Minority Retirees: More Healthcare Access

The pandemic has dramatized the grim consequences of Black and Latino Americans having less access to healthcare than whites: disproportionately high death rates from COVID-19.

Medicare Advantage figureBut there has been some progress toward racial equity in an unlikely place: Medicare Advantage plans sold by insurance companies. Enrollment in the plans has increased unabated for years, and minority enrollment more than doubled between 2013 and 2019.

During that time, Advantage plans increased from about a third of the various Medicare options purchased by Black, Latino, Asian and other minority retirees to nearly half, according to the non-profit Better Medicare Alliance.

Dr. Elena Rios, president of the National Hispanic Medical Association, and Martin Hamlette, executive director of the National Medical Association representing Black physicians, said Advantage plans provide retirees with access to preventive services like mammograms and cholesterol checks that keep them healthy.

Advantage plans are “a needed tool in the work of building a more just health care system,” they wrote in a recent Health Affairs article.

The appeal is upfront affordability. The monthly premiums are significantly lower than Medigap premiums, and many Advantage plans charge no premium. They frequently include prescription drug coverage, eliminating the need to pay for a separate Part D drug plan.

The reason Advantage plans are especially popular with minorities is that they tend to have lower incomes than whites and less room in their monthly budgets for medical care. Three out of four minority retirees in Advantage plans have incomes below 200 percent of the federal poverty level, compared with half of the whites in the plans.

Like all insurance, however, Advantage policies are a mixed bag. Medicare beneficiaries in poor health may face higher costs down the road if they experience a major medical crisis. In one study, the sickest retirees with Advantage plans had more risk of inordinately large annual out-of-pocket expenses for copayments and deductibles than retirees with Medigap plans. …Learn More

Pharmacist attending to a customer

Mortgage Payoff Frees Up Money for Meds

Paying off the mortgage frees up a lot of money for other things. The homeowners in one study splurged on big-ticket items.

Older homeowners, however, are adding another priority: medications.

After a mortgage payoff, workers and retirees ages 50 to 64 spent 50 percent more on prescription drugs in a comparison with households who had no major changes in their monthly housing costs, according to a new study by Harvard’s Joint Center for Housing Studies and funded by the U.S Social Security Administration.

The mortgage is typically a homeowner’s largest monthly expense. If medication spending rises when this big bill is eliminated, it supports the argument that some aging homeowners who are still carrying a mortgage may be choosing housing over necessary medical care.

This research is particularly relevant at a time older Americans are entering retirement with more debt. In 2016, four in 10 retirees had a mortgage – double the share in the late 1980s.

Not surprisingly, the researchers found some indication that lower-income workers and early retirees benefited more from eliminating their monthly payments. They have difficulty paying even for essential expenses, and the increase in their prescription purchases after paying off the home loan appeared to be larger than for higher-income groups with fewer constraints.

The researchers split the homeowners into two age groups – under and over 65. While homeowners under 65 sharply increased their drug spending after the mortgage payments ended, the Medicare beneficiaries did not.

The level spending after Medicare eligibility indicates that the program relieves some of the pressure on the family budget, the researchers said. Medicare also provides an average $5,000 annually to subsidize low-income retirees’ medications under the Low Income Subsidy program.

But for older homeowners who are too young to get Medicare but are still paying a mortgage, the study “raises serious concerns for health care quality and the costs to treat poorly managed conditions,” the researchers said.

To read this study, authored by Christopher Herbert, Jennifer Molinsky, Samara Scheckler, and Kacie Dragan, see “Older Adult Out-of-Pocket Pharmaceutical Spending after Home Mortgage Payoff.”

A blog post last year featured a similar study – this one about the older Americans’ adherence to medications after …Learn More

Documentary: Navigating a 401k World

Early in this new documentary, the director’s message seems to be that retirement finances are messy, elusive, and too complicated for mere mortals to understand. He’s right on all counts.

Filmmaker Doug Orchard reminds us in “The Baby Boomer Dilemma: An Exposé on America’s Retirement Experiment” that there are no easy solutions for Social Security, which economists predict will deplete its trust fund reserves around 2034. Closing the shortfall will probably require some combination of benefit cuts and revenue increases.

Social Security is “one of the most important problems we face as a nation,” The Wharton School’s Olivia Mitchell says in the documentary.

Our other primary program – a 401(k)-style retirement savings plan – seems great when the stock market is going up, as it has until recently. Viewers are reminded of the 2008 stock market crash, which panicked older workers who realized they might not have time to make up their losses before retiring. The stock market rises over long periods of time, increasing the money in retirement accounts, but it entails risks that can be unnerving for workers and force them into making bad decisions about their investments.

Finally, the filmmaker presents a real-world example – in Florida – of the difficult decisions workers grapple with in a U.S. retirement system that has largely transitioned from defined benefit pensions, which provide regular monthly income, to 401(k) and other defined contribution plans, which accumulate a pot of savings that retirees have to figure out how to manage.

“Baby boomers are sort of the guinea pig, and we’ve said, ‘Okay you figure it out guys,’ ” says David Babbel at Wharton. …Learn More

People of different ages and nationalities

Workers: Social Security Info is Eye-Opening

Most workers have never created an online my SocialSecurity account to get an estimate of their future retirement benefits. The people who do use this feature tend to be older or are retired and already receiving their benefits.

If only more younger adults would log on.

One 31-year-old worker, after looking up his personal estimate for the first time, learned that his future benefit is “not quite nearly enough to survive on.” The estimate – retrieved during an interview with researchers for a new study – prompted him to think about a retirement plan now. A 43-year-old woman realized her spouse’s decision about when to retire would affect her spousal benefit from Social Security. “I had no idea,” she said, calling the information “a reality check.”

And it’s a good thing one 60-year-old logged on to my Social Security. He didn’t know he qualified for retirement benefits, because the last time he’d checked, he had not built up the earnings record – 40 quarters of work – the program requires. “I will look into it further and find out exactly what is going on,” he said.

These and other revelations came from interviews with 24 workers by University of Southern California researchers Lila Rabinovich and Francisco Perez-Arce. They combined these insights with a much larger, online survey to analyze how Americans use the valuable benefit estimates available to them.

It’s important to understand why my Social Security isn’t being used more, especially since first-time users described the online feature as easy to use and eye-opening. Going online didn’t seem to be an issue either, because the people in the survey already search for other information that way.

One of the primary reasons the workers hadn’t looked up their personal accounts, the researchers concluded, was a lack of awareness the feature existed. But this isn’t at all surprising for younger workers, who are more concerned about developing their careers than about retiring. …Learn More

How to Help Low-Wage Workers Pay Bills

The Consumer Financial Protection Bureau (CFPB) will host a series of webinars next month for professionals and volunteers who regularly work with low-income clients and want guidance on how to help them with their finances.

People who serve this vulnerable population may want to help but don’t always feel comfortable giving advice. CFPB has assembled an online toolkit – a companion to the webinars – filled with simple, practical solutions and suggestions about how to get clients to open up about their finances or overcome the emotional obstacles to change. The agency also supplies professionals with thought-provoking questions for their clients about a range of financial issues.

“There are no right or wrong answers,” CFPB explains.

The webinars, scheduled for March, are open to everyone, including social service case workers, legal aid providers, housing counselors, tax preparers, non-profit volunteers, financial advisers, and local government officials.

The agency’s package of tips, tools and worksheets cover the basics that can make a big difference to families on a tight budget. A couple examples are a Spending Tracker to help them manage their expenses and a Comparing Auto Loans worksheet for car shopping.

Try these links for more information:

newborn baby at hospital

Newborns’ Health Issues Affect Moms’ Work

One in five babies born in U.S. cities is in poor health, with profound and lasting impacts on their own and their mother’s lives.

Researchers reached this conclusion after following nearly 3,700 infants and their mothers through Princeton’s Fragile Families Survey, which checked in on the families six times between the child’s birth and age 15. The survey was fielded in cities with a 200,000-plus population, and the babies’ most common medical conditions were low birth weight, premature birth, and genetic or other abnormalities, such as difficulty breathing.

A body of research on the long-run prospects for children with disadvantages – whether medical or socioeconomic – has established that they have far more problems as adults. Consistent with other prior research, a study by Dara Lee Luca and Purvi Sevak at Mathematica also found an immediate consequence for newborns in poor neonatal health: a greater likelihood of having a disability such as a motor or speech disorder or neurodevelopmental problems such as ADHD and autism.

Within their first year, the infants often qualified for federal cash payments to their mothers under Supplemental Security Income for Children (SSI).

The inordinate amount of time spent caring for babies in poor neonatal health takes an enormous toll on the mothers, the researchers found. While caregiving didn’t seem to impact their mental health, their ability to hold down a job was significantly compromised. The mothers of babies in poor health worked fewer hours, especially when the children were very young, and were more likely to drop out of the labor force entirely. …Learn More

Every Caregiver’s Challenge is Unique

Caregivers for loved ones with dementia experience their duties in ways that are unique to the individuals they’re caring for.

Some wrestle with the behavioral issues of the people in their care, while others must balance caregiving and work or struggle to navigate the Medicaid system, line up day care, or track down a reliable in-home professional.

“There is no one way to care for a loved one who has dementia,” says Amy Goyer, caregiver and author of “Juggling Life, Work and Caregiving.”

Goyer feels that every caregiver’s perspective could be useful to someone else going through the same thing. She recently hosted a webinar that opened a window on the lives of three Pennsylvania caregivers – one for a father, one for a husband, and one for a partner’s mother.

The three women had a couple things in common, including the stress of shouldering the burden and the strain on their finances of paying for the all-day care that family members required, especially in the later stages of dementia.

But the similarities ended there. To understand the variety and depth of each person’s experience, there is no substitute for hearing directly from them in this webinar, which was sponsored by AARP, the Alzheimer’s Association, and the Pennsylvania Association of Area Agencies on Aging.

Here are snippets of their stories:

Robin Madison and her son, Morgan Madison

Robin Madison and her son, Morgan Madison.

Robin Madison’s husband had Lewy body dementia, and Madison had four jobs: wife, mother, breadwinner, and caregiver. Her husband was 18 years older, and she was fully aware that she might one day have to take care of him. On the good days, he could be entertained by playing music on his tablet or watching television for hours. But he was often ill-tempered and difficult to manage.

Madison described her seven years of caregiving as a “battle” – a battle to get a diagnosis, to work at home while her husband roamed the house, and to secure consistent end-of-life caregivers for her husband, who died last year.

In the final months of his life, he was receiving in-home hospice, which proposed sending him to a facility close to home – for $10,000 a month. Should Madison pay that bill or pay for college for her son, Morgan? “I had to choose my son and his future,” she said. The pair shared caregiving duties.

Madison stressed that it was important to get something positive out of a very difficult time. Her son decided they should donate his father’s brain to science “to help somebody else,” she said. Madison is grateful to have emerged from the experience with a stronger bond with her son. “All we had was each other,” she said. Turns out that was a lot to have.

Diane Powell’s family could not afford professional care for her mother and father either. But one of the hardest things for Powell and her sister, who shared caregiving duties, came early in their father’s dementia, when they were “trying to figure out what is wrong.” Something was clearly amiss when her father, who owned a trucking company, would get lost on the road and couldn’t remember how to get home. A family member would figure out where he was and drive there to guide him home. …Learn More