LTC 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 choice."  Nonsense.  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 *** 

*** 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 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."

Mickie Hoff
Long-Term Care Insurance Specialist
Lake Oswego, Ore.

Hear, hear!  Who is this Mickie Hoff and why isn't he a member of the Center? *** 



"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,, subscription required. 

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 weep here

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 too. 

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. 

Check it out here.  You'll need your user name and password to get into the Members Only Zone.  Call or email Damon at 206-283-7036 or if you need a reminder. 

Not yet a member of the Center for Long-Term Care Reform.  No worries.  Call or email Damon at 206-283-7036 or, 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.