October 27, 2022

A Start on Estimating Retiree Medical Costs

New Medicare enrollees can expect their uncertain medical expenses to take roughly $67,000 out of the household budget, on average, over the rest of their lives.

Since this estimate is only an average, some retirees will pay less and some will pay much more. And the estimate, revealed in a new brief by Karolos Arapakis at the Center for Retirement Research and based on a larger study, includes only the copayments and cost-sharing charges paid by retired households over 65. It excludes their single largest medical expense – monthly insurance premiums.

The estimate is, nevertheless, a useful benchmark for older workers and retirees who want to get a better handle on their health care spending, which is very difficult to plan for. The study takes into account the unexpected cost of things like a broken arm, as well as the cost of managing chronic medical conditions, which accumulate over the years.

To estimate total medical costs, the researchers linked a periodic survey of retirees that includes out-of-pocket spending to their Medicare insurance records – for Parts A, B and D, and Medicaid  – and to a separate data source that tracks private insurance policies such as Medicare Advantage plans and other smaller public and private sources.

The various government and private insurers pay around 78 percent of older households’ total lifetime health care costs, excluding premiums, the researchers found. The retirees pay the remaining 22 percent, or about $67,300 for an older household with average spending for medical care.

However, retirees with the most serious medical problems will spend two times more out-of-pocket during their lives, and relatively healthy people will pay less. …Learn More

October 25, 2022

Cut off from Grandkids, Depression Sets in

The purpose of the 2020 restrictions on older people’s activities during COVID – whether voluntary or government enforced – were crucial: keeping them alive as the deadly Delta variant raced through the population worldwide.

But saving lives came at the cost of grandparents’ mental health, according to a study in the Journal of Gerontology: Social Sciences about grandparents in England.

In the scary early months of the pandemic, grandparents cut off or limited interactions with their grandchildren. In England, the grandparents who isolated themselves suffered more mental health problems, including bouts of depression, than the grandparents who maintained the same amount of contact with grandchildren as they’d had before COVID, the researchers found.

This isolation affected grandparents all over the world. American doctors warned older people against mingling with young family members, any of whom might be asymptomatic carriers of the disease. European governments imposed lockdowns or discouraged old and young from getting together. In Israel, the defense minister said, “the single most lethal combination cocktail is when grandma meets her grandchild and hugs him.”

The response by grandparents was echoed in a March 2020 article, “When Can I See my Grandkids?” The COVID-imposed isolation finally gave way to some normalcy after the older population got vaccinated at high rates.

But researchers said the pre-vaccine loneliness had an especially big impact on the grandparents of children under 15 who took the most dramatic step: cutting off all contact with them. Early in 2020, half of the English grandparents who had caregiving duties prior to the pandemic stopped interacting with the children. …Learn More

October 20, 2022

Yes, White Men’s Career Paths are Different

White men have the most success over the course of their lives in holding on to well-paying jobs that require high-level analytical abilities and interpersonal skills, a new study finds.

They have so much success that they often remain in this challenging non-routine work – astronomer, community college instructor, and analyst are examples – well into their 60s and even 70s. This isn’t the case for everyone else.

White women and also Asian-American men and women with college degrees also frequently start their careers in positions with demands that are similar to white men. But after they pass their prime working years, this type of work declines, in sharp contrast to white men’s career paths, the researchers found.

For example, the intensity of white women’s nonroutine cognitive work, as well as nonroutine interpersonal jobs like coach or education administrator, peaks around age 40 and then starts declining. At the same time, the intensity of the women’s routine cognitive tasks increase. This trend, which continues until they retire, might happen as older women are sidelined into less challenging office work.

The study, based on occupational data and a couple of long-running surveys of workers, accomplished two things. First, the researchers followed changes since 2004 in the nature of the overall job market. The intensity of the nonroutine tasks required to do a job, rated on a scale from low to high, has declined. But jobs requiring routine tasks have gained ground.

This doesn’t seem to jibe with well-known past research showing that people who do routine work are disproportionately being replaced by robots. But perhaps the prevalence of computers and artificial intelligence in the jobs that remain have increased routinization in many occupations. Reservation and ticket agents, telephone call center representatives, and medical transcriptionists are very high-intensity routine cognitive jobs.

The second part of the analysis showed that the evolution in job demands progresses very differently for various workers as they age and approach retirement.

The focus for Black and Hispanic men is on physical labor. The demands on all men doing manual jobs lessen over time as they lose physical strength. But the racial differences are clear. …Learn More

October 18, 2022

Underinsured and Unable to Afford Care

The share of Americans who lack health insurance is at historic lows. Even so, being uninsured and underinsured is a problem. I’ve seen what this means for members of my own family.

Example 1: a man in his early 60s with a high-deductible employer plan. His 60-year-old wife, after working for years as a waitress, has had knee surgery and other problems. Each major treatment racks up thousands of dollars in bills they struggle for months to pay.

Example 2: a 62-year-old woman working as a low-wage independent contractor. She is uninsured and has painful arthritis. She frequently cancels jobs because she is sick.

Example 3: a construction worker also in his 60s with a high insurance deductible. He rarely goes to the doctor because he pays cash for just about everything under a policy purchased on a state health insurance marketplace.

Nearly half of working-age Americans recently surveyed said they have skipped or delayed medical care because they couldn’t afford it, reported a healthcare nonprofit. People are considered to be underinsured in the report either because they lack insurance altogether or have a policy that is unaffordable, meaning that it uses at least 10 percent of the household’s yearly income.

Specific decisions the underinsured make include not seeing a doctor if they have a problem, not following through on recommended treatments for a diagnosed illness, not seeing a recommended specialist, or not filling a prescription, the Commonwealth Fund’s report said.

Affordability remains a problem despite Congress’ move to encourage people to buy coverage during COVID by slashing the premiums for federally subsidized policies purchased on the national and state insurance marketplaces. The Biden administration just extended the premium subsidies through 2025. …Learn More

October 13, 2022

Beware: a New Government Imposter Scam

It is a cruel farce. Scammers use the names of federal agencies charged with protecting citizens’ financial security to rip them off.

The Consumer Financial Protection Bureau (CFPB) has confirmed the existence of a new scam in which someone purporting to be from the agency contacts individuals and tells them they are eligible for a payout in a class-action lawsuit. On one condition: to collect the money, the scammer says the taxes owed must be paid upfront.

This is known as an imposter scam. Imposter scams involving other federal agencies – the IRS or the Social Security Administration – are common.

The CFPB imposter scam sounds vaguely credible since the story the victim is told is similar to the agency’s actual mission. The mission of the CFPB, established after the collapse of the subprime mortgage market, is to uncover chicanery by financial companies and get restitution to compensate victims for their losses.

The agency said the recently disclosed scam often targets older people, who are more vulnerable to falling victim if they are experiencing cognitive decline. “We can’t say it enough. The CFPB will NEVER call you to confirm that you have won a lottery, sweepstakes, class-action lawsuit, or about any other fees or taxes,” CFPB said.

A different imposter scam involving the agency occurred a few years ago. Someone used the name of a former top CFPB official to convince older victims they’d won a lottery or sweepstakes they had never entered.

“An imposter scam happens,” the official said, “when a criminal tricks you by claiming to be someone you trust.” …Learn More

October 11, 2022

How Eager are Employers to Hire Boomers?

Older Americans’ share of the labor force has doubled since the early 1990s, and they constitute roughly one in four workers today.

But their dominance is mainly an artifact of the baby boomers’ demographic bulge moving through the labor force and says little about how employers view the growing ranks of aging workers.

Employers’ willingness to hire or retain older workers, especially when someone younger is available, is an important issue for a couple related reasons. Boomers are under increasing pressure to work as long as possible to improve their finances before retiring. It’s also easier for many to work well into their 60s since people are living longer and technological advances have reduced the physical requirements for some types of work.

But do employers want boomers on the payroll?

A study by Damir Cosic at the Congressional Budget Office and C. Eugene Steuerle at the Urban Institute finds some evidence that employers increasingly view them as pretty good substitutes for workers in their prime whose age – the mid-30s to mid-50s – and experience puts them at peak productivity. What distinguishes this research is its focus on understanding the demand for older workers, a departure from the many studies describing the changes in their labor supply.

The analysis turned on whether the growth in the older labor force has affected prime-aged workers’ wages. If, for example, their wages are increasing relative to the wages of workers over 55, this may indicate that employers are more willing to hire workers in their prime, because they have qualities the older workers lack.

If, however, the younger workers’ wages are declining relative to boomers’ wages as the growing supply of older workers puts some downward pressure on pay, employers may view the boomers as acceptable substitutes for their younger counterparts and are equally willing to employ them.

The researchers found that employers viewed older workers as increasingly attractive substitutes over the period 2000 through 2018. This trend was clearly evident in several specific industries, including utilities, real estate, information, government, finance, transportation, and wholesale. …Learn More

October 6, 2022

One Reason the US Labor Force is Shrinking

U.S. industries have become increasingly concentrated in the 21^st century, leaving fewer employers in local labor markets. This is not good for workers.

The simplest example is a town with one company in the business of producing widgets. The company has little competition when hiring widget workers and can pay them lower wages.

A new study finds that the increase in employer concentration – one or a few firms that dominate locally – has played a role in the 20-year decline in labor force participation in the United States. When workers have fewer employment options and wages are lower, looking for and finding a job is a more difficult, less fruitful pursuit. Some give up and drop out of the labor force.

Employer concentration “push[es] marginally attached workers out of the labor force entirely,” concluded Anqi Chen, Laura Quinby and Gal Wettstein at the Center for Retirement Research at Boston College.

Their research builds on several recent studies showing that when firms possess more bargaining power with workers, they can drive down wages. This new study is the first to make a direct link between employer concentration and its impact on employment activity.

Labor force participation – the share of adults of all ages who are either working or looking for a job – is lower in concentrated markets, the researchers found. Actual employment levels are also lower, though this is mainly the case for teenagers and workers in their 20s. …
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