Monday, July 13, 2009

'Socialized Medicine? Bring It On

Richard Cohen WahingtonPost

When I was in the Army and known to my friends as "Combat Cohen," I could not get over the fact that, during an era of almost universal military service, the American public supported high Pentagon spending despite firsthand knowledge of astounding waste and theft. I cite, for instance, the well-known and frequently witnessed pillaging of food by mess sergeants. From tasting their stuff, I can say that theft is what they did best.

Now I am similarly perplexed. Many, if not most, Americans have some experience with our nation's mostly private health-care system. Yet they still fall prey to the scare tactic that nothing -- but nothing -- could be worse than a government takeover of the system. How things could be worse than they are now, I cannot imagine.

In the past two months, I have spent many hours accompanying a loved one to hospital emergency rooms -- all of them privately operated. The rap on what is sometimes called socialized medicine is that if the government ran the system, the wait would be interminable. Well, I am here to tell you that even when the government does not run the system, the wait can be interminable.

And uncomfortable. In one hospital there was not enough space in the emergency room for all those seeking treatment. My friend got moved from a bed -- where she was relatively comfortable -- to a wheelchair in the hallway. There she sat, in agony, for about six hours. Something similar happened at another emergency room, though this time she was given a cot. The wait, though, was just as long.

The emergency room has become the equivalent of the family doctor. It is where you go if you don't have a family doctor or if you do have a family doctor -- and it's after hours or the weekend. It is also where you sometimes have to go in order to be admitted to a hospital. The staff is mostly courteous, sometimes wonderfully solicitous, but the constant triaging of new people can put you on a treadmill to nowhere. The emergency room is the great leveler of American life. Everyone gets miserable treatment.

On Friday, Bill Moyers interviewed Wendell Potter about health care and such matters. Potter is the former head of corporate communications for Cigna, the nation's fourth-largest health insurer. By his own characterization, he is one of those insurance executives who flew from meeting to meeting in private planes and hardly ever touched ground to meet real people. One day he did. He went to an outdoor health clinic over the Virginia border from his home town in Tennessee. This is what he told Moyers:

"What I saw were doctors who were set up to provide care in animal stalls. Or they'd erected tents to care for people. . . . And I saw people lined up, standing in line or sitting in these long, long lines, waiting to get care. People drove from South Carolina and Georgia and Kentucky, Tennessee -- all over the region."

Thank God we don't have socialized medicine.

Into this debate about the role of government in medical care, I come jaded by experience. In addition to having been Combat Cohen, I was also Cohen of Claims when I worked for an insurance company. This means that whenever someone says something about "government bureaucrats," I smile because I was once a non-government bureaucrat. It is not government bureaucrats who say that certain treatments will not be covered, and it is not the government that purges insurance rolls of the sick or the old, and it is not the government that makes money -- lots of money -- on health insurance. It is private enterprise.

But as Potter points out, the insurance industry sets out to spook the public with talk of "socialized medicine," "government bureaucrats" and "government-run health care." My loved one recently had to return to the emergency room because she was dehydrated. Her insurance company listed the reasons someone could return, and dehydration was one of them. They still denied her claim. The government had nothing to do with it.

The ongoing health-care debate is complex -- not as interesting as Michael Jackson or Sarah Palin. But in deciding what to do and who to support in the current attempt to reform health care, don't rely on insurance industry propaganda, but on your own experience. Recall the last time you went to the emergency room and ask yourself whether the government could possibly do a worse job. If the answer is yes, you might need medical attention more than you realize.

Chutzpah on Steroids BOB HERBERT

NY Times Washington

What is up with the banks and the rest of the financial industry? The people running this system remind me of gangsters who manage to walk out of the courthouse with a suspended sentence and can’t wait to get back to their nefarious activities.

These malefactors of great wealth (thank you, Teddy) developed hideously destructive credit policies and took insane risks that hurt millions of American families and nearly wrecked the economy. Then they were bailed out with hundreds of billions of taxpayer dollars, money that came from the very people victimized by the industry’s outlandish practices.

Now the industry is fighting against creation of an agency that would protect taxpayers and ordinary consumers from a similarly devastating onslaught in the future. And at the same time they are scrambling to raise credit card interest rates and all manner of exploitive fees to build a brand new superstructure of questionable profits on the backs of the taxpayers who came to their rescue.

We’re reaching a whole new level of chutzpah here.

The Obama administration wants to create a Consumer Financial Protection Agency that would shield individuals and families from deceptive practices and outright fraud by banks and other businesses offering credit cards, mortgages, home loans and other forms of consumer finance.

Everything we’ve learned in this recession tells us we need such an agency. As Treasury Secretary Timothy Geithner described it, “This agency will have only one mission: to protect consumers.”

Protecting the consumer is, of course, anathema to the industry. So it’s preparing for war. The Times’s Edmund Andrews neatly summed up the matter when he wrote that “banks and mortgage lenders are placing top priority on killing” the president’s proposal.

The proposed agency developed from an idea offered some time ago by Elizabeth Warren, a Harvard Law School professor who currently chairs the Congressional Oversight Panel, which has been monitoring the financial industry bailouts. She is a strong contender to lead the proposed new agency.

Ms. Warren told a Congressional committee last month about the stark difference between the warm and fuzzy advertising approach used by lenders competing for consumer dollars and the treachery that is so often hidden in the fine print.

“Giant lenders compete for business by talking about nominal interest rates, free gifts and warm feelings,” she said, “but the fine print hides the things that really rake in the cash. Today’s business model is about making money through tricks and traps.”

It should be clear by now that it is often the goal of financial institutions to see that the consumer is not well informed. “In the early-1980s,” said Professor Warren, the average credit card contract was about a page long. “Today, it is more than 30 pages. ... I am a contract law professor, and I cannot make out some of the fine print.”

She added, “Study after study shows that credit products are designed in ways that obscure the meaning and trick customers.”

There is nothing free or fair about a market in which one side uses double talk and mumbo jumbo to obscure important information and deliberately dupe the other side into making decisions against its own interests.

When I think of the banking industry fighting to kill this proposed agency, it brings to mind the decades in which tobacco companies insisted that cigarettes were safe, and those days long ago when the auto companies fought against seat belts, and all the dopey arguments that were made against protecting the public from unsafe drugs and kitchen appliances that might burst into flames, and so on.

The Department of Housing and Urban Development has concluded that Americans spend approximately $55 billion each year on closing costs that they don’t fully understand. As Ms. Warren noted, “Mortgage lenders furnish reams of unreadable documents shortly before closing, often leaving people with no practical option but to take whatever terms the lender has filled in.”

The family home is the largest purchase most Americans ever make. Paying it off can take much of a lifetime. Everything about that contract should be crystal clear to the buyer.

I had a breakfast interview with Ms. Warren on a variety of subjects last week. On the day of the meeting, USA Today had a front-page article that began: “Even as regulators crack down on abusive mortgage and credit card practices, another type of lending threatens to mire consumers in a credit trap.”

The article detailed the ways in which banks are wringing huge profits from overdraft fees that often are sky high and in many cases are handled in ways that are exploitive, if not predatory.

The malefactors of great wealth view an informed consumer as Public Enemy No. 1. The last thing in the world that they want is a fair marketplace, which is why the Consumer Financial Protection Agency can’t come fast enough.

Collect Now, or Later?

Collect Now, or Later? Timing Your Social Security Benefits


Collecting Social Security as soon as you are eligible is a tempting proposition — but experts agree you should try to resist if you can.

The majority of people don’t follow that advice, choosing instead to start benefits early. Why wait to collect what is rightfully yours?

That logic may sound reasonable now. But in reality, the bigger risk is that you will live to a ripe old age. You can claim Social Security any time from age 62 to 70, but the longer you wait, the larger your monthly check. And many people come out ahead if they wait at least until their full retirement age, which is different from the day you stop working for good. For people born 1943 to 1954, full retirement age is 66, and it creeps up for younger people.

What do you stand to lose by taking benefits early? Take those who are set to receive $1,000 a month at their full retirement age. If they sign up for benefits at age 62, they will collect only $750. But if they wait until 70, they will earn extra credit and receive up to $1,320 a month — nearly a third more.

At first glance, it seems that everyone should wait until they are 70. But that is not the case. The answer depends on many factors, including when you stop working, how much you have in savings, whether you are healthy, whether you are married or single and whether your spouse earns more — or less.

It may be impossible for some households to wait because the breadwinner has lost a job or is no longer able to work. And planners agree that it is smarter to collect earlier if it will prevent you from accumulating debt.

But if you can wait, think of the money you aren’t receiving during that period as a payment of sorts for an annuity that will pay a higher, guaranteed stream of income later, if you live a long time (or at least longer than your savings last), financial experts say.

“You can’t buy an inflation-adjusted annuity for anywhere near the cost of delaying Social Security,” said Henry Hebeler, a retired Boeing executive who created, a Web site that offers retirement advice and calculators.

For people who choose to defer benefits until age 66, it generally takes about 12 more years to collect as much as if you started getting checks at 62. So you break even, so to speak, about age 78, according to Avram Sacks, a Social Security law analyst for CCH, a tax and accounting information service. “If you are in good health, and you expect to live to 78 or longer, then the advantage goes to the person who waits,” he says. “But that’s assuming we’re all prophets and we know what’s going to happen tomorrow, and we don’t all know.”

And that is why financial advisers recommend planning for a long life. Here are some strategies to consider before signing up.

SINGLES Figuring out when to collect is easier when you do not have to worry about how your actions will affect a spouse. It usually pays to wait until your full retirement age if you can support yourself until then. (This obviously does not apply to people who are already in poor health and probably won’t live past 78, give or take a couple of years. People who are still working should also defer.)

Though many experts will tell you to delay as long as you can, waiting from 66 until 70 may not be optimal for some singles. “The reason is that they will have consumed too much of their savings in those extra four years to be able to offset the savings loss with higher Social Security payments within their lifetime,” said Mr. Hebeler, who has also written three books on retirement. “It’s surprising, but that’s what the analysis shows.”

Consider a single person with $200,000 in savings returning 5 percent a year. Instead of taking Social Security at age 62, she withdraws $19,000 annually until she turns 66. Her savings will last until age 94, but she will still have $21,000 a year in Social Security benefits. If she claimed at 62, her savings would run out at age 87 and she would be left with only $16,000 a year in Social Security.

For people with significant savings who expect to live well into their 80s, it may make sense to wait until 70, Mr. Hebeler added.

If you have already started receiving benefits, but wish you had waited, you are allowed to give it all back and start over. But this gets complicated. You will probably have to pay back more than what you actually received each month, since Medicare premiums and income taxes may have been deducted. Married people can do this, too, but some advisers caution against it.

MARRIED COUPLES Planning is more complex for married couples because there are age differences, varying retirement dates and earnings and other factors to consider. In many cases, the higher-earning spouse should delay his or her benefits until age 70, while the lower earner begins to collect at age 62. This ensures that the surviving spouse will end up with the maximum amount of benefits for the rest of his or her life. Even if the higher earner died before age 70, the survivor’s benefits would be bumped up to what the deceased spouse would have gotten, said Lesley J. Brey, a fee-only financial planner in Honolulu.

But once the higher earner hits full retirement age, there is a way for the lower earner to potentially get a bigger check by qualifying for spousal benefits. The higher earner can “file and suspend,” or file for benefits but immediately suspend them — it is perfectly legal and allows the lower-earning spouse to get up to half the higher earner’s benefits, while the higher earner’s benefits continue to accrue.

“This is the way to get the most out of the system without jeopardizing the longevity insurance aspect, which is the most important component,” Ms. Brey said. “You want the last survivor to have the highest possible payment. However, you get cash flow, which reduces the amount you have to withdraw from other sources and you don’t have to guess when anyone is going to die.”

But if the couple can afford it, should the lower earner wait until full retirement age? “It doesn’t matter because the goal is to get the most money for the person who lives the longest,” Ms. Brey said.

Married people with similar earnings may also consider another strategy. Here, one person claims spousal benefits at full retirement age and switches to his or her own, and presumably higher, benefits later, said Alicia H. Munnell, director of the Center for Retirement Research at Boston College.

To get a more precise idea about how to maximize your benefits, go to the Social Security’s retirement estimator, which uses your actual earnings record in its calculation. (Click on “create scenarios” to how retiring at different ages affects benefits). offers calculators that will help determine the best time for singles and couples to take Social Security.

If figuring it all out on your own proves too difficult, have a fee-only financial planner run the analysis for you. “It is worth it,” Mr. Hebeler said, “to spend the money.”

Poll: Americans want health-care bill, but not cost

Susan Page - USA TODAY

WASHINGTON — Most Americans want a big health care bill passed this year, a USA TODAY/Gallup Poll finds, but they are less enthusiastic about paying for it.
And while a majority of respondents say controlling costs should be the legislation's top goal, more than 9 in 10 oppose limits on getting whatever tests or treatments they and their doctor think are necessary.

The findings underscore the difficult path ahead for the White House and Congress as the health care debate enters crunch time. President Obama, who has called for the House and Senate to pass bills within the next few weeks, was meeting Monday afternoon with two key congressional chairmen to try to hammer out financing for the $1 trillion-plus legislation.

"For those naysayers and cynics who think that this is not going to happen, don't bet against us," Obama said earlier in the day as he announced the appointment of Regina Benjamin as U.S. surgeon general. "We are going to make this thing happen because the American people desperately need it."

One advantage for the president: A third of those surveyed say they trust him and congressional Democrats most when it comes to changing health care; 10% choose congressional Republicans. Doctors and hospitals are trusted the most, by 45%. Just 4% choose insurance companies.

The poll of 3,026 adults, surveyed Friday through Sunday by landline and cellphone, has a margin of error of +/— 2 percentage points. Some of the questions, asked of half the sample, have an error margin of +/— 3 points.

By 56%-33%, those surveyed endorse the idea of enacting major health care reform this year. Half call it extremely or very important to them personally; just 1 in 4 say it's not important.

Ask about proposals to help pay the costs, though, and there are sharper divisions — and potential openings for critics who may oppose the final bill.

Six of 10 favor the idea of requiring employers to provide health insurance to their workers or pay a fee to the government instead. The idea of increasing income taxes on upper-income Americans, an approach backed by House Ways and Means Chairman Charles Rangel, is backed by 58%. Just over half support taxing sugary soft drinks.

However, by 53%-43% most oppose taxing health care benefits above a certain level — Senate Finance Chairman Max Baucus had been floating that idea — and even more are against cutting Medicare costs. Savings in Medicare are part of both House and Senate versions of health care bills.

Robert Blendon, a professor of health policy at Harvard, says the results show the friction between competing goals of the health care bills.

"The dilemma is that Congress is trying to solve two problems simultaneously: Save money and insure more people," Blendon says. In the USA TODAY poll, 52% choose controlling costs as more important; 42% expanding coverage. Those focused on costs are likely to have little tolerance for paying higher taxes to cover the uninsured, he says.

More than 8 in 10 of those surveyed say it's extremely or very important that the legislation make health insurance more affordable, but they also express strong resistance to some steps that might help control costs. Ninety-three percent want their health care plan to cover any medical test or treatment that they and their doctor think is needed, and 88% want to be able to choose any doctor or hospital they like.