The New York Times reports that the GOP is preparing a host of suggestions for how to cut the Federal Budget deficit.
Only 12% of the Federal Budget is in the form of “discretionary” spending, meaning spending other than Defence, Medicare, and Social Security. Republican Lawmakers have therefore been looking to Medicare and Social Security to make cuts.
I’ll soon be facing the all-important task of completing our 1040 return. Just for fun, I ordered a paper copy of the instructions. It’s come to the point where it’s actually a book of 100 pages excluding a pile of forms almost as thick. I remember the time when J. K. Lasser was still alive and put out his annual publication to help people prepare their taxes. It wasn’t much more than an orange booklet then. At that time, the tax code was only a little over 100 pages long. It’s now a library of documents. Lasser died in 1984, but John Wiley & Sons bought his name for subsequent publications including one I authored at their request.
Our country is in unbelievable financial trouble now–and it continues to get worse as we delay taking the necessary bites out of Social Security, Medicare and Medicaid. Instead, we added 12 million more people to Medicare this last year and now all of us Medicare patients have the opportunity to get a free annual medical exam and pay less for drugs.
I’ve talked to lots of doctors while riding the ski lifts. Some small town doctors favor the increases in Medicare, but generally the larger city doctors dislike it, many saying that they are starting to reject Medicare patients because the compensation is too low, rules too tight and waiting times too long for the increasing number of elderly and the ever diminishing supply of doctors. One doctor said that Medicare now wants the doctors to report which of the specified cost-effective treatments they have used with some unannounced penalty for not using one on the prescribed list.
I pity the youth of our nation who will have to take the brunt of all of this. As it stands now, each already has over $50,000 share of the current national debt plus $300,000 share of the unfunded obligations for Social Security, Medicare and Medicaid. Since only about 55% of the poeple who turn in 1040′s actually pay any income tax (and many who don’t pay actually get cash instead), it’s likely that the remaining 45% will continue to vote for politicians who will further increase their benefits. It won’t be long until the non-payers are more than half of the voters as the Baby Boomers start to retire–most with insufficient funds. One study found that only 4% of middle income people nearing retirement will have enough money to sustain them through retirement. No wonder. The national savings rates have been a disgrace for over two decades as people consumed more and “invested” in houses they could not afford.
Our generation has lived in the best of times. I’m grateful for all of the opportunities available to us and our high standard of living. Nevertheless, we have consumed too much, and now someone has to pay the price. I seriously doubt if those who follow us will enjoy the same lifestyles for several generations. My most common response to people who ask me retirement questions are to exercise, eat wisely, spend less, save more and work longer. They’ll be very grateful later in life!
Bud
The New York Times, February 9th, 2011
Even as the federal courts kick around the new health care law, certain improvements for Medicare recipients are nonetheless under way.
Dr. Donald Berwick, administrator of the Centers for Medicare and
Medicaid Services, ticked off several new developments in a recent
interview.
First, he said, “there’s a lot of good news on the prevention side.”
At its creation in 1965, Medicare focused on treatment, by doctors and
in hospitals. Now that we’re all much more conscious of heading off
disease and disability whenever possible, the program is making
preventive care easier to access.
So an older person’s very first “welcome to Medicare” visit, which
used to involve a co-pay and deductible, is now free of any
out-of-pocket costs. It’s an attempt to encourage those who may have
been avoiding or delaying medical care to go see a physician.
And for the first time, beneficiaries are entitled to a wellness exam each year, also without charge.
Because there’s a shortage of primary care physicians who will accept
Medicare, the new law offers a 10 percent payment bonus to qualifying
doctors and other health care providers who will agree to see Medicare
patients.
Finally, the dread “doughnut hole” gets a little less dreadful. To
review: The Part D benefit that covers drugs allowed patients to pay
just 25 percent of the cost up to $2,800. Then they fell into the hole
and — until now — had to pay the full tab themselves until the total
charges reached $4,550; at that point they paid 5 percent. That gap
posed real hardship for millions of people, and a $250 nontaxable rebate
check last year offered scant comfort.
This year, those in the hole (and you now reach the hole $40 later,
at $2,840) will see a 50 percent discount on brand-name drugs and a 7
percent discount on cheaper generics until the $4,550 cap is reached.
Supplemental Medicare Insurance: At NewRetirement, we believe these new changes will help improve Medicare services to seniors drastically. However, there are still holes in Medicare that can be filled with additional insurance programs designed to supplement Medicare. Find out more about your options at NewRetirement.com
Chatanooga Times, January 13th, 2010
Q: I didn’t enroll in Medicare Part B back when my Part A started a few years ago. Can I enroll now?
A: Yes, but if you want to do it this year, you’ll
have to act soon. The general enrollment period for Medicare Part B
medical insurance began Jan. 1 and runs through March 31. Keep in mind
that although Part A is free, there will be a premium for your Part B.
And in most cases, that premium goes up each 12-month period you were
eligible for it and elected not to enroll.
To find out more about Medicare, visit the Medicare website at
www.medicare.gov or see Social Security’s online page of resources by
visiting www.socialsecurity.gov and selecting the “Medicare” link.
Q: I get both Social Security and supplemental security
income benefits. I recently was switched from a benefit based on my own
earnings to a higher widow’s benefit on my husband’s work record. But
then my SSI check was reduced. Why did you give me money with one hand
and take it away with the other?
A: SSI is a needs-based program. In other words, the
amount of your SSI is based, in part, on your income and resources. So
if your income goes up and your financial need decreases, your SSI
payment also will decline. When you started getting the higher widow’s
benefit from Social Security, your other income went up, so your SSI
payment had to go down. For more information, you can visit our Web page
about SSI at www.socialsecurity.gov/ssi. Or you can call Social
Security’s toll-free number at 1-800-772-1213 (TTY 1-800-325-0778) and
ask for the publication, “Supplemental Security Income.”
Social Security Optimization: Timing is everything with Social Security and with Medicare. Find out what strategy will get you the most return at NewRetirement.com
Boston Herald, December 30th, 2010
You paid your Medicare taxes all those years and think you deserve your money’s worth: full benefits after you retire.
Nearly three out of five people say in a recent Associated Press-GfK
poll that they paid into the system so their benefits shouldn’t be cut.
But a newly updated financial analysis shows that what people paid
into the system doesn’t come close to covering the full value of the
medical care they can expect to receive as retirees.
Consider an average-wage, two-earner couple together earning $89,000 a
year. Upon retiring in 2011, they would have paid $114,000 in Medicare
payroll taxes during their careers.
But they can expect to receive medical services — from prescriptions
to hospital care — worth $355,000, or about three times what they put
in.
The estimates by economists Eugene Steuerle and Stephanie Rennane of
the Urban Institute think tank illustrate the huge disconnect between
widely-held perceptions and the numbers behind Medicare’s shaky
financing. Although Americans are worried about Medicare’s long-term
solvency, few realize the size of the gap.
“The fact that you put money into the system doesn’t mean it’s there waiting for you to collect,” said Steuerle.
By comparison, Social Security taxes and expected benefits come closer to balancing out.
The same hypothetical couple retiring in 2011 will have paid $614,000
in Social Security taxes, and can expect to collect $555,000 in
benefits. They will have paid about 10 percent more into the system than
they’re likely to get back.
Many workers may believe their Medicare payroll taxes are going for
their own insurance after they retiree, but the money is actually used
to pay the bills of seniors currently on the program.
Supplemental Medicare Insurance: Medicare’s solvency is an ongoing problem that is only going to get more heated. Even if the benefits you qualify for are not cut, however, it may be necessary for you to supplement Medicare with other insurance.
Yahoo News, December 29th, 2010
The first baby boomers will be old enough to qualify for Medicare
Jan. 1, and many fear the program’s obituary will be written before
their own.
A new Associated Press-GfK poll finds that baby
boomers believe by a ratio of 2-to-1 they won’t be able to rely on the
giant health insurance plan throughout their retirement.
The boomers took a running dive into adolescence and
went on to redefine work and family, but getting old is making them
nervous.
Now, forty-three percent say they don’t expect to be
able to depend on Medicare forever, while only 20 percent think their
Medicare is secure. The rest have mixed feelings.
Yet the survey also shows a surprising willingness among adults of all ages to sacrifice to preserve Medicare benefits that most Americans say they deserve after years of paying taxes into the system at work.
Take the contentious issue of Medicare’s eligibility age, fixed at 65, while the qualifying age for Social Security is rising gradually to 67.
Initially, 63 percent of boomers in the poll
dismissed the idea of raising the eligibility age to keep Medicare
afloat financially. But when the survey forced them to choose between
raising the age or cutting benefits, 59 percent said raise the age and
keep the benefits.
“I don’t mind the fact that people may have to work a
little longer,” said Lynn Barlow, 60, a real estate agent who lives
outside Atlanta. Especially if there’s time to plan, laboring a few
extra years allows people to save more for retirement.
Bring up benefit cuts
and Barlow isn’t nearly as accommodating. “I started working when I was
16 and I expect a benefit after putting into it for so many years,” she
said.
As Medicare reaches a historic threshold, the poll
also found differences by age, gender and income among baby boomers. For
example, baby boom women, who can expect to live longer than both their
mothers and their husbands, are much more pessimistic than men about
the program’s future.
Medicare is a middle-class bulwark against the
ravages of illness in old age. It covers 46 million elderly and disabled
people at an annual cost of about $500 billion. But the high price of
American-style medicine, stressing intensive treatment and the latest
innovations, is already straining program finances. Add the number of
baby boomers, more than 70 million born between 1946 and 1964, and
Medicare’s fiscal foundation starts to shake.
Supplemental Medicare Insurance: We do not anticipate Medicare disappearing entirely, but it is entirely possible that the program will undergo major changes in the near future. As such, considering insurance to supplement Medicare now may be a good plan.
Arizona Sun-Sentinel, December 22nd, 2010
A federal crackdown on Medicare
fraud and overspending will force South Florida seniors to think twice
about where they buy walkers, motorized wheelchairs, mail-order diabetes supplies and other equipment.
Starting
Jan. 1, Medicare will pay only for certain equipment that comes from a
vendor who has been screened and selected through competitive bidding.
Affected items include feeding-tube supplies, mail-order diabetic
supplies, oxygen equipment, respiratory devices, mattresses, hospital
beds and motorized scooters.
Failure to buy from an approved shop
could leave seniors stuck paying the entire cost of their medical
supplies, Medicare warned. The change may be awkward, but it will save
seniors and the Medicare program a significant sum, said Jonathan Blum,
deputy administrator of the Centers for Medicare & Medicaid
Services.
“Over the next 10 years, our actuaries estimate it will
save $17 billion for the Medicare Part B trust fund and $11 billion for
our beneficiaries,” Blum said Monday. “There is tremendous evidence that
the program pays too much for these items and supplies.”
Washington Post, November 30th, 2010
One of the most significant savings envisioned in the new health- care
law – limiting payments to the private health plans that cover 11
million older Americans under Medicare – is, so far, bringing little of
the turbulence that the insurance industry and many Republicans
predicted.
The law, which sets in motion the broadest changes to the U.S.
health-care system in decades, will hold down the amount of money the
government gives to Medicare Advantage plans, which are available to
patients who prefer a managed-care version of the program. The savings
is forecast to amount to $145 billion by the end of the decade.
Whether the payment changes are warranted was a contentious subplot in
the protracted debate over the legislation. Democrats argued
successfully that the private plans were being overpaid and could
withstand the changes. Republicans warned that such plans would raise
prices, lower benefits or cause defections from the program, stranding
the elderly people who rely on them.
Early clues to the actual effects have now materialized, as elderly
Americans may sign up for a health plan for 2011 during an enrollment
period through the end of the year, and the warnings of swift, serious
damage to the program are not borne out. Fewer health plans are
available for the coming year, but the decrease is largely for reasons
unrelated to the new law. Premiums have not jumped substantially, and
benefits have not tended to erode.
Plans drop out
According to federal figures, the number of plans that accept Medicare
recipients has fallen by about 13 percent from 2010, or slightly more
than 500 plans.
A closer look shows that about half those plans left Medicare because of
changes in federal rules that predate the sprawling overhaul law passed
by Congress in March, according to the figures from the Department of
Health and Human Services’ Centers for Medicare and Medicaid Services
(CMS). And many of the others left as a result of deliberate efforts by
the CMS to merge or eliminate small, neighboring health plans with
similar benefits.
Supplemental Medicare Insurance: Good as this news is, Medicare is still not equipped to cover every contingency you may encounter in retirement. For that, there are a host of insurance programs designed to supplement medicare. Find out if any are right for you at NewRetirement.com
Q.
I’ve been told that if we put our mother in a nursing home, we
must first spend down all her assets before Medicaid will kick in. But
her major asset is her house. In this economy, with houses not selling,
how will that work? Does Medicaid put a lien on the house and get
reimbursed after it sells?
Also, my sister currently lives in the house. Is she allowed to continue living there until the house sells?
— Lynn
In most states, a house that is a person’s primary residence is
exempt for purposes of Medicaid eligibility — even if the recipient then
moves to a nursing home. (Remember, Medicaid is a federal-state
program, so its rules vary by state.)
But there are two other conditions for exemption. The net value of
the house can’t exceed $500,000. (States have an option to increase
that to $750,000, but only a few have done so.) And the owner needs to
sign a form stating her intent to return to the house, even if that
seems an unlikely prospect and she remains in a nursing home.
In addition, any real estate, including the primary residence, is
exempt if you are legitimately trying to sell it and no one will buy it.
Even if the house is exempt, it may not make much sense to try to
hold on to it. Once the owner is on Medicaid, she will not have enough
income to pay the taxes, insurance and upkeep.
There isn’t much incentive for children or others to pay those
expenses, either, because when the owner dies, Medicaid will want to be
reimbursed. That usually happens by using the proceeds from the sale
of the house. And yes, many states do put a lien on a house when the
owner becomes eligible for Medicaid. This protects the state’s ability
to get reimbursed when the house sells.
Your sister could live in your mother’s house until it sells. But
there may be an even better option. If your sister were to live in your
mother’s house and to care for her for at least two years, and if
because of this care your mother were able to remain in her home rather
than enter a nursing home, then your mother could give your sister the
house without any Medicaid penalty or disqualification.
The New York Times, October 29th, 2010
THIS month, more than 40 members of what is said to be an
Armenian-American crime syndicate were arrested and charged in an
extensive Medicare
fraud. Prosecutors say the suspects stole the identities of doctors and
thousands of patients, using them at more than 100 bogus health clinics
in 25 states to bill Medicare for more than $100 million.
On Oct. 21, officials at a chain of mental health
clinics in Miami were charged with making $200 million in fraudulent
claims for group therapy sessions that authorities said were
unnecessary or never provided.
Medicare scams like these are rampant, costing taxpayers billions of
dollars every year. But the schemes are not always so ambitious.
Thieves may simply offer unsuspecting patients medical supplies and
equipment they do not need, or do not qualify for, to collect Medicare
numbers, said Julie Schoen, director of the California Senior Medicare
Patrol, part of a federally financed anti-fraud program that operates
in every state.
The swindlers then bill for other supplies and services the patients
never received and pocket the reimbursements. Another common ruse is to
offer free services, such as cholesterol or diabetes screenings, to get Medicare numbers.
Medicare recipients caught up in these crimes rarely face financial liability, but compromised medical and insurance records may cause them problems later.
“One woman called me saying her father needed a wheelchair but Medicare
denied it, saying he had already had a wheelchair for five years,” said
Makeba Huntington-Symons, program manager for the Florida Senior
Medicare Patrol in St. Petersburg. “His Medicare number and his records
were compromised, and he didn’t know it.”
Some Medicare recipients apply for long-term care or other insurance and
find they do not qualify because their medical records are full of
fraudulent treatments and tests, Ms. Schoen said. Medicare fraud raises
the cost of Medicare premiums for everyone. And when scams get
particularly popular, Medicare cracks down on eligibility, making it
more difficult for those who really do need, say, a motorized wheelchair
or hospice services.
