CHICAGO (Reuters) – Now that the U.S. Supreme Court has ruled on healthcare reform, the front line of the battle moves to the states. Some are vowing to resist implementation of the Affordable Care Act (ACA), while others are moving full speed ahead. And the stakes for uninsured Americans are enormous.

In states that do not implement their own public insurance exchanges, the federal government will step in. Federally sponsored exchanges will provide access to insurance for middle-income residents without employer-provided health insurance to buy policies with costs offset by subsidies.

The outlook for lower-income people is less certain, because the ACA aims to cover them through Medicaid – a program that currently serves mainly adults with very low incomes and seldom adults with children. The new ACA funding will serve all households with income near the federal poverty level – about $30,000 in annual income for a family of four.

The Urban Institute estimates that 15.1 million Americans fall into this category. The federal government will pay 100 percent of the cost of expanding Medicaid for the first three years and 90 percent afterwards.

OPTING OUT

But the Supreme Court’s ruling gives states the option not to participate in the expansion and low-income residents in states that opt out would be left high and dry. For example, the Urban Institute estimates that Florida, whose governor is on record as unwilling to expand Medicaid, has 1.3 million residents who could be covered under the law. Texas, whose governor is also against expansion, has 1.7 million potential beneficiaries.

In the public exchanges, applicants will be eligible for federal subsidies on the cost of coverage if they make less than 400 percent of the federally defined poverty level – currently $92,000 for a family of four. For this group, the subsidy uses a sliding scale to hold costs as a share of income between 2 percent and 9.5 percent. Those subsidies will be available even to residents of states such as Florida and Texas through the federally sponsored exchanges that are offered there.

CHICAGO, July 6 (Reuters) – Consumer advocates, government regulators and watchdogs have been warning seniors for several years about the risks associated with reverse mortgages. Now, the red flags are being hoisted significantly higher.

The new federal Consumer Financial Protection Bureau (CFPB) has issued a report signaling a likely tightening of regulations for reverse loans. Regulation of all mortgages was transferred to the CFPB under the Dodd-Frank reform law. Congress also instructed the agency to produce a detailed study on the reverse loan market – and to issue new regulations if its research uncovered unfair, deceptive or abusive practices.

The CFPB’s report confirms earlier warnings that reverse mortgages have become an increasingly risky business for borrowers and would-be borrowers. A growing number of borrowers are taking on reverse mortgage loans at younger ages in return for large lump payouts that carry high fixed rates of interest. And a growing percentage of outstanding loans are at risk of default.

While it is clear CFPB will be considering new regulations, the agency, and the industry, are taking steps to educate consumers on how to avoid problems with reverse loans.

“We’re going to continue to follow this, and work to get answers to our questions,” says Hubert H. (“Skip”) Humphrey III, who heads up CFPB’s Office of Older Americans.

CURRENT RULES

Reverse mortgages, available to homeowners over age 62, allow seniors to turn equity in their home into cash while staying in their homes. Unlike a forward mortgage, where you use income to pay down principal and increase equity, a reverse mortgage pays out the equity in your home as cash; your debt level rises and equity decreases.

CHICAGO, June 28 (Reuters) – The Supreme Court’s decision to uphold Obamacare is great news for everyone over age 50. If you’re over age 65 and on Medicare, the Affordable Care Act (ACA) improves your benefits. If you’re over 50 and don’t have insurance through an employer, your options for health coverage will be improved greatly starting in 2014, when the new state health exchanges are launched.

Yet polling data says older Americans oppose the ACA by much wider margins than younger people. Forty-four percent of baby boomers and 46 percent of seniors favor repeal of the law, according to a Pew Research Center survey last November. By contrast, just 27 percent of millennials – and 37 percent of GenXers – favored repeal, the survey found.

Here’s why older Americans should reconsider their opposition.

AGE 50 to 65

The U.S. Census Bureau reports that 15.3 percent of Americans age 50 to 64 were uninsured in 2010. That is a whopping 8,987,487 people and the number has been rising dramatically since the 2008 financial crisis and ensuing economic downturn, which cost millions of older workers their jobs and employer-provided insurance.

The exchanges will provide a simplified process for getting coverage for anyone who is not covered at work. You start with an application for insurance submitted to your state exchange. Depending on your income, you will be eligible to buy a policy in the exchange – or receive coverage under Medicaid.

Middle-class insurance shoppers will be able to buy an individual commercial policy with a government subsidy to assure affordability. But this marketplace will not be anything like the current individual insurance market, where applicants can be denied based on pre-existing conditions, prices are high and coverage is weak. Especially important for those over 50, the ACA forbids insurance companies from charging higher premiums or denying coverage based on health or age, and insurance companies will no longer be permitted to disqualify applicants based on pre-existing conditions.

CHICAGO, June 26 (Reuters) – Mutual fund costs will be Topic A this fall around many kitchen tables when workplace retirement savers start receiving the new government-mandated quarterly statements spelling out exactly what they are paying for their 401(k)s. But a kitchen table chat is also in order for retirees.

After all, smart portfolio management is important in retirement, too. Retirees draw down assets to pay living expenses. Fees are still being levied on those accounts – and they can have a much larger impact on retirement lifestyles and portfolio longevity than most people understand.

“There’s a portion of your assets that are being spent to pay the investment managers” says John Ameriks, who heads up investment counseling and research at Vanguard. “And there’s a portion of the assets that are being spent to pay you. When we do drawdown analysis, we just look at aggregate spending. But to the extent the expense ratio is higher, that cuts into what you can spend.”

Ameriks ran the numbers recently to demonstrate the impact that investment costs can have on retirees. The results suggest many retirees could get more mileage from their nest eggs by paring costs – either by jumping ship from a former employer’s high-cost 401(k) plan, or by ditching high-cost actively managed funds.

Ameriks started with some basic assumptions. An investor retires at age 60 with a $100,000 portfolio, and plans to spend 4 percent of her portfolio balance at the beginning of each year thereafter. She can choose one of three identical portfolios to generate 5 percent before-cost total investment return; the only difference among the three is investment cost – 0.25 percent, 1 percent or 2 percent. For purposes of simplicity, Ameriks assumed reinvestment of all dividends and distributions and no taxes on the returns.

The three portfolios each start with the same $4,000 withdrawal, but diverge sharply from there. By the time our retiree hits 65, the high-expense portfolio is generating a withdrawal 8.3 percent lower than the amount for the low-expense portfolio. After 15 years, the gap widens to more than 20 percent – a huge reduction in spending power.

“The differences sound small to most people,” he says. “I’m going to withdraw 4 percent, and I’m going to pay 1 percent in fees. But that 1 percent is equivalent to 25 percent of what you’re paying yourself. And what people seem to forget is that expense ratio hits over and over again – year in and year out. It hits the base of your portfolio, and since you’re withdrawing a fraction of the base, it’s also going to hit your income.”

CHICAGO (Reuters) – June is Gay Pride Month in the United States. And you can tell the times they are a changing when U.S. Secretary of Defense Leon Panetta salutes the event by taping a video personally thanking gay members of the military for their service.

But when it comes to retirement security, LGBT Americans still have a long way to go. The federal Defense of Marriage Act (DOMA) is a core obstacle to equality for a range of important benefits and legal protections, because it defines the word “spouse” as applying only to different-sex married couples for any purpose involving interpretation of federal law.

The ground is shifting quickly, though. Legal challenges related to DOMA and same-sex marriage are making their way toward the Supreme Court. And the workplace is changing quickly as companies reshape their benefit programs to ensure equality.

But LGBT individuals and couples also can take action on their own to improve their retirement security. Here’s a checklist of five key areas LGBT Americans should be sure to address.

401(k) BENEFICIARIES

Until 2010, it wasn’t possible for a workplace retirement saver to name a non-spouse beneficiary. That changed starting in 2010 due to provisions of the Pension Protection Act of 2006. Non-spouse beneficiaries, including employees’ partners, are permitted to roll their inherited retirement benefits directly to an individual retirement account or an annuity.

Gay workers who started with their employers before 2010 should re-visit their beneficiary designations. But they also should check to make sure their employers are complying with the new law. Only 86 percent of corporations that have rollover provisions have made the adjustments needed to extend benefits to same-sex partners, according to the 2012 Corporate Equality Index, an annual survey of corporations by the Human Rights Campaign Foundation (HRC), a non-profit research, education and advocacy group.

(The writer is a Reuters columnist. The opinions expressed are his own.)

By Mark Miller

CHICAGO, June 20(Reuters) – The message from voters about public pension plans is clear: They’re ready to cut the retirement benefits of police, firefighters, teachers and other state and municipal workers.

The latest indicators include the failed recall of Gov. Scott Walker in Wisconsin – which started with his efforts to cut pensions – and referendums in San Jose and San Diego, where voters overwhelmingly backed pension reform measures.

A recent study by the U.S. Government Accountability Office found that 35 states have reduced pension benefits since the 2008 financial crisis, mostly for future employees. Eighteen states have reduced or eliminated cost-of-living adjustments (COLA) – and some states have even applied these changes retroactively to current retirees.

This week, the Pew Center on the States reported that states are continuing to lose ground in their efforts to cover long-term retiree obligations. In fiscal year 2010, the gap between states’ assets and their obligations for retirement benefits was $1.38 trillion, up nearly 9 percent from fiscal 2009. Of that figure, $757 billion was for pensions, and $627 billion was for retiree health care (see link.reuters.com/xyh88s).

Pensions are, no doubt, consuming a larger share of some state and local budgets. The bill has come due for years when plan sponsors did not make their full plan contributions; in the years leading up to the 2008 financial crisis, many papered that over by relying on strong stock market returns. Many plans also took major hits in the 2008 crash, and returns have since been hurt by low interest rates.

CHICAGO, Date (Reuters) – Kathryn Anne Edwards doesn’t look at Social Security like most 26-year-olds.

Her cohort takes a dim view of the program’s prospects, according to a slew of surveys. Some 76 percent of young Americans don’t think Social Security will be able to pay them a benefit when they retire (Gallup); 86 percent would like to divert the taxes they pay to Social Security into private accounts (Pew Research Center); 48 percent of Americans under 40 think the system is in crisis and about to go bankrupt (Lake Research Partners).

But Edwards isn’t buying any of that. “I’m convinced if young people knew the facts, they wouldn’t have any reason to be against Social Security. It’s effective, efficient, sustaining and important.”

What makes Edwards different is that she knows more about how Social Security works than most people her age – or any age, for that matter. She’s a Ph.D. candidate in economics at the University of Wisconsin, and co-authored a guide to Social Security for young people (here) while working at the Economic Policy Institute, the liberal Washington think tank.

Edwards and other young Americans do have this much in common: they’re all very interested in having a guaranteed source of income in retirement.

A survey released last month by The Hartford found that 95 percent of workers younger than 30 found it “very” or “somewhat” appealing to be able to turn at least a portion of their retirement savings into guaranteed income – a higher percentage than any other age group surveyed.

Another study released this week by Bank of America Merrill Lynch found that 82 percent of employees would give up five percent or more of their salaries if it meant getting “reliable income to help them live comfortably” during their later years; 42 percent were willing to give up 10 percent or more of salary.

CHICAGO, June 7 (Reuters) – Can you fly the coop on your company’s 401(k) plan if you don’t like its investment choices? A growing number of plans offer a “brokerage window” that lets retirement savers sidestep the standard investment menu and access a much larger number of mutual funds or stocks offered by their plan providers.

But plan providers are complaining after the U.S. Department of Labor (DOL) released unexpected new rules for plan sponsors that cover brokerage window. The regulatory “guidance” is part of a broader document dealing with important new rules that take effect this summer requiring greater transparency of the fees that participants are charged.

Brokerage windows occupy a small corner of the 401(k) world, but they are gaining in popularity. Twenty-nine percent of plans offered a brokerage window last year, compared with just 12 percent in 2001, according to consulting firm Aon Hewitt. But just 6 percent of workers at companies offering a brokerage window use them.

Most are higher-income investors who do not want to be limited by mutual fund choices vetted by plan sponsors. By opening up a brokerage account, these investors can pick from a much wider array of choices available through the plan’s service provider. Aon Hewitt’s survey data shows that 10 percent of participants who make over $100,000 use brokerage windows, while 6 percent of those making $40,000 to $60,000 use the accounts.

Jumping through the brokerage window also can mean lower fees and better investment choices for employees stuck in high-cost plans with mediocre fund options. About half of brokerage windows restrict investing to mutual funds, with the rest allowing investment in individual stocks, Aon Hewitt says. Brokerage windows typically come with a small annual fee of around $150, plus trading fees.

Under the new rules, which go into effect at the end of the summer, plan sponsors would be required to track the investments made by individuals in their brokerage accounts. If more than 1 percent of all plan participants invest in a single fund or stock (or five investors at plans with less than 500 participants), that investment would cross a threshold that requires the disclosure of information about the investment to all participants.

Plan sponsors also would have to consider whether the investment should be endorsed as an mainline choice for all plan participants. The threshold isn’t likely to be crossed often in large plans, but sponsors still would be saddled with the monitoring and compliance requirements.

CHICAGO (Reuters) – Opponents of President Barack Obama’s health care law have been predicting dire consequences for seniors on Medicare ever since the legislation was signed last year. The warnings are mostly political spin, but there could be real problems if the U.S. Supreme Court strikes down the Affordable Care Act this month.

The ACA, a cornerstone of President Obama’s health care plan, would extend health insurance to an additional 23 million Americans by 2019. But it’s run into significant roadblocks as opponents argue that key components are un-Constitutional.

The Supreme Court could decide to uphold the law, strike down specific portions or toss it out entirely. A decision is expected by late June.

Important improvements to Medicare would disappear if the high court decides to toss out the entire law. The decision could paralyze the Medicare system because the act lays out the benefits, payment rates and delivery systems. Some of the changes already have been implemented, and others are works in progress.

“If the law is struck down, there will be a high level of chaos and confusion the very next day, especially in Medicare,” predicts Bonnie Washington, senior vice president of Avalere Health, a health policy consulting firm. “Every single provider payment that Medicare makes now has been modified one way or the other by the Affordable Care Act.”

The Centers for Medicare & Medicaid Services, which runs Medicare, is not commenting on how it might proceed if the law is nullified. But the administration has warned the court of “extraordinary disruption” to the system.

CMS might attempt to assert its own administrative authority – and perhaps use executive orders from President Obama – to continue paying claims and providing benefits so the Medicare system doesn’t freeze up. But disruption will be virtually unavoidable.

CHICAGO, June 1 (Reuters) – Retirement savers will get an eyeful when 401(k) account statements hit their mailboxes this summer.

A new format mandated by federal regulators will give investors a more transparent view of the fees they pay and a study released this week suggests many will be shocked by what they see.

Demos, a progressive think tank, argues that even in best-case scenarios, fees take an enormous bite from retirement nest eggs. The report kicked off immediate blow-back from the industry, which criticized its methodology.

The study looked at a median-earning couple that makes substantial, escalating 401(k) contributions over a 40-year period. The couple – each invested 50-50 in stock and bond index funds – accumulates a $510,000 portfolio over that period, but would end up paying a whopping $155,000 in fees, a number that is disputed by some critics.

While the fee disclosures mandated under new U.S. Department of Labor rules are a good start, Demos argues that transparency is not nearly enough. The report suggests a more radical step - scrapping the defined contribution system entirely and replacing it with a new plan focused on low cost and guaranteed returns.

It is hard to dispute the critical importance of fees in reaching retirement goals – or that fees are not well understood by investors and even plan sponsors.

A recent AARP survey found that 71 percent of retirement savers do not think they pay any investment fees at all. And a report issued last month by the U.S. Government Accountability Office found broad misunderstanding and ignorance among plan sponsors about the fees charged by retirement plan providers.