Retirement Security in a Changing America: How Can We Fill the Gaps?
“We recognize that retirement security means affordability, access, independence, and security,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security & Medicare (NCPSSM). “It’s up to us to ensure this is available to all older Americans.” Building a secure and healthy retirement is a promise to all Americans that must be kept, Richtman recently explained at “Retirement Security in a Changing America,” a conference hosted by NCPSSM in partnership with the McCourt School of Public Policy at Georgetown University and the Harkin Institute for Public Policy and Citizen Engagement at Drake University. The conference brought together leaders from the fields of academia, journalism, government, and finance to address a pressing question: How do we keep that promise?
Amid the answers being tossed around, Richtman explained, one thing was clear: “American people have responded to our proposals to strengthen retirement security for all Americans.” So NCPSSM is standing strong against campaigns to cut Social Security, Medicare, and Medicaid. If progress is to be made, the counterargument goes, benefits have to be cut. But this line of reasoning is flawed, Richtman pointed out. “Cutting benefits is not progress” when you consider how much they are needed, especially by poor and middle-class seniors.
We’re facing a growing retirement crisis warned a panel that opened the conference. The core problem is inequality in the larger economy, said David Maidland, managing director of the Economic Policy Team and director of the American Worker Project at the Center for American Progress. “Most people have had stagnant incomes since 1989 but housing costs have skyrocketed, which makes saving hard.” In addition, Maidland went on to say, seniors have less retirement income because employers have scaled back or cut out defined benefit plans. What little disposable income middle-class Americans have is often used to take care of children, grandchildren, and aging parents. Millions of Americans reach retirement age without enough private savings to live on. As a result, 40 percent of Social Security beneficiaries depend on the program for 90 percent of their income in retirement.
Medicare plays an equally vital role for many people, said an afternoon panel on health care, the “wild card” in the retirement crisis. Like Social Security payments, Medicare forms the bedrock of a secure life for today’s seniors and tomorrow’s retirees, the panel explained. Medicare helps prevent poverty and promotes access to health care for older people and the disabled, but it’s still not meeting all their needs. In 2013, Medicare households spent three times more than the average household on out-of-pocket health care costs, even though half of those on Medicare had incomes below $23,500. These extra costs force older Americans to choose between paying for health care, food, or utilities. This is a choice they shouldn’t have to make, the panel agreed. Medicare benefits must be improved, not cut. Medicare’s long-term solvency must be strengthened, and access to health care providers and benefits must be enhanced.
To reach these goals, NCPSSM has put forth several proposals. It has urged lawmakers to strengthen Medicare by replacing a volume-based payment system with one that rewards quality, efficiency, and innovation. NCPSSM also supports measures to combat fraud, waste, and abuse, especially the payment of improper claims which leads to the costly process of recovering payments from Medicare providers. Also useful in combating fraud would be to remove Social Security numbers from Medicare cards, a measure that would protect beneficiaries’ identities and the integrity of the Medicare program. In addition, NCPSSM has opposed further means testing of Part B and D premiums, which could increase costs for middle- and lower-income seniors if higher-income seniors, who are often in better health, are driven away by increased cost-sharing. Lastly, NCPSSM urges lawmakers to build on provisions of the Affordable Care Act which have already added years of solvency to the Medicare program. Models like accountable care organizations and medical homes, which improve care for beneficiaries with multiple chronic conditions, help contain costs and promote access to high-quality care.
We’ll need these new models, Senator Susan Collins (R-ME) noted in a video presentation to the meeting. “Health care is the wild card in retirement security,” she said. “Alzheimer’s takes a particularly heavy toll so one of my highest priorities is investing in research in Alzheimer’s.” The national plan to combat Alzheimer’s must help caregivers, Collins explained. To achieve this, she has introduced the Health Outcomes, Planning, and Education (HOPE) for Alzheimer’s Act. The legislation would offer better supports for the 5.2 million Americans with Alzheimer’s and their caregivers by providing Medicare coverage for a planning session. “We must do all we can,” she implored, “to combat the wild card that depletes seniors’ savings.”
Congressman Chris Smith (R-NJ) shares Collins’ concern since he’s a longtime advocate for those with Alzheimer’s. When he addressed the crowd, he expressed his commitment to combatting the disease and lamented that “so many laudable proposals are not going into effect because of money.” And there’s so much need to do more, he pointed out. “We haven’t had any breakthroughs and Alzheimer’s costs Medicare and Medicaid $154 billion each year. “ In addition, there are the “uncalculated costs to caregivers,” and only worse is to come. “The number of people with Alzheimer’s will double by 2050, leading the health care system to collapse” Smith warned.
The consequences have led him to join Collins in introducing the HOPE Act and support a number of bills to improve Medicare for those with Alzheimer’s. Among them is the Program of All-Inclusive Care for the Elderly (PACE) Innovation Act, which would allow the Centers for Medicare and Medicaid to develop pilot programs that test the PACE model with new populations — including individuals with multiple chronic conditions and disabilities, younger individuals, and seniors who do not yet meet the nursing home standard of care. PACE has a proven track record in letting people to get coordinated, all-inclusive medical and long-term care in the setting of their choice, as Smith has seen in New Jersey. He’s also looked beyond his own state and even the nation by introducing the Global Brain Health Act, which will take lessons we have learned at home and apply them to address brain health worldwide.
These bills matter since “retirement security is inconceivable without good health security,” said Tricia Neuman, senior vice president of the Kaiser Family Foundation and director of the foundation’s Program on Medicare Policy and its Project on Medicare’s Future. She posed a number of pressing questions about a problem that disproportionately affects women and people of color: Who is falling through the cracks? What can we do to build security? And what are the gaps in Medicare benefits? Among them, she explained, is that there are no dental benefits and no provisions for long-term services and supports. These gaps are especially glaring, Neuman pointed out, because “there are no serious policy actions being discussed that can fill the holes.”
Valerie Arkoosh has seen the results as a physician, health policy expert, and member of the Montgomery County Board of Commissioners in Pennsylvania. Some of the gaps lead to bigger problems as she pointed out. For example bad vision leads to falls and dental problems can prevent a person from eating. In addition, people sometimes don’t go the hospital if they haven’t paid their bills, so we need to find a way to get the bills paid. We also need to do more education in insurance literacy among consumers and providers, along with providing tools to help consumers know if they really need a test or procedure. And we need to be more transparent about costs. These changes are needed since much has changed since Medicare’s inception. “When it was designed 50 years ago, we barely had antibiotics,” Arkoosh pointed out. But all the advances have led to a great complexity in which seniors have to make many decisions without a comprehensive plan.
And an “enormous hole” in the current fragmented plan is the lack of long-term services and supports, according to Judith Feder, a professor of public policy and former dean of the McCourt School of Public Policy. “About 12 million people need this,” she said. “Most are getting the help they need from their families, but families can only do so much. Someone should kick in for long-term services and supports. Medicaid will but only after you’ve impoverished yourself and Medicare has proposed cuts for support to stay at home where people want to stay.” Unfortunately, Feder continued, “you can’t save for this yourself” and you can’t even know what to expect. “Not everyone will need long-term care. Some of us will die and some will spend a fortune. It is unpredictable. You can’t prepare unless there is an insurance mechanism to which you can contribute.” Granted, it will require a social insurance program to spread the risk, but it’s important to make long-term services and supports part of our safety net. “If we don’t take care of this, our children will be moving in and they’ll be freaking out.”
The future looks even grimmer for people of color, said Cara James, director of the Office of Minority Health at the Centers for Medicare and Medicaid Services. “There is a huge gap in income among people of color,” she explained. “There is a huge gap in savings. It’s hard to put away money when you’re struggling to pay your day-to-day bills.” As a result Medicaid is especially important for communities of color, which include many dual eligibles. “Another complicating factor is seniors are impoverished in different ways across the country. Where you live matters in terms of benefits. And diversity makes it harder to start an insurance literacy program.”
These problems have led to what Rosemary Gibson calls a “Medicare meltdown. “ But it doesn’t have to be this way, said Gibson, a senior advisor at the Hastings Center and founding editor of “Less is More” narratives in JAMA Internal Medicine. “I met a gentleman while working on a book,” she recalled. “He was on Medicare and had supplemental coverage. After spending one night in the hospital, he got a bill for $244,000, but he only had to pay $19,000 after Medicare negotiated.” And this coup gave Gibson ideas. “What if there was price negotiation for generic drugs?” she asked. “Many of our drugs are commodities made in China, so why can’t we negotiate the price for generics?” It’s important because health care has become much more expensive over the past five decades, and drug companies are now expected to show profits for shareholders. It was not like this when Medicare was created, but the upside is the years have brought some progress, Gibson explained. “For example, David Green of Sound World Solutions has found a way to make cheap hearing aids for developing nations, and there are now high-quality lenses for cataracts. We need more high-quality disruptive technology like this.”
It’s a critical part of transforming Medicare into what we need, Feder said. And one solution is PACE. “The program is very successful but resource intensive and the problem is that the focus is now on programs to save money, bringing up a pressing question: Why aren’t states moving drastically toward home care? It saves so much money and people want to stay at home instead of going into a nursing home. When we consider the cost of expanding home care, we should look at it as spending money more wisely. And as we encourage home care, we have to resist that urge to spend less. We have to make patients confident that we’re giving them enough care.”
Public perception of health care was among the topics discussed in a media panel that concluded the day’s events. “It’s a good time for discussing how Social Security and Medicare are perceived by the media as the programs face increasing challenges,” said Mark Miller, a retirement columnist for Reuters. “Social Security has been popular and so has Medicare,” said Trudy Lieberman, formerly with Consumer Reports, where she specialized in insurance, health care and long-term care. “People have never been taught what social insurance is. Myths have grown up that Social Security and Medicare don’t give good returns. So the challenge is to introduce a different view through good reporting,” which will become more important because “Social Security and Medicare will be major topics in the Presidential campaign,” said Zach Carter, senior political economy reporter for The Huffington Post. But the debate goes further because the idea of intergenerational conflict is out there as younger folks worry about the costs of caring for the baby boomers. To face the future, NCPSS has proposed a number of solutions to decrease the strain on American families and the Medicaid program.
Among them is developing a long-term care insurance program to strengthen long-term services and supports under Medicaid. Individuals and families, who pay for the care of patients with physical disabilities and/or cognitive impairments like Alzheimer’s, need assistance in paying for that custodial care. They should not have to impoverish themselves or their spouses. Nor should they have to endure life in an institution, so NCPSSM wants to eliminate the institutional bias in Medicaid. For Medicaid beneficiaries who require long-term services and supports, institutional care is usually their only option. Home and community-based care is seldom allowed as an alternative. And this bias should be eliminated so more people needing long-term services and supports can receive them where they want to be — in their own homes — rather than in nursing homes.
Another important step would be to strengthen Older Americans Act (OAA) programs, which provide local services and assistance to help seniors live with dignity and independence in their own homes. These services save lives, preserve families, and reduce demand for more costly hospital and institutional care. However, funding for the OAA has not kept pace with inflation or population growth and eligible seniors face waiting periods for some services in most states. So NCPSSM supports more federal investment in OAA programs for a growing population of frail elders and the 77 million baby boomers who are reaching retirement age. We also need to reauthorize the OAA, which expired in 2011 because Congress failed to pass reauthorization legislation. The “Older Americans Act Amendment of 2015” would improve OAA’s core programs, including congregate and home-delivered meals, assistance for family caregivers, transportation, and senior services. It would also add elder abuse prevention measures, strengthen long-term ombudsman services and promotes healthy living through programs like fall prevention and chronic disease self-management.
Adding benefits like this will help us all, presenters at conference made clear. Americans of all ages and political persuasions overwhelmingly support the social insurance system and safety net that have protected generations of seniors, workers with disabilities, survivors, and children. However growing income inequality and declining employer-sponsored retirement and health benefits mean that protecting and improving the social insurance safety net is even more essential to keeping middle and working-class Americans out of poverty. And the important thing to remember, as Feder pointed out, is that “we are all in this together, and we have to support one another.”