America’s long-term care. Suffer in illness, then die early in poverty

It takes only two things to keep people in chains:

The ignorance of the oppressed
and the treachery of their leaders.


A nation that does not take care of its elderly is, to borrow a phrase from our President, a “shithole” country. In fact, if you could vote for a single measure of a nation’s greatness, the treatment of its elderly would rank near the top.

By that measure, the U.S. does moderately well, but certainly not “great,” especially considering our vast national wealth. Unfortunately, that vast national wealth is not spread evenly, so millions cannot afford long term care.

Could you afford these costs?

 It is not uncommon for someone to receive care at home for several months or longer, followed by a two and a half year stay in an assisted living facility, with almost 60% then requiring a nursing home stay of somewhere between nine months and a little over two years.

All combined, this is a total of approximately 4-5 years of long-term care. In this scenario, the total cost of care could easily exceed $300,000, depending on the cost of care in your region.

Would you find this affordable? Would paying for it leave you impoverished? And, after paying all that money, what would happen to you if you finally left the nursing home facility?

The U.S. offers two primary, but insufficient, programs to protect our elderly: Social Security for living expenses, and Medicare for hospital and doctor expenses.

For those people who have not earned enough or been prudent enough to save a significant amount for retirement, Social Security benefits are ridiculously inadequate.

How Big Is the Average Person’s Social Security Check?
The Motley Fool, Todd Campbell, Aug 30, 2017

In the 12-month period ending June 2017, over 2.9 million Americans signed up for Social Security benefits. On average, these retired workers were awarded $1,413.08 in monthly benefits, however, the average benefits payable were quite different for men and women.

In the period, 1.4 million women filed for Social Security benefits, and their average award was $1,231.50. Men, however, were awarded $1,583.77, on average.

Wage inequality arguably plays a role in women’s lower average payment, but so, too, does Social Security’s formula, which penalizes individuals who take time off from their career to raise children.

Congress has added two years to the date when you first can receive normal Social Security benefits. Why? Because Congress is run by the rich, and the rich want the Gap widened between the rich and the rest.

For the rich, the less given to the lower income groups, including the elderly, the better.

To deceive the public, politicians make the dual false claims that the federal government is running short of dollars, and that your federal taxes are necessary to fund federal spending.

As a result, too many of America’s elderly suffer in illness, then die early in poverty.

It actually is a good program so far as it goes, but it won’t cover all your medical costs, which means you’ll have choices:

  1. Pay for a Medigap policy, or
  2. Pay for what Medicare doesn’t cover, or
  3. Do without some medical services.

And in the almost 100% probability that you’ll need medicines, you’ll either have to:

  1. Pay for a “Medicare Part D” policy, or
  2. Pay for the medicines, yourself
  3. Do without medicine.

Everything boils down to “pay for” (may be impossible for many) or “do without.”

Here’s how many Americans have nothing at all saved for retirement
Ester Bloom
If you’re overwhelmed by the financial responsibilities of day-to-day life and more focused on making it to the end of the month than on the possibility of being able to save for the distant future, you’re not alone.

In fact, the vast majority of Americans have under $1,000 saved and half of all Americans have nothing at all put away for retirement.

There is a related problem. Middle-income people lead middle-income lives. Over the years, they do middle-income things.

They live in middle-income communities, drive-middle-income cars and when planning for the future, they anticipate middle-income expenses.

But then, they are surprised:

Wages finally rising, but not for middle class
 Don Lee Washington Bureau
WASHINGTON —Jorge Hunzelmann was pleased enough when his employer bumped up his pay this year by $2.50 an hour to $19.50.

The truck driver, 52 and father of two, is a beneficiary of a tightening labor market, but he does not have company-provided health benefits, and he says it’s still a hand-to-mouth existence for his family. “We don’t have money to save to put into the bank,” said the Gaithersburg, Md., resident.

Most of us expect to lead modest lives when we first go to work. Then we anticipate significant wage gains until perhaps we are in our 50’s, after which we predict more modest wage gains, but gains nevertheless until we retire in our 60’s.

And we live according to our anticipations. So perhaps we plan to rent an apartment, followed by a modest house, then a bigger house, all of which we expect to be able to afford on our anticipated income.

But what happens if our income does not increase as we had planned, and here we already live in a neighborhood we can’t afford, and have children and friends we can’t afford? The step back is incredibly painful and humiliating for our entire family.

Across the country, wages that were stuck for years finally seem to have started to rise faster, especially in industries such as trucking, which is begging for workers. Average hourly earnings for all private-sector employees last month grew at a 2.9 percent annual rate of increase, the most since 2009.

That has fueled hopes for workers. It has also spooked some investors with fears of higher inflation and interest rates.

But wage gains thus far have been very uneven, according to Labor Department statistics. They’re concentrated at the higher end of the pay scale and the lower. By and large, the broad middle of the labor force has not seen much of a raise, mirroring a long-running trend.

Even with unemployment at a 17-year low of 4.1 percent, the proverbial rising tide has not lifted all boats: The fancy yachts have gotten most of the lift.

Take the finance sector, which has led the pack in the recent wage increases. Some 8.5 million people work in banking, insurance and real estate; their average hourly pay jumped 4.2 percent in January from a year earlier, to just a penny under $34 an hour.

But for ordinary nonsupervisory employees in finance — about four out of five financial-industry workers — the average increase was just 1.6 percent, to $26.75 an hour.

“It’s a pulling apart at the top,” said Elise Gould, a senior economist at the Economic Policy Institute, noting that if the trend continues, it will exacerbate the country’s already large income inequality. 

The problem is not that the poor are too “lazy” to work, or that the middle are too “ignorant” to have a plan.

The problem is that the rich have stacked the deck by bribing Congress to pass laws that favor the rich — laws that widen the Gap between the rich and the rest.

This brings us to long-term care.

Caution on long-term care
Elliot Raphaelson, Chicago Tribune,

When people live past 65, there is a high probability that they will need some form of long-term care.

A major problem for many insurance companies in the long-term care industry is that they are not profitable or are losing money.

Immediately, we see several problems:Related image

Long-term care is like medical care, in that the majority of us will need it as we grow older, but unlike medical care, there is no “Medicare” for long-term care. This is a terrible omission by Congress.

And unlike medical care, long-term care usually ends with death. While people ordinarily occupy a hospital bed for a day or two — a week is exceptional — an elderly person may spend many years needing long-term care.

Thus, it is difficult, if not impossible, for private insurance companies to provide affordable long-term care coverage at affordable premiums, and still be profitable.

People are living much longer now than when many of the long-term care policies were sold.

And, it was commonly assumed that 5 percent of policyholders would allow their policies to lapse annually. In fact, only about 1 percent of policyholders have done so.

There is something implicitly wrong with pricing a policy in the hopes that every year, 5% of policyholders would spend money on premiums, then allow the policy to lapse when it is needed most.

Another assumption was that insurance companies would be able to invest their capital at a 7.5 percent return. Interest rates, however, have remained below historical levels, and returns in 2017 were approximately 4.6 percent, according to A.M. Best.

The problem with private, for-profit insurance companies is that they are designed first to make a profit, and only secondarily, to provide a service.  This problem becomes quite serious in the case of a necessary service paid for by the public.

Many insurance companies offering LTC policies have either gone out of business or discontinued selling the policies. Most of the companies that remain in the business have taken steps to increase premiums for existing policyholders and new customers.

Healthy people have invested many thousands of dollars to have protection by LTC policies, only to discover that the LTC policies will not be there when finally needed.

Insurance companies cannot arbitrarily raise premiums for existing customers without the approval of the state insurance department. When premium increases have been granted, they have more than doubled. For those who had the foresight to buy these policies many years ago, it seems very unfair.

The majority of policyholders expected that their premiums would remain fixed. Unfortunately, I am not aware of any insurance company that guaranteed premiums would not increase.

If any company had guaranteed its premiums were fixed, that company is out of business, today. In essence, the underwriting either was knowingly fraudulent, with low premiums as a “come-on,” or it was done with extraordinary ignorance.

Another factor that makes the situation worse is that many of these policyholders have already retired and have few or no options to increase their income to be able to afford premium increases.

The people who can afford premium increases least, are the ones who lose coverage just before they need it most.

Insurance companies can go to their state insurance departments to try to obtain approval for premium increases. If the insurance department refuses to approve premium increases, the insurance company — facing large losses — may have to liquidate.

When an insurance company is forced to liquidate, the policyholder generally loses some coverage. There is no guarantee, when a company does liquidate, that policyholders will receive the coverage they initially contracted for.

Currently, only about a dozen companies still offer LTC policies.

In summary, long-term care is:

  1. Unaffordable for the average person,
  2. Necessary for
  3. A high percentage of people are
  4. Unprofitable to insure, except with high premiums and low coverage.

Those four factors: Costly, necessary, commonly needed and unprofitable cry out for federal support. They describe the exact services the federal government should provide.

The solution:

The problem lies with the private insurance companies and their profit motive.

The solution is a Medicare for All plan that includes long-term care, funded by a Monetarily Sovereign government that has no need for profits and cannot run short of dollars.

No public purpose is served by forcing Americans to self-insure or to pay for long-term care private insurance out of their own pockets.

Medicare is a social experiment that has identified the private insurance companies as useless middlemen. The experiment has worked, as far as it has gone. It just hasn’t gone far enough.

Our long-term care problems are mistakenly identified as “high costs,” or “lack of preparation by the young,”  The real problem is the unnecessary insertion of private insurance company “middlemen” into the situation.

With regard to long-term care, private insurance companies serve no function other than to increase costs and to decrease benefits. Federally funded Medicare should pay for long-term care.

Otherwise, our older Americans will continue to suffer in illness, then die early in poverty. And you probably will be one of them.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.


2 thoughts on “America’s long-term care. Suffer in illness, then die early in poverty

  1. Household Member(s)

    Chance of Living to: 85, 90, 95, 100

    62-year-old man: 40%, 19%, 6%, 1%

    62-year-old woman: 52%, 31%, 13%, 4%

    62-year-old man and woman:* 71%, 44%, 18%, 5%

    62-year-old man and man:* 64%, 34%, 11%, 2%

    62-year-old woman and woman* 77%, 52%, 25%, 8%

    Data source: Vanguard calculator. *The figures for the couples reflect the chance of either of them reaching that age.


  2. What an awful & unnecessary situation we Americans have put ourselves in (I still think if more people knew the issues and voted, we could have things like Medicare for All paid for by a Sovereign Government. In fact, I thought so so much that I wrote an article about it and called my plan Sammycare:

    But it’s even worse, if that’s possible.
    The notion that an individual should personally save enough to not only pay for his/her needs in retirement but to have enough to GENERATE enough to pay for those needs – say, realistically, 5% a year (even the best government pension fund managers rarely make >6%/year over time) – is actually rather odd.

    It means 95% of your money, until perhaps the very end, needs to be retained just to spin off enough money to live on. And when will that be? 10 years after you retire at, what 67, 68…70…beyond? And what will inflation and especially old age expenses inflation look like then? The things the elderly spend money on are going up faster than regular inflation.
    It’s really very inefficient!

    It would be much more efficient to have Social Security provide a Basic Income Guarantee that was sufficient and predictable. Probably less of a drain on the kids too, who need money to avoid long-term poverty themselves; most people don’t even have $400 for emergencies without selling or borrowing.

    This you’re-on-your-own society doesn’t work for the vast majority of Americans, and if it hasn’t worked so far, how will taking away even more of the social safety net work, as Republicans want to do, and many Democrats too?

    So,even if you did almost everything right and managed to save, say a million dollars for retirement, even that may not be enough if you don’t have kids who will help support you. That $300,000 expense may leave you too little to generate enough income to keep you out of poverty if you “live too long.”
    And of course, all of this sets up a Senior-eat-Senior world in which the have-slightly-mores try to keep the have -nots from taking what little more they have.

    Hell of a system we have here. Hell.


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