisis. …Learn More

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Financial Stress Rings in the New Year

Having dug ourselves out of the worst financial crisis since the Depression, the nation entered 2017 amid rising wages and record-low unemployment.  Yet three out of four adults report being “financially stressed.”

And no wonder: half of the 2,000 adults in the December survey by the National Endowment for Financial Education (NEFE) said they are living paycheck to paycheck.

Americans’ specific financial issues are routinely documented in this blog and run the gamut from cash-flow shortages to poor retirement prospects.

The primary sources of financial stress identified in the NEFE survey were not enough savings and too much debt.  This was consistent with a second finding in which respondents said that solving these issues would also provide the most “financial relief.” Here are the other findings: …
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Snippet from Spent

Try Walking in the Working Poor’s Shoes

Minimum-wage workers in 21 states and Washington D.C. will have larger paychecks this year.

But it’s still extremely difficult to eke out a living on the minimum wage, as demonstrated by this video game. The game, “Spent,” was actually the topic of Squared Away’s very first blog in 2011 and is worth featuring again.

The Urban Ministries of Durham in North Carolina designed Spent a few years ago so others could see how it feels to live on about $300 per week – the weekly income of those earning the federal minimum wage of $7.25 per hour but at the low-end in many states.  The game conveys the very real, sometimes impossible, financial choices faced by working men and women who use the organization’s food pantry and clothing closet.

The game was updated a few years ago to incorporate both the monthly premiums and more reasonably priced health care offered by the Affordable Care Act.

Employers from Arizona to Maine are being required to increase their 2017 minimum wages to anywhere from $8.90 to $12.50 per hour, according to the National Conference of State Legislatures. Many of the ballot initiatives, legislation, and automatic cost-of-living adjustments driving these wage hikes promise more increases in the future.

Click here to try walking in the shoes of a minimum-wage worker.
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