As Global Aging Shapes Our Future, New Models Are Required
Paul Irving, chairman at the Milken Institute’s Center for the Future of Aging, did not mince words when he said “global aging, along with climate change, may be the great challenge of this century.” Despite our jaded response to such claims, this is one deserving of serious contemplation and immediate response. Why? Because Mr. Irving is correct and he has the data to support it. In addition to lower birthrates, advancements in science, technology, and sanitation have driven the average life expectancy on a perpetual incline over the past century. As new demographics bring forth added pressure on budgets and social structures, innovative paradigm shifts to institutions, safety nets, and social contracts are required.
While increased longevity of life brings forth an abundance of opportunities to individuals and societies at large, it also significantly impacts government budgets, workforces, and healthcare systems. At present, the United Nations has confirmed “virtually every country in the world is experiencing growth in the number and proportion of older persons in their population.” Currently there are over 900 million people in the world age 60 years or older. By midcentury, that figure is expected to reach 2 billion according to the World Health Organization. Total Medicare spending in the U.S. reached $618.7 billion in 2014. While 86 percent of older persons cited Social Security as a major source of income, total spending here reached $888 billion in 2015. Together, Medicare, Medicaid and Social Security account for nearly half of the federal budget. This, coupled with our national debt of nearly 20 trillion dollars points to the simple conclusion that as things stand we’re having a difficult time paying for senior citizens, if that population more than doubles as expected, financial crises lie ahead.
Family, Community, and ALFs
This growing population has effects beyond that of economics and finance. Population aging has also begun to reshape our homes, churches, and communities. In their first issue of 2017, the pulitzer prize winning Christian Science Monitor, released an article on global aging entitled “Where Seniors Count”. In it they interviewed a family in Baghdad currently caring for their 85 year old matriarch. The daughter, Hanaa, spends nearly half her salary on her mother’s medical care. War and sanctions have prohibited them from sending her to decent doctors in Iraq or abroad so the act of caretake falls to Hanaa, Jafar, and their 7 year old son, Fadl. Historically this arrangement has been common place in many middle east and Asian countries, both of whom stress cultural and/or religious importance of caring for aging parents. In the wake of our new globalized economy, this custom has begun to fade.
As the shifting landscape of markets and workforces moves ever further from rural to metropolitan, the youth in many nations are forced to follow. As the young move to cities in search of jobs and opportunities, a shortage of caregivers for aging parents has resulted in a growing demand for assisted living facilities or ALFs. These facilities are even breaking ground in places like China and Qatar where once they were a cultural anomaly. This surge in ALFs is born out of necessity in caring for seniors physical well being, as well as their psychological. As Stanford Professor Laura Carstensen wrote, “feeling socially connected to others is critical to physical and mental health.”
Next comes the issue of staffing these facilities or in house caregivers. In 2014, the New York Times reported that the U.S. would need a subsequent 1.3 million paid caregivers to meet the demand over the next decade. Soon to become the largest occupation in the nation, surpassing even retail, the industry needs revamping. Caregiver positions are often low-paying, demanding, and offering little in the way of benefits. Unsurprisingly, experts are skeptical as to whether the needed positions will be filled.
Socio-economics also plays a key role in who can and will be able to afford this type of care. The national median rate for a one-bedroom unit in an ALF is $3,500 a month or $42,000 a year. This, coupled with the fact that over 25 million Americans aged 60 or over are economically insecure and living on less than $30,000 a year makes ALFs unrealistic for many senior citizens. The task of caring for those without families or private facilities falls heavy on government budgets. However, that burden is nothing compared to the psychological and psychical effects that befalls the 15 percent of seniors who live in poverty and the 34 percent of those who report income under $15,000 according the U.S. Department of Health and Human Services.
At this crucial juncture, solutions must be found to both reduce costs on seniors and taxpayers while increasing education and wages for caregivers. It would appear the opposite approach may be heading our way. As President-Elect Donald Trump and a republican Congress lead by Paul Ryan look to repeal and replace the Affordable Care Act, many fear cuts to Medicare and Medicaid, both of whom, as the Times reported, are financially responsible for 75 percent of services provided by home care agencies. We could analyze the efficacy of their replacement plan if such a plan was made public, or existed at all. At present we can only speculate based on Trump’s vague previous positions and his cabinet appointees such as Tom Price. The threat of privatization looms ominously on the horizon.
A Dangerous Gamble
Privatization of Medicare is a system wherein senior citizens receive a voucher from the federal government where they then take to private insurers for health care coverage. A conservative argument in support is that doing so would drive much needed competition within the insurance market and force prices to lower, benefiting seniors, the national budget, and the economy. Liberals, and perhaps history, would argue that insurance companies simply do not want older customers, do not accept pre-existing conditions, offer only plans at incredible mark ups, and perhaps most importantly, Medicare is cheaper. As our society gets older and more people, institutions, and facilities are needed to care for them, it is an important moment for social policy reform — one the Trump presidency looks unlikely to succeed in.