September 7, 2017
Why Many Retirees Choose Medigap
The Medicare open enrollment period starting Oct. 15 applies only to two specific insurance plans: Part D prescription drug coverage and Medicare Advantage plans.
But before choosing among various plans sold in the insurance market, the first – and bigger – decision facing people just turning 65 is whether to hitch their wagons to Medicare-plus-Medigap or Medicare Advantage. Squared Away spoke with insurance broker Garrett Ball, owner of Secure Medicare Solutions in North Carolina, who sells both. Most of his clients buy Medigap, and he explains why.
In a second blog post, we’ll interview a broker who deals mainly in Advantage plans. Another source of information about Medigap and Advantage plans are the State Health Insurance Assistance Programs.
Q: Let’s start with explaining to readers what your company does.
We’re an independent Medicare insurance broker that works with some 2,000 clients on Medicare annually who are shopping for supplemental plans. My company began in 2007, then in 2015 I launched a website tailored to people just turning 65 to answer the questions I get every day. We’re not contractually obligated to just one insurance company. When we work with someone, we survey the marketplace where they live, assess their needs, and help them pick a plan. We get paid by the insurance companies when someone signs up for a plan. Different states have different commission levels, and there is more variation state-by-state than company-by-company. Insurers typically pay fees of $200-300 per person per year.
Q: What share of your clients buy Medigap policies, rather than Medicare Advantage plans?
Approximately 10 percent of my clients end up with Medicare Advantage vs 90 percent with Medigap. Some states have a higher percentage in Medicare Advantage. I do business in 42 states, so this depends on the insurance markets in individual states.
Q: Why do you sell more Medigap plans? …Learn More
August 24, 2017
Outsized Caregiving Duties for the Few
The value of the informal care provided to the nation’s elderly, often by adult children, exceeds $500 billion a year – more than double the price tag for the formal care of nursing homes and home health aides.
Only 6 percent of Americans are, at any given time, regularly helping parents who have deteriorating health or disabilities to perform their routine daily activities (and 17 percent will provide this care sometime during their lifetime). But a sliver of the population shoulders an inordinate amount of responsibility.
A study by Gal Wettstein and Alice Zulkarnain of the Center for Retirement Research finds that the
6 percent of adults providing parental care devote an average 77 hours to their duties each month, or roughly the equivalent of a full-time job for two weeks.
And the burden grows as adult offspring get older. They found that 12 percent of 70-year-olds are caring for parents and spend, on average, 95 hours per month doing so, even though they’ve reached an age when they might be developing health issues of their own. This remarkable situation is no doubt a result of both rising life expectancies for the elderly parents and improving health among their offspring, who are also aging but are nevertheless still able to provide care.
The study was based on data from a survey of older Americans that used the standard definition of care, which includes helping seniors with activities of daily living (known as ADLs), such as bathing, eating, and walking across a room, and includes instrumental activities of daily living (IADLs), such as taking medications, cooking, and managing finances.
For the half of seniors over 85 who require this assistance, informal family care is their first choice. Not surprisingly, nearly two-thirds of this care is done by spouses and daughters, especially unmarried daughters. But there are costs, in terms of money and work, as well as time. Caregivers report that they spend more than one-third of their budgets on parental care. …Learn More
August 10, 2017
Beach Reads for and about Old Folks
Who wants to spend their beach vacation reading about growing older? These recommendations just might surprise you.
“The Accomplished Guest” by Ann Beattie
Ann Beattie’s 1983 book of short stories, “The Burning House,” explored the drift, emotional detachment, and cynicism of boomers, whose worldview was darkened by Watergate. That book made Beattie’s reputation, and she has been prolific ever since, including regular appearances in The New Yorker. Her 2017 short story volume, “The Accomplished Guest,” is, for now, a bookend to “The Burning House” (Beattie is only 69 and no doubt has more books in her). While baby boom skepticism remains a central theme, her characters have developed a little heart and sentimentality over the years. I particularly liked “Company,” about an older couple entertaining newlyweds at their Maine summer house (one advantage of getting older). All night, Henry ruminates about his death. But as this glorious summer evening draws to a close, he finds reason to celebrate his friendship with the much younger Jackson. Jackson is still decades away from facing his own mortality, but tonight, they are “just two men – you know, any two men – passing time on the back porch.”
“Can’t We Talk About Something More Pleasant?” by Roz Chast
For months, I ignored raving recommendations about Roz Chast’s book on how she navigated her parents’ old age. I should not have. This book by the long-time New Yorker cartoonist is a poignant, laugh-out-loud funny examination of the guilt, love, memories, regrets, anger, and tenderness that churn inside adult children carrying their parents through the final stages of their lives. …Learn More
July 25, 2017
Retirement Researchers Meet Next Week
On August 3 and 4, the Retirement Research Consortium will hold its annual meeting in which retirement researchers from around the country will converge on Washington to present their latest findings.
The papers being presented next week will explore the impact on retirement from our health, work-life balance, and family ties, as well the millennial generation’s prospects for retirement. These are just some of the research topics. Click here for the full agenda.
For those who can’t attend, the CRR will provide live streaming of the presentations as they occur. In late August, they will be archived on the CRR’s website.
The Retirement Research Consortium includes the Center for Retirement Research (CRR) at Boston College, which sponsors this blog, as well as the Michigan Retirement Research Center, and the National Bureau of Economic Research. The research being presented at the conference is funded by the U.S. Social Security Administration. Throughout the year, the findings will be covered in this blog.Learn More
July 20, 2017
Retrofitting Your Home for Old Age
Brickhouse Design Group Ltd.
Big advances in the construction industry are helping the elderly better maneuver around their homes, and they’re doing it in style.
Ramps no longer look like ramps; they are pleasantly lit walkways with stone paving. Compact pneumatic elevators squeeze into tight spaces. The lip at the entrance to the shower – the one an elderly person can trip over or that blocks a wheelchair – has cleverly been eliminated. Watch this recent webinar to find out how.
And here’s an interesting idea: a reverse mortgage is one way to pay for the upgrades required for seniors who want to remain in their homes as they age.
That is the punch line in the webinar, which is sponsored (not surprisingly) by the National Reverse Mortgage Lenders Association (NRMLA). NRMLA confirms that some loan originators report that the proceeds from federally insured reverse mortgages are being used for the purpose, though this is not widespread – yet.
Many are, however, considering it: one in four older households in a 2014-2015 academic survey reported, after they had received reverse mortgage counseling, that they planned to use their funds to pay for home improvements.
This webinar isn’t exactly exciting. But it will interest baby boomers who are either caring for elderly parents or thinking about their own old age. One poll found that 87 percent of older Americans would not want to move into a nursing home. But if they want to age in their homes, there’s apparently a lot of work to be done.
“The bulk of long-term care will occur in single-family, owner-occupied homes,” predicted one webinar presenter, citing a study. “But the homes aren’t prepared.” …Learn More
July 13, 2017
Medicaid: it’s Not Just for Nursing Homes
Medicaid serves millions of low-income Americans, many of them elderly. Federal spending on this program now approaches the dollars spent on Medicare, the primary health care program covering virtually all Americans over 65. Many people confuse the two programs, or cast Medicaid as a program strictly for the poor. Many are unaware of the financial support that it provides to seniors.
With major changes to Medicaid now being debated, Squared Away interviewed Diane Rowland, executive vice president of the Henry J. Kaiser Family Foundation, to learn just what Medicaid does.
Q. Describe Medicaid’s broad mission and how older Americans fit into that mission.
A. Medicaid’s basic mission has been to provide support from the federal government to the states to enable them to provide health and long-term care services to their low-income populations, which include seniors in many states. This includes both people who need assistance with long-term care, but Medicaid also helps one in five Medicare beneficiaries pay for their premiums and cost-sharing obligations under Medicare. In essence, Medicaid is the gap-filler for many of Medicare’s seniors, including seniors with disabilities who have low incomes.
Q. Virtually everyone over 65 enrolls in Medicare? So why do seniors need Medicaid?
A. Seniors need Medicaid, because over one-quarter of seniors have very low incomes. Medicare doesn’t pay for 100 percent of medical care, and some of the gaps in Medicare coverage are unaffordable for low-income seniors. They can’t afford Medigap policies to help with Medicare’s cost-sharing requirements. Many struggle even to pay their Part B premiums. One of the first roles of Medicaid – and over the 52-year history of the program – was always that the program was going to fill in the holes for seniors under Medicare. Medicaid’s other role is that Medicare does not provide a lot of the benefits that seniors need in nursing homes and in their communities. At one time, Medicaid also helped with prescription drugs – back when Medicare didn’t cover them. In many places, Medicaid will also help to pay for dental, eyeglasses and other services Medicare doesn’t cover. Essentially Medicaid has always been the wraparound for Medicare for both the benefits Medicare doesn’t cover and for the financial obligations that Medicare imposes on low-income people.
Q. Nearly two-thirds of nursing home patients are on Medicaid. This nursing home funding isn’t just for the poor, is it?
A. Medicare will pay for some nursing-home coverage immediately after hospitalization, but it does not include a benefit that helps people who need long-term assistance, especially people with cognitive impairment or Alzheimer’s or who need other services that require substantial help at home. Nursing homes are expensive – $90,000-$100,000 per year – so even if someone enters a nursing home with their own resources, they quickly spend that down. Once they spend it down, Medicaid picks up the remainder of their care. Many good, hard-working, middle-class seniors who retire – if they or their spouse need nursing home care – quickly become unable to pay the full cost of their nursing home stay, and that’s when Medicaid kicks in. …Learn More
May 23, 2017
Paying Medical Bills is a Herculean Task
Hercules sculpture, Florence, Italy.
Medical bills are leaving “a lasting imprint on families’ balance sheets,” JP Morgan Chase concludes from its recent analysis of the anonymous checking and credit card account activity of some 250,000 bank customers.
With little available cash on hand, 53 percent of these families prepare to pay large, one-time medical expenses by waiting for an uptick in their income. Nevertheless, a year after the bill is paid, they are still struggling to patch the hole blown in their household budgets, according to the report, “Coping with Costs: Big Data on Expense Volatility and Medical Payments.”
The 2013-2015 account data show that family incomes tend to be 4 percent higher, on average, in the month a medical bill is paid. This doesn’t mean that people suddenly become Uber drivers or work more overtime hours. What is probably going on, the bank said, is that people “have delayed either receipt of medical treatment or payment of their medical bill until they were able to pay” – when the extra income arrives.
Tax refunds are one clear source of this income for paying large one-time medical bills. These payments were the most frequent around tax time, JP Morgan’s customer data show. But the $163 average increase in monthly income, mostly from tax returns, was small relative to the average $2,000 medical bill.
The damage done to family finances was apparent even a year after such bills were paid. Credit card balances, which had been reduced prior to paying the medical bill, rose for at least a year following a payment. Meanwhile, spending on non-medical purchases, as well as the amount of cash on hand, decline in the aftermath as the families struggle to repair their household finances.
This dry but compelling report is a window into the Herculean feat of paying medical bills for some families. It helps to explain why two out of three Republicans and Democrats in a Kaiser Family Foundation poll said that lowering their health care costs should be a top priority for any reform.
To read the full J.P. Morgan report, click here.Learn More