CHICAGO (Reuters) – Ford Motor Company is making an offer it hopes 90,000 former employees can’t refuse: a lump sum buyout of their pensions.

The auto giant plans to offer a voluntary buyout of defined benefit pensions to salaried retirees and former employees, with payouts to start later this year.

Although Ford hasn’t revealed the exact terms of the payments, the scale of the offer is unprecedented for a corporation that isn’t actually terminating a pension plan. Ford hopes the strategy will reduce its pension liabilities and balance sheet volatility. If successful, Ford could be starting a trend that other companies follow.

Is a lump sum offer a good deal for Ford’s pension beneficiaries? How about workers at other companies, many of whom are offered lump sum options at retirement in lieu of a lifetime income stream from a pension?

I posed the question to one of the top experts in North America on pensions, retirement and annuities – Moshe A. Milevsky. He’s a finance professor at the Schulich School of Business at York University in Toronto and CEO of QWeMA Group, which licenses intellectual property and algorithms used in retirement calculators. His latest book, “The Seven Most Important Equations for Your Retirement and the Stories Behind Them” (John Wiley & Sons), was published this week.

Milevsky cautions that there’s no one-size-fits all answer.

“But my default position is not to take the lump sum and I therefore have to be convinced to give up the pension annuity. Not the other way around,” he says.

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

By Mark Miller

CHICAGO, May 1(Reuters) – When older patients experience memory loss or confusion, it’s not uncommon for doctors to suspect dementia. But for Dr. Roseann Leipzig, her first thought is to check the patient’s medications, including over-the-counter meds, to make sure none are causing trouble.

“For example, Benadryl can cause confusion in older people, even in very low dosages” says Leipzig, a professor of geriatrics and palliative medicine at the Mount Sinai School of Medicine in New York City.

In addition to better health, such probes in primary care can save seniors – and the government – money in the long run, but too often, they just don’t happen.

Many seniors weren’t asked screening questions that geriatric medicine experts view as critical for older patients, according to a survey of more than 1,000 U.S. seniors conducted earlier this year by the John A. Hartford Foundation, a foundation that focuses on health care research and training for older adults.

Only 67 percent said their doctor had reviewed their prescription medications with them in the past 12 months; 37 percent had been asked about their mood or if they were depressed; and less than a third, or just 30 percent were asked if they had experienced a fall.

CHICAGO (Reuters) – In Garrison Keillor’s Lake Wobegon Days, all the children are above average. In Washington, the same impossible math is being applied to Medicare’s managed-care insurance plans.

The Affordable Care Act (ACA) includes funds to pay special bonuses to Medicare Advantage plans offering above-average quality of care. Instead, the Obama Administration is paying the bonuses to nearly all Advantage plans, including a majority that are rated just average.

The U.S. Government Accountability Office (GAO) issued a report this week castigating the administration for wasting more than $8 billion over ten years on the bonus program, and recommends that it be canceled. The bonus program also has been criticized by another non-partisan Congressional watchdog, the Medicare Payment Advisory Commission (MedPAC).

Advantage is a fast-growing privatized insurance option that seniors can select instead of traditional fee-for-service Medicare. Most are health maintenance organizations or preferred provider organizations, and they have grown rapidly in recent years by bundling all-in-one medical and prescription drug services.

The plans get higher reimbursements from Medicare than fee-for-service providers – 14 cents on every dollar before the ACA was passed. The plans are required to use the higher reimbursements to offer lower premiums and extra benefits to seniors.

The ACA is funded, in part, through savings from the phasing out of those extra payments. But the blow to insurance companies is cushioned by a new system of bonus payments rewarding plans that achieve better than average quality.

The quality bonuses were to be paid only to above-average plans starting this year, and ramped up over time. Instead, the U.S. Department of Health and Human Services put in place a huge quality demonstration program that has resulted in quality bonus payments to 91 percent of plans. In comparison, just 25 percent of plans would have received bonuses under the statutory provisions of the ACA, according to MedPAC.

CHICAGO (Reuters) – In Garrison Keillor’s Lake Wobegon Days, all the children are above average. In Washington, the same impossible math is being applied to Medicare’s managed-care insurance plans.

The Affordable Care Act (ACA) includes funds to pay special bonuses to Medicare Advantage plans offering above-average quality of care. Instead, the Obama Administration is paying the bonuses to nearly all Advantage plans, including a majority that are rated just average.

The U.S. Government Accountability Office (GAO) issued a report this week castigating the administration for wasting more than $8 billion over ten years on the bonus program, and recommends that it be canceled. The bonus program also has been criticized by another non-partisan Congressional watchdog, the Medicare Payment Advisory Commission (MedPAC).

Advantage is a fast-growing privatized insurance option that seniors can select instead of traditional fee-for-service Medicare. Most are health maintenance organizations or preferred provider organizations, and they have grown rapidly in recent years by bundling all-in-one medical and prescription drug services.

The plans get higher reimbursements from Medicare than fee-for-service providers – 14 cents on every dollar before the ACA was passed. The plans are required to use the higher reimbursements to offer lower premiums and extra benefits to seniors.

The ACA is funded, in part, through savings from the phasing out of those extra payments. But the blow to insurance companies is cushioned by a new system of bonus payments rewarding plans that achieve better than average quality.

The quality bonuses were to be paid only to above-average plans starting this year, and ramped up over time. Instead, the U.S. Department of Health and Human Services put in place a huge quality demonstration program that has resulted in quality bonus payments to 91 percent of plans. In comparison, just 25 percent of plans would have received bonuses under the statutory provisions of the ACA, according to MedPAC.

CHICAGO, April 24 (Reuters) – It’s rare to see a federal official publicly beg reporters to get a story right, but the commissioner of the Social Security Administration seemed ready to get down on his hands and knees at a Monday press briefing. Michael Astrue was cautioning journalists not to scare the public about the meaning of the word “exhaustion.”

“Please, please remember that exhaustion is an actuarial term of art and it does not mean there will be no money left to pay any benefits” he warned in issuing the trustees’ annual report on the financial health of the Social Security program.

“After 2033, even if Congress does nothing, there will still be sufficient assets (from payroll taxes) to pay about 75 percent of benefits. That’s not acceptable, but it’s still a fact that there will still be substantial assets there,” Astrue insisted.

This year’s report shows some acceleration of the drawdown of Social Security’s vast trust fund reserves. Absent Congressional action, the trust funds of the retirement and disability programs are expected to be exhausted in 2033 as baby-boomer retirements accelerate – three years sooner than projected a year ago.

But Astrue went out of his way to emphasize that the program is far from broke. Social Security took in $69 billion more than it spent last year, according to the report, when you include tax receipts and interest on bonds held in the Social Security Trust Fund (SSTF). The SSTF had reserves of $2.7 trillion last year.

Yet the press plowed right ahead with stories warning that the Social Security retirement program is running out of money. “There won’t be much money left for you” after 2033, warned a public radio reporter – a line that pretty well summed up the coverage and nearly forced me to run my car into a ditch.

Americans need to get this right, because Social Security is the primary source of retirement security for most Americans - and it will be even more important in the future as we continue to dig our way out of the rubble of the Great Recession.

CHICAGO, April 19 (Reuters) – There may not be a consensus in the nation’s capital on how to control the cost of health care, but businesses and their employees are not sitting around waiting for clarity. They are voting with their wallets for one approach that’s already available: Account-based health insurance plans, which offer lower premiums in exchange for high deductibles.

Consumer-directed health insurance is a cornerstone of Republican-backed market-oriented health reform solutions. It will also be offered as an option to shoppers in the public health insurance exchanges under the Affordable Care Act (ACA), if the law isn’t struck down by the U.S. Supreme Court in June.

Currently, 59 percent of major employers have an account-based health plan option in place, up from 53 percent a year ago, according to a survey by Towers Watson and the National Business Group on Health. They queried companies with 1,000 or more employees across a range of industries.

More significantly, employee enrollment in ABHPs has spiked at companies offering them as a choice. This year, 27 percent of eligible employees are enrolled, a 35 percent increase from 2011. That finding mirrors a Fidelity Investments report last week showing a 61 percent surge in sign-ups for health savings accounts among its client companies – the largest one-year gain since Fidelity has been offering HSAs.

ABHPs are linked to tax-advantaged HSAs, because contributions can be used to accumulate funds to help pay costs not covered by the high-deductible plans.

Savings on premium costs are the key driver.

Employers expect their healthcare costs to jump 5.9 percent this year, according to the Towers/NBGH survey. Total annual premiums paid by employers and workers for high-deductible plans in 2011 were 10 percent to 19 percent lower than for managed care or traditional point-of-service plans, according to a Kaiser Family Foundation study.

CHICAGO (Reuters) – If the Supreme Court overturns President Obama’s health care reform law in June, Americans without health coverage may get some relief anyway – especially if they live in Rhode Island, Maryland or Oregon.

These states are at the head of the pack in implementing the Affordable Care Act (ACA), and they were working to expand health coverage well before the law was passed. If the ACA is thrown out by the high court, these states – and others supportive of the law’s goals – will keep pursuing reforms.

“What I hear is, they still intend to proceed,” says John Holahan, director of the Health Policy Research Center at The Urban Institute.

Under the Affordable Care Act (ACA), job one for the states is to establish a public insurance exchange where uninsured residents would shop for coverage. The good news is that 16 states and the District of Columbia already have passed legislation enabling implementation of the law, or have governors who have issued executive orders to move forward.

New York state became the latest last week when Governor Andrew Cuomo decided to bypass Republican lawmakers who were holding up the state’s effort to build New York’s state insurance exchange by issuing an executive order to proceed.

Another 20 states either have legislation pending or have received some federal grant money to move forward. The remaining 15 states have made little or no progress.

Two-thirds of the states are on track to have viable exchanges in place by 2013, according to Sam Gibbs, president of the Exchange Technology Group at eHealth Inc., which operates a national online insurance marketplace and is bidding to help build many of the new state-level exchanges.

CHICAGO, April 17 (Reuters) – If the Supreme Court overturns President Obama’s health care reform law in June, Americans without health coverage may get some relief anyway – especially if they live in Rhode Island, Maryland or Oregon.

These states are at the head of the pack in implementing the Affordable Care Act (ACA), and they were working to expand health coverage well before the law was passed. If the ACA is thrown out by the high court, these states – and others supportive of the law’s goals – will keep pursuing reforms.

“What I hear is, they still intend to proceed,” says John Holahan, director of the Health Policy Research Center at The Urban Institute.

Under the Affordable Care Act (ACA), job one for the states is to establish a public insurance exchange where uninsured residents would shop for coverage. The good news is that 16 states and the District of Columbia already have passed legislation enabling implementation of the law, or have governors who have issued executive orders to move forward.

New York state became the latest last week when Governor Andrew Cuomo decided to bypass Republican lawmakers who were holding up the state’s effort to build New York’s state insurance exchange by issuing an executive order to proceed.

Another 20 states either have legislation pending or have received some federal grant money to move forward. The remaining 15 states have made little or no progress.

Two-thirds of the states are on track to have viable exchanges in place by 2013, according to Sam Gibbs, president of the Exchange Technology Group at eHealth Inc., which operates a national online insurance marketplace and is bidding to help build many of the new state-level exchanges.

CHICAGO (Reuters) – The trustees of Social Security will release their annual report on the program’s health sometime in the next few weeks, and the news will not be good.

The 2012 briefing is expected to show further deterioration in Social Security’s financial outlook, due to the higher-than-expected 2.9 percent cost-of-living adjustment awarded this year and a decline in the taxable wage base available to the program. The report is the official gauge of the program’s health – signed by three Cabinet members, the Social Security commissioner and two independent Congressional appointees.

Social Security is not in imminent danger of running out of money, but it faces a financial crunch a bit further out – around 2035. That is when Social Security’s Trust Fund is projected to be exhausted due to the drawdown of benefits by the baby boom generation. At that point, the program would have sufficient tax revenue to pay only about 76 percent of promised benefits.

Steve Goss, chief actuary of the Social Security Administration (SSA), is one of the nation’s top experts on retirement data. Since he is like a walking encyclopedia on Social Security’s workings and features, Reuters talked with him ahead of the trustee report’s release to find out how beneficiaries can get the most out of the current Social Security program:

Q: You’ve been at the Social Security Administration nearly 39 years. We hear a lot of talk now in Washington that the aging baby boomer population is the big problem facing Social Security. Is that a surprise, or is it impossible to surprise an actuary?

A: It’s not a surprise at all. People say it’s about the growing number of older people living longer, but it’s all just about birth rates. Our birth rates dropped after 1965 when the baby boom ended, to the lowest-ever single year of births experienced in this country’s history – 1.74 births per woman, on average, in 1976. It dropped very quickly over a short period of time and stabilized at 2.

Q: So Social Security’s main long-term challenge is the change in ratio of workers to retirees?

CHICAGO, April 10 (Reuters) – The trustees of Social Security will release their annual report on the program’s health sometime in the next few weeks, and the news will not be good.

The 2012 briefing is expected to show further deterioration in Social Security’s financial outlook, due to the higher-than-expected 2.9 percent cost-of-living adjustment awarded this year and a decline in the taxable wage base available to the program. The report is the official gauge of the program’s health – signed by three Cabinet members, the Social Security commissioner and two independent Congressional appointees.

Social Security is not in imminent danger of running out of money, but it faces a financial crunch a bit further out - around 2035. That is when Social Security’s Trust Fund is projected to be exhausted due to the drawdown of benefits by the baby boom generation. At that point, the program would have sufficient tax revenue to pay only about 76 percent of promised benefits.

Steve Goss, chief actuary of the Social Security Administration (SSA), is one of the nation’s top experts on retirement data. Since he is like a walking encyclopedia on Social Security’s workings and features, Reuters talked with him ahead of the trustee report’s release to find out how beneficiaries can get the most out of the current Social Security program:

Q: You’ve been at the Social Security Administration nearly 39 years. We hear a lot of talk now in Washington that the aging baby boomer population is the big problem facing Social Security. Is that a surprise, or is it impossible to surprise an actuary?

A: It’s not a surprise at all. People say it’s about the growing number of older people living longer, but it’s all just about birth rates. Our birth rates dropped after 1965 when the baby boom ended, to the lowest-ever single year of births experienced in this country’s history – 1.74 births per woman, on average, in 1976. It dropped very quickly over a short period of time and stabilized at 2.

Q: So Social Security’s main long-term challenge is the change in ratio of workers to retirees?