February 6, 2018

Health Coverage Varies Widely by State

When it comes to state residents’ health insurance coverage, Utah and New Mexico are polar opposites.

Sixty percent of Utah residents are covered at work – the most nationwide. New Mexico employers cover only 36 percent – the lowest coverage rate.

It follows that their Medicaid populations also differ. In Utah, the federal-state health insurance program covers the nation’s smallest share (10 percent) of poor and low-income workers. New Mexico’s Medicaid population is triple that (31 percent of residents), and its poverty rate is among the highest nationwide.

“Where you live can play an important role in what coverage options are available to you and how affordable they are,” said Rachel Garfield, the Henry J. Kaiser Family Foundation’s senior researcher and associate director of its Medicaid and uninsured program. The Kaiser data are from 2016.

The factors driving the two indicators – employer vs. Medicaid coverage – are intertwined. A larger presence of big, successful companies ensures more employer coverage, raising the standard of living and reducing the need for federal aid. These are, in turn, influenced by other cross-currents in each state, Garfield said: the nature of its industry, whether retail, industrial, high-tech, or agricultural; population demographics, such as the number of immigrants; whether the state expanded Medicaid eligibility under the Affordable Care Act (ACA); and the ebbs and flows of regional recessions and recoveries.

Take Utah. Despite being a primarily rural state with its “Mighty Five” national parks, it is chock full of major employers. Utah’s three largest have 20,000-plus workers each: Intermountain Healthcare, the University of Utah, and state government. Many more employ at least 5,000. Utah’s relatively slim Medicaid population is no doubt influenced by both its employer base and the state’s decision not to participate in the ACA’s Medicaid expansion, which increased the program’s income limits to make more workers eligible. …Learn More

February 1, 2018

My Hillbilly Roots

J.D. Vance’s rural Kentucky roots, described in his book, “Hillbilly Elegy,” differ from my father’s family in southern Indiana in one important way. Vance’s violent, angry mother was a substance abuser with a trail of failed relationships in her wake. Vance carries the childhood scars. My dad’s family was a bunch of kind, reticent, teetotaling farmers.

But the similarities between our families struck me too – Vance called his grandfather Blanton “Papaw,” which I’d always thought was unique to my own Papaw Blanton but, I now know, is an endearment. And believe me, the corn fields and hills of southern Indiana and contiguous Kentucky are more southern than Midwestern. My grandma’s fried chicken was heaven.

The backdrop for Vance’s hillbilly stories emerges front and center in my own take on family: I look at rural poverty through a socioeconomic lens.

Vance, an acclaimed writer and Silicon Valley investment banker, “got out” via the Marine Corps, Ohio State University and Yale Law School. “To move up,” he writes, “was to move on.”  With sheer determination – supported by his tough, caring Mamaw – he overcame long odds, childhood stress-eating, and psychological retreat from a conflict-filled home. His Yale scholarship wasn’t earned on grades but because “I was one of the poorest kids in the school.”

To be clear, I do not see “getting out” as pejorative. Nor does “getting out” mean getting away from family. Rural people relocate in search of better job opportunities than what is available in depressed areas with eerily quiet “downtowns” of struggling or abandoned establishments pushed out of town by big-box retailers like WalMart and fast-food joints. Getting out is code for earning a decent living, buying a modest house, having health insurance, and being able to retire. In short, capturing the American Dream.

In my family, the strategy of getting out worked for some but not for others. Please bear with me through my generational story.

My late father, Leland Blanton, left home – Jasonville, Indiana, population 2,147 – so that my two brothers and I didn’t have to. His father – Papaw – owned a small-town gas station and, due to childhood polio, walked with a cane. A midwife helped my father’s true-grit mother deliver him into a three-room farmhouse with an outhouse. Twenty years later, his ticket out was a high test score that paved the way to becoming a hotshot pilot in the U.S. Air Force in the 1950s and 1960s. Greenland, Saudi Arabia, Morocco, Greece, Germany, Bangkok, Saigon, Turkey – he flew to every corner of the globe. We all lived nearly three years outside Tokyo. …Learn More

January 25, 2018

Just Half of Americans Enjoy Bull Market

The stock market’s 19 percent climb in 2017 was nothing short of impressive. This year, it has gained another 6 percent.

This means that many boomers with 401(k)s are feeling a little more secure about retirement – at least for now. That more people feel they will be able to afford a vacation this summer with their children. And that Warren Buffett is getting richer even faster.

But one in two Americans isn’t at the party. According to the Survey of Consumer Finances in 2016, the Federal Reserve Board’s latest triennial survey and the most comprehensive look at Americans’ personal finances, 48 percent of U.S. families do not own equities.

Less surprising is how stock holdings break out at various income levels. About 30 percent of families with earnings in the bottom half of all incomes own equities, whether in the form of 401(k) investments, brokerage accounts, mutual funds, or individual stocks. For these lower-paid workers, the 2.5 percent average increase in hourly wages in 2017 is usually more meaningful. But inflation increased 2.1 percent last year, leaving them with just 0.4 percent more spending money, according to U.S. Bureau of Labor Statistics wage and inflation data. This is half of 2016’s inflation-adjusted wage gain.

In the next highest income group – from the middle-income level up to the 90^th percentile – about 70 percent of families own equities in various forms. In the top 10 percent, the vast majority do (94 percent).

The chasm between the well-heeled and ordinary workers has been widening. Stock ownership is one prism through which to view that inequality. …

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August 8, 2017

401k Saving Harder at Lower Incomes

Our 401(k) retirement system doesn’t work as well for lower- and middle-income workers as it does for those at the top.

That’s because they face more severe headwinds in pursuit of their retirement goals, concludes a new study.

Consider what happens when a worker’s earnings drop 10 percent or he experiences a bout of unemployment. These episodes are more common among lower-paid workers, and when they hit, they hit their 401(k)s harder than the 401(k)s of people who earn more, according to the study, “Defined Contribution Wealth Inequality.”

In theory, 401(k)s could work for everyone – if everyone had access to an employer savings plan (which they don’t).  And while people who earn more money obviously have more to sock away in their retirement plans at work, smaller paychecks aren’t necessarily a problem either.

The key to retirement for any worker is whether he or she has saved enough, along with Social Security, to cover about 75 percent of what they earned at work during the years leading up to their retirement. It’s true that lower-paid workers can’t save as much, but less could still be enough to reach their more modest retirement goals.

But earnings declines, unemployment, smaller employer contributions, and unwise investment choices – these “barely affect earners in the top 10 percent of the earnings distribution but are associated with less DC [defined contribution] wealth accumulation for those at the bottom,” concluded the researchers, Joelle Saad-Lessler at the Stevens Institute of Technology and Teresa Ghilarducci and Gayle Reznik at the New School for Social Research.

This disparity, they argue, has increased the retirement wealth gap in this country.  In the post-recession period 2009-2011, for example, more high-income workers saw their DC account balances increase than did workers in the bottom half.

The researchers tracked the same people over time in two groups – the bottom 55 percent of the earnings ladder and the top 10 percent. They were able to more precisely compare each group’s ability to save for retirement by using the actual earnings and employer contributions to individual workers’ retirement plans. Here are their other findings: …Learn More

February 23, 2017

Some Insured Workers Delay Healthcare

Stark differences are emerging in the ways that workers, depending on how much they earn, are using the medical services covered by their employer health plans.

While higher-income workers gravitate toward preventive and maintenance care, lower-wage workers visit emergency rooms far more often, according to a study published last month in Health Affairs.  The researchers pointed to one major culprit: a 67 percent increase in average deductibles for employer health plans since 2010.

Employers usually offer the same health plans to all their employees. But the growing prevalence of high-deductible plans could be making making some low-wage workers think twice before seeing a doctor if they’ll have to pay the entire bill because they haven’t hit their yearly deductibles yet. Health insurance premiums and other out-of-pocket medical costs in high-deductible plans together consumed about 21 percent of pretax earnings for the low-wage workers studied.

Many of these workers, apparently trying to contain their out-of-pocket costs, might “avoid or delay health care services, despite having coverage,” said the researchers.

They analyzed four employers that covered some 43,000 workers through a common private health insurance exchange in 2014.  The researchers adjusted the data so they could compare the employees, controlling for, among other things, health insurance plan design, deductible levels, employee characteristics, and the size of their households.

An analysis of insurance claims data found that lower-paid workers were more likely to see a doctor after medical problems develop, while higher-paid workers were more diligent about preventing problems.

For example, workers in the top two wage categories ($44,000-$70,000 and over $70,001) received preventive care during visits to the doctor’s office far more often than workers earning under $30,000.  Screenings for breast, cervical and colon cancer were also more frequent among high-paid employees, who also adhered more closely to the drug regimens prescribed by their doctors.

Not surprisingly, hospital admission rates for lower-wage workers were nearly double the rates of the highest-paid workers – and four times higher for avoidable medical problems that landed them in the hospital. Low-paid workers visited emergency rooms about three times more often.

There are many potential reasons for these differences, including low-paid workers’ generally lower education levels and less access to paid time off from work to see a doctor. But the researchers said financial constraints certainly played a role: …Learn More

February 16, 2017

Rights of Low-income Medicare Users

A 2014 report from the Consumer Financial Protection Bureau (CFPB) said that the largest category of financial complaints by seniors was debt collection, with nearly half of their complaints involving “continued attempts to collect debt not owed.”

The CFPB just followed up with a missive directed at some 7 million older Americans enrolled in the Qualified Medicare Beneficiary Program (QMB). People who qualify for this Medicare designation receive such small Social Security checks – less than $1,010 per month for individuals and $1,355 for couples – that doctors, hospitals and other medical providers are barred from billing them directly for services rendered. The CFPB said that it, as well as the Centers for Medicare & Medicaid Services, continue to hear from QMB participants who report they are receiving unjustified medical bills.

Here’s how the CFPB suggests that QMBs or family members deal with improper medical billing:

• Prevent the problem by repeatedly reminding your doctor or medical service provider that you are a Qualified Medicare Beneficiary. QMB cards aren’t required federally but the District of Columbia and at least one state, Texas, provide members with a card to prove it.
• If you are billed, tell the medical provider or debt collector they are barred from charging you for Medicare deductibles, coinsurance and copayments, because you are enrolled in QMB.
• You have a right to a refund for a bill paid in error.
• If the medical provider will not stop billing you or refuses to issue a refund, call 1-800-Medicare (1-800-633-4227).
• Submit online complaints about debt collection practices by clicking here. …

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February 14, 2017

Unpaid Water Bills Open Door to Advice

Nearly half of the low-income residents in some sections of Louisville are delinquent on their city water bills. In Newark, water customers’ unpaid balances have been known to reach $4,000.

The shutoff and reactivation fees that some cities charge when they stop a customer’s water service create another problem in places like Houston: they add to the unpaid balances of customers who are already struggling financially. Cities are also becoming more aggressive about collecting on their debts, hiring third-party collection firms.

Researchers and the National League of Cities tried an alternative in the form of an ambitious pilot program involving five city water departments: Houston; Louisville, Kentucky; Newark, New Jersey; Savannah, Georgia; and St. Petersburg, Florida. Driving the program was the recognition that unpaid water bills are an indication of deep financial distress. So the cities, which are loathe to turn off this essential service, embraced a broader vision: providing financial counseling to empower families with delinquent water bills to better manage their situations.

While every city’s pilot program was slightly different, Ohio State researcher Stephanie Moulton said they had two things in common: an agreement to restructure residents’ unpaid water bills to make them affordable, and at least one private session with a financial counselor or coach already working for the city or a local non-profit. Some cities added other services, such as screening for public benefits if a job loss had caused a resident to fall behind on the water bill.

Houston, for example, trained and certified six customer service representatives in its Department of Public Works to act as financial coaches, said Bonnie Ashcroft, a departmental section chief. The counselors who coached clients on their household finances also advised them on how to reduce their water bills.

It’s not possible to do a rigorous analysis of the pilot’s overall effectiveness, because each city’s water department is unique. But individual analyses of each city found three that showed marked improvements in their water payments, Moulton said. These successes were presented in a recent webinar. …

In Houston, customers’ unpaid account balances declined, on average, from $544 to $374. Unpaid account balances in Newark went from $969 to $605. The frequency of payments in these cities also increased, Moulton said. Learn More