Tuesday, January 10, 2017

Proposed Changes to Medicare

At the beginning of 2017, over 57 million American citizens, or approximately 15 percent of the U.S. population, relied on Medicare for their health insurance coverage.  With more than 10,000 people turning age 65 every DAY, this number is expected to grow in the coming years.  According to a poll by Kaiser Permanente Healthcare, which offers a popular Medicare Advantage program in some states, 77 percent of people consider Medicare a "very important" program.  Despite its popularity, Congress is fast-tracking their own proposals to privatize Medicare within eight years.

What Changes Does Congress Want to Make to Medicare?

Since the time Medicare was established in 1965, it has always been a "defined benefit" program, which means they guaranteed a certain level of health coverage.  When the Affordable Care Act was passed, the defined benefits were improved to include free preventive services such as flu shots and screenings for diabetes and cancer.  Under the current program, Medicare pays for 80 percent of the cost of doctor and hospital visits.  The beneficiaries either pay for the remaining 20 percent out-of pocket or they use a private insurance company in the form of a supplemental insurance policy or Medicare Advantage plan to cover most of their remaining expenses.

Congress is now considering changing from a "defined benefit" program to a "defined contribution" plan.  Their plan could also be called a voucher system.  Under the proposed plan, the government would give people a voucher to help with the cost of their insurance premiums, forcing senior citizens to shop for their own private medical insurance.  In addition, Congress wants to increase the eligibility age from 65 to 67.  Their goal is to limit how much the government spends on Medicare, despite the fact that nearly all U.S. citizens have been paying into Medicare their entire working lives ... some of them for decades.

What this new plan would do is put the responsibility for obtaining insurance on the backs of senior citizens.  The government would give you a voucher which you could use to pay for a discount on a private insurance policy, which you would be responsible for finding.  You would then have to pay any difference between the value of the voucher and the actual cost of your insurance premiums.  There would be no guarantee that the government voucher would cover a specific percentage of your insurance premiums.  In addition, you would be responsible for whatever deductibles and co-pays are required by your new insurance plan.  It is possible that seniors who cannot afford to pay these extra expenses would simply go without insurance or would buy the cheapest insurance with the highest deductibles.  This could cause them to avoid obtaining medical care except in the most extreme circumstances.

People over the age of 60 would be able to stay with traditional Medicare.  However, the new plan would gradually decrease the benefits and increase the costs which beneficiaries must pay.  The goal is to eventually "encourage" current Medicare beneficiaries to switch to the voucher program.

Could President Trump Veto the Proposed Changes to Medicare?

The only way to stop the above changes from going into effect would be if public pressure causes Congress to change its mind, or if President Trump vetoes the changes after Congress passes them.  While he was running for office, Trump was quoted at a rally in New Hampshire as saying, "Every Republican wants to do a big number on Social Security.  They want to do it on Medicare.  They want to do it on Medicaid.  And we can't do that.  It's not fair to the people who have been paying in for years."  However, recently his website has been changed to say that he is in favor of "modernizing" Medicare, although it is very ambiguous what that means.

On Dec. 4, 2016, on ABC News, the Vice-president elect Mike Pence said that Trump has "made it very clear in the course of the campaign that we're going to keep our promises on Social Security and Medicare."

Despite these statements by the incoming president and vice-president, it is important that U.S. citizens make their feelings known both to members of Congress and members of the new administration.

What are Other Ways Medicare Could be Fixed?

Many experts agree that the Medicare trust fund will need to slightly increase its income and decrease its expenses if it is going to remain solvent.  There are other changes which could be made to Medicare which would extend its life significantly, without privatizing it or doing away with the program.

1.  Keep Obamacare or a similar program.  When the Affordable Care Act (Obamacare) was passed, the cost savings included in the bill meant that the Medicare Trust Fund was able to remain solvent for an additional 11 years.  Obamacare slowed the growth of spending and reduced waste, fraud and excessive payments to care providers.  At the same time, the average beneficiary was able to personally save approximately $1,945 a year because the prescription drug "doughnut hole" was reduced.  These changes, and others, would disappear if the Affordable Care Act is repealed without being immediately replaced with a program which offers the same or similar benefits.

2.  Slightly increase payroll withholding and beneficiary premiums, deductibles and co-pays.  A small increase in revenues would help keep the current Medicare program solvent.  Modest increases in payroll withholding and the premiums, deductibles and co-pays which beneficiaries pay would adequately provide the necessary revenues while protecting the program.

3.  Give Medicare the authority to directly negotiate prescription drug prices.  Approximately one-sixth of the budget of Medicare goes to pay for prescription drugs.  If Medicare could negotiate directly with the pharmaceutical companies, which they would like to do, this would be a major step towards controlling their costs.

How Can Citizens Voice Their Opinions On Medicare Changes?

If you wish to let Congress know how you feel about the proposed changes to Medicare, now is the time to voice your opinion.  In addition, AARP will be lobbying Congress and they need to be able to show that they have the support of the public behind them.  Below is a list of ways you can make your voice heard and help keep our current Medicare system viable:

You can email the U.S. president after the election at:  president@whitehouse.gov

Prior to his inauguration, you can contact Donald Trump at: https://www.donaldjtrump.com/contact

Contact your Representative at:  http://www.house.gov/representatives/find/

Contact your Senator at:  https://www.senate.gov/senators/contact/

Join AARP and support their lobbying efforts at:  aarp.org 

You may also be interested in learning more about the proposed changes to Social Security and voicing your opinion on those issues, as well.  You can learn more about those proposals at:

Proposed Changes to Social Security

If you are interested in learning more about Social Security, Medicare, financial planning, where to retire, common medical problems and changing family relationships after retirement, use the tabs or pull-down menu at the top of the page to find links to hundreds of additional articles.

(Info about the proposed changes to Medicare based on a series of articles on Medicare in the January-February 2017 issue of the AARP Bulletin)

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Wednesday, January 4, 2017

Proposed Changes to Social Security

Nearly every adult American knows the Social Security Administration will face a financial shortfall when the trust fund runs out of cash in 2034. If nothing is done, both current and future retirees will face benefit cuts of approximately 21 percent.  In order to keep this safety net at full strength, changes have to be made.  The good news is that Social Security is in no danger of going completely bankrupt.  As long as there are people in the workforce, the government will receive payroll taxes which are large enough to cover approximately 80 percent of what they are obligated to pay.  What the government is trying to find, however, is a way to make up for that 20 percent shortfall.

If you are curious about the proposed changes to Social Security which are under consideration by the new, Republican-controlled Congress, there is a list of the proposals below.  According to a series of articles posted on the Fox News website, including one titled "7 Ways the GOP's Proposed Social Security Changes Could Impact Your Pocketbook," a number of ideas are under discussion.  Some of these proposed changes will affect current retirees; others will have a larger effect on people who will reach retirement age in the next decade or two.  Some of the proposals will receive wide support; others will be more controversial.

It is important to remember that the proposals listed below are just that ... proposals.  The final bill may differ from what is being considered, particularly if citizens become upset by any of these proposals and contact their individual U.S. Representatives and Senators to complain.  Whether you support or object to the ideas under consideration, now is the time to let Congress know your opinion.

Proposed Changes to Social Security

1.  First, no new revenues are currently under consideration.  The proposals which have been put forth so far do not include any increase in Social Security withholding; nor do they include an increase in the amount of wages which are subject to Social Security withholding.

2.  Between 2023 and 2030, the full retirement age (which will be 67 in 2022) would gradually increase to age 69.

3.  Beginning in 2023, the way Social Security benefits are calculated would change slightly.  Low-income beneficiaries and people who have worked over 35 years would receive a small increase; those who have above-average incomes would see their benefits decrease slightly.

4.  Beginning in December, 2018, cost-of-living increases would be lower because a different consumer price index would be used.  Instead of the the current CPI-W index, a chained CPI would be used.  The difference is that a chained CPI assumes that inflation causes people to make substitutions when they cannot afford their current expenses.  This means they might move to a less expensive home, buy more affordable cars, or switch from name-brand to generic products.  As a result, according to the chain-weighted CPI, the "real" inflation most people experience is not as large as the actual rate of inflation.  The AARP has long opposed this change, arguing that many seniors already have cut out as much as they can and a chain-weighted CPI could cause even more seniors to eventually end up in poverty.

5.  Some retirees would receive no cost-of-living increases at all after they retire.  Those affected would be single retirees with an adjusted gross income of over $85,000 or joint tax filers with an adjusted gross income over 170,000.

6.  Beginning in January, 2019, there would no longer be an earnings limit on people who begin to collect their Social Security benefits early. Those who continue working while they collect reduced benefits between the age of 62 and their full retirement age could earn as much as they want. 

7.  Between 2045 and 2054, federal income taxes on Social Security benefits would gradually be eliminated.  Currently, up to 85 percent of your benefits are subject to federal income taxes, depending on how much additional income you have.  After this change, only your additional income would be taxable.  However, this proposal would not go into effect for nearly 30 years.

8.  People who delay collecting their Social Security benefits past their full retirement age currently receive an increase in benefits of 8 percent for every year they postpone collecting.  One proposal being considered would allow people to choose a lump sum payment, instead, if they delay receiving their Social Security.

9.  Currently, a non-working spouse can receive a monthly benefit that is up to 50 percent of what the working spouse receives after retirement.  Under the new proposals, there would be a cap on what a non-working spouse could receive, so some spouses would no longer receive half of what the higher wage earner receives.  This cap is more likely to affect high-income couples.

We can expect there will be disagreements on whether or not these are the best ideas for fixing Social Security. However, what is not in dispute is that some changes are necessary and, no matter what Congress does, most people will be impacted in some way by the changes.  If you want to have a voice in what changes are made, be sure to contact your U.S. Representative or Senator.  Ask what changes they support and why they believe those are the best choices.  Then, be sure to let them know if you agree or disagree with each proposal.

Contact your Representative at:  http://www.house.gov/representatives/find/

Contact your Senator at:  https://www.senate.gov/senators/contact/

After the inauguration, contact the new president at:  president@whitehouse.gov

Support the lobbying efforts of AARP by joining them at:  aarp.org

If you are interested in more information on financial planning, where to retire, common medical
issues, changing family relationships and more, use the tabs or pull-down menu to find links to hundreds of additional articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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Wednesday, December 28, 2016

Most Popular Retirement Stories of 2016

As we look back over the past year, it is interesting to review the most popular retirement stories of 2016 which were covered by the Baby Boomer Retirement blog.  There were a wide range of topics that appealed to Baby Boomers this year including an overview of Social Security and Medicare, information about voice therapy, longevity tips, housing choices, painkiller addictions, social media scams, family relationships, Alzheimers research and how to earn extra money.

All of these are topics of importance to those who have already retired, as well as those who are preparing to retire.  Below are links to the most popular retirement articles of the past year, as well as more details about the information they contain.  Just click on the links to go directly to the articles which interest you.

2016 Most Popular Retirement Stories

Social Security and Medicare Information - This is an overview article which contains links to a number of other articles that cover many of the questions people have about maximizing Social Security benefits, getting the maximum benefit from Medicare, and more.

Voice Therapy for Senior Citizens - Many people begin to discover that their voices become faint, sore or hoarse as they age.  Senior citizens may believe there is nothing they can do about these problems; however, there are therapies which can improve the quality of their voices.  Learn more about the types of therapies available.

Longevity Tips from Time Magazine - Do you want to live a healthy life as long as possible?  Here are the most current tips that will increase your chances of maximizing the number of years you have left.

Reata Glen and Other CCRCs in Orange County, California - Continuing Care Retirement Communities are becoming increasingly popular with aging senior citizens, especially those who do not have long-term care insurance.  Learn more about them, including specific information about the ones in Orange County, California.

Risks of Social Media Phishing - Social media such as Facebook are popular ways of staying in touch with our family and friends.  However, some of the games and other apps can be used to obtain your personal information.  In addition, when you use Twitter or Facebook to contact the customer service offices of companies, you could be contacting a fake site. Learn more about dangerous social media phishing and how to protect yourself.

Best Senior Housing Choices for Aging Boomers - What are some of the housing choices people have as they age?  This article explains the various options and how they might fit your lifestyle.

Senior Living Communities for Baby Boomers - Information about the types of senior living communities which could appeal to aging Baby Boomers.

Dangerous Prescription Painkillers Addictions: Opiods - Opiod painkiller addiction has become an increasingly serious problem for senior citizens.  Many people who never dreamed they could become addicts, discover that they have slipped into this overwhelming situation after surgery or other painful treatments. 

How to Overcome Resistance to Assisted Living - Do you have an aging spouse or parent who needs to move into an assisted living or memory care facility?  Do they oppose the move?  This article may help you reduce their resistance and help them become more accepting of the idea.

New Alzheimers Disease Research - Alzheimers and other forms of dementia are some of the most feared consequences of aging.  Learn more about the research which is being done and how these dreaded diseases could become less common in the future.

Earn Extra Money from the Sharing Economy - Would you like to use your home, your car, your garage or your talents in order to earn a little extra money?  Learn how easy it can be to join the "sharing economy" and supplement your retirement income.

Family Relationships - How to Stop Arguments - Do you feel stressed when you spend time with your family over the holidays or on other special occasions?  This article will give you tips on how to reduce the tension and, in many cases, stop family arguments in their tracks.  

If you are interested in reading more retirement information, use the tabs or pull-down menus at the top of this page to find links to hundreds of additional articles about where to retire, financial planning, Social Security, Medicare, common medical problems and more.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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