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Healthcare Revolution

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Europe is able to have successful and affordable Healthcare, so why can’t we. Well, the answer might be right on the tip of our tongues. We have an obesity rate of 64.5% vs. a 27% and 38% obesity rate for European females and males, respectively. (The European obesity rate is increasing at an alarming rate due to what I believe is due to poorer nutrition, the increase of fast food chains, and to many extents, the McDonaldization of Society, where quality is substituted for quantity). I found a brilliant analysis of the single problem we have with Healthcare and what must be done to change it in this Op-Ed piece in the New York Times. The author, Michael Pollan points out that the single biggest problem with Healthcare is not the system itself but America’s food industry, “a second even more powerful industry,” even more powerful than Insurance. The American diet most clearly leads to health problems in the future.  Super size meals, dollar menus, pound burritos, pretty much everything the Fast Food Industry puts on the table is fodder for the Healthcare industry. Even the salads and healthier food they have put on the menu aren’t as healthy as they appear to be. A salad with heavy dressing is over 1000 calories (like a Chipotle Burrito), and most people, because they think salad is healthy will get fries to complement said salad. You can thank the drive thru for that Type 2 diabetes as well as the fact that you have no insurance. And sure, to an lower to average income American eating 3 burgers, fries and a soda for as much as you would pay for a cup of fruit and a bagel is very tempting. What must be done aside from fixing the Healthcare system of its flaws is to tackle the giant food system and the American way of eating. By providing Americans with cost-effective and healthy eating, we will decrease the burden we are putting on the Healthcare system. If we get the health insurance industry involved in the fight over the farm bill, which they certainly will because they see the profits in having a healthy population, then we can see a true step forward for Healthcare Reform and cutting Healthcare costs.  While Pollan believes the fight should be between “Big Food and Big Insurance,” I also believe that the Healthcare Industry will side with Big Food since it throws money their way.   It looks like a we have a battle of the bigs, I hope us little ones just don’t get lost in the fog.

President Obama’s Healthcare Speech Real Time Updates

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Get ready, come 8 o’clock Eastern Time, live updates will be rolling through the wires covering President Obama’s Address To Congress.  You’re not gonna want to miss this.  8pm- First Lady Obama enters into the House    8:11- The President Finally Arrives to warm applause   8:16– Speaker of The House Pelosi Announces The President of the United States   8:18 Describes that a recovery is many months away, declares he will not let up until those seeking jobs will find them  8:18 1/2 “Pulled this economy back from the brink,” only Democrats rise in applause  8:19 Issue of Healthcare, Determined to be the last President to take up Healthcare, again Democrats only stand  8:20 A History Lesson on Healthcare by Obama    8:21-8:22 PersonalAmerican stories of Healthcare’s Lapses, “This is wrong.”  Every seat applauses.  8:23-4 We must do something to control costs, “Our Healthcare Problem is Our Deficit Problem” 8:25 Left: Single Payer System (Public Plan) Right: Individualized Healthcare  8:26 4 out of 5 commitees have finished there tasks and there is an 80% agreement 8:27-8 We have also seen scare tactics that have not helped the debate, “The time for bickering is over.”  8:29 Three goals More security to those with insurance, provide those that don’t have it, slow the Healthcare costs for our country 8:30-2 If you have Healthcare, nothing will require you to change.  Against the law for insurance companies to deny you coverage if you have a preexisting condition, cannot drop coverage when you get sick, no arbitrary cap, place a limit on out of pocket expenses. If you don’t have Insurance you will have quality affordable coverage.  New Insurance exchange (shop for insurance at competitive prices).  Every seat rises in applause 8:33 This exchange will happen in 4 years.  But right now if you get sick you will be covered.  8:34-7 You are required to have Basic Health Care. (It is clear that Obama has looked at the Massachusetts system and how small businesses have many times been left out.)  8:38 Time to put down some rumors: States rumors of “Death Squads” is a complete lie 8:39 Illegal immigrants will not be covered, no abortions will be funded by the gov’t 8:40 “Consumers do better when there’s choice and competition.” 8:41 “I want to hold Insurance Companies accountable” 8:43 “Republicans and Democrats need to work together” 8:44 “If you get affordable coverage then we will give you a choice” Only democrats stand up 8:45 How to pay for this plan, “not a single dime will be added to our deficits.” 8:46 We can find savings within the Healthcare system already 8:47 Medicare “Must be passed down from one generation to the next”8:52 Reforming Medical malpractice laws, Republicans stand up in applause.  8:53 900 Billion dollars over ten years Expect commentary early tomorrow morning

Long Term Care Insurance and The AARP’s Media Blitz (No Relation)

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Watch out ladies! You may not be planning and preparing for long term care properly, according to a report by the American Association for Long Term Care Insurance.  Looking at the data though, I cannot see a link between the economic downturn and the ability for women to plan and prepare for long term care.  Nonetheless, the takeaway from this data is that long term care and long term care insurance are important issues that very often get overlooked.

 

In other news, be prepared for a media blitz this Labor Day weekend by the AARP as it attempts to prove to retirees that it is has no political leanings in the Healthcare Reform Debate.  They are rolling out with millions of dollars in advertising budget to convince people that they are only looking out to help its members in the Healthcare Debate.  This advertising is rolling out because of the fact the AARP lost 60,000 or so members who thought the association was flat out siding with Democratic camp.  This is yet another reason why I’m glad I have DVR. 

The Future of Medicare and Other News

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Back to the debate that was discussed in the blog post entitled “A Generational Battle Awaits.”  While Obama says he is cutting funding to Medicare to get rid of waste and the excesses of private insurance companies, it seems many seniors and Dem. Rep. Betsey Markey in her address to a Colorado town hall believe that as she stated: “There’s going to be some people who are going to have to give up some things, honestly for this to work.”  Who those people are the Representative did not say, but we can pretty much tell it will be those benefiting from Medicare. Yet, to counter these viewpoints, the secretary of Health and Human Services stated in an address: “Health Insurance reform will protect the coverage seniors depend on, improve the quality of care and help make Medicare strong.”  What can be seen from these opposing views is that the Obama administration wants to ensure that Medicare stays around, but Medicare will need to be changed, in some cases for the worse, to continue to benefit all of those who are a part of it.In a slight side note, there is a great PBS Frontline website and video entitled “Can You Afford to Retire.”  It paints a bleak picture of retirement right now, but shows the truths that need to be addressed.

Apply for Social Security Benefits Online

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Great news for those of you who don’t want to wait in line at the Social Security office.  If you are at least 61 years and 9 months old and want your benefits to start no more than four months in the future then you can apply for social security benefits online here at social security online.  Furthermore, the site has an interesting “Retirement Estimator” that will prepare a personal estimate of your benefits depending on different starting ages.  

Retirement News 8/27/2009

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A new Edward Jones report released this morning has some interesting details on parents saving for retirement and college for their children. The report says that a third of parents are saving equally for retirement and paying for college, a third are putting more money into one than the other and another third aren’t saving for either.   To further analyze this data, the report states that younger parents (35-44) are more likely to save for both (37%) than those ages 55-64 (23%).  This is interesting data considering retirement and paying for a child’s college education many times come around the same time.  So remember that retirement savings are just one of many financial considerations when growing older. 

 

In other news, in regards to a USA Today posting on 401(k)’s it seems that the IRS may just reduce the amount you are allowd to contribute to your 401(k) in 2010 to $16,000.  This is truly upsetting news considering now is the time that people are going to have to put as much as they can back into their savings because they had to delve into during the recession. Let your Congressmen know that this should not happen, now is the time to save away for the future!

On Being Conservative

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I grew up in the Great Depression and witnessed my parents’ penchant for avoiding risk. I learned my own lessons as well after I started earning my own money and tried to save it. Someone advised me of a “good” stock broker. He wasn’t good to me. I lost money on every stock he sold to me. I think that his firm directed him to sell the stocks in their own inventory that they considered bad investments.Midway through my working career at Boeing, I became head of corporate planning—a job that required parceling out research and new business budgets to the operating divisions and justifying the investments on the the sales prospects to the company’s board of directors. The total of the budget requests were always higher than we could afford to support while the sales projections from the operating divisions were, when totaled, higher than the customers could afford to spend. They reminded me of the always optimistic projections of my first stock broker.Years later, in retirement, I learned a lot about the various retirement planning methods. Almost all of them used optimistic portfolio returns from history and left out many things that influenced retirement spending and income, and no two gave similar answers. Inserting my standard test values for investment returns, pension, Social Security, tax rates, etc., I found they all gave different results. In fact, some said that no additional savings were required while others would impose staggeringly high monthly savings. These results were published in two, full page, articles in The Wall Street Journal.These programs came from well-known financial firms which seemed reluctant to improve their programs. I still find significant shortcomings after all of these years. The majority do not account for the appreciable costs that bring actual returns to values lower than the indexes for returns, nor do the simpler programs account for reverse dollar-cost-averaging shown by my research and described in J. K. Lasser’s Your Winning Retirement Plan.There are more complex statistical programs that purport to predict the future. They don’t. They should really say they are poor representations of what might have happened in the past. Most are based on fake return statistics and don’t correlate with actual historical inflation at the time of the returns.Together with my wife, we offer modest assistance to some people relying only on Social Security. They consumed their savings too early for various reasons, and now are sorry that they weren’t more conservative in their planning, budgeting, investing and spending. Over the years inflation destroyed the value of the pensions some have. Even then, they didn’t realize that they can’t spend all of their fixed pensions in retirement. It’s necessary to save part of each pension payment so they’ll be able to supplement their income later as inflation destroys fixed pensions income.Then there are Unk-Unks, a term for unknown-unknowns, that is, things you are unlikely to think about in advance, such as household emergencies and events in the lives of your adult children or elderly parents. Retirees have told me their biggest Unk-Unks were the divorce of a daughter with children followed by the need to support elderly parents after the parents exhausted their own savings.There are the things that you could have planned using some very detailed planning. Such planning is used by estimators in the construction industry. When an item was forgotten, we called these OSIFs, short for “Oh, shoot, I forgot,” except we had a stronger word than “shoot.” Forgotten items result in a dollar-for-dollar loss. On www.analyzenow.com I include a special event worksheet in the comprehensive programs that encourages people to include the cost of high value items such as to replace a roof, automobiles, etc. Retirees (and older working people) can gain much by first saving for a future purchase rather than paying for it over time.During my working years, I was very successful managing projects and organizations ultimately becoming president of The Boeing Aerospace Company (1980-1985). I attribute much of my success to being conservative both in work and retirement. Being conservative in retirement planning means using inputs that are low for returns, high for taxes, long life spans, etc. It also means having a significant portion of your assets in conservative securities. You can’t afford to retire on lottery tickets in a retirement portfolio.Bud Hebeler, www.analyzenow.com

Addendum to A Generational Battle

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And now to add to yesterday’s blog, as a recent businesswire article, “Americans Dramatically Underestimate Health Care Costs in Retirement, First Command Reports” states that retirees need to show some foresight and put extra money for the rising costs of healthcare and clear deficit in Medicare and Social Security spending.  So ensure you and your financial advisor discuss and plan on having enough money for rising healthcare expenses and the rising taxes required to fund the government stimulus packages.  

A Generational Battle Awaits

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The baby boomers and their kids are involved in serious debate over Social Security, Medicare and their respective futures.  The Social Security program is clearly running out of money, according to the Social Security Trustees report, if we do nothing, negative cash flow will commence in 2017, and all the money will be gone by 2040.  At this point in time, the boomers and their children are both supplying social security but come 2011, there will begin to be a turnaround as more and more boomers, eventually 76 million come 2029, become benefactors of the program. 

  Add to this problem the fact that life expectancy at birth is about 76 years old and life expectancy at 65 is now 17 years and there is something economically uneasy about the situation. As boomers are living longer, their medical expenses are increasing, so where are all the workers to cover these increasing costs? Well we don’t have enough workers to cover these expenses, so serious debate, as is happening now, must take place as to the next steps.  Someone, or rather a particular demographic, is going to have to cover the cost, so what is the best way to settle this without causing a generational debate. It seems boomers’ children are going to have to carry the weight of their parents but as Garver states in his article “Social Security Sets the Stage for Generational Warfare,” “Because boomers’ kids neither created the Social Security problem not let it fester more than 40 years, the problem is potentially one of generational warfare.  And boomers’ kids would hold the moral high ground by reminding their boomer parents about being taught to take responsibility for one’s own mistakes.

  There are many plans in the works about ensuring the future of Social Security and Medicare, and in a recent New York Times article, “A Basis is Seen for Some Health Plan Fears Among the Elderly” the boomers have some reason to fear about the future of Medicare as they have known it under the Obama administration.  In a Kaiser Family Foundation poll this month, only 23 percent of respondents over the age of 65 felt they would be better off if health reform passed. Younger respondents were more optimistic To many boomers Obama’s cutting of healthcare costs, and combined emphasis on effectiveness of certain programs has lead them to see that he wants to curb some of Medicare’s services.  Many are even going so far as to say that Obama is implementing so called “death squads” that will decide people’s medical fates in the last parts of their lives.  While these death squads are one extreme viewpoint and takeaway from a lengthy and constantly expanding (1,017 pages) reform bill, it still reflects as one Gallup poll released last month shows that by a 3-to-1 margin, seniors believe that reform will reduce their access to healthcare.  But as one article in the “Christian Science Monitor” points out “Why GOP sees Seniors as Crucial to Health Reform Battle” seniors are the ones with the time to attend town meetings, and they pay close attention to the details of their benefits. 

  Its going to be interesting to see if we will be able to find a common ground, where maybe if you are a senior who has enough money for private insurance you can wave benefits knowing that you will be benefiting from your children’s hard work.  As it seems right now, both sides are taking the extremes of the debate, but hopefully we find a middle ground because if we don’t it’s surely going to be an uphill battle.

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