A Different Perspective on Mexico

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The monologue on Mexico focuses on those crossing the border into the US. In fact, that’smexico a very narrow view of the relationship between the two countries.

According to the State Department, there are one million US citizens living in Mexico. However,

  • That figure was first reported in 2014. The number has been increasing since. The US government doesn’t  track residents living out of the country as long as they pay their taxes.
    • One US expat realtor reports a 40% increase in home sales in one US expat enclave just in the last year.
    • A commentator in The Guardian estimates the number of Americans living in Mexico as closer  to two million.
  • A number of the US citizens living in Mexico aren’t there legally (estimates vary from 50 to 90 percent). The Mexican government isn’t particularly good about tracking them, and doesn’t deport them. In fact, Mexico abolished a mandatory prison sentence for undocumented immigrants in 2008. Those who have not committed a crime are simply allowed to stay.

CNN reports that there are four reasons that Americans give for moving to Mexico:

  • Climate
  • Culture
  • Cost of living
  • Escaping the US political climate

One American comments that doctors in Mexico are more helpful and enjoyable to visit than are doctors in the US.

It’s cheap. It’s very patient-oriented. It’s like my father practiced in Illinois about 50 years ago, without all the paperwork.

Many Americans, including some in Congress, view Mexico through the prism of an out-dated stereotype. Of course, if that changes, more Americans might move there.


Sources:

  1. Instituto Nacional de Estadística y Geografíca. http://www.inegi.org.mx/\
  2. Adam Taylor, “Mexico has its own immigration problem: American retirees,” The Washington Post, 21 November 2014. https://www.washingtonpost.com/news/worldviews/wp/2014/11/21/mexico-has-its-own-immigration-problem-american-retirees/?utm_term=.dc11626a341f
  3. Leyla Santiago and Traci Tamura, “South of the border, US expats have a different take on Mexico,” CNN 24 June 2017.  http://www.cnn.com/2017/06/24/americas/mexico-american-expats/index.html
  4. “News Report: 91.2% of All Americans Who Live in Mexico Are Living There Illegally,” Latino Rebels, 5 March 2017. http://www.latinorebels.com/2017/03/05/news-report-91-2-of-all-americans-who-live-in-mexico-are-living-there-illegally/
  5. Millions of Americans live in Mexico. Can we continue to coexist?” The Guardian, 23 January 2017. https://www.theguardian.com/commentisfree/2017/jan/23/trump-futures-mexico-us-interlocked-wall-border

How Americans Drive Up Their Own Health Insurance Costs (UPDATE)

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This is not a defense or excuse for the exorbitant pricing or profits in the health insurance industry in the US.  As with most social issues, there is no single cause of a problem. The industry owns part of the issue, Congress owns a major part, but consumers also own a piece. It’s time to recognize that and do what you can do about it.

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I grew up in an advertising era touting “rugged individualism.” The icons of that era included John Wayne, the TV character Palladin, and the advertising “Marlboro Man,” all part of a mythology that people could cut their own path regardless of others.

Unfortunately, that’s not how life works. If your reading this, someone else probably had provided the electricity for  you. If you also write, the court system protects your intellectual property. If you have a retirment account, you depend on financial regulators to protect your assets. If you eat (and you’d better be doing that), there’s the farmers and fishermen who provide what you consume. We are a connected network of people, whether on the grid or not. Whether you like it or not.

That’s blatantly the case in health insurance. There was a time when health insurance didn’t exist and didn’t matter. There were relatively few doctors in the 1850s, medical knowledge was relatively crude, and life expectancy was short.

  • In the Americans, life expectancy from birth was only 35.1 years in 1850. Life expectancy for slaves was less, with estimates ranging from 22 to 30 years of age.
  • The shortness was due to childhood deaths. If one could make it to age 10, there was a reasonable prospect to live to age 60.

ourworldindata_life-expectancy-cumulative-over-200-years-768x548

Life expectancy has  increased dramatically in the last two years, as you can see from the chart above, from an excellent article by Max Roser. (1)

In most geographies, the major gain in life expectancy came after World War II.

Exponential-PHE-Growth-Irfan

However, the increase in life expectancy comes at a substantial cost. One estimate says that each day of additional life expectancy adds $1.6 billion to medical costs just in the US. (2) However, living longer is just one component of the story of rising health costs.

Behavior matters. Certain things some of us do add substantially to medical costs for each and every one of us. How does that work? It’s in built into the concept of insurance as conceived by Benjamin Franklin.

  • People — healthy and sick — pay into a fund that in turn pays people in their time of need.
  • The required size of the fund is determined by the number of claims and the size of claims. The required size of the fund determines what people who participate have to pay.

That might seem unfair to healthy people, but we have to remember that no one stays healthy forever. Everyone dies. Everyone gets a turn with illness, sometimes more than one turn.

What might be considered unfair is when people do things or allow things to happen that cause illness. For example,

  • The CDC estimates that 36.5 million Americans smoke cigarettes, and 16 million currently have a smoking-related illness. Not everyone who smokes gets sick, but a larger percentage do, and that adds $170 billion to total medical expenses in the US. (3, 4)
    • According to a recent Gallup survey, more than 28% of adults in Ft. Smith, Arkansas, Layfayette, Louisiana, Erie, Pennsylvania and Bristol, Tennessee smoke. The national incidence is 18.2%, down from more than 40% in the 1960s. (9)
  • Obesity is estimated to add $147 billion to national healthcare spending (2008 dollars). (5) That figure may be low due to the large number of undiagnosed diabetics in the US.
  • Alcohol and drug abuse adds another $64 billion to healthcare spending (7)
  • Distracted driving (there are no separate estimates of direct medical costs), but medical bills have been rising even as the severity of injuries has been declining. (6)

The medical expenses that result from these behaviors hit every consumer:

  • Rising healthcare charges (remember the principle of “supply and demand”?)
  • Rising insurance premiums to cover the rising healthcare costs
  • Rising taxes to cover the proportion of expenses the government pays

High spending doesn’t mean better medical results.

With development, health outcomes generally improve, but the U.S. is an anomaly. The U.S. and the U.K. are both high-income, highly developed countries. The U.K. spends less per person ($3,749) on health care than the U.S. ($9,237). Despite its high spending, the U.S. does not have the best health outcomes. [Life expectancy, for example, is 79.1 years in the U.S. and 80.9 years in the U.K. And while the U.S. spends more on health care than any country in the world, it ranks 12th in life expectancy among the 12 wealthiest industrialized countries, according to the Kaiser Family Foundation, a non-profit organization focusing on health issues.] (8)

Europeans and the Chinese government understand the impact of individual behavior on costs. Americans have been more reluctant to understand and accept personal responsibility for how their behavior affects themselves and everyone else. It’s time to grow up and put the myth of rugged individualism away.

 


Sources:

  1. Max Roser, “Life Expectancy,” Our World in Data, undated. https://ourworldindata.org/life-expectancy/
  2. Sean Davis, “8 Charts that Explain the Explosive Growth of U. S. Health Care Costs,” Media Trackers, 1 October 2013. http://mediatrackers.org/national/2013/10/01/8-charts-explain-explosive-growth-u-s-health-care-costs
  3. US Centers for Disease Control and Prevention, “Economic Trends in Tobacco,” last updated 17 June 2017. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm
  4. US Centers for Disease Control and Prevention, “Current Cigarette Smoking Among Adults in the United States,” last updated 1 December 2016. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/index.htm
  5. US Centers for Disease Control and Prevention, “Adult Obesity Causes and Consequences,” last updated 15 August 2016. https://www.cdc.gov/obesity/adult/causes.html
  6. Rocky Mountain Insurance Information Association, “Cost of Auto Crashes and Statistics,” undated. http://www.rmiia.org/auto/traffic_safety/Cost_of_crashes.asp
  7. National Institute of Drug Abuse, “Trends and Statistics,” last updated April 2017. https://www.drugabuse.gov/related-topics/trends-statistics
  8. NPR, “What Country Spends The Most (And Least) On Health Care Per Person?” 20 April 2017. http://www.npr.org/sections/goatsandsoda/2017/04/20/524774195/what-country-spends-the-most-and-least-on-health-care-per-person
  9. Samuel Stebbins, “Cities with the Most Smokers,” 24/7 Wall Street, 22 JUne 2017. http://247wallst.com/special-report/2017/06/22/cities-with-the-highest-smoking-rates/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUN232017A&utm_campaign=DailyNewsletter

Parenting and Risky Sexual Behavior in Teens

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It may sound obvious, but parents matter. Both parents matter.ben_franklin

However, when it comes to risky sexual behavior in teen daughters, the spotlight is on the father.

A new study from the University of Utah relates the “quality of fathering” with teen behavior.

  • High quality fathering is associated with setting standards for behavior and consistent monitoring of how the teen spends her time and money. It affects with whom the teen associates and reduces the likelihood of risky behavior.
  • Low quality fathering does just the opposite.

The study strongly suggests that having a low quality father out of the home may be better for daughters than keeping the family intact.

The study may in fact underestimate the negative effects of low quality fathering. In some cases, parents or other family members are the source of risky behavior.

According to an The Atlantic article from 2013,

One in three-to-four girls, and one in five-to-seven boys are sexually abused before they turn 18, an overwhelming incidence of which happens within the family. These statistics are well known among industry professionals, who are often quick to add, “and this is a notoriously underreported crime.” (2)

Another review of the research literature suggests a 40% rate of molestation among girls and 30% among boys in the US. (4) In all cases, the figures are subject to some disagreement about definitions.

For those of us who know victims  of family abuse, this incidence is quite plausible. In my own conversations, I’ve been flabbergasted by the people who reveal histories of abuse — people I would never have suspected. It comes out in conversations after a certain level of trust is in place. And it surfaces too many times with too many people.

Ultimately, the statistics we have are unreliable, because too many people won’t talk about this. The statistics are incomplete, as they tend to focus on father-daughter abuse and not on mother-son or sibling relations (or on abuse by authority figures other than priests).

Traditional studies have focused on “broken” families and the importance of having two parents in the home. The truth seems to be a bit more complex. There are many cases in which the “intact” family is broken and dysfunctional, and breakup represents improvement.


Sources:

  1. Danielle J. DelPriore, Gabriel L. Schlomer, Bruce J. Ellis. Impact of Fathers on Parental Monitoring of Daughters and Their Affiliation With Sexually Promiscuous Peers: A Genetically and Environmentally Controlled Sibling Study. Developmental Psychology, 2017; DOI: 10.1037/dev0000327
  2. Mia Fontaine, “America Has an Incest Problem,” The Atlantic, 24 January 2013. https://www.theatlantic.com/national/archive/2013/01/america-has-an-incest-problem/272459/
  3. Margaret Ballantine and Lynne Soine, “Sibling Sexual Abuse — Uncovering the Secret,” Social Work Today Vol. 12 No. 6 P. 18. http://www.socialworktoday.com/archive/111312p18.shtml
  4. Rational Skepticism.org. “Just how common is incest?” 11 July 2010. http://www.rationalskepticism.org/social-sciences/just-how-common-is-incest-t9841.html

The Latest Bearing Sign for the US Economy

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The Federal Highway Administration reports that highway travel has declined from theben_franklin last quarter of 2016. That fits with weak consumer spending data from the first quarter of this year — but is a surprise to many economists.

Retail sales at gasoline stations are down 4.8% from this time a year ago. Those sales include gasoline, snacks and other items stations sell.

In reporting this, the Wall Street Journal speculates on a number of possible causes, including immigration enforcement.

The Journal doesn’t cite two obvious causes:

  • The decline in tourist visits to the US — down 16% from a year ago, and
  • Uncertainty about healthcare costs that may be causing consumers to cut spending.

The drop-off in tourism affects all industries that serve tourists:

  • Hotels and recreational facilities
  • Transportation, including air, rental cars and gasoline
  • Restaurants

The decline in this industry is a big deal and affects a lot of jobs as well as city and state tax  revenue.

It doesn’t look like consumer spending is going to drive economic growth.  If it doesn’t, is there anything else that can? Historically, the answer largely is no.

Further, Trump has alienated trading partners who might be interested in seeing our economy recover — Mexico, Canada, China, Germany. The downside of “America First” might be “America Alone”.


Sources:

  1. “Americans Tap Breaks on Driving,” The Wall Street Journal, 27-28 May 2017, p. B12.
  2. Kate Taylor, “Tourism in the US has drastically declined since Trump was elected,” Business Insider, 17 May 2017. http://www.businessinsider.com/trumps-rhetoric-hurt-us-tourism-and-retail-2017-5

How Safe Is Your Kitchen?

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An exploration of a sample of kitchens in Philadelphia by a research team at Drexel findsth that most have serious food safety violations that could affect the health of those who cook and eat there. How does yours compare?

The study: the researchers visited 100 homes with a visual checklist that inspectors use for health inspections for restaurants.

What they found:

  • In 97% of the homes, raw meat was stored improperly. In some cases, juice from the raw meet was dripping down on ready-to-eat food.
  • In 43% of the homes, raw meet was stored at an improperly high temperature, allowing bacteria to flourish.
  • Traces of pests were found in 65% of the kitchens.
  • Fecal coliform bacteria was present in 44% of the kitchens.
  • E. coli was found in 15% of the kitchens.
  • At least one foodborne pathogen was discovered in 45% of the kitchens, and 12 percent had more than one type. Listeria was found in 15%.

The key problem areas were sinks, sponges, dishcloths and refrigerators set to a too-high temperature.

Recommendations:

  1. Check the temperature setting for the fridge.
  2. Microwave your sponges for one minute each day.
  3. Disinfect the sink.
  4. Wash hands before handling food.

Common sense would be nice, too!

It’s hard to complain about healthcare costs when we’re making ourselves sick!

Disclosure: My son attended Drexel University; I’ve very impressed with that school.


Sources:

  1. Patricia A. Borrusso, Jennifer J. Quinlan. Prevalence of Pathogens and Indicator Organisms in Home Kitchens and Correlation with Unsafe Food Handling Practices and Conditions. Journal of Food Protection, 2017; 80 (4): 590 DOI: 10.4315/0362-028X.JFP-16-354
  2. Drexel University. “Most home kitchens in Philadelphia study would earn severe code violations: Bacteria-laden sponges and poor raw meat storage main culprits.” ScienceDaily. ScienceDaily, 9 May 2017. <www.sciencedaily.com/releases/2017/05/170509132844.htm>.

Politicians Take Care of Themselves

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This is either sad or funny.

24/7WallStreet ranked counties in the US on a combination of three measures:

  • Education (economic status of residents)
  • Poverty rate (how the local economy is doing)
  • Life expectancy (a measure of health and medical services)

The top 5 counties in the US (and 7 of the top 10) on these measures are suburbs of Washington, DC, where Congress lives.

  1. Falls Church (Independent City), VA ————————————- (DC metro)
  2. Arlington County, VA ———————————————————– (DC metro)
  3. Fairfax County, VA ————————————————————— (DC metro)
  4. Loudoun County, VA ————————————————————- (DC metro)
  5. Howard County, MD ————————————————————- (suburb of both DC and Baltimore; location of Columbia, MD)
  6. Douglas County, CO (part of Denver metro area)
  7. Los Alamos, NM (Federal nuclear research center)
  8. Fairfax (Independent City), VA ———————————————- (DC metro)
  9. Marin County, CA
  10. Alexandria (Independent City), VA —————————————- (DC metro)

Surprised?

Conversely, the worst counties in which to live are

  1. McDowell County, WV
  2. East Carroll Parish, LA
  3. Issaquena County, MS
  4. McCreary County, KY
  5. Clay County, KY
  6. Holmes County, MS
  7. Quitman County, MS
  8. Jefferson County, MS
  9. Calhoun County, GA
  10. Stewart County, GA

Given what I’ve posted recently on education and healthcare in the South, this list shouldn’t come as a surprise either.


Sources:

  1. http://247wallst.com/special-report/2017/01/13/the-worst-counties-to-live-in/
  2. http://247wallst.com/special-report/2017/01/24/the-best-counties-to-live-in/?utm_source=AOL&utm_medium=CPC&utm_content=the-best-counties-to-live-in&utm_campaign=AOL

Just how smart are you with your money?

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The Future is coming, whether you like it or not. In fact, some parts are going to be very ben_franklinpositive, and some aren’t. You have to be prepared to deal with both. The sooner you start to prepare, the lower your costs will be!

We like to think about buying a house, buying a car, fancy weddings, babies and graduations. We don’t like to think about down payments, maternity costs or paying for college. However, as economist Milton Friedman famously wrote, “there’s no such thing as a free lunch.”

The statistics are simple.

  • The average life expectancy (LE) in the US is 78.8 years (1) — shorter for the poor and Southerners; longer for women and the affluent.
  • The healthy life expectancy (HLE) in the US is 68.1 years. By comparison, the HLE for Bosnia is 68.8 years and for Canada it’s 72.3 years. (3) HLE in the US varies by state and is shorter for Southerners. (2)
  • The difference between LE and HLE is the amount of time you can expect to have to deal with some kind of physical impairment. In the US, that amounts to a decade of trouble on average.

A new study confirms what people with elder parents already knew: older people need help with daily living. Even if they are fairly independent, both finances and medications can get out of control. They may not have or want to be dependent on family members to manage either.

Over 10 years, 10.3% of those aged 65 to 69 needed help managing medications and 23.1% needed help managing finances. These rates rose with age, to 38.2% and 69%, respectively, in those over age 85. Women had a higher risk than men, especially with advancing age. Additional factors linked with an increased risk for both outcomes included a history of stroke, low cognitive functioning, and difficulty with activities of daily living. (4/5)

There are resources, but they aren’t free.

  • The average cost of in-home healthcare in the US is $3,600 per month, as I mentioned in a prior blog. The average cost of a nursing home is $9,200 per month. Medicare can pick up the first 100 days. One of the Trump proposals for Medicaid reform involves eliminating Medicaid as a way to deal with these expenses.
  • There is a  category of professional, “daily money managers.” These aren’t financial planners, but they deal with records management, budgeting, checking the validity of expenditures, and bill payment. Costs for these services vary but can start at around $450 per month. (6) Not only do they keep things together for their clients, they are an important line of defense against scammers preying on seniors.

So, how are your parents going to deal with this? How are you going to deal with this when it’s your turn?

These problems are  best addressed when you do what most people don’t — act early on them.

  • Set aside dedicated savings for retirement.
  • Purchase permanent life insurance with a rider that allows you to take up to 50% of the face value of the policy for disability and long term care expenses. (7)

Both of these actions are best done earlier in life rather than later

  • Starting savings early allows the most time for compounding of interest.
  • Starting life insurance early minimizes cost. Insurance premiums are directly related to the length of time the carrier expects to have your money before they have to pay out. The earlier you buy, the less it will cost and the more you can afford. For example —
    • In NJ, for a woman age 24 non-smoker, a new $200,000 whole life policy might cost $113.68 per month.
    • In NJ, for a woman age 44 non-smoker, the same policy would cost $365.08 per month.
    • In NJ, for a woman age 59 non-smoker, a new $100,000 policy would cost $395.08. From the carrier used to quote these examples, a $200,000 whole life policy would not be available for someone that age.

With age, the price goes up and what you can buy goes down.

Procrastination costs you money. Don’t put this off.

If you practice a healthy life style, you can try to minimize the gap between LE and HLE, but you can’t count on eliminating it. There are just too many factors outside of your control (e.g., ice, drunk drivers, pollution, etc.).

 


Sources:

  1. Centers for Disease Control and Prevention, “FastStats,” 17 March 2017. https://www.cdc.gov/nchs/fastats/life-expectancy.htm
  2. Centers for Disease Control and Prevention, “State-Specific Healthy Life Expectancy at Age 65 Years — United States, 2007–2009,” 19 July 2013. https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6228a1.htm#fig1
  3. World Health Organization, “Healthy Life Expectancy at Birth — 2000 to 2015,” http://gamapserver.who.int/gho/interactive_charts/mbd/hale_1/atlas.html
  4. Nienke Bleijenberg, Alexander K. Smith, Sei J. Lee, Irena Stijacic Cenzer, John W. Boscardin, Kenneth E. Covinsky. Difficulty Managing Medications and Finances in Older Adults: A 10-year Cohort Study. Journal of the American Geriatrics Society, 2017; DOI: 10.1111/jgs.14819
  5. Wiley. “Many older adults will need help with managing their medicines and money.” ScienceDaily. ScienceDaily, 7 April 2017. <www.sciencedaily.com/releases/2017/04/170407113035.htm.
  6. For those in the NJ area, I have a friend, Nancy Sobin, who offers these services. Please see her at http://paperwork-services.com/. She belongs to the American Association of Daily Money Managers, http://www.aadmm.com/.
  7. There are some companies that offer these riders for term insurance, which is much less expensive than permanent. The problem is that term insurance typically terminates by age 65, and home or nursing home care expenses typically start after that age. There’s no point having a rider that’s not going to be in force when you need it.