January 19, 2023
What’s Up with Medicare Advantage Ads?
Starting months before my 65th birthday, my mailbox has been swamped with advertisements for Medicare Advantage insurance plans. The ads are still coming in.
And then there are the television commercials with promises of Advantage plan benefits that original Medicare doesn’t cover – vision, dental and hearing services, rides to doctors’ appointments, zero premiums. Sounds amazing, doesn’t it?
The advertising blitz surely has contributed to the doubling in Advantage plan enrollment since 2013, to 28 million last year. The plans are overtaking Medigap plans, which the nonprofit Commonwealth Fund estimates do not bring in as much profit for brokers as Advantage plans.
It is true that the vast majority of Advantage plans provide some type of vision, dental and hearing coverage. And retirees with these benefits in their Advantage plans spend slightly less for the services than other retirees, the Kaiser Family Foundation, a healthcare non-profit, found.
But the devil is in the details.
For example, the average dollar limit for vision benefits in Advantage plans was $160 in 2021, said Meredith Freed, Kaiser’s senior policy advocate. That $160 probably wouldn’t be enough to pay for an exam and buy the prescription glasses. The television and mailed advertisements are short on these details.
Or consider dental coverage for preventive services, such as cleanings and X-rays. This coverage might be useful, but the plan might not cover cavities, root canals and caps. Or, if they are covered, a $1,000 limit is fairly common and insufficient for many expensive procedures, Freed said. And what about the two out of three Advantage plans that do not charge a premium? The ads touting “zero premiums” aren’t usually clear that you’re still responsible for Medicare’s Part B premium of $164.90 per month.
“I’m hesitant to use the word misleading,” Freed said. But when choosing a Medicare Advantage plan, “Unfortunately, it’s on the consumer to dig more when they’re interested in a plan” to understand not only how the specific plans work but also how Medicare’s underlying benefits work, she said.
An analysis of Google search data has found that older Americans are not finding the kind of information online that they are seeking about their Medicare options. Instead, they are being bombarded with advertising by insurance companies, agents, and brokers, according to the Commonwealth Fund.
Older people search for Medicare information online from a diverse range of sources – patient advocacy groups, the media, and federal agencies including Social Security and the Centers for Medicare and Medicaid Services (CMS). A minority of the searches are for insurance industry information.
January 3, 2023
Readers’ Favorite Retirement Blogs: 2022
Older Americans who want to be smart about retirement finances are curious about the intricacies of Social Security.
The blog that drew the most traffic from our readers last year – “The Bridge to a Larger Social Security Check” – suggested a strategy for getting more out of the program: delay signing up for Social Security by withdrawing savings from a 401(k) to pay the bills.
Each year that Social Security is postponed adds 7 percent to 8 percent to a retiree’s monthly benefit check. A couple of years of delay, funded with savings, can provide significantly more money, month after month, to pay the bills. The researchers concluded from an experiment that asked older workers to consider the delay strategy that a substantial minority “are interested in a bridge option despite its unfamiliarity.”
Another popular blog last year was about an experiment involving another unfamiliar concept fundamental to the program: the Retirement Earnings Test. In “Explaining Social Security’s Earnings Test,” readers learned that any reduction in benefits that occurs if they simultaneously work and collect the benefit in their early to mid-60s is not a tax.
Instead, under Social Security’s rules, some of an older worker’s benefits may be deferred. The benefits are incrementally added back into his monthly checks after he reaches his full retirement age under the program. Understanding that the reduction in benefits is a deferral, rather than an outright cut, is an important aspect of the program that is increasingly important for older workers looking for strategies to improve their standard of living in retirement.
If delaying Social Security is good for older workers’ financial security, the article “COVID’s Impact on Social Security Claiming” delivered a little good news. The generous, extended unemployment benefits approved by Congress made it easier for older workers who lost their jobs during the 2020 spike in unemployment to remain in the labor force rather than sign up early for their benefits and lock in a smaller monthly check.
This positive pandemic trend was a stark contrast to the Great Recession. During months of protracted unemployment following the 2008 financial crisis, jobless older workers became more likely to resort to signing up for Social Security because they needed income.
One aspect of retiring and aging that can really throw a wrench in financial planning is medical costs. In “A Start on Estimating Retiree Medical Costs,” the researcher estimates that retirees with average healthcare needs must cover about 22 percent of their total out-of-pocket costs, excluding premiums, or just over $67,000 in total over their remaining lives. Retirees needing high levels of care can spend twice as much.
Another unknown: long-term care. A study covered in “Spouse in Nursing Home Raises Poverty Risk” finds that one in three married people in their early 70s is likely to have a spouse who will eventually wind up in a nursing home. Not all nursing home stays are for an extended period of time. But if an unlucky spouse does have a long stay, the couple is significantly more likely to become impoverished while paying for the care.
Other popular blog topics in 2022 included Medicare, work, and profiles of individual retirees: …Learn More
November 23, 2022
The staff at the Center for Retirement Research at Boston College who put together this blog hope our readers have a safe, joyful and delicious Thanksgiving with family and friends.
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October 4, 2022
Social Security Información – en Español
Alrededor del 14 por ciento de trabajadores y trabajadoras aquí hablan español. El Seguro Social tiene un sitio web para usted.
Translation: About 14 percent of the working-age population here speaks Spanish. Social Security has a website for you.
It’s critical that workers who speak only Spanish or are more comfortable with the language have a clear understanding of how Social Security benefits work. It’s estimated that Americans 65 and over receive just under a third of their income from the benefits, and lower-income people rely on it for much more than that.
Social Security’s Spanish-language website, which has been around in some form since the mid-1990s, provides general information about the program and also addresses issues especially relevant to this population. One example is an employer’s responsibility to report income for the one in four domestic workers in this country who are Latina.
Below are some of the general topics, as described on the website:
- Cómo funcionan los beneficios por jubilación. (How retirement benefits work.)
- Decidir cuándo comenzar los beneficios. (Deciding when to start the benefits.)
- Qué cosas adicionales puede afectar sus beneficios por jubilación. (Things that may affect benefits.)
- Lista de verificación para su jubilación. (Retirement checklist.)
September 22, 2022
Need for Low-Cost Retiree Housing is Urgent
San Francisco is caught in the vortex of two powerful forces: a fast-growing retiree population and rising rents.
Residents over 60 are expected to make up a fourth of the city’s residents by 2030, according to this video project for The San Francisco Standard by Chris Chang, a student in the University of California, Berkeley’s graduate journalism school.
And San Francisco rents, after collapsing during the pandemic as people left the city, are on the rise again. A one-bedroom apartment is going for $3,100 per month – second only to New York City – despite a rent control policy that limits annual rent increases.
A San Francisco retiree with an unusually onerous rent burden is Shao Yan-Zhen, whom Chang interviewed for the video. The rent soaks up nearly 70 percent of her and her husband’s modest retirement monthly income. They have been on a waiting list for a federally subsidized apartment for two decades and are among the two-thirds of retirees nationwide who qualify for the assistance but can’t get it due largely to a shortage of rental housing. …Learn More
July 26, 2022
Retirement’s a Struggle? Get a Boommate!
Soaring apartment rents and widowed or divorced baby boomers with spare bedrooms and inadequate retirement income – these two trends have conspired to drive up the number of boomers seeking roommates.
New listings being posted by homeowners between January and June on Silvernest, a website where boomers can search for potential roommates, doubled to 2,331 compared with the first six months of 2021, said Riley Gibson, president of Silvernest. Women account for two-thirds of the listings.
The end of the crisis phase of the pandemic and the availability of protective vaccines may have something to do with the recent surge in people being willing to share housing. And with rents up 14 percent in a year, renters – whether boomers or young adults – are looking for affordable options. “We often see [young] people are looking for an exchange for less rent – help around the house,” Riley said.
Millions of retirees still live alone and aren’t willing to let a roommate invade their space. Yet Jennifer Molinsky at Harvard’s Joint Center for Housing Studies estimates that more than 1 million older Americans currently live with non-family members.
Finding a “boommate” has multiple benefits. In this PBS video, what motivated Becky Miller, a retired receptionist, to find a roommate was the need to defray the cost of maintaining her home. But by renting to a fellow boomer, Debra Mears, Miller found more than just financial relief.
By sharing her home, she also found companionship. …Learn More
July 21, 2022
Research to Look at Work, Retiring by Race
The racial disparities embedded in our work, retirement, and government systems will be front and center at the annual meeting of a national research consortium.
One of the presentations at the online meeting on Aug. 4 and 5 will explore the impact of wealth and income inequality on Black and Latinx workers at a time these populations are rapidly aging. The researchers are concerned with how their decisions about when to retire will impact their economic security.
Growing inequality “point[s] to greater risks of financial insecurity” for future Black and Latinx retirees, the researchers said.
Another paper will address a related topic: the differences, by race and ethnicity, in workers’ levels of knowledge about how Social Security benefits work. Understanding the ins and outs of the federal retirement benefit – and specifically the advantages of delaying retirement to get a larger monthly check – are critical to improving living standards in old age.
Other research will explore an area that hasn’t been well studied: government programs used by non-parental caregivers such as Black grandparents or members of Latinx three-generation households to support the children in their care. The researchers will examine minority and low-income workers’ and retirees’ use of SNAP food stamps, child care subsidies, Temporary Assistance for Needy Families, and various benefit programs overseen by Social Security.
COVID is another topic on the agenda. One study compares the financial impact of the pandemic on early retirement for different income groups with the patterns in the aftermath of the Great Recession more than a decade ago. Another study examines how mortality rates might change in the wake of the pandemic.
Research on many other topics will also be featured, including health insurance, mothers, and longevity. The agenda and information about registration are posted online. Registration is free. …Learn More