One Thing You Can Count on with Obamacare

The Affordable Care Act, better known as Obamacare, got off to a rocky start last week. But it will be years before we know whether the law can achieve its long-term goal of getting more Americans insured while slowing the growth of medical costs.

Proponents say that more Americans will have access to medical care, certainly a plus in a country as prosperous as ours.

However, many of us could end up paying higher premiums to supplement those who will pay little or nothing at all.

I’ve spoken to experts in the healthcare and insurance professions. Most are pessimistic with this move towards socialized medicine. One concern is that the wait time to receive that care could soar as more doctors refuse to accept insurance and Medicare. Thus delaying critical treatments.

With that consensus, one thing is almost for certain: More people piling into doctors’ offices seeking treatment means longer waiting times for you.

For example, if you normally estimate a visit with a specialist will take two hours, better figure on four once Obamacare takes hold.

Best wishes,

George

No Long-Term Care in Obamacare

Open enrollment for the Affordable Care Act as passed by Congress, also known as Obamacare, starts October 1st. But if you haven’t been following my posts, you may be shocked to learn that long-term care insurance is not part of the provisions.

Back on June 30, 2012, I announced that the CLASS Act entitlement was Obamacare's first casualty and a huge embarrassment. It was meant to be a voluntary long-term care insurance program that would have let Americans with health problems receive coverage. But the Administration’s beancounters discovered that the concept was impractical, so they quietly walked away from it.

To sum it up: You’re on your own when it comes to long-term care. Medicare has limited coverage. And you must be almost broke to qualify for Medicaid. My advice is to learn what options you have and come up with a strategy to follow in case your health, or that of a loved-one, changes.

Best wishes,

George

Long-Term Care Survey Yields Scary Findings

Bankers Life and Casualty recently conducted a survey about long-term care (LTC) costs. The result: 52% of the respondents said they expect Medicare to pick up the tab.

Scary because the truth is that Medicare generally doesn’t pay for nursing home or assisted living expenses.

Sorry, Congressman, you didn’t make me feel any better

Back on August 15, I wrote a post More Americans Say ‘Adios’ to Uncle Sam. And just as I said I would do, I sent my concerns to my Congressmen.  

Here is Representative Patrick Murphy’s reply:

 

 

I appreciate the time the Congressman or his aide took to reply. However, he really didn’t say anything that most of us didn’t already know. His allegedly comforting words: “I will keep your thoughts in mind to work across the aisle to get our nation back on track.”  

Sorry, Congressman, you didn’t make me feel any better.  

Neither Senator Nelson nor Senator Rubio has replied.  

You can locate your Senators here. And for your Representative, go here.

 

Best wishes,

 

George 

P.S. Feel free to use the following letter when contacting them, or tone it down if that’s your style. I’ll let you know the reply I get from my lost Senators.

-----------------------------

Dear [name of the Congressman],  

I’m going to make this real simple: You and your colleagues in Washington are doing a horrible job. And 81% of Americans in a recent poll agree with me. Still not convinced?  

Well, the number of American giving up their passports jumped six fold from a year ago.

Spend, spend, spend on social programs has become the mantra in Congress, with no end in sight. But amid the recovery, the U.S. has also seen an increase in poverty levels, which the Census Bureau puts at 15.9% of the total population, or close to 50 million citizens. In 2008, that figure was 13.2% of the population.

And, while the unemployment rate has fallen from 10% at its Great Recession peak in 2009 to 7.6% in May, 11.8 million Americans still remain without work; 4.4 million comprise the long-term unemployed.

The way you are giving out my tax dollars simply is not working.

So please let me know what specific action you are taking to cut the outrageous spending on social programs that do nothing other than create a society that depends on big government for its survival.

Sincerely,

 

[Your name]

 

More Americans Say ‘Adios’ to Uncle Sam

A lot of Americans are making that move … at least compared to past years.

According to an August 9 Bloomberg article, the number of Americans giving up their nationality at U.S. embassies leaped to 1,131 in the three months through June from 189 in the year-earlier period. For the first half of this year the total is 1,810 compared with 235 for all of 2008.

Granted, that’s a tiny number. But it points to how many Americans feel about the Foreign Account Tax Compliance Act (FATCA), which requires them to disclose foreign assets in excess of $50,000 to the IRS. Financial institutions abroad must now provide the IRS with information about accounts held by U.S. taxpayers and foreign entities in which U.S. taxpayers hold a substantial ownership interest.

The Bloomberg article pointed out that,

"The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit."

Having more than $50,000 in an offshore account doesn’t exactly put you in the mega-rich camp. So it’s clear that our elected officials in Congress are going after middle class Americans … you and me. Shame on them, and shame on us for keeping them in Washington with the hope they’ll look out for our interests.

But I think there is an additional reason Americans are fed up and turning in their passports …

Coincidently, also last week, Gallup released a poll that found that only 14% of Americans approve of job Congress is doing. And 81% give them a thumbs down.

The approval trend is clearly on a slippery slope as you can see in the chart below.

 

So is it time to turn in your passport and take off for Dominical, Costa Rica; Saint Helena Island; or the slopes of Nepal? I don’t think so.

But it is time we hold Congress accountable for burying us up to our eyeballs in debt, and now using every trick in the book to dip in hardworking taxpayers’ wallets even more.

You can locate your Senators here. And for your Representative, go here.

Best wishes,

George

P.S. Feel free to use the following letter when contacting them, or tone it down if that’s your style. I’ll let you know the reply I get from my Congressmen.

-----------------------------

Dear [name of the Congressman],

I’m going to make this real simple: You and your colleagues in Washington are doing a horrible job. And 81% of Americans in a recent poll agree with me. Still not convinced?

Well, the number of American giving up their passports jumped six fold from a year ago.

Spend, spend, spend on social programs has become the mantra in Congress, with no end in sight. But amid the recovery, the U.S. has also seen an increase in poverty levels, which the Census Bureau puts at 15.9% of the total population, or close to 50 million citizens. In 2008, that figure was 13.2% of the population.

And, while the unemployment rate has fallen from 10% at its Great Recession peak in 2009 to 7.6% in May, 11.8 million Americans still remain without work; 4.4 million comprise the long-term unemployed.

The way you are giving out my tax dollars simply is not working.

So please let me know what specific action you are taking to cut the outrageous spending on social programs that do nothing other than create a society that depends on big government for its survival.

Sincerely,

[Your name]

The Worst Tenant Mess I’ve Ever Seen

Over the years, I’ve had my share of tenants who left the properties in pretty rough shape. A hole in the wall, a screen door ripped off its hinges, and carpet destroyed by a pet with a bladder problem are not uncommon.

But nothing that even comes close to what this poor landlord experienced. He took a shocking video of what was once a beautiful home that you can watch by clicking here.

Best wishes,

George

Why It Pays to Screen Tenants

I’ve owned and managed a number of rental properties over the years. And I’ve learned the hard way why it pays to screen prospective tenants before turning over the keys.

Well, here’s a case that was reported in the Milwaukee Journal Sentinel where a landlord apparently didn’t do that, and it cost him dearly.

A landlord in the Milwaukee area unknowingly rented a building to the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The agency used the building to run an undercover sting. When they moved out, they left behind broken doors and walls, unpaid utility bills, and damaged carpeting from an overflowing toilet.  

The landlord asked the ATF to pay for the damage to the building and unpaid utility bills. ATF supervisors in Milwaukee and regional headquarters in St. Paul refused.

When the landlord pressed his case, an ATF attorney warned him to stop contacting the agency or it may be considered threatening a federal agent.

He settled for a fraction of his original claim because he wanted to end the fight with ATF and move on. He has since sold the building and said the episode has made him distrustful.

He is still upset that the agents put him and his son in harm's way. Both were at the building several times when ATF customers — felons selling guns and drugs — were inside. After ATF cleared out, he encountered customers looking to do business with the Federal agents.

You can read the complete story here.

Best wishes,

George

Why Your Long-term Insurance Premiums Could Skyrocket

Most long-term care (LTC) insurance policyholders have become used to single-digit premium increases every few years over the past decade. But recently some have received the shocking news that their premiums have gone up 50%, 60%, 70%, or more.

So why the huge increase? There are a few reasons ...

First, insurance companies misjudged their customers

People are living longer than the industry had expected. And they’re using their LTC benefits more than anticipated. Plus insurers overestimated how many policyholders would let their policies lapse. The result: Companies paying out more money than had been estimated.

Second, blame the Fed

Insurance companies look to earn money on the premiums you send in. And they invest those dollars mostly in bonds. The Federal Reserve has pushed interest rates down to almost 0%, which cuts insurance companies’ profits.

Low interest rates have also made inflation protection a major liability for carriers. After all, how can an insurance company increase your benefit at 5% when interest rates are at half a percent? And a 5% compounded growth rate could double your benefit in 14-and-a-half years.

Therefore, premiums have to rise to make up the difference.

Third, newer data

Insurance companies now have data that wasn’t available years ago. And they’re using that new data when evaluating older policies, which are getting hit the hardest. This newer data reflects how long and how well people should live. And carriers now have figures showing that the cost of long-term care is increasing at an average of 4.7% to 6.6% a year.

Consequently, insurance companies are adjusting premiums to more accurately reflect this added risk.

However, carriers can’t just raise rates arbitrarily

Insurance companies have to make their case to state regulators for across-the-board increases that would apply to all policyholders. Even once the authorities give approval, there’s a waiting period before the new rates can go into effect.

Still that doesn’t stop companies from raising rates to try to make up past shortfalls or discouraging customers from renewing.

So what can you do about soaring LTC premiums?

Even if you haven’t been hit with a massive increase yet, get prepared. Contact your agent and ask if revising your policy’s benefits could reduce your cost. For example, changing a compound inflation rider from 5% to 3% could make a significant difference.

Review your investment portfolio, too. Make sure you have included inflation hedges, such as REITs, MLPs, and even precious metals that can help offset soaring health care costs.  

And you might want to consider getting a copy of A Boomer’s Guide to Long-Term Care. Inside you’ll find ideas for cutting premium costs, plus alternatives to long-term care insurance.

Best wishes,

George

Why isn’t the country’s biggest real estate holder selling its losers?

The government owns or manages tens of thousands buildings and other structures across the country — office buildings, courthouses, warehouses, and other property types — making it the nation’s largest real estate holder. However, between 55,000 and 77,000 of them sit vacant. It's impossible to tell exactly how many. No precise inventory has been kept.

Whatever the number, they’re costing you and me BILLIONS to maintain each year.

At the same time, Washington is up to its eyeballs in debt, approaching $17 trillion by last count.

It’s no secret that real estate is one of my favorite investments for increasing your income and growing your portfolio along the way. I’ve written about it many times in this blog and have answered numerous questions readers have sent in. And I can pretty much guarantee that if you told me you owned real estate that had negative cash flow with no chance of turning it around and were hurting for money, I’d tell you to sell it … as quickly as possible.

But that’s not how the folks in Washington think. They’re in no hurry. Let me give you an example …

There is an old steam-generating plant with a spectacular view of the Potomac waterfront. The government just sold this building to a private developer for $19.5 million. However, it sat there — vacant and off the market — for 10 years!
It turns out that a for-sale sign wasn’t put up until the day before the House Committee on Oversight and Government Reform drug GSA officials to the dingy facility for a hearing last summer.

Representative Jeff Denham chastised a GSA official, saying, "You can't get your job done! I don't care if it's a Republican or Democratic administration, the job is not getting done!" 

Selling buildings that the government has no use for could save taxpayers between $3 billion and $8 billion a year, according to various analysts. Chump change by Washington standards. But still, it’s money that could be put to better use such as helping to shore up Medicare.

However, it’s not as simple as sticking a for-sale sign out front and waiting for offers to pour in … several hurdles must be cleared.

One is that federal, state and local government agencies must first be given the opportunity to acquire it. Next the property must be made available to shelter the homeless. On top of that, federal environmental and historic preservation reviews are required. Only then can properties be sold to private entities.

Legislation to require the federal government to expedite the sale of underused properties died in the last Congress. At the moment, nothing is pending.

There is something you can do, though. Tell your Congressmen that you’re sick and tired of their dillydallying around with the budget problems. And making it easier to sell government buildings is a no-brainer that shouldn’t offend any special interest groups.  

You can find your Representative’s contact info here. And for your Senators, go here.

Best wishes,

George

P.S. Feel free to use the letter below when contacting them.

------------------------

Dear [Representative or Senator],

I understand that the Federal government owns tens of thousands of buildings and other structures that are vacant or underutilized. What’s more, it’s costing taxpayers billions of dollars to maintain this real estate. I would like to know what you are doing to get these properties off our backs.

I look forward to your reply, as this is an issue I will keep in mind when the next election rolls around.

Sincerely,

[Your name]

 

Added Sun Communities (SUI)

As I wrote back in November, I removed the INVRLPRA:CN fund because it wasn’t meeting expectations. And I felt there were better opportunities for income and growth in the residential REIT sector. So on January 18, I added Sun Communities, Inc. (SUI) to the portfolio.

More and more families are recovering from foreclosure and looking for affordable housing. Plus many Boomers are viewing manufactured home communities as an attractive retirement lifestyle. With all that, I think Sun could be a real winner.

Sun Communities owns, operates, and develops manufactured housing communities in the mid-western, southern, and southeastern United States. As of February 21, 2013, it owned and operated a portfolio of 183 communities comprising approximately 52,800 developed sites. Through its subsidiary, Sun Home Services, Inc., the company markets, sells, and leases new and pre-owned homes. Sun Communities, Inc. was founded in 1975 and is headquartered in Southfield, Michigan.

You can read more about Sun Communities on the company’s web site.

Here’s where the REITs in the e-FinancialWriter portfolio stand as of Friday’s close, not including dividends.

REIT	Sector	Blog date	Price	Price 03/01/13	RTD* %	Yield %
PSA	Self storage	3/14/2010	90.75	151.95	67.44	3.29
VTR	Health care	12/30/2010	52.87	71.26	34.78	3.76
HCP	Health care		36.81	48.9	32.84	4.3
HCN	Health care		47.53	64.62	35.96	4.74
IAECREIN:CN	Canada	9/27/2011	19.45cn	26.58cn	36.66	0
ZRE:CN	Canada		16.29cn	20.97cn	28.73	4.64
	Retail	1/29/2012	27.18	34.56	27.15	4.57
NNN
SUI	Res.	03/03/13	47.43	46.97	-0.97	5.37
Avg yield of REITs in portfolio						3.26

Source: Bloomberg  *Does not include dividends paid

If you have trouble seeing the chart, just in zoom in with your web browser.

Enjoy your weekend!

George

P.S. Would you like to know the moment I post something? If so, just submit your e-mail address in the box in the upper right of this blog post.