Spending Too Much On The Elderly? Absolutely Not!

Affirmation: Medicare and Social Security are the bedrock programs of American liberalism.

Question:

 "Then why do so many liberals consider it taboo to even suggest adjusting these systems to ensure their sustainability for future generations?"

Response: Liberals emphatically do not regard it as "taboo" to "adjust" these systems so long as that does not mean outright cuts - which serve no one's purpose. In addition, adjustments have already been implemented including ACA future budgetary fixes to "means test" more middle class seniors in Medicare as well as moving greater medical burdens to individuals, including: higher medical co-pays, higher premiums, etc.

This response is needed given 'We The People Live'  host Josh Zepps' claim of  "progressive orthodoxy" (e.g. to fix Medicare especially)  in an original Salon.com video filmed at the Democratic National Convention. (You can google Josh Zepps video at DNC to pick it up)

Zepps claims that America’s resource allocation is "in need of a serious reexamination"  This is also a theme that's been recycled in a number of media outlets including The Wall Street Journal, The Financial Times and New York Times.  The core argument or thread running through all is: Young workers, families are getting the shaft as more and more resources, funds are funneled to the elderly in social programs.

What is Zepps further justification? He argues:

“Medicare costs more than $500 billion per annum, 30 percent of which is spent on the five percent of beneficiaries who die each year. One third of that is spent on the final month of life. The final month. I mean, you want to talk about priorities, let’s just take that one datum. More than $50 million each year spent on the final month of life.”

Let's examine this at some length. First, Medicare costs are exploding, but a large part of that is due to a program called "Medicare Advantage" (MA) which was created by BushCO and the Republicans with their Medicare Modernization Act of 2003. It basically confected a privatized form of Medicare ("Part C"), with the express purpose of bleeding regular (traditional) Medicare into insolvency by blowing up to $20-25 billion or more a year (based on gamed "risk scores")  and funneling much of it from the older program. Unless this (MA) program is killed (the sooner the better),  no other cuts will matter - because MA will metastasize to the point every $ is swallowed up.. For those who wish to read the details on why MA is hurling Medicare into insolvency check out the content in these links:

https://www.publicintegrity.org/2014/06/04/14840/why-medicare-advantage-costs-taxpayers-billions-more-it-should

And:  https://www.medicareresources.org/blog/2015/11/04/is-medicare-on-the-brink-of-insolvency/

Zepps is correct about the magnitude of Medicare spending in the final months of life. But I believe that is the fault of the medical establishment and its specialist practitioners. This is based on not leveling with severely infirm elderly people regarding limits of additional treatments and their real costs v. benefits.. Missing in most treatment discussions, for example, is any reference to quality of life . The focus is exclusively on quantity and that also often comes with huge medical costs. Missing "the talk" is it any wonder older patients tend to believe medical treatments can offer curative solutions rather than only palliative ones?

In my own case I already mentioned my prostate cancer which has now recurred. I also discussed some of the many treatment options, e.g .

http://brane-space.blogspot.com/2016/07/no-you-dont-have-to-accept-further.html

and:

http://brane-space.blogspot.com/2016/07/why-do-so-many-men-opt-for-castration.html

I have been immersed in research on treatment options and what I have found thus far isn't encouraging, including:

1) Cancer experts themselves can't agree on which primary treatment is best.

2) The same experts (oncologists) can't agree on which ("salvage") treatment for recurrent disease is best, or when to start it.

3) Most agree that if a guy has recurrent disease and a biopsy shows it has spread to the bones ("bone mets"), his days are basically numbered - though certain treatments (e.g. hormone) will allow some limited life extension.

The question then becomes: How much life extension? While I don't want to croak prematurely and deprive my many readers of my blog posts and insights, I also recognize that once I hit a certain phase in possible further treatment (called "castration resistance") it is basically time to pack it in. Game over. Finito. Some will yelp: "You can't give up or quit!" but the flip side of that is Zepps' point that we spend excessively to stay alive in the last months when all the pointers show we ought to be going to hospice care and telling the medical industrial complex 'Enough!'

The problem is that the medical complex doesn't want to quit since they see it as a renunciation of their practice to fight for life all costs.  Hence, they regard the palliative option as failure, even though added treatments may only marginally increase life - but usually at the expense of life quality. (E.g. hormone treatments for advanced prostate cancer can increase life by 1-3 years but usually with side effects including: memory loss, depression, diabetes, cardiovascular problems, enlarged and tender breasts, shrunken testicles, zero libido and hot flashes such as suffered by menopausal females.).

So in this I do side with Zepps. The tricky question for him (and other would be "adjusters")  is: WHO assumes responsibility for telling an older patient his or her days are numbered and they need to just go gently into that good night? Medicare now has a special program where end of life issues are addressed, but as yet too few patients are getting these consultations, often because their nervous PCPs don't refer them.

I encountered this when I told my own PCP back in June - after the latest PSA test came back at 6.0 - that I planned to do nothing more. I wanted no urologist referrals, no more biopsies, no more anything.  Her reaction? She wouldn't hear of it. Short of strapping me down to the exam table and coercing me, she said I HAD to see the urologist and listen to what he said concerning the latest MRI results  So, while my inclination was to halt all further medical involvement, she wasn't going to play along.  In effect, she intended to add more medical intervention and expenses to my Medicare account. .(Mind you, her adamant stance could well be traced to our litigious culture, especially relative to  medical practitioners, whom we often hold to absurd standards of action and  judgment.)

Same thing with an oncology RN at UCSF who phoned me up after the MRI and stated I "sounded too young" not to accept brachytherapy salvage therapy, i.e. instead of possibly dying at 74 or 75.  When I asked about the side effects she kind of dodged the extreme "level III toxic comorbidities" which included loss of bowel and urinary control and extreme pain with every excretion - thanks to the radiation (36 Gy delivered in two fractional treatments a week apart - under general anesthesia)

How does Zepps propose we deal with  such situations? Clearly, his superficial call for simple "adjustments" shows he doesn't want to get "in the weeds".  But at the same time, you can't just uniformly cut $50b from Medicare and tell sick oldsters to "sink or swim".  And as I noted, Medicare already has the end of life palliative care option in the program (as part of the ACA), ostensibly to limit end of life expenses. But how does it get maximized without resorting to draconian cuts? The devil, as always, is in the details.

Zepps adds:

"The left needs to reckon with the uncomfortable truth that what this country is doing is sapping the vitality of the young and pumping it into the elderly,” he says. “It is a gigantic resources Hoover from young professionals into old retirees.”

But as I pointed out the ball is not in the "Left's" court, it is really in the province and court of the medical establishment.  It is also in the court of the craven politicians who are not prepared to tell Medicare Advantage folks that they need to come out of that too expensive program and go into regular Medicare. Their MA is costing taxpayers way too much each year.

First, if Medicare Advantage had been mothballed, as Obama originally vowed to do back in 2011-12,  we would already have seen more than $75 b saved over the past 4 years. Second, if that Part D Medicare drug plan had been altered to allow bargaining for lowest cost prescription meds like the VA, another $200b would have been saved. (Especially in the wake of the news that costs for catastrophic disease drug prescriptions (like for Hepatitis C) have gone up 85% since 2013.

Third, if the medical establishment more faithfully implemented end of life palliative care conversations with patients - via the Medicare program for that purpose - we'd save a lot of that $50b used in the last months of life. But this portends a massive change in perception by that same medical establishment, to wit, maybe they themselves need retraining especially in the nature of palliative care. This latter as opposed to pushing new and expensive treatments that only marginally improve life extension.

How then do we convince patients as well as the medical experts that end of life quality is as important as quantity?

When Zepps can answer these difficult questions, as opposed to merely interjecting "adjustments" (read cuts) for the sake of cuts, we would be more likely to take his arguments seriously.  It is evident to this observer that Zepps, like so many of his younger cohort, is too ready to blame oldsters for what are really faults of the health system we have. That includes the presence of insurance companies with their built in extortion and selective rules As I noted before, the only way out is a single payer system such as my wife and her activist group are fighting for here in Colorado with ColoradoCare and Amendment 69, see e.g.

http://brane-space.blogspot.com/2016/07/janice-gives-robust-defense-of-colorado.html

Sadly, Zepps objects to those who would "change the topic" by pointing to other items in the federal budget that could use cutting. But this is being myopic and foolish. Because unless we closely examine those other items, especially military spending for which the GDP allocation has doubled since 9/11, we will never get anywhere in terms of real world priorities.  See e.g.  http://brane-space.blogspot.com/2012/07/muricans-need-to-wake-up-about-military.html

Does the U.S. REALLY need 900 foreign military bases worldwide to fund to the tune of over $1 trillion a year? Especially as the Pentagon already "misplaced" $1.2 trillion in budget allocations prior to 9/11, according to former Defense Dept. analyst Chuck Spinney in a 2002 PBS NOW appearance . Does U.S. "defense" spending REALLY need to exceed that of the next 25 nations?  Clearly Zepps needs more education, though one must give him a prop or two for his audacious salon.com video. But to shed needed light (for his benefit) we can thank Nancy J. Altman and Eric Kingson, authors of 'Social Security Works' .

As the authors observe (p. 40):

"It is false that most older Americans are on "easy street". A very small percentage are, many more are poor or near poor, while some maintain a modest, middle class life style, often struggling to make ends meet."

So much for Zepps' indiscriminate claim of a "resource Hoover" hoovering up everything not bolted down for the benefit of fat, complacent seniors.  (Many of whom still have kids living in their homes, basements because they can't get decent jobs).

Last but not least, Zepps doesn't cover Medicare fraud at all, which could easily be neutralized by implementation of a computer system to track care received over time by different providers.  

I have shown in this post (including links) that Zepps' arguments are immature and don't take full account of: a) how seniors have been exploited by the existing system, and b) how younger workers and families are being exploited by a Neoliberal system with misplaced priorities.  One whose design and financial reward basis finds it more profitable for companies to fund massive stock buybacks than create jobs with decent salaries.

But one thing we cannot do is permit superficial memes and facile arguments against senior health and other benefits to be spread, thereby propelling a push for an elderly  "hunger games" . 

Btw, if the Reepos in the Nov. election seize  all branches of the government, Zepps may get his wish of massive cuts, thanks to Paul Ryan's Medicare voucher plan..  That will save hundreds of billions for sure, but leave most elderly in the same position they were in before Medicare arrived in 1966. That is, begging and scraping for financial help from family, offspring just to stay alive to deal with normal health issues - never mind treating stage IV prostate or breast cancers.

Are You Better Off Dying Younger? New Research Says 'Yes'

Who can forget the cover of TIME from barely more than a year ago, featuring an infant's  head and a side tag  proclaiming: 'This Baby Could Live To Be 142 YEARS OLD'  The  cover subtitle added:  "Dispatches from the Frontiers of Longevity".  The feature article then dove into all the ways these "longevity researchers" were doing everything to ensure most of the human race - at least inhabiting advanced nations - could live to a ripe old age. And newly born infants might even hit 142.

In a blog post nearly a year ago (3/2/15), I basically skewered this longevity balderdash and suggested that life quality ought to supersede quantity, if for no other reason than keeping medical costs from destroying lives as effectively as diseases like diabetes or Alzheimer's. Now all these issues were revived in a new TIME piece, 'The New Age Of Aging' (Feb. 22, p. 60) which suggests Americans "need to start thinking further into their future" - not just to 70 or so but maybe to 90 or 100. This is an admirable sentiment, but is it worth thinking that far into one's future if one may not have the financial means to support it?

Now, new research reinforces my premise and shows just how parlous living longer may be for the pocketbooks of people who keep themselves physically healthy. According to Van Harlow, director of research at the Empower Institute, healthy seniors actually need to set aside much more money - not less - to cover Medicare premiums and related costs in retirement. This contradicts the usual advice given in sources such as MONEY magazine, i.e. that if seniors keep themselves healthy they will save a bundle of money. Hence, Harlow's findings are clearly counterintuitive.

What's the primary basis for this?

Contrary to the Repukes' and Neolibs'  PR that "Medicare  (or Medicare for All) is a freebie",  it is nothing of the sort. As Harlow found (Denver Post, p. 13A, 'Good Health In Retirement Creates Its Own Ills', Feb. 11):

"A healthy 65 year old man needs to set aside $143, 800 on average to cover typical health care expenses, mostly for premiums on the various Medicare supplement coverages, as well as co-pays and out of pocket expenses."

He added that even if one major disease befalls the otherwise healthy senior, say diabetes, it would add an additional $88,000 to what he or she needs to pay for medical, drug etc. costs. Add in a catastrophe like Alzheimer's disease, which even a healthy vegetarian can get, and you are looking at another $250,000 -300,000 for nursing home care.

Add in prolonged cancer treatments or accessing costly new cancer drugs just to try and grab a year or so more of life, e.g.

http://brane-space.blogspot.com/2015/12/big-phrma-extortionists-exposed-ya.html

and you could be looking at up to a million or more added smackeroos, and a condition of "financial toxicity" as bad or worse than chemo toxicity - according to an article appearing in today's WSJ ('The High Cost of Cancer Care -  And The Physical Toll It Takes', p. R5). As one patient quoted in the piece put it:

"I am used to always working - paying bills on time. Now the illness took all that away."

These cases aren't just scare hype or exaggerations. Currently, for example, wifey and I each pay in  $105/ month in Medicare premiums (via deductions from Social Security) and separately pay roughly $190/ month each for Medicare Plan F supplements. And we aren't even including the Part D drug plan expenses, which include a monthly premium of $18.40 each - not including the deductibles or copays. (This also doesn't include the dental costs or for glasses, eye exams - which Medicare doesn't cover, period.)

I also went through a prostate cancer treatment (high dose brachytherapy) 3 years ago, and was fortunate I had Medicare by then. Else, the total cost would have been over $60,000 if I'd had to cough it all up myself (as it was I had to pay just over $1,200)

 In other words, getting older isn't cheap! And Medicare isn't a free "entitlement" as some of our brash, brainless politicos try to portray it.  Harlow's findings merely confirm this and disclose the longer one lives the more one will need to pay out for medical care-premiums, and hence the more money s/he will be need.  This is as opposed to a hard core (2 packs a day) smoker of age 65 who can maybe expect to croak at 69 or 70 from cancer or some other disease, thereby saving himself the extra hundreds of thousands of bucks he'd otherwise need - say if he managed to survive until 85 or so.

As I said, growing old isn't some "life of Riley" deal for most of us. This is also why it is supremely unfair (citing author  Paul Taylor in the latest TIME) to compare seniors'  aggregated wealth to that of young people. In this instance, Taylor wrote that as of 2013 the "median wealth of today's seniors was 20 times the wealth of the young". (This compared to a factor 8 times greater back in 1983, but Taylor never says whether he adjusted for inflation.) .

In any case, it's like comparing apples to oranges.  First, it takes no account of the decades the senior has had to accumulate that wealth - working, saving and investing-  and second, it takes no account of the much higher medical bills and debt he or she may face in old age. Add in a potential disability, say Alzheimer's or a permanent back injury from a fall and "longevity can prove devastating" according to the Harlow study. This is exactly why senior "wealth" must always include qualification (if compare to millennial wealth)  especially if the senior is not a member of the rarefied upper 1 percent income class. But too many media pieces recently have beaten up on merely moderately affluent elders say with the net worth of Bernie Sanders ($700k), This is egregious and off base.

Yeah, the young - especially today's college debt burdened millennials -  are "poor" by our (senior) standards, but what would you expect them to be? At the age of 23 or 24 I wasn't exactly rolling in money either and had minimal assets (as well as college loan debt albeit not as great as today's kids). That didn't change until after getting married and my wife and I could pool our talents, earnings and resources as a team. It is also why marriage remains the central means by which young people can parlay their meager assets into major ones. Inability to marry, for whatever reason, remains the key reason today's kids can't get ahead, buy homes or even rent apartments

But what is facing the young currently in terms of our rigged economic system, and low paying jobs, is only a taste of what will face them in old age, given this recent (Harlow)  study. In ten even twenty years there will be 30-40% more people chasing fewer jobs. Some scientists have even warned that the corporate yen to build more robots to take over positions could spell mass unemployment on a hitherto unseen scale. Looking "ahead" far into the future,  as the new TIME article suggests, means including all these limiting financial factors. All of which can curb potential assets and one's ability to pay medical costs.

In the computer-tech domain this is exactly what has happened. While we do see the occasional piece bragging about Google hiring 12,000 new workers, say in California, the mainstream media leaves unreported how many hundreds of thousands of computer-tech jobs are dispatched to Bangalore or Delhi in a given year. A Denver Post series last year on offshoring of jobs noted that youngsters planning college aren't stupid either, and having seen swatches of good computer tech support jobs dispatched offshore (including perhaps their own parents' positions) they aren't that convinced a computer science degree will get them very far anymore. Nor are they willing to gamble, leaving university with debts in the tens of thousands of dollars, that they'll nail a Google job by beating 100,000 to 1 odds.

The gist of it all is that extending human lifespans just for the sake of more years is misplaced. Without life quality or the associated means of financial support, those extra years will merely be spent as paupers or wards of the state - assuming the state has any money left after all its unpaid for wars, occupations etc.

A far more mature and rational goal for the longevity bunch is to enhance life quality. For example, by pouring money into  Alzheimer's research which currently (at barely $0.5b a year) is vastly under funded compared to cancer and cardiology research. Do that, and one might believe most people have a chance of living to maybe 90 with some degree of life quality, independence and dignity as well as not breaking the bank coping with a major disability and enormous nursing home expenses.

Sadly, if Bernie Sanders fails in his bid to win the presidency (thanks to the attacks of the corporate state and its numerous apparatchiks), dying younger may indeed be the only practical option for most Americans in their later years. In that case, the choice of many to continue smoking away or chowing down on gigantic 'Jack in the Box' burgers and KFC chicken, may actually be a rational one.

Financial Tropes Exposed - and Some New Year's Money Heads Ups!

Exposing widely circulated financial tropes is always a thankless task and an endless battle. You are fighting not only against the co-opted (by corporatism) MSM and its lackeys, but also the blow-dried yellers and screamers inhabiting the Business cable shows. These bozos tend to pop out sporadically to yelp at the hoi polloi and question why they are still "sitting on the sidelines". 

Thus, it come to the point one must expose some of this nonsense, even though one's audience may already have been convinced the Street's snake oil salesmen are telling the truth.

Under Financial Tropes Exposed:

1) You Need to Save $1.8 Million or More for Retirement

Yes it is true that many people aren't saving enough. But at the other end too many people are saving too much, and likely postponing retirement when they could already be enjoying it. One story that recently caught my eye appeared in MONEY magazine  (Jan. -Feb.) and concerned a couple with current total assets of $1.8 million - but for whom the magazine felt it incumbent to offer advice on how to save more!

But the couple may be wasting time and ending up like the subjects described last week in a New York Times Sunday Review piece. That concerned people in an experiment on consumption and waste being offered chocolate pieces contingent on how many hours they listened to white noise, instead of decent music. Every two hours listening to white noise earned a chocolate piece while listening to proper music earned nada. At the end of the experiment (on average for a given bloc of time) a large set of subjects had compiled an average of 10.4 chocolates of which only 5 were eaten, the rest wasted - they could not consume them later. Moral of the story? People over-worked and over-earned but inevitably under-consumed.

Applied to the real world of finance: most people never felt secure enough to stop working, they always wanted more because they feared losing it. Yet the evidence showed the 'more'  one gained or earned,  the more was usually wasted (or left unused). (In the case of a retired person, it would mean leaving a huge sum of assets behind which your 'heirs' may collect, or the state - if you die intestate)

Now, according to Morningstar Investment Management's David Blanchett, the evidence is in that working people are making the same error regarding saving for retirement.  He especially takes issue with the "80 percent replacement" rule which asserts that prospective retirees need to plan to replace at least 80 percent of their pre-retirement income. So if your pre-retirement income was $50,000 a year, you had to plan to be able to receive at least $40,000 a year. If your projected retirement is 25 years, then this means you need:

($40,000/ yr) x 25 years = $1, 000, 000

But by Blanchett's analysis this formula could lead some workers to over save for their golden years by as much as 20 percent.

2)  Put More Money Into Stocks AFTER You Retire.

This is an incredibly bad idea, so it was even more incredible to see Jane Bryant Quinn pushing it in the most recent issue of the AARP Bulletin. Quinn cites some new study which appears to show retirees are less likely to run out of money if they have more money in stocks - after they retire - as opposed to being "too cautious" and easing out over time.

The inescapable fact, however, is that the retired ordinary person (as opposed to the rich one percenter) has virtually no time at all to make up losses after a stock crash-  should it occur. He is then left to try to scrape by however he can - especially if 55% invested in stocks as one person suggests. A far better strategy, if one doesn't wish to outlive his money - is to save aggressively and then use savings to purchase immediate annuities. These then create a stream of income you're unlikely to outlive. It is preferable to stock-mutual fund dependency because you are not hostage to some phantom money stream that will gyrate with any and all external events in the markets. And if a correction or crash occurs, you can get through it.

3) You Don't Need a Will - You're Too Young

Incredibly, nearly 2 in 3 Americans have no Will. Though they may pout and whine about the "government" taking their hard earned money, this is where it all gets exposed as nonsense-- since without a will that's exactly what you're allowing to happen!  No one likes to think about the inevitable (except maybe the crazed fundies in their salvation and 'Hell' phantasms)  but think about it you must - especially if a  Bird flu pandemic were to be facing you.   Among the myths that people buy into:  

"Joint ownership of accounts, property etc. makes a will unnecessary". 

This is a common misconception. In fact, joint ownership alone often creates needless state or federal estate taxes and may result in gift taxes being due. It may also deny you complete control over your property while you're still living. Thus, joint ownership is a poor substitute for a will but can work well in conjunction with one.  

"A Will is not needed for a small estate".

On the contrary, the smaller the assets or estate the more important it be settled quickly, since delays mean increased expenses cutting down the proceeds. In many cases, an estate is larger than the owner realizes, and it's often undervalued. Still have all those 1952 TOPPS baseball cards? Well, they are part of your estate and if in near mint condition, now worth over $55,000.  

Can you prepare a will - last will and testament- on your own? Yes, but it's not a good idea. The reason is that many do-it-yourself wills are declared null and void by the courts.   My wife and I got our original will done soon after our marriage (1975)  by an attorney  in Barbados, it took ten minutes and cost $100 Bds. We got our will revised about ten years ago, to take into account family-beneficiary changes etc. It was done by a local attorney for about $200 and took less than a half hour.  

Given such an important piece of the typical American's financial puzzle, it is incredible that more haven't done it. It's especially incredible that folks who otherwise are hyper money careful, watching every penny, controlling their credit cards etc., are prepared to let tens of thousands slip out of their fingers (to the state) because they are too lazy to prepare a will!


Under Financial Heads Ups:

1) Be Aware of How the Affordable Care Act Affects Medicare:

Many seniors aren't aware of how the Obama Affordable Care Act starts affecting Medicare this year. The primary effects will be on all Medicare Advantage plans, which the ACA subjects to a $156 b decrease in spending over ten years, The changes will already be seen by many Advantage members in more limited options, including for primary care physicians (already "thousands" have been cut from networks in 11 states according to the AARP Bulletin).  Another change you're likely to see is higher premiums, which some plans are likely to impose in order to preserve existing benefits and choices.

2) Make a Plan to Foil ID Thieves:

This ought to be on almost everyone's radar after the recent TARGET fiasco, with nearly 120 million people compromised in some way.  Some of the measures are pure common sense, but it doesn't hurt to repeat them:

a) Never provide any personal info, like your Social Security number, to anyone you don't know - or over the phone.

b) Get off all mailing lists for "pre-approves credit cards" - as they're a gold mine for identity thieves. To opt out you can call: 888- 567-8688 toll free

c) Access your free credit report at least once per year at:

www.annualcreditreport.com

If you don't plan to apply for new credit or loans then freeze your report so crooks can't get new accounts in your name. (Type in 'security freeze' at the websites for Experian, Transunion, and Equifax.)

d) Ask your credit card providers to issue you new smart cards with EMV chip technology. If unavailable, then replace existing cards with ones with your photos.

e) Shred all documents that contain personal information - use cross-cutting shredders if you can.


Hopefully this advice will help to avoid money issues, problems in this new year.