Bullet: Halloween Scare and
New Members-Only Feature
Tuesday, October 31, 2006
LTC Comment: Happy
Halloween! Want to hear
something really scary? Social
Security and Medicare unfunded liabilities have topped $86 trillion.
More after the ***news.***
GROWING OLDER. Don't miss
Liz Taylor's column "We're Living Longer Lives, but Eventually We
All Need Care," in Monday's Seattle Times.
Read it here.
Governor Gregoire of Washington State has embraced the "Own
Your Future" long-term care education campaign.
This would be an excellent article for you to forward to your
Governor and state legislators. ***
WRONG ON RAMS. Today's Wall
Street Journal Online has a short front-page piece by Terri Cullen
that debunks reverse annuity mortgages:
"Go Figure: Demand
for reverse mortgages has risen, but costs may make the loans a poor
Reverse mortgages are heavily regulated and their fees are higher
than "forward loans" for good reason.
Don't take casual comments in the media at face value.
Study the facts. Two good places to start are Barb Stucki's "Use
Your Home to Stay at Home" and the Reverse Mortgage Lenders
Association website at http://www.reversemortgage.org/.
*** WRONG AGAIN.
Remember our critique of the WSJ coverage of Vermont's
Medicaid LTC reform in a recent LTC Bullet?
Evidently, other readers of that premier capitalistic journal
agreed. Today's issue has
two letters similarly critiquing the WSJ's take on Vermont.
Read them at http://online.wsj.com/page/2_0048.html if you subscribe, but
here's a taste:
"A senior policy adviser for the AARP's Public Policy Institute says that Vermont's 'Choices for Care' program 'is turning the ship around' with regard to America's system for caring for the elderly. The true direction in which the ship needs to sail is for Americans to wake up and realize they must take steps to plan privately for their long-term care needs and not rely on the federal and state governments to pay for their care. Medicaid was established for the purpose of providing care for the poor and not as a middle-class entitlement program. If Americans think they can rely on the government with 77 million baby boomers turning 60, then the ship has sunk."
Hear, hear! Who
is this Mickie Hoff and why isn't he a member of the Center? ***
LTC BULLET: UNFUNDED
ENTITLEMENT LIABILITIES AND NEW MEMBERS-ONLY FEATURE
"Want to have some fun this Halloween?
Find a government accountant.
You probably think there isn't a more unflappable person anywhere
than one of the green-eyeshade boys.
OK, now sneak up behind him and whisper 'Medicare obligations'
into his ear. Aaaagggghh!
He'll go racing in the street, stark-raving mad with fright.
Entitlement costs are Uncle Sam's permanent Halloween."
"Uncle Sam's Halloween," Wall Street
Journal editorial, October 30, 2006, Page A12, http://online.wsj.com/article/SB116217217911207397.html,
LTC Comment: Be
afraid, be very afraid. Here's
why: There's more to
retirement planning than counting up your savings, estimating what
you'll need to live on after you stop working, and setting aside enough
each month to get you from here to there.
If you're figuring on having a nice helpful check
from Social Security and no worries about acute health care because of
Medicare, you are fooling yourself.
And if the idea that Medicaid can help with your long-term care
is part of your plan, you are truly delusional.
According to the October 2006 issue of the Concord
Coalition's Facing Facts Quarterly, the 75-year unfunded liability for Social Security and
Medicare is $38.8 trillion and the infinite-time-horizon liability is
$86 trillion. That's what
Uncle Sugar has promised us minus what he's setting aside to make the
promise good. Read it and
How about the Social Security and Medicare
"trust funds?" Won't
they help? Nope.
That money's already been spent.
The obvious ways to cover Social Security and Medicare debt are
to raise payroll taxes or reduce benefits.
Neither alternative is attractive politically.
So, what's going to happen?
Means testing. Social
Security and Medicare will become welfare programs like SSI and
Medicaid. And, count on it,
the elder law bar will game them just as they've exploited the
traditional welfare programs. But
don't go there! If
self-impoverishment is a bad solution for long-term care, think what it
will mean when it's the only pathway to government-financed acute care
Bottom line, if you're really serious about
retirement planning, start now to prepare for the worst.
And if you advise others on retirement planning, stay abreast of
these hard facts and exercise the tough love it takes to tell your
clients the truth, even if they don't want to hear it.
This means save more, invest wisely, insure
thoroughly, and plan on using your home equity to close any gaps. And for heaven's sake, ignore the advice of elder law
attorneys who tell you to start impoverishing yourself early to get
ahead of Medicaid's new five-year transfer of assets look-back period. That kind of thinking is irresponsible and deadly to your
hopes for a secure retirement. Although,
come to think of it, maybe you could recover something with a
malpractice suit against your Medicaid planner.
To help members of the Center for Long-Term Care
Reform stay on top of all the official and unofficial warnings about
publicly financed retirement and health security programs, we've begun a
new feature in the Members Only Zone.
In "Unfunded Entitlement Liabilities" you'll find an
ongoing list in chronological order of the Paul Revere-like admonitions
coming frequently from the likes of the Comptroller General of the
United States, the chief of the Congressional Budget Office, the
Chairman of the Federal Reserve Board and a handful of scholars with
their eyes open.
Not yet a member of the Center for Long-Term Care
Reform. No worries.
Call or email Damon at 206-283-7036 or email@example.com,
tell him your check is on the way, and he'll get you immediately into
"The Zone." Individual
memberships are $150 per year; corporate memberships are negotiable.
Thanks for supporting the Center and for being part of the solution to our country's biggest long-term problem.