Old-Age Programs in an Era of Shrinking Government
Older Americans have a lot riding on efforts to curtail federal spending. The failure of the Joint Select Committee on Deficit Reduction (the "Super Committee") to agree on a deficit reduction package is refocusing attention on reducing Social Security and Medicare costs, and the suspension of a planned federal long-term care insurance program means that future seniors will continue to shoulder these costs. Yet, a new poverty measure from the Census Bureau reveals that many more older adults struggle to make ends meet than previously thought. New research and commentary from the Urban Institute help inform these issues.
How Would the President’s Fiscal Commission Change Social Security? Late last year President Obama’s fiscal commission proposed sweeping changes to Social Security to improve the program’s financial footing. These recommendations appear to be attracting more attention on Capitol Hill after the congressional "Super Committee" failed to agree on a way to cut spending. In a new report, Melissa Favreault and Nadia Karamcheva show that these reforms would substantially reduce scheduled benefits for high-income seniors several decades from now but largely shield those near the bottom of the income distribution.
Preserving Medicare: A Practical Approach to Controlling Spending Although the Affordable Care Act will reduce Medicare spending growth, Robert Berenson and John Holahan highlight policies that could cut costs even more. Examples include reforming cost-sharing provisions, increasing premiums for beneficiaries earning more than 300 percent of the federal poverty level, increasing the age of eligibility, reducing fraud, and better managing Medicare’s dual eligibles. They also note that privatization initiatives would increase health care spending and shift costs to beneficiaries.
How Will We Pay for Long-Term Care? The Obama administration appears to be abandoning the Community Living Assistance Services and Supports (CLASS) Act, a program in the Affordable Care Act that aimed to make long-term care more affordable and accessible for most Americans. In an online video, Senior Fellow Richard Johnson walks us through CLASS’s aims and design, why greater access to long-term care is needed, and where the program ran into problems. A second video looks at what policymakers can do to help Americans pay for long-term care.
Old-Age Poverty Persists In a commentary for New York Times’ Room for Debate, Institute Fellow Sheila Zedlewski explains that many of the nation's 41 million seniors live in or very near poverty and many have assets mostly tied up in their houses. Policymakers must be ever mindful of that diversity when considering changes in policy that would affect retirement income security.