Applying for Medicare

November 30, 2011

A significant step in most people’s retirement is applying for Medicare.

After spending several days adjusting to the idea that I am actually old enough for Medicare, I decided to take the plunge. Actually, I am three months shy of my 65th birthday but Medicare suggests that one apply three months in advance.

You can apply at a Social Security Office or on-line. Since my blood pressure tends to surge while standing in lines in government offices, I opted for the on-line approach. I am pleased to report it worked well.

The entire process took just a few minutes and was mostly straightforward. The only quirky part was in the section describing what medical coverage I have now, and what I will have after age 65 from my previous employer. None of the boxes provided seemed to provide the opportunity to answer clearly. Fortunately there is a message box included in the on-line form which I was able to use to explain the situation. A push of the button and I was officially an applicant.

Today (about 10 days after applying) I received a “Notice of Award” telling me I am entitled to Medicare hospital and medical insurance beginning next year (I knew that). It also told me that “we will send you a Medicare card” and that “you can enroll in a Medicare prescription drug plan (Part D)” which I won’t do because my former employer’s plan is better.

More ominously, the notice also told me “The benefit in this letter is the only one you can receive from Social Security.” That is wrong since I am also entitled to a retirement benefit (at least until Congress takes it away) but I attribute the errant sentence to poor draftsmanship in the government letter writing department.

More interestingly, the letter then went on at significant length to tell me what to do if I disagreed with the decision to send me a Medicare card including filing an appeal, getting representation, seeking reconsideration, getting a hearing, appealing to the Appeals Council, filing suit in Federal Court and directed me to the enclosed pamphlet which described all of this in greater detail. Whew!

The questions I wanted answered most were how much is this going to cost me and what are my payment options. On these topics there was no information provided. I am assuming all of this will come in due course. Time will tell.

R. Kevin Price

www.successfulretirementguide.com

© 2008-2011 R.K. Price

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Generativity in Retirement

March 15, 2010

In a recent article, New York Times Columnist David Brooks opined that, under the banner of “generativity,” senior citizens – who have the time, energy and the tools in his view – should band together to demand “changes in health care spending and the retirement age to make life better for their grandchildren.” Mister Brooks says he has lost faith in our political leadership to effect the needed changes. It thus falls to our seniors to organize in support of lower benefits for seniors in order to provide more freedom, opportunity and financial wherewithal for later generations.

Well. I didn’t find Brooks’ arguments as presented in his article to be particularly persuasive but I believe he has a point that is worthy of attention. I’ll describe why I think that is the case, but first, what is this “generativity” thing?

Erik Erikson (1902-1994) was a famous psychoanalyst who studied the social development of humans. In his view, humans progress through eight “stages” of psychosocial development beginning with our first year of lives when we decide whether or not we are going to trust our parents, and progressing until the end of our lives at which time we hopefully will have achieved what he calls “wisdom.” The stage with which most people may be familiar is that of our teenage years when we have what he terms an “identity crisis” as we try to sort out who we are in relation to everyone else. (Of course, some of us may be familiar with people who are still trying to figure that out much later in life). Some people refer to Erikson’s stages as “tasks” that we need to complete in our lives.

“Generativity” is the term Erikson uses to describe an unselfish concern for the well being of future generations that arises during the middle years of our lives in the seventh of his development stages. In his view if we fail to develop this concern or caring for those who follow us chronologically, we stagnate in self-absorption and may well fail to find any meaning in our lives leading to what Elliott Jacques called a “mid-life crisis.”

In Erikson’s view, generativity is much larger than bearing and nurturing our children. It is larger than passing on information. It is more about passing on a culture of caring; of a society concerned with giving rather than getting; of a responsibility for protecting our seed corn rather than consuming it; of the need to preserve our physical world for those who follow, of preserving values that will sustain future generations through their challenges, as the values we have received from our forebears have supported us.

OK. If the above describes “generativity” (albeit in very brief and simplified form) what does it have to do with retirement?

John Kotre in his excellent book Outliving the Self has refined and distilled Erikson’s view of generativity to: a desire to invest one’s substance in forms of life and work that will outlive the self. We can do this at any point in our lives and many people do it throughout their lives. But when it comes to retirement, this is our last shot at it. And it may be our best shot – why is it that parents are frequently better at being grandparents than they were at being parents? Why does the desire to be teacher, helper, guide, coach, big brother/big sister (even if not always acted on) grow as we get older? Is it generativity at work? I think so. As we get closer to the end of our lives, I believe our concern with what we leave behind grows.

To Mr. Brooks’ point: seniors consume an outsize portion of our society’s financial resources and that portion is destined to grow. This leaves fewer and probably inadequate resources for the education of our young and in support of the economic growth needed to sustain our society for the long term.

So what can a senior in a generative frame of mind do to help? I suggest four things:

Social Security: Support gradually increasing the social security retirement age for full benefits to 69 as recommended by the American Academy of Actuaries. Better health care and healthier living have increased life expectancy and working lives. Social Security’s retirement age has not kept pace. Also, support changing Social Security’s inflation adjustment to be in line with actual inflation rather than the (higher) CPI.

Medicare: Support raising the age for Medicare eligibility in line with the Social Security retirement age. Also support reducing the taxpayer subsidies for Parts B and D for financially independent seniors.

Health Care Reform: Lobby for health care reform (not expansion) to reduce and control expenses, e.g. replace the employer-based health care tax exemption with a federal tax credit; implement tort reform; eliminate state regulation of insurance and create a national marketplace for coverage. Once costs are under control, then look at expansion issues.

End of Life Care: Finally, one item each of us can contribute without needing to wrestle with the federal octopus: implement a living will and a health care proxy to dictate our desired end of life health care. A “living will” tells health care providers and others about your wishes regarding treatment if you are in a coma or have become mentally incompetent and are not able to consult with them directly. A “health care proxy” designates someone you trust to make medical decisions that are in your best interests, as you have described them, if you are not able to make those decisions yourself.

Why are these two documents important? When asked, almost nine in ten seniors say they do not want their lives prolonged as long as possible through extraordinary means; rather, they’d prefer to be kept comfortable without extraordinary measures being taken. The living will and health care proxy help assure those wishes are followed. However less than 10% of seniors have put these documents in place. About 30% of all Medicare dollars are expended during the last year of life and the bulk of that is expended in the last few weeks. We spend enormous amounts of money prolonging the process of dying. Why? When the time comes, let us choose to pass on with grace and in comfort rather than in a desperate attempt to forgo the inevitable for a few more weeks. This brings me to Erikson’s eighth and final stage of development.

Erikson called his final stage “ego integrity” in which we, facing the end of our lives, accept that we have had success and failures, that we have lived our lives and grown old and that death is inevitable and soon to be upon us. If we are able to do this and face death with a healthy detachment, Erikson says we have developed wisdom. With respect to generativity at this stage he notes: “healthy children will not fear life if their elders have integrity enough not to fear death.”

R. Kevin Price

www.successfulretirementguide.com

© 2008-2010 R.K. Price


Relying on Social Security

February 27, 2009

Each year most of us receive a Statement from Social Security which provides an estimate of our Social Security Benefits and an update of our Earnings Record upon which the estimated Benefits have been calculated.  We are asked to check the Earnings Record for accuracy and to understand the benefits that may be available to us at various ages and under varying circumstances.

It is important to note that the normal retirement benefit estimate assumes you will continue to work until your normal retirement age and make about the same amount of income as you did in the last year of earnings as recorded to date by Social Security.  If your earnings are reduced due to retiring early, being laid off or taking a lower-paying position (all very real possibilities in these times), your actual retirement benefit may be less.  The best way to get an accurate and up-to-date  estimate or your benefit is to use Social Security’s on-line estimator at www.socialsecurity.gov.

We are also informed on our Social Security Statements that …

“Social Security is a compact between generations.  For decades, America has kept the promise of security for its workers and their families, now however, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today’s younger workers are ready for retirement.

In 2017 we will begin paying more in benefits than we collect in taxes.  Without changes, by 2041 The Social Security Trust Fund will be exhausted and there will be enough money to pay only about 78 cents for each dollar of scheduled benefits.  We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations.”

Sound familiar?  It should. We have known this and have been hearing about it for decades.  However, our elected representatives have preferred to busy themselves with whatever short term Porky Pig projects they believe will be most efficacious in getting themselves re-elected instead of dealing with the fundamental issues facing the nation.  (But that’s a subject for another time.)

The Social Security Trust Fund mentioned above is a joke (and not at all funny).  It contains no substantive assets.  All the funds that go into it are sucked up by the Federal Government (to pay for our representatives’ Porky Pig projects) which issues the “Trust Fund” a series of  IOUs.  Where will the Government get the money to repay the fund?  Since we are undergoing a massive increase in government debt, it will have to raise taxes.

Leaving aside the silliness of the “Trust Fund,” what are the options for dealing with the problem?

  1. Raise the retirement age
  2. Reduce cost-of-living adjustments
  3. Change the benefit formula
  4. Invest in something other than government IOUs
  5. Privatize it
  6. Increase the payroll tax
  7. Increase the limits on taxable earnings
  8. Finance it with general revenues
  9. Means testing
  10. Some combination of the above

Items 1-3 are certainly doable and may contribute to a solution.

Items 4 and 5 sound too much like something George Bush would espouse and therefore will be automatically rejected by the political elite.

Items 6 and 7 risk a generational revolt: the Social Security tax is already the largest tax that the average American family pays.  Younger workers see it as a bad deal, one in which they will end up paying more in taxes than they receive in benefits.  They and their children (our grandchildren) are already being saddled with a gigantic debt to pay for all the Porky Pig projects our representatives pretend will stimulate us out of recession.  Obama wants to “ask (ask?  really?) those making over $250,000 to pay in the range of 2-4 percent more in total”  (quote from http://www.barakobama.com).  This will be on top of  increased income taxes.  Let’s add class warfare to the generational conflict.

Item 8 is impossible given the level of government debt.

Item 9 – Social Security has always been based on an “earned right” to a benefit – you earn a benefit by paying into the system over a required period of time.  Under Means Testing, the political elite will determine whether someone has enough assets or income of their own and should therefore have his or her Social Security benefit reduced or eliminated.

Grab hold of the rug and give it a big pull…

And if you agree that Social Security is a problem, please know that Medicare’s long-term deficit is five times as large and that is before we get full-blown government health care for all.

R. Kevin Price

www.successfulretirementguide.com

© 2008-2009 R.K. Price