[Supervisor]
Abstract
The main reason behind the increase in the median age of the global population is a reduction in fertility and two decade increase in the average life span in the 20th century. These factors together with increased fertility in several nations throughout the 20 years post World War II will lead to elevated number of citizens aged >= 65 years throughout 2010 to 2030. The rising number of older adults results in an increase in demands on the public health system as well as on the social and medical services. One of the diseases affecting older adults is chronic disease that contributes to disability, diminished quality of life and rise in long term health care costs. Growing life expectancy indicates the success of public health treatments; however, public health programs need to react to the challenges posed by this accomplishment, along with the increasing burden of disabilities, chronic illness, injuries, and growing concerns pertaining to the future healthcare costs.
The current research study focuses on the effect of having an elevating older population in the United States of America on the population in a broad way and relates these impacts in terms of risen health care costs with concurrent reduction in economic contributions, housing requirements, and a decreased balance of the population that provides for Social Security.
The tremendous growth of older adults is a worldwide phenomenon. Even though the global growth rate has reduced from 2 per cent in the 1960s to just 1 per cent today, the global population will continue to multiply over the coming 40 years, as reported by the United Nations, from 6.9 billion to a whopping 9.1 billion.
With falling birth rates, the population of older adults has grown drastically. Increasing number of Americans are crossing 60 and 80 years of age, and a similar pattern is seen across Western developed nations. Similarly, remaining nations will follow suit in the coming years. This has been shown in data that predicts the global population of children below 5 years to drop by 49 million in the next 37 years, while those above 60 years will grow by 1.2 billion.
For several decades, both the rise in ageing and decrease in the overall population has been seen as a wealthy nation’s problem. Typically termed as zero population growth, it happens when birth rates fall lower than replacement levels. In such conditions (sub-replacement fertility), rich nations can encourage the type of conditions that result in lower birth rates and long life expectancies. However, out of the 59 nations wherein families have lesser children that required for maintaining their existing population level, 18 are termed as not rich or “developing” nations.
One such country is Iran where the average Iranian mother had approximately 7 children in the late 1970s. However, in 2010 she had only 1.74 children which is well below the replacement level. Since Iran now sees fewer children being born, the population of elderly is anticipated to grow from 7% to nearly 28% by 2050.
In Asian countries, the rise in older adults is most striking. Even though Japan is at the lead, Taiwan and Korea witness some of the lowest birth rates among developed nations and will see decrease in population by 2025. Furthermore, Singaporean government has established a social policy to offer new mothers a bonus of $3000 for the first two children and $4500 for the third or fourth baby.
At the other end, China possesses an extremely different social policy for child birth. The country’s one-child policy offers several economic advantages to parents; families have only one child to support. However, this policy results into a very low birth rate, which is why the nation is transforming into a 4-2-1 society; according to demographers, one child in chine has to support two parents and four grandparents.
In addition, there are significant challenges facing an aging population. These include Retirement health benefits, long-term care, health-care costs, retirement income, etc.
Even though these obstacles need social policies in place, the United States of America fails to have a consensus on which policies must be rejected or approved.
Health care costs:
One of the major economic challenges is Retirement health benefits. Unfortunately only few private employers tend to provide retirement health benefits to elder citizens. Employees retiring before 65 years of age do not fall in the criteria set by Medicare. Moreover, individual health insurance is way too costly for almost all workers. To tackle this issue, the Patient Protection and Affordable Care Act (PPACA) will mandate most Americans to acquire health insurance or pay a fee, starting from 2014. Under this act, health policies will not reject elder citizens based on pre-existing conditions and will not incur extra charges to older and ill people more than thrice as much as their younger and healthier citizens. Irrespective of these new facilities, people retired early will tend to incur more costs for health insurance policies than they incurred while working.
Another economic challenge is the ever increasing cost of health care. Approximately 16% of the United State’s GDP was attributed to healthcare costs in 2008. Approximately 36% of total national health costs was attributed to elderly citizens aged 65 and above, contributing to 13% of all Americans. This amount was reported to be more than 4 times the expense done on younger citizens. It is evident from this finding that there is greater prevalence of chronic illness and longer hospital bills, along with higher expenditure of multiple diseases that drastically affects a small part of the population in the later part of their lives.
It must be noted that Medicare incurs only a small portion of senior citizens’ health care costs. With current trends in place, more than 50% of elders aged 65 and more are likely to spend above 25% of their income on insurance premiums and medical/hospital bills.
As aforesaid, several economic challenges are posed by long-term care. From 8 people, almost 1 person aged 65 and more suffers a disability and requires aide in basic personal care or household works. Additionally, it is estimated that 2/3rds of American citizens would require long-term assistance, whether in a hospital or at home. With this, more number of women with smaller families is seen contributing to labour force resulting to fewer relatives available to offer unpaid care. While paid long-term care is costly, Medicare offers only a limited part of long-term care.
Insurance for long-term normally covers services which might not be covered by healthcare insurance policies, for example, lifetime homecare, adult day care, nursing home facilities, assisted living, etc. Nonetheless, such insurance has been purchased by very few Americans. It has been estimated that older adults’ long-term spending will triple the cost by 2040.
Controversial issues revolving around the future of Social Security demonstrates the ways in which public policies and political forces have an impact on the economic security of any age group.
Notably, older American adults have greatly profited from Social Security since its origination. Interestingly, social security is known to reduce poverty rates among elder citizens from 35 per cent in 1959 to only more than 9 percent in 2012 (O’Brien, Wu, & Baer, 2010). As many as 14 million elder Americans were given financial security Social Security (US Census Bureau, 2011).
Two factors that are neglected while considering privatizing Social Security are: life insurance and disability provisions of Old-Age, Survivors, and Disability Insurance (OASDI), Social Security being a major part of OASDI. For instance, even though “35.2 million retired workers and their family members received 69% of the OASDI funds, 6.5 million survivors of deceased workers received about 13%, and 9.3 million disabled workers and their families received 18%”.
A question still remains unanswered that whether or not Social Security is really undergoing a crisis, or there is a greater entitlement crisis, an attempt to reduce the federal government. The prime factor for obstacles facing Social Security is the aging population for current. Other secondary factors include the political decisions about ways of allocating resources.
Today, Social Security and Medicare are moderately solvent, though. A report was issued by the federal government in April 2012 stating the deterioration of both schemes and forecasted the Social Security Trust Fund will be completely used up in 2033 (Social Security Administration, 2012).
According to Pear (2012), if the system remains unchanged, tax receipts will be enough for paying nearly 75% of predicted benefits after the trust system is used up. Nonetheless, the federal law reserves a dedicated amount for Social Security.
In legal terms, the program is supported by funds not only from current payroll taxes, but also by collected past surpluses which are the trust funds. Furthermore, if in a specific year, payroll tax receipts are low on paid-out benefits, trillions of dollars is accumulated within the trust fund. These surplus funds can then be used by the program for operating without any congressional action. Reports suggested that in 2012, the assets of the Social Security Trust Fund summed to approximately $2.4 trillion in government bonds; the collected accumulated money reserved over the past 30 years for the baby boom’s retirement. Moreover, accumulated money from trust fund moneys which are not required to pay current benefits are used up as an investment in interest-bearing government securities. These funds can then be redeemed at any point in time to compensate the retirement benefits.
Yet the ideological and political debate on financing is unclear. From the social progressive viewpoint, Social Security takes a compressed form between generations, wherein younger citizens support their elders and expect support in return someday in the future—a kind of "pay it forward" scheme which reflects a major accomplishment of the welfare state. Nonetheless, from a social conservative viewpoint, Social Security is still an unsuccessful social experiment that admonishes the free market as well as discourages individual independence.
Increasing the Age for Benefits
Yet another proposal is to change the age criteria for full benefits, although this change has already being acquired in many European nations. However, increasing the retirement age would decrease the planned deficit. A person eligible to attain full benefits in the U. S. will now be 66 years of age and the age criteria will rise to 67 between 2021 and 2026.
As stated by Baker (2012), one challenge facing the increase of the eligibility age is that it will tend to have an impact on the blue-collar workers (Baker, 2012). “As they are more likely than their white-collar age peers to suffer from health problems, it may be impossible for them to stay on the job for that long; they may also have few other savings for retirement” (Baker, 2012). Advocators of altering the retirement age need to consider that it is more likely that companies will hire older employees-- an unlikely proposal since older workers take long to search for jobs if they are replaced, than their younger counterparts (Rix, 2011).
Economists and healthcare specialists have indicated that America’s health care system is highly costly and unfair and needs a national program to be amended. At present, 1 out of 6 American citizens do not use a health insurance; those uninsured and are of working age are at a 40% high risk of death than the insured citizens.
The elderly population needs greater long-term care which becomes more costly each year. Medicaid is a program devised to serve the poor of all age groups. Although offering a small safety net, Medicaid criteria for eligibility, policies, and regulations are different in different state. Through Medicaid, elder people ought to use up their assets before they become eligible for funds. As stated previously, very few Americans purchase long-term insurance.
People with long-term-care insurance face the risk of not receiving services promised by their policy, since policy provisions might change. Citizens with low income and those who are more prone to diseases in later life are therefore most likely to use Medicaid in order to obtain long-term care.
References
Baker, D. (2012). The primary cause of Social Security’s bleak outlook is upward redistribution. Center for Economic and Policy Research. Retrieved from http://www.cepr.net/index.php/blogs/beat-the-press/the-primary-cause-of-social-securitys-bleak-outlook-is-upward-redistribution?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29.
Harris, M. (2011). The Big (and Profitable) Business of Dying. Retrieved from http://www.cbsnews.com/8301-505145_162-38141107/the-big-and-profitable-business-of-dying/
Pear, R. (2011). Ambiguity in health law could make family coverage too costly for many. The New York Times. Retrieved from http://www.nytimes.com/.
Rix, S. (2011). The employment situation August 2011: Older worker unemployment remains stubbornly high. Washington, DC: AARP Public Policy Institute.
Social Security Administration. (2012). Social security board of trustees: Projected trust fund exhaustion three years sooner than last year [Press release]. Retrieved from http://www.ssa.gov/pressoffice/pr/trustee12-pr.html.
US Bureau of Labor Statistics. (2011). Consumer expenditure survey 2011. Washington, DC: Author
Zarroli, J., Adams, N., & Wertheimer, L. (1998). The funeral business [Transcript]. In The end of life: Exploring death in America, All Things Considered. Washington, DC: NPR. Retrieved from http://www.npr.org/programs/death/980203.death.html
