Policymakers have been talking on and off for decades about ways to make Social Security solvent and adequate. However, the conversation often seems stuck in the 1980s, the last time Social Security was addressed, with a small set of policy tools to raise revenue or cut benefits being recommended by each politician or group.
Yet most of those standard tools are not well-designed. Take, for example, the proposal to raise the retirement age. Policymakers often cite the fact that average life expectancy has risen over the last several decades and that more people are working longer. Raising the retirement age effectively cuts all retirees benefits by roughly 8 percent. Yet, all retirees are not equal. For some populations, such as white women without a high school education, life expectancy has actually dropped, and low-income individuals in general have seen much smaller gains in life expectancy than high income individuals. And many older workers are in physically demanding jobs, making it difficult to work into their late 60s.
We need new ideas, and we need to understand their impact on current and future generations. That’s why last year we issued a Policy Innovation Challenge for Social Security Adequacy.
Through the Challenge, we asked, how can we make Social Security better? The result was the development of seven papers detailing solutions to strengthen the adequacy of Social Security benefits.
Social Security clearly is one of the most successful and trusted federal programs out there. It’s also relied upon by a vast majority of Americans, both through the program’s survivor retirement benefits as well as disability insurance protections. But any longstanding program affecting so many people will need attention as time passes, and to say that society has changed a little since President Roosevelt signed Social Security legislation into law in 1935 would be an understatement. Today, for example, many older Americans rely more heavily than ever on their Social Security checks, despite the program never being intended to provide a sole source of income. While the retirement age is already increasing from 65 to 67, the program does not take into account the extra tools individuals will need to stay relevant in today’s economy and the impact job loss, health, and caregiving have on Americans’ retirement.
The variables at play in today’s workforce are many. They present both challenges and opportunities, and that’s where our Challenge comes in. AARP received an overwhelming number of responses, coming from thought leaders from across the country. After review by AARP staff for technical compliance, applications progressed to a blind review by an expert panel, which included the directors of the Retirement Research Centers at the University of Michigan, Boston College, and the National Bureau of Economic Research. The multistep process resulted in the selection of a set of policy innovations to receive financial support for further development. As an economist with a long-time passion for the area of retirement security, I was so inspired by the Challenge myself that I jumped in and put pen to paper to develop a concept for the blind-review process. (AARP authors were not eligible for the funding award.)
I’m thrilled to say that the project has uncovered some innovative ideas. We discussed the solutions this week, when the National Academy of Social Insurance and AARP joined to convene a policy forum, “New Approaches to Social Security Adequacy & Solvency in the 21st Century.” At the event, authors and other policy experts described and debated the innovative Social Security ideas coming out of the Challenge as well as those from other sources. Each idea was independently analyzed by the Urban Institute to show how it will impact the benefits for future generations, as well as the solvency of the program.
We hope that these ideas make an impact on the next discussion about Social Security. Great policy happens when solutions are carefully developed and then examined from all angles, by many people, and through interactive means. We hope you will check out the ideas at www.aarp.org/socialsecuritypolicy and think of your own ways to improve the system.
Debra Whitman is AARP’s chief public policy officer and leads policy development, analysis and research, as well as global thought leadership that supports and advances the interests of individuals age 50-plus and their families. Follow Deb on Twitter: @policydeb
Federal subsidies, known as cost-sharing reductions (CSRs), have been critical to ensuring that over 2 million lower-income adults ages 50 to 64 who purchase coverage through health insurance Marketplaces can afford health care. Despite the subsidies’ crucial role, the Administration announced yesterday that it will terminate payments for CSRs. The announcement—which comes less than 3 weeks before millions of Americans who buy insurance on the individual market start shopping for 2018 health coverage— is bad news for older adults and people of all ages.
That’s because the move could leave people facing significantly higher premiums and fewer plan choices—regardless of their income or whether they get CSRs.
What are cost-sharing reductions?
The Affordable Care Act’s (ACA) better known premium tax credits help reduce the cost of monthly health insurance premiums for lower- and moderate-income individuals. CSRs address the other major expenses that can prevent people from being able to afford health care: out-of-pocket costs for health care services, such as deductibles, coinsurances and copayments. CSRs are available to lower-income people, with individuals of more modest incomes receiving greater subsidies.
CSRs are critical to making individual health insurance affordable for people with lower incomes. This is especially true for lower-income older adults because over a third of the people enrolled in CSR plans are ages 50 to 64. What’s more, older adults typically face higher out-of-pocket medical expenses and cost-sharing because they are more likely to have chronic conditions and health care needs. You can learn more about CSRs here.
Eliminating CSR payments will lead to significant increases in premiums.
Without the federal CSR payments, insurers will have to absorb an estimated $10 billion in costs. A recent analysis by the Congressional Budget Office (CBO) estimates that silver plan premiums would jump 20% next year and 25% by 2020 without the federal CSR subsidies.
Due to uncertainty in recent months over the continuation of CSR payments, insurers in some states have already factored premiums increases into their 2018 rates. Other insurers will likely increase premiums in order to account for this loss in federal payments.
Premium increase will hit middle-income people the most – especially those who do not receive premium tax credit subsidies, or who are only eligible for limited tax credits.
The CBO also expects that controversy around CSR payments will encourage some insurance companies to stop offering coverage altogether or deter them from entering the Marketplaces—leaving consumers with fewer, or potentially, no plan choices.
Terminating CSR payments would increase the federal deficit.
If you think stopping CSR payments would save federal dollars, think again. Doing so would actually increase the federal deficit by $200 billion, CBO estimates. This is because the government is required to fund premium tax credits for lower-income enrollees, and the premium increases resulting from ending CSR payments would mean the government must spend billions of dollars more in premium tax credits to lower those premium costs for lower-income enrollees.
Eliminating CSRs altogether would make health care unaffordable for lower-income older adults.
Recent proposals to replace the ACA would have eliminated cost-sharing reductions altogether. Without CSRs, lower-income older adults would face steep increases in their medical bills—putting needed health care services out of reach for millions. We estimate that eliminating CSRs would mean lower-income persons could face as much as $5,600 more in out-of-pocket costs for copays, co-insurances and deductibles. For someone earning $18,000 annually (about 150% of FPL), that’s nearly one-third of their income!
Here’s the bottom-line: Cost-sharing reductions are a critical financial protection for lower-income Americans, including many older adults. Terminating CSR payments will disrupt efforts to ensure a stable individual health insurance market and actually end up costing the government more.
Jane Sung is a senior strategic policy adviser with AARP’s Public Policy Institute, where she focuses on health insurance coverage among adults age 50 and older, private health insurance market reforms, retiree coverage, Medicare supplemental insurance and Medicare Advantage.
Olivia Dean is a policy analyst with the AARP Public Policy Institute. Her work focuses on a wide variety of health-related issues, with an emphasis on public health, health disparities, and healthy behavior.
Claire Noel-Miller is a senior strategic policy adviser for the AARP Public Policy Institute, where she provides expertise in quantitative research methods applied to a variety of health policy issues related to older adults.
 Urban Institute, 2017 Health Insurance Policy Simulation Model, data for 2016 enrollment.
 Cost-sharing reductions are available for people who earn between 100% and 250% of the federal poverty level (FPL). In 2017, this corresponds to incomes between $12,060 and $30,150 for an individual and to incomes between $24,600 and $61,500 for a family of four. Only people enrolled in Silver plans (which pay for 70% of total health care costs on average) are eligible for cost-sharing reductions.
 Urban Institute, 2017 Health Insurance Policy Simulation Model, data for 2016 enrollment.
 Total CSR payments in 2017 are estimated at $7 billion.
 For people with incomes between 100-150% of the federal poverty level, or between $12,060 and $18,090 for an individual. Estimates are based on 2017 federal poverty levels and out-of-pocket limits.
The economy lost 33,000 jobs in September largely reflecting the impact of hurricanes Harvey and Irma. Despite the overall job loss, the labor force participation rate for those ages 55 and older decreased only slightly to 40.1 percent. The Bureau of Labor Statistics’ (BLS) September Employment Situation report showed the overall labor force participation rate edged up slightly to 63.1 percent. The unemployment rate declined to 4.2 percent with 6.8 million persons remaining unemployed. Much of the impact of the hurricanes was seen in the food services sector, which lost 105,000 jobs. Meanwhile, jobs were added in health care, transportation, and warehousing. The unemployment rate for those ages 55+ was unchanged from August (3.2 percent), but the percentage of job seekers ages 55+ who are long-term unemployed (i.e., looking for 27 or more weeks) rose from 30.5 percent to 35.3 percent.
Spotlight: Labor Market Experiences of Americans at Age 50
Turning to more long-term trends, the BLS recently released new findings from an ongoing longitudinal study of Americans born between 1957 and 1964, the tail end of the baby boomer generation. The National Longitudinal Survey of Youth 1979 is a survey of 9,964 men and women who were ages 14 to 22 in 1979 when the study first began. Participants were most recently interviewed in 2014-2015. The recently released findings track the number of jobs, labor market experience, and earnings growth of this age cohort.
Interestingly, the average annual percentage growth in inflation-adjusted hourly earnings was highest for this cohort during their late teens and early twenties. This means that their earnings increased most rapidly while they were young and just at the beginning of their careers. As a cohort, they never again replicated this rate of earnings growth over the course of their career life span, reflecting some of the larger economic trends over the ensuing decades of their lives. Earnings growth rates tended to be higher for college graduates compared with workers with less education.
Individuals without a high school diploma had lower percentages of weeks in employment compared with individuals with higher levels of education. Men were employed a greater percentage of weeks than women (84 percent of weeks for men versus 71 percent of weeks for women). But the percentage of weeks of employment grew for women from 63 percent in the 18 to 24 age category to 76 percent in the 35 to 44 age group. Overall this group of baby boomers were employed on average 78 percent of the weeks from age 18 to age 50.
This group of baby boomers held an average of 11.9 jobs from the ages of 18 to 50, spanning from five jobs while ages 18 to 24 down to 4.5 jobs from ages 25 to 34, to 2.9 jobs from ages 35 to 44, and to 1.7 jobs from ages 45 to 50. Older workers are generally thought to have longer average job durations but the study found that at least for this youngest cohort of baby boomers, short-duration jobs continued to be common at older ages. Among jobs started during ages 35 to 44, 75 percent ended in fewer than five years.
For more details on this month’s employment numbers, check out the September Employment Data Digest, PPI’s monthly review of job trends for those ages 55 and over.
Jen Schramm is a senior strategic policy adviser at the AARP Public Policy Institute. As part of the Financial Security Team, she identifies policy challenges and opportunities related to workers age 50 and above. Through research and analyses of emerging employment trends, she develops policy options to inform AARP’s strategy on work and jobs, including helping older workers find and retain jobs.
Many of you, like me, know that family caregiving for someone you love can be a source of deep satisfaction and meaning. But caring for a person with dementia, known as dementia caregivers, can exact an especially high emotional, physical and financial toll on family members themselves.
Dementia caregivers commonly experience more emotional upset, distress, isolation, and financial burdens than those caring for people with other illnesses who do not have dementia because daily care needs are progressive, complex, and frequently unpredictable.
More people are living at home with dementia and relying on their family to care for them
Addressing the needs of dementia caregivers is important because of the growing number of older people living at home with dementia who rely primarily on their families for help with basic tasks of daily living. According to a report from the Centers for Disease Control and Prevention (CDC), the proportion of people with dementia dying at home increased significantly between 1999 and 2014, from 13.9 percent in 1999 to 24.9 percent in 2014, underscoring the increasing numbers of people with dementia residing outside of a nursing home setting. This means that more people than ever are caring at home for someone living with dementia often without adequate and affordable support services, exacerbating the stresses all the more.
Part of that stress is the cost to families.
A recent study on the lifetime cost of dementia shows that families incur 70 percent of the total cost of care ($225,140 in 2015 dollars) for a person living with dementia. Medicare ($52,540) and Medicaid ($44,090) accounted for 30 percent of the total cost.
Taking care of dementia caregivers
Targeted care strategies, such as education, skills training, and counseling, can make a real difference in the daily lives of people with dementia and their family caregivers. It is especially important, for example, to have someone to talk to when help is needed to address the behavioral and psychological symptoms of dementia. Successful programs for dementia caregivers begin with the health or social service provider talking with the family caregiver about his or her unique needs, problems, strengths, and resources, in what is known as a caregiver assessment.
Although evidence-based programs hold promise to create more value in the lives of dementia caregivers, these proven services are still not commonplace in communities and available to the families who could benefit from them.
A new AARP Public Policy Institute paper highlights examples of successful dementia caregiver programs and services. The report also identifies several barriers to scaling up evidence-based programs, including health care and social service providers’ lack of knowledge about successful caregiver services, and limited technical assistance to help providers understand how to identify family caregivers who might benefit from such programs and services. Barriers also include a lack of integration of caregiver supports in existing systems of health care and long-term services and supports, and a lack of sufficient funding and payment mechanisms to adopt proven caregiver support services in practice settings.
The forthcoming National Research Summit on Dementia Care aims to shine a light on the need to accelerate the scaling up of evidence-based services for individuals living with dementia and their family caregivers. Advancing these programs to reach families who need them should be a priority at the federal, state and local levels.
Lynn Friss Feinberg is a senior strategic policy adviser for the AARP Public Policy Institute. She has conducted policy analysis and applied research on family caregiving and long-term services and supports for more than 30 years.
As I put the finishing touches on this post, I’m making final preparations to travel to Adelaide, the capital city of the Australian state of South Australia. There I’ll present at the 7th annual International Carers Conference.
This year the theme of the conference is “Caring into the Future: the new world?” That theme is appropriate for a number of reasons, but as for the world reference, the event serves as a reminder that caregiving is a global topic of growing importance everywhere. Not only is the U.S. aging, so is the world. By 2050, the number of people over age 60 will have more than doubled to over 2 billion, representing 22 percent of the population. While today Japan is the only country with more than 30 percent of its population age 60 and over, that number of countries will climb to 64 by 2050.
As I often say, it’s all about idea and information exchange; with this conference, the exchange is on a global scale. I’m excited to hear the perspectives of policymakers, community and business leaders, researchers, advocates and, of course, caregivers on how to foster new opportunities through both innovation and partnerships. This is something we aim to do every day at AARP’s Public Policy Institute, and so in Adelaide I’ll share with an international gathering some of what we’ve learned and put into practice.
I’ll be giving two presentations during the three-day conference. In one session, “Family Caregiving and Public Policy: How Research and Policy Can Create New Opportunities to Support Family Caregivers,” C. Grace Whiting, Chief Operating Officer of the National Alliance for Caregiving (NAC), and I will discuss family caregiver-related policy at the state and national levels as well as findings from several studies our organizations have conducted, both jointly and independently.
One such study, “Caregiving In the United States,” highlights the estimated 43.5 million adults who provide unpaid care in the U.S. The research digs deep into that large number, revealing the diversity of the caregiver and care recipient populations. Approximately 40 percent of family caregivers are men, for example, while some 8.4 million caregivers support people with mental health diagnoses. Among other things, our session will highlight opportunities for better supporting these groups.
In another session, “The Home Alone AllianceSM: Translating Research into Practice through Partnerships,” I will co-present with Heather Young, Associate Vice Chancellor for Nursing, Dean and Professor at the Betty Irene Moore School of Nursing at University of California, Davis. We’ll discuss how the Home Alone AllianceSM (HAA) is working to create solutions for stressed, overtaxed caregivers.
One effort of which we’re particularly proud is the series of instructional videos for family caregivers, which I blogged about earlier this year. AARP has worked with its HAA partners to conduct formative research, generate topics for the videos, and disseminate them via channels with direct access to caregivers.
Certainly the U.S. has made headway on the caregiving front in recent years. Notably, AARP translated the Home Alone research into policy—the Caregiver Advise, Record, Enable (CARE) Act, state-level legislation that ensures hospitals identify and offer instruction to family caregivers who perform medical/nursing tasks. However, as we learned from this year’s Scorecard on Long-Term Services and Supports, states still need to pick up the pace now in the areas of caregiving and other LTSS areas, focusing their energies on meeting the needs and preferences of the rapidly aging population.
A primary purpose of the Scorecard is to allow states to communicate with one another on solutions. Again, it’s about knowledge exchange—the very reason the global caregiving movement is gathering in Adelaide. Australia is an appropriate location for this event. It has taken a leadership role on many caregiving fronts, and in fact the U.S. has something to learn from the host nation’s attention to the issue. I’m excited that the event will illuminate Australia’s caregiving promising practices as well as those of the U.S. and other nations.
I’ll be sure to report back on my takeaways from the conference in a future post.
Be sure to follow the conference on Twitter at #IntCarersConference and @CarersAus. If you’re planning to attend the International Carers Conference from October 4-6, or you have recently attended another local, national or international conference focused on caregiving practices, I’d love to hear what topics/ideas stood out. The only way to move the needle on policy in this country is to share these ideas—no matter how insignificant or far-fetched they may seem.
The latest attempt to repeal and replace the Affordable Care Act poses a major threat to the Medicaid program. The bill under consideration in the Senate, known as Graham-Cassidy-Heller-Johnson, would fundamentally change how Medicaid is financed, shifting costs to states and to Medicaid enrollees.
Recent reports suggest that the bill may exempt low density states—those that have less than 15 people per square mile, using data from the U.S. Census Bureau—from some of the cuts to their Medicaid programs during the early years of its enactment (between 2020 and 2026) by delaying the implementation of per enrollee caps. But even with this exemption, low density states would still feel the pain of massive Medicaid funding cuts.
While low density states, including Alaska and Montana, may receive an exemption through 2026, the way the law is written leaves them vulnerable to a massive funding cliff in 2027 when the exemption would no be longer available and the per enrollee caps would go into effect.
Because per enrollee caps cut non-expansion Medicaid funding by a greater amount every year, even low-density states with delayed implementation will see vast cuts between 2027 and 2036. For example, Table 1 compares the cuts to non-expansion Medicaid funding in Alaska and Montana if the per capita caps went into effect either in 2020 or if they are delayed until 2027.
Using the average general and medical inflation rates from the last five years, AARP Public Policy Institute projects that even with the potential exemption provision in the Graham-Cassidy-Heller-Johnson, low density states, like Alaska and Montana, still stand to lose billions in Medicaid funds. Alaska could lose $9.4 billion, compared with $11 billion without the exemption. In Montana, Medicaid cuts could reach $6.4 billion, compared with $7.5 billion without the exemption. Even with higher inflation rates, the provision would still lead to major Medicaid cuts in Alaska ($4.2 billion) and Montana ($2.6 billion) through 2036.
For low density states, the potential exemption provision simply delays but would not eliminate the inevitable: massive Medicaid cuts that will have devastating impacts on the people who rely on the Medicaid program. In the end, the result of this bill remains the same for all states: access to services for some of the most vulnerable populations in our society, guaranteed for over a half-century, are in jeopardy.
Brendan Flinn is a policy research senior analyst for the AARP Public Policy Institute. He works on Medicaid, long-term services and supports, and family caregiving issues.
Lynda Flowers is a Senior Strategic Policy Adviser with the AARP Public Policy Institute, specializing in Medicaid issues, health disparities and public health.
Jean Accius is vice president of livable communities and long-term services and supports for the AARP Public Policy Institute. He works on Medicaid and long-term care issues.
Ari Houser is a Senior Methods Adviser at AARP Public Policy Institute. His work focuses on demographics, disability, family caregiving, and long-term services and supports (LTSS).