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July 7, 2006

CMS Exempts 8 Million From New Medicaid Law
The Centers for Medicare and Medicaid Services (CMS) issued alternative regulations that will exempt about 8 million beneficiaries from the new law requiring applicants and current Medicaid recipients to prove their citizenship before receiving health care.  The law, which went into effect July 1 and is the subject of at least two lawsuits, puts nursing home residents, the mentally ill and severely disabled at risk of losing their Medicaid benefits because of their physical or mental inability to find a birth certificate or obtain a passport.  Recognizing the potential interference of care for the most vulnerable Medicaid participants, CMS officials will exempt the elderly and disabled people who are enrolled in Medicare or who are receiving Supplemental Security Income through Social Security.  Additionally, those who are making a “good faith effort” to prove their citizenship will not have their coverage interrupted.  “The new regulations issued by CMS will alleviate some of the punitive aspects of the law,” said Edward Coyle, Executive Director of the Alliance.  “However, we must continue to watch this issue and make sure the people who need the most assistance from Medicaid don’t suffer as a result of the new law.”

The Five Stage Retirement
America’s baby boomers are facing very long retirements, the longest retirements that any U.S generation has experienced.  For a 65-year-old couple today, there is a 45 percent chance that one of them will reach age 95, as reported in USA Today.  Because retirees are living so much longer and continually redefining themselves, demographers are distinguishing 5 stages of retirement.  The first phase begins 15 years before actual retirement begins.  During the “imagination” phase, many start fantasizing about what their retirement will be like, with 65 percent having high expectations of adventure.  The “anticipation” phase kicks in about 5 years before retirement.  About 80 percent report they are very optimistic about what the future holds for them, and 22 percent expect to feel a sense of loss after retirement.  Next is the “implementation” phase.  This phase starts on the big day of retirement and lasts about a year.  Nearly 80 percent still claim to be enjoying their post-career days.  After a year, the euphoria tends to fade as reality sets in, when the fourth stage called “reorientation” begins.  During this phase, which lasts between 2 and 15 years, optimism tends to dip and the proportion of people who enjoy retirement drops to below 65 percent.  Finally, in the fifth stage, retirees “come to terms” with retirement.  “These proposed 5 stages of retirement are definitely interesting,” said Ruben Burks, Secretary-Treasurer of the Alliance.  “But I know that more than 65 percent of active Alliance members are enjoying their retirements as they continue fighting for justice.”

Tax Cuts Add to Debt Burden
The net share of the national debt for 99 percent of Americans has jumped by more than $7,000 per person over the past six years, according to a report by Citizens for Tax Justice (CTJ).  As a result of the Bush administration tax cuts, the national debt has grown to $7.5 trillion and is being paid for with borrowed money, such as money owed to the Social Security Trust Fund.  The only Americans spared paying for this debt are the most wealthy 1 percent, those who have an average income of more than $1.2 million a year.  Everyone else received an average tax break of $2,616 from 2001 to 2006, however, the average debt burden rose by $9,782 per person, leaving a net debt of $7,166 per person.  For the wealthiest 1 percent, the tax breaks outweigh the added debt burden by a net average of $30,352 per family member.  “The CTJ report offers concrete evidence that the Bush tax cuts have hurt America tremendously,” said George J. Kourpias, President of the Alliance.  “The tax cuts basically cost the average American over $7,000 while adding more than $30,000 to the bank accounts of those who were already rich.  The fact that Republicans want to extend the tax cuts proves they only care about lining their pockets and those of their wealthy friends instead of acting with fiscal responsibility.”

Homes May Provide Retirement Relief
With the main sources of retiree income – Social Security benefits, pensions and personal savings – dwindling, some financial experts are encouraging people to use their home equity to help fund their retirement.  Real estate prices across the country have soared in recent years, greatly appreciating the values of homes in many areas.  For those who have not been able to save, the various options to “monetize” their home, from selling and investing the proceeds to reverse mortgages, may provide some income.  According to calculations by Wells Fargo & Co., the assets in pension plans totaled $1.7 trillion last year.  Assets in other company-sponsored plans, such as 401(k), totaled $2.8 trillion and Individual Retirement Accounts (IRAs) had assets of $3.7 trillion.  In the same year, the home equity held by all households was nearly $11 trillion.  “Relying on home equity is extremely risky, as homes may not appreciate as fast in the future as they have in the past decade,” said Edward Coyle, Executive Director of the Alliance.  “Furthermore, the reality is that nearly 30 percent of older home owners are both house poor – their homes have a low market value – and cash poor.”

Did You Know…
Being laid off from work can have a significant impact on the health of someone near retirement age.  Those who lose their job after age 50 have twice the risk of stroke and heart attack than people their age who are still working, according to researchers from Yale who followed the health of 600 people for 10 years after they were laid off.