The New Aging: Politics and Change in America


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Introduction to Aging and the Elderly

In the s, at the height of the U. That share will double to 20 percent by The greying of America will touch every station of economic and political life: the size of the labor force, the jobs the economy will require, the ethnic makeup of the country, and the productivity of the workforce. In short, aging affects everything. Start with the economy. First, as a workforce ages, it becomes less productive. Medicare, Social Security, and other programs for the elderly require lots of tax income from a large and vibrant working force. The simplest way for Washington to think about the future is often as an accounting exercise.

For this reason, many discussions about the future of governance are focused on the debt, which is appropriate to a degree. But the future is more than the sum of its federal budget deficits.

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Old, Online, And Fed On Lies: How An Aging Population Will Reshape The Internet

The aging of the population will also change the kinds of jobs Americans will do. Although both campaigns occasionally like to pretend that manufacturing is the backbone of the U. The fastest growing occupations of the next decade are all in health—personal care aides, registered nurses, and home health aides. Indeed, immigrants account for almost a third of the in-home health-care workforce, and one in five of them are undocumented, by one estimate.

This speaks directly to a second-order effect of an aging country, which is the diversification of the workforce. In , the majority of children born in the U. By , immigration will add twice as many people as natural births and deaths to the population. This divide could shape politics, particularly around the issue of work and redistribution. Today the rich and mostly white upper- and upper-middle class pay the majority of federal income taxes, which often support programs to help lower-income minorities. But within a generation or two, this picture will change.

It is not immediately clear what the implications of this would be. But as the elderly, white, less educated, and retired population grows, perhaps another cultural gap will open between a mosaic workforce and a more monochromatic generation of Boomers. Unlike most private pensions, Social Security benefits increase each year with inflation. Social Security and the Disability Insurance programmes are primarily financed by payroll taxes levied on salaries. Employers and employees each pay 6.

As the population ages, public expenditures are projected to grow as a per cent of GDP. Table 2 presents official government projections for Medicare and Social Security expenditures and projections by Wiener, Illston and Hanley for long-term care expenditures. Overall, Medicare, Social Security, and the Medicaid funding for long-term care are projected to grow from 6.

Health and long-term care programmes are projected to increase from 2.


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In addition to the sharply greater number of beneficiaries, the large increase in GDP for health and long-term care is a function of three factors. All other health programmes in developed countries cover the entire population. Second, older people have higher average expenditures than do younger people.

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For example, in , per capita personal health expenditures for a person aged 65 and older were 4. Third, Medicare and long-term care expenditures as a proportion of GDP is projected to increase more than Social Security because of the assumption that average health care costs per person will increase considerably faster than per capita GDP. Projections of Medicare costs 50 years into the future depend heavily on this assumption, which is very uncertain and has fluctuated wildly.

For example, because of changes primarily in assumptions of the rate of increase in health care costs, Medicare was estimated to be 7. A number of factors, including changing disability rates, the size of the economy and efforts at privatization may affect how much of an economic burden these programmes impose in the future. Some researchers have found evidence of declining disability rates, which might moderate the growth in the use of acute and long-term care services. For example, using the National Long-Term Care Survey, Manton and Gu found that on an age-adjusted basis, the proportion of the elderly population that was disabled declined from If these disability declines continue, they could, in theory, have a major impact on use of both acute and long-term care services.

People with substantial disabilities have three times the average Medicare expenditure of beneficiaries without substantial disabilities. While most public policy has focused on public expenditures for older people, less attention has been given to the size of the economy. For example, in projecting long-term care expenditures, Wiener, Illston and Hanley estimated that public long-term care expenditures as a percentage of GDP could triple from to if the US economy were to grow by only 1.

How aging Americans are changing the economy

There are also factors that could increase the number of workers, including immigration and increased labour force participation, which would provide workers to pay taxes to support the older population. The terrorist attacks of 11 September have sharply undermined evolving support for immigration liberalization and made the admission of additional immigrants highly unlikely, at least for the time being. The other factor that could increase the economy is that a higher percentage of the population could enter the workforce.

As workers become more scarce, labour force participation rates may rise as employers compete for workers. Labour force participation for women has risen substantially over the last 30 years, but is still well below that of men. Older people themselves also may be a source of additional workers.

Conservatives and some moderates are convinced that privatization of Medicare, Social Security and long-term care is necessary to address the future burdens of an ageing population.

For Social Security, the main proposal has been to divert some of the payroll tax to private accounts that could be used to purchase stocks and bonds. The recent downturn in the stock market has made this proposal less attractive. For Medicare, privatization has been proposed mostly through the introduction of competing private health plans to substitute for the current system of government funded, but privately administered health care. People who wanted a more generous health plan would pay the difference between the premium and the government contribution.

The assumption of this strategy is that competition will force insurers to find ways to control costs while maintaining good quality care. Opponents fear that health plans would compete based on risk selection rather than efficiency or quality and that the government contribution would not keep pace with costs over time, shifting costs to older beneficiaries. They worry that the net result would be a two-tiered system, in which wealthier older people would have significantly better and different coverage than people who are financially less well off.

Similar to the strategy for acute care, conservatives and some moderates are promoting private long-term care insurance as a way of financing long-term care, hoping that it will reduce dependence on public programmes, especially Medicaid. Most research suggests that only a small fraction of the elderly population can afford good quality policies and that the non-elderly population is unwilling to voluntarily purchase insurance in large numbers.

The ageing of the population in the US will place substantial additional economic burden on public programmes. Looking to the future, a great deal will depend on the economy and the political will to control health care costs and pay for these programmes. The economic forecasts have been complicated by tax cuts and terrorism. Critics also contend that the tax cut will disproportionately benefit upper-income individuals. The terrorist attacks of 11 September have had at least two economic consequences.

First, they have exacerbated the economic downturn of and called into question the rate of economic growth for the future. Second, it has stimulated substantial additional government expenditures for domestic and foreign anti-terrorism activities, precluding government spending for social programmes and for public debt reduction. Thus, the vast budget surplus on which the tax cut was premised is now called into question or is being used for purposes other than programmes for older people. At the time of writing this paper October the Bush Administration and Congress seem unwilling to repeal or postpone various elements of the tax cut.

Without the budget surplus, the reduction in public debt, which was the main strategy for dealing with the ageing of the population, is now doubtful. The ageing of the population will almost certainly impose additional fiscal burdens on the public sector in the US, especially for health and long-term care. However, health care costs and their rate of growth depend only partly on demographic forces; they depend much more on political decision-making. The US spends more on medical care as a share of GDP than any other country, in part because it provides more high technology services but mainly because American insurance funds pay higher prices than are paid elsewhere.

These higher costs mean that each additional older person requires greater expenditure, but that is not the direct consequence of an ageing society; it is the consequence of a political system that creates high health care costs. Indeed, the empirical evidence suggests that there is surprisingly little relationship between ageing and national health care costs, at least in the past. Examining data from to , Marmour and Oberlander found no correlation across Organization for Economic Co-operation and Development nations between ageing populations and growth in medical costs.

The often predicted generational conflict has yet to appear. Whether that will continue to be true in the future will probably be the most important determinant of the economic burden of ageing programmes. Per cent of gross domestic product for Medicare, Social Security and publicly-funded long-term care, and Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide. Sign In or Create an Account.

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Demographic change and its consequences for health care. Public programmes for older people. Economic importance. Factors potentially affecting the economic burden. Oxford Academic. Google Scholar. Jane Tilly. Cite Citation. Permissions Icon Permissions. Demographic change and its consequences for health care An ageing society Like the rest of the world, the US is an ageing society Table 1. Implications for organization and delivery of health care The ageing of the population will have a major impact on the organization and delivery of health care. Public programmes for older people Like other developed countries, the US has large public programmes for the older population that provide health care, long-term care, and income support.

Acute care financing Acute care services for older people, such as hospital and physician care, are financed through a mix of public and private sources. Retirement income Retirement income is financed through a combination of public and private pensions, savings, and welfare payments. Disability rates Some researchers have found evidence of declining disability rates, which might moderate the growth in the use of acute and long-term care services.

Ageing and the elderly

The economy The economic forecasts have been complicated by tax cuts and terrorism. Importance of political decision-making The ageing of the population will almost certainly impose additional fiscal burdens on the public sector in the US, especially for health and long-term care. Table 1. Open in new tab. Table 2. Population aging: A comparison among industrialized countries. Health Aff. Eberstadt N. World population prospects: The shape of things to come. Pawlson GL. Chronic illness: Implications of a new paradigm for health care.

Journal of Quality Improvement. Wiener JM, Skaggs J. Public Policy Institute Who Will Care for Us? Addressing the Long-term Care Workforce Crisis. Implications of an aging registered nurse workforce. US General Accounting Office. Tilly J, Wiener JM. State pharmaceutical assistance programs for older and disabled Americans. New York: The Commonwealth Fund, Committee on Ways and Means. American Health Care Association. Centers for Medicare and Medicaid Services.

The New Aging: Politics and Change in America The New Aging: Politics and Change in America
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The New Aging: Politics and Change in America The New Aging: Politics and Change in America
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