Wednesday, December 31, 2008

Holiday Notes

I'm enjoying a year-end break, trying to relax without to much computer usage-- just doing lots of reading, baking pies, and today, watching it snow!

But here's a little update on how the holidays went:

First of all, my father was in the hospital the whole time. Taking care of him meant my mother hadn't had much time to do Xmas shopping, so once I showed up to share the visiting duties, she went to town! Literally-- she went to the downtown shopping area of my hometown, and within a couple of hours, spent over $1000! As I've probably mentioned before, I have a very large extended family and my parents give presents to every aunt, uncle, cousin and second cousin, which at this point is over 40 people not even counting me and my sister and her family! At least this year, my father didn't do any of his own shopping, as in the past, he and my mother sometimes each bought their own gifts for some of these people! I really wish my family would come up with some way to reduce all this gift giving insanity, but no one ever seems to want to go for it. It all seems like too much to me, but the flip side of this is that my parents really are very generous and thoughtful in their gift giving, which I do appreciate. While my mom was wrapping some jewelry for the aunts and cousins, I saw where she'd bought it and couldn't help blurting out "Isn't that store really expensive?" My mother claimed the jewelry was inexpensive, and I realized I'd better shut my trap-- it's her money and it's not my place to be a Scrooge about her gift-giving.

This year, the other factor that influenced my mother is the idea that there is this large sum of money that will be "taken by the government" if she doesn't spend it. As I have tried to explain to her, this is a maximum amount of money that we would have to spend on a nursing home, should my father need one, before they become eligible for Medicaid. Given his health situation, the likelihood of actually spending ALL this money on a nursing home is very small, but of course my mother is quite inclined to spend it all on other things just in case!

As for my share of the holiday loot: my parents gave me a very nice large covered frying pan, which I've been asking for for years-- the last few years I've been given a few smaller pans without lids, but this year they finally got it right! My mom also gave me two Banana Republic gift cards-- the one I have partially redeemed already was for $100, and I suspect that is the value of the second one too. Then there were some stocking stuffers, including some art supplies, assorted makeup, and a little candy. Then there was the huge box that I started to open until I saw that it came from "Toys to Grow On." "Uh, Mom," I said, "Why are you giving me a set of wooden blocks?" Whoops! Those were for my niece and nephew but she'd mislabeled them! And finally, my last gift was a check for $900, since the lawyer said anything under $1000 wouldn't be considered a non-qualifying transfer by Medicaid. She gave $900 checks to my sister ZZ, her husband, and each of their two kids too.

I feel weird getting this kind of money from her. She definitely is giving it as an advance on our inheritance, but I'm setting it aside in a "Mom and Dad" fund, as I still am so anxious about whether their assets will be enough to support them. I have suggested to my sister that she establish a similar fund for any gifts from our parents, but I'm afraid she'll be putting the money to other use: she didn't tell me this herself, but Mom told me that ZZ and her husband's credit card debt is now $15,000. This news just killed me-- ZZ shared all my anguish when Mom got herself into debt, and I never thought she would let her own situation get that bad. The debt is not due to any sort of crisis or catastrophe-- it's just letting regular household expenses get out of hand while living on one income.

So I couldn't help stressing about money a lot over the holidays, though I tried to set it aside and just focus on enjoying the company of my family. After leaving them, I spent a few days with my sweetie's family, which was a huge contrast in many ways, finances and attitudes towards gift-giving included! More on that in a later post, but for now, I'll sign off until... next year! May you all have a happy and safe New Year.

19 comments:

wyche128 said...

Did it actually snow in NY? I know here in Rhode Island it dropped 5 inches. Hope you can enjoy the new year!

Anonymous said...

How do you feel about the idea that your parents are trying to get rid of money so that they don't have to pay for their own medical care? Who do they think does pay for it?

bugbear said...

@ Anonymous:

Chill out, please. Medicare pays for it. Madame X's parents are doing what they should do, which is make their own situation as good as possible, since that is the best thing to do in the situation. I am sure they are aware that at the end, other anonymous individuals foot the bill for it, just as they are aware that other anonymous individuals will be trying to position *themselves* as well as possible and do the same thing-divest themselves of assets while they can. Most of us are familiar with this phenomenon, it's called the free-rider dilemma, and it has been unsolvable by the greatest mathemeticians up to this date, as well as by the fisheries, where a relative of it is known as "the tragedy of the commons". It is practically and logically absurd to suggest that Madame X's parents' are going to magically step into the gap and solve the free rider dilemma with $1800 in foregone gift giving (the two $900 gifts).

Anonymous said...

Actually bugbear, not only have the "greatest mathemeticians" been able to solve this conundrum, but the solution is simple. Everyone pays for their own health care. Simple. No free rides means no problem with people who can pay for their health care giving all their money away so we pay for it instead.

Medicare is meant to care for the indigent (and improvident) not to preserve the inheritance of the middle classes. If Madame X's father's money gets spent on health care for him, isn't that a worthy use? Better than more jewelry for Madame X's relatives?

Anonymous said...

Actually bugbear, not only have the "greatest mathemeticians" been able to solve this conundrum, but the solution is simple. Everyone pays for their own health care. Simple. No free rides means no problem with people who can pay for their health care giving all their money away so we pay for it instead.

Medicare is meant to care for the indigent (and improvident) not to preserve the inheritance of the middle classes. If Madame X's father's money gets spent on health care for him, isn't that a worthy use? Better than more jewelry for Madame X's relatives?

Boston renter

Anonymous said...

Just to clarify, there are two different anons, me of 9:13 (who actually is a mathematician, so it's amusing to receive a game theory lecture as if the world operates under idealized conditions) and the anon of 12:42.

I was genuinely curious how Madame X feels about the practice, mostly because I'm not sure what my own feelings are and it's useful to hear from someone with a closer perspective. On the one hand, as the other anon said, "Medicare is meant to care for the indigent (and improvident) not to preserve the inheritance of the middle classes". But bugbear, no, I don't expect any one family to take a lone stand against the practice if all it does is deplete an inheritance that everyone else gets to keep.

So if you feel as I do, what is the solution? Agitate for different legislation so that this type of abuse is much more difficult to accomplish?

bugbear said...

@ "So if you feel as I do, what is the solution? Agitate for different legislation so that this type of abuse is much more difficult to accomplish?"

My position is that there *is* no solution. And, unless there is an egregious imbalance in the existing MediCare guidelines, any further change we will make will provid an opportunity for similar cash movements by people in the future--unless we set the income and asset setback to, say, 20 years--effectively requiring people to, as Anonymous ("Boston Renter") suggests, more fully tap their own assets and pay their own way. Or, you could say that ANY gift by a Medicare recipient within the last 10 years is countable as assets for the purpose of determining MediCare benefits. But here again, it is not an absolute solution. Actually, both of these are probably workable ideas, with the downsides of removing a lot of personal financial freedom from everyone and the upsides of reducing the amount of free riding.
As things stand, though, it's not clear to me that someone's parents deciding to give away $900 per year per child with the intention of avoiding spending it on their elder health care and having MediCare pick up the tab sooner is wrong at all. She may be looking at it as keeping money in the family to be used in the event that all other assets are exhausted, and so they won't be thrown totally on the mercy of the government. This is certainly how Madame X is viewing the money, although it seems her sister may not be.
Again, there are lots of problems that don't have out-and-out solutions. If we could go back in time and tell Mm. X's parents someone in their 40s and tell them they should be saving more cash because they will need it for medical expenses an 2009 then that would help, but we can't.

However, we can learn from this story and do better ourselves if it is within out personal means to do so.

BTW, anonymous 9:13, what's your field (within mathematics)?

bugbear said...

"Medicare is meant to care for the indigent (and improvident) not to preserve the inheritance of the middle classes."

That may be so, but there also is the rub: "indigent" and "improvident" are determined operationally by Medicare's rules, and we do not have a moral obligation to make ourselves appear as wealthy as possible for the purpose of preserving benefits for someone else in the system. We do have to follow the rules as they are handed to us, however. And it is within the rules to do as Mm. X's parents have done.

I would agree that paying for health care, as opposed to stuff for your kids, is a good use of the money. However, you could also say that that $900, given to Mm. X, puts her in a better financial position so that she will be less likely to need Medicare herself, which effectively preserves future health care dollars for other needier potential future recipients. 6 of one, half a dozen of the other.

Optioned Unarmed said...

People here seem to be confusing Medicare with Medicaid. Everybody qualifies for Medicare once they are old enough.

Madame X - sorry to hear your dad isn't doing so well.

Anonymous said...

Madame X,

Thanks again for sharing such personal information so that these topics can be discussed (although anonymously) out in the open. I hope your father is taken care of.


Loyal Reader

Anonymous said...

bugbear, I am a logician -- now based in a CS dept, but with a math PhD.

I doubt anyone believes there is a perfect solution. But I believe that any system that can at least "reduce the amount of freeriding" is an improvement.

bugbear said...

@Anonymous logician:

Perhaps behavioral economics will be able to come up with an insight that will more effectively minimize freeriding than currently. But I believe that, in the end, it is less important to do that than it is to meet the original goal of the program in question, which is to provide medical care assistance to the elderly. I'm inclined to say that since we know there will always be freeriders, it may be best to accept some degree of that and just ensure that our main goal is being attained in the round.

Anonymous said...

This year my family said we weren't going to do gift exchanging because we have everything we need. Unfortunately, it did not quite work out that way. My aunt and mom couldn't resist going shopping. For my sister, my fiance, and me. Though I appreciate the gifts I mostly ended up with things I didn't need or want. Just more stuff to put at the back of the closet.

What ever happened to the holidays being about family, instead of gift giving and spending money?

SandyVoice said...

In all this discussion, nobody has said it yet ...

HAPPY NEW YEAR TO ALL!!!

To address another question Mme X has brought up -- a couple of years ago my family decided not to give presents for Chanuka except to kids, which means my niece is the only one left to get presents, and this may be the last year for her, since she's about to be 18. None of us has much money, so she got a couple of small, but very well chosen and greatly appreciated, presents. I have to say, though, that the season doesn't feel as festive without shopping for the perfect thing in brightly decorated stores, without wrapping creatively, without seeing eyes light up when it turns out you got it absolutely right, and without the litter of colorful paper and ribbon all over the living room. I know we're doing the right thing, but I feel deprived of seasonal cheer.

Any suggestions?

Clean ClutterFree Simple said...

We turned off the gifts to adults in the family a few years ago and it's been great. The adults get each kid (there are four, my two and my SIL's two) a gift or two, and we give tokens to adults if desired.

This year, FIL gave adults a carved wood Christmas tree ornament. In years past, he would have given multiple gifts--books, cds, clothing, etc. We don't need anything!

SandyVoice, it is different at first to have so few gifts to open, but it's really nice once you realize the impact of it. We add festivity with our tree, tasty foods and snacks, and have holiday cds in constant rotation. Just knowing that hundreds of dollars have been saved instead of spent on nonsense makes me happy. And...bonus--no need to return anything!

zeeshan rahat kureshi said...

Its so nice to know that you care about your parents. Parents are ofcourse a blessing from God in my religion (Islam) and in every religion ofcourse, there is so much importance given to parents.

As far as the debt crisis is concerend, it gives me pain in my heart to see that so many hard working Americans are stuck in debt. In our culture (Pakistan), we are told by our parents from day one to live within our means. However, the banking culture has changed much of that here too and people have started living on credit. I hope good sense prevails on everyone.

Amy K. said...

SandyVoice,

This year for Chanuka we, too, agreed that we had everything we needed, and chose instead to "adopt" a family through the Jewish Parents Institute of Detroit. We had the thrill of shopping, and our get together was a cheery gathering, showing off the things we'd bought for our family, and wrapping and ribboning everything. I really enjoyed it, and hope we keep it as a tradition next year.

finance girl said...

RE: Medicaid coverage for nursing homes: you want to be super careful to communicate to your Mom that if it looks like she spent her and your Dad's money just so your Dad could qualify for Medicaid, they may get in trouble.

The agency that oversees the Medicaid program has wisened up over the years to families that do this, and you don't want to be one of those families.

Please make sure your Mom and Dad are super clear on this risk and don't start liquidating their net worth just to get Medicaid.

Aside from that, your Dad likely wouldn't even want to be in most facilities that accept Medicaid.

Medicaid essentially is welfare, and there is very little, if any, control the individual has in the type of service they receive or facilities.

NOTE this is not Medicare, which I am sure you know; Medicare is different and is the fed gov't sponsored health insurance for those 62 (or is it 65?) and over.

shaki said...

Doesn't it seem strange how people in the past wouldn't accept a handout unless it was practically forced upon them... and today it's such a moral conundrum for people to do the "right thing" simply because so many take the easiest way out. "Right" seems "wrong", or "stupid".
I agree with the commenter who spoke of growing up in a culture of "live within your means". Those people are like a rare gem these days.
I hope all goes well with your mom & dad, madame x, whatever their choice. The system is definitely broken, making any decision seem difficult. -tu shaki