Introduction
An aging population is the collective shift in the population, in terms of the age structure, towards an older age group making up most of the population. This shift is sometimes referred as an aging demography. This is a direct result of global shift in fertility, from a fertile population to a non-child bearing population. While in the last decade, it was honorable to bear several children in the household, current adults view children as major economic hurdle and thus avoid bearing children. Furthermore, the mortality rate has been on a steady decline due proper health service provision, reduced wars and eradication of several fatal diseases such a measles and polio .
The pattern of a healthy population has led to an older population in some countries like Italy and Japan leading in the demographics. Projections indicate that other developed states are inevitably following the same trend. In the next few decades, United States just like the rest of the developed nations will see about 59% of the share of prime workers shift to retirement. At the same time, the elderly population will increase from about 12 percent to 21 percent of the population .
Such shift in the demographics will have adverse social, political and economic consequences. Dependency ratio will increase nearly 10 fold presenting challenges on public health systems in terms of the medical programs, an attenuating workforce and a leadership quagmire. This final report presents an analysis of the consequences of an aging population (social, economic and political) and the possible policies and solutions to this certain future predicament.
Socio-Economic Impacts
Several medical scholars have argued that, an aged population is one of the indicators successes in humanity. The consequence of this success is quite a challenge for all of us. One of the great challenges posed by this shift is the dependency ratio. This is the size of the working population (young and productive workers) to the non-productive population (children and elderly) . As mentioned earlier, the percentage of working population that will hit the 65-age mark is set to increase considerably. The reduction in such a labor force will imply a reduction in total per capita output of the country. Rogers, Toder, & Jones, (2006) explain that contributions to saving schemes, insurance plans, social security, mortgages and other financial contribution will all decrease quite significantly. The implication is that, the few working individuals will be burdened to complete the mark-up in the contributions.
Apart from reduction in contribution to national public programs, the shift in the population distribution will also affect national savings in the country . Savings is anything produced but kept to for future consumption. The shift from a working population to a retired one means that the country will require much savings to support the old. However, projections indicate that national saving has been on the decline since the trend of non-fertility began. Lack of saving put a nation a tight spot and lowers living standards of a people .
In the end, the nation’s macro-economic model will shift to solving short-term problems and projection. Lloyd-Sherlock (2010), assert that a poor federal saving standards, high spending and small labor force are the basic features of a poor macro-economic model. Policies and focus will certainly shift to short term planning and design, a model defined by economists to be very weak.
Impacts on Medical Services
Probably one of the biggest challenges of an aged demography is its impact on provision of health care. Such a population will see the medical state of a nation shift from acute and treatable diseases to chronic diseases. The aging population suffers from age related chronic diseases such as heart disease, cancer, Alzheimer’s disease, diabetes and other chronic conditions . Such conditions need more than simple one-time corrective measures. They call for long time management by long serving medical personnel and expensive specialized treatments. Chronic diseases are both expensive and time consuming to manage. Additionally, these diseases, more often than not, lead to some form of disabilities, such as limb amputations, partial or complete blindness and deafness. This will increase the medical needs of an already strained country.
Similarly, an old population will see the care providers and workers in long-term health programs decrease. While the United States claims to hire a new workforce, the process has only resulted in the hiring of non-skilled paraprofessionals and nurse assistance . Furthermore, the group that hired is mainly composed of women from immigrant and minority communities. Rogers,.. et al (2006) emphasize that is the case because of fact that working in the health care is characterized by low wages, long working hours and heavy workloads making working in the sector is rather stigmatized. While this hiring process of desperate workers seems to solve the problem on a short-term basis, the need for acute and long-term care service providers will increase to levels beyond the short-term solution. In a few decades, this group of resilient workers will have retired and the gap for the workers will have greatly widened .
Medicare
This is a publicly funded and administered social insurance program that pays for the care of the old. This program has a near general eligibility status covering for both the elderly and the young disable workers with a healthy working history.
The program is divided into two broad parts. Part A deals with how the population contributes to the program. Contribution for the finances is through taxes of about 2.9 percent on the payroll. This tax burden is divided between the employer and the employee on a fifty-fifty basis with no ceiling limitation on the amount of income subject to the tax .
The second part concerns the second financing strategy of the program, which is payments of premiums by beneficiaries. In general, contributions by premiums are rather voluntary, but in most cases, it has been found out that the elderly enroll for the program.
While the program pays for a wide range of medical services, it however does not cover for other services such as dental services, outpatient prescription drugs and in most cases, pays for only a fraction of the total cost (cost sharing). In the years 2000-2001, there was a spirited move to include the outpatient prescription drugs into the program. These efforts were hampered by terrorist attacks of September 11 2001, which shifted most of the American budget to the war on terrorism. Lack of such a national decision to improve Medicare program left the states to improve on their own pharmaceutical programs for the elderly and disabled persons .
Medicaid
Medicaid was also enacted a program for some families and individuals with extremely low incomes. The program has since helped in financing the provision of medical services to poor person and their families together with disabled individuals . The state administrations and the federal government through programs such as Medicare jointly fund Medicaid. Gavrilov & Heuveline (2003) explain that when enacting this program, it was found out that most middle class American did not have enough savings to last them long as soon as the retired. Thus to keep these non affluent members of the society in nursing, states in conjunction with the federal government look to identify these persons and pay for their costs in nursing homes. In recent analysis, it was found out that Medicaid pays for an estimated 40% of all the nursing homes as well as domestic care programs.
Projections indicate that Medicaid cost will soon surpass Medicare. The recent recession in the economy has done much to create more poor than rich Americans. This means that with a larger part of the population being old, the rate at which Medicaid surpasses Medicare will be sooner than later. What most states have begun doing is making the eligibility more stringent and cutting back on services on those already benefiting for the program in a bid to reduce spending .
A similar form of program is the Older Americans Act (OAA). The program is a federal initiative to provide services for the elderly. In the act, a National Aging Network consisting of other satellite networks such as Administration on Aging, State aging units and Local Aging units, were formed to find persons aged 60 and above. The services provided include nutritional support, home care services and community services .
In the year 2006, congress restructured the OAA to redefine its mandate. The new mandate was, one, provide sufficient income during retirement, secondly, the OAA was to provide for medical care, both physical and mental, without regard to the economic status of t he beneficiaries. The care to be provided was to be the best possible. A third mandate of the programs was ensure the elderly enjoyed suitable housing as well as invigorating long-term care. The program also provided recreational participation, educational advancement in some cases opportunity for employment .
Possible Solutions that May Address the Challenge
Several options have been forwarded that try to mitigate the effects of a hastily aging population. While some policies attempt to reverse the trend, Lloyd-Sherlock (2010), claims that it is futile to redress the trend, as it will take ages to get new young people to challenge the old guard in terms of numbers. On the contrary, he suggests that policies should be formulated in a manner that addresses the consequences. It is fundamental to understand that it will be the political will of the American society to appreciate the position of the population so to elicit the appropriate measures. Formulating these measures will be as important as implementing them.
One of the other options suggested is the adjustment of the population structure. From the earlier discussion, we have established that boosting fertility within the country may not be the best solution. Some scholars however suggest a planed and well-executed immigration policy . This will foster a good working to dependency ratio as well as vibrant workers brought through the immigration process.
Another possible solution is to encourage the older workers to keep working at same time giving some financial incentives to the older workers. Many of the older workers wish to retire as they believe that the income they earn is heavily taxed. Quotas of academicians suggest that taxes on workers aged 60 and above should be eliminated to encourage them to work.
Quite the opposite is the suggestion of increasing the taxes on the middle-aged group. Since this group will soon retire and thereby consume the highest share of the health care finances, it thus upon them to contribute the most of the funding . In this sense, the old guard will be left with the responsibility to manage and improve services provide by Medicare and Medicaid. Many also suggest that Medicaid should be managed from a federal level and the budgetary allocation should be revised. The government should shift focus from extravagant military spending to social programs that seek to address the needs of the American society.
Conclusion
An aged demography is going to place a heavy economic burden on the public programs. In the future, much will depend on the political will of the society to embrace this shift and take measures to ease its impacts. Economists recommend that America should shift attention from wars and political struggles for international supremacy and begin to concentrate on domestic social aspects
References
Gavrilov, L. A., & Heuveline, P. (2003). Aging of Population. Retrieved November 18, 2011, from longevity-science.org: http://longevity-science.org/Population_Aging.htm
Lloyd-Sherlock, P. (2010). Population ageing and international development: from generalisation to evidence. The Policy Pres.
Rogers, D. L., Toder, E., & Jones, L. (2006). Economic Consequences of an Aging Population. Retrieved November 18, 2011, from urban.org: http://www.urban.org/publications/310237.html
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