Squared Away Blog

Behavior

October 18, 2022

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

Field Work

October 13, 2022

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

Research

October 11, 2022

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

Research

October 6, 2022

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. …
Learn More

On the Web

October 4, 2022

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.)

If you know someone who could use this information, please pass on the link! ….Learn More

Field Work

September 29, 2022

This year, retirees were jolted by the 14.5 percent hike in Medicare’s Part B premium for medical services. It was the second-largest percentage increase in at least 20 years.

The monthly premium, which rose to $170, will drop to $165 in 2023. But medical care is an expensive proposition that consumes a big chunk of many retirees’ income from Social Security, 401(k)s, and other sources.

According to a new analysis of 2018 health care data, typical retirees had 88 percent of their total income left to buy everything else after paying for medical care. And one in 10 retirees with inordinately large health care costs had 63 percent or less left over for living expenses, said Melissa McInerney, Matthew Rutledge, and Sara Ellen King in their study for the Center for Retirement Research.

Interestingly, Medicare does protect against the larger cost burdens that follow health declines. As retirees age or develop chronic physical or medical conditions, the researchers found, the share of income consumed by medical costs doesn’t change very much.

Medicare covers virtually all retirees, and the lion’s share of their out-of-pocket medical expenses are premiums – for Part B, Part D drug coverage, Medigap, or Medicare Advantage insurance plans. The other medical expenses included in this study were cost-sharing and copayments for basic Medicare, prescription drugs, eyeglasses, hearing aids, and visits to the doctor, dentist, and hospital. Long-term care costs were excluded.

The analysis was restricted to people who have signed up for both Medicare and Social Security.

Paying for care puts the most strain on low-income Americans, many of whom rely almost exclusively on Social Security and have few, if any, other income sources. The exception is people with such low incomes that they qualify for Medicaid; they pay only 4 percent of their income for health care. …Learn More

Money Culture

September 27, 2022

To paraphrase a U.S. senator in 1977, the moral test of government is how it treats the sick, the poor, and its children. That rings especially true during an historic public health emergency like COVID.

Congress came through with financial relief to blunt the pandemic’s impact, and the money that flowed through the economy provided more Americans with health insurance, while also reducing poverty.

Several newly released U.S. Census reports “show how much vigorous policies can do to prevent poverty and preserve access to health care,” the Center on Budget and Policy Priorities concluded.

The Uninsured. During the pandemic, the share of all adults lacking health insurance declined from 9.2% in 2019 to 8.6% in 2021, reversing the trend of a rising uninsured rate in prior years. The rate dropped as Congress improved access and affordability during COVID by passing large premium reductions for policies purchased on the federal and state exchanges and by requiring states that receive Medicaid funds to expand their coverage of poor and low-income workers during the pandemic.

Congress has extended the premium reductions through 2025, but the federal enhancements to Medicaid are set to expire, leaving states to determine the extent to which they will cover their low-income workers in the future.

The Poor. The COVID aid passed by Congress lifted nearly 14 million Americans out of poverty over the past two years, according to Census. This statistic aligns with earlier research showing the financial assistance was particularly effective in helping low-income workers and people who were struggling financially prior to the pandemic. …Learn More