Elderly poverty decline is one of the greatest success stories of the contemporary American Welfare State. Due to incremental raises in Social Security and Supplemental Security Income over the past several decades, the poverty rate for this age group declined by more than 15 percentage points from 25% in 1968 to just under 10% in 2010.
So, it seems that the plan to raise Medicare Part B premiums, offsetting a raise in Social Security benefits in 2012 shouldn’t be all that big of a deal. After all, the elderly can afford it.
The GOP candidates also see the elderly as well equipped to handle rising Medicare costs. Herman Cain has pledged to pare down Medicare entitlements to the bare minimum necessary, while Mitt Romney wants turn Medicare into a privatized voucher program. After all, the elderly can afford it.
Or can they? What tales can be told underneath the rhetoric of this poverty success story that conclude if the elderly can afford these rising Medicare costs? First, is the very real tale of the almost 3.8 million elderly Americans living underneath the poverty threshold for his or her family size and the 1 in 5 elderly Americans with family incomes at 150% below the poverty threshold, clearly unable to afford rising costs of anything, let alone Medicare.
The tale quietly continues to unfold when we explore the story of the poverty threshold. What the poverty threshold as defined by the Census Bureau doesn’t factor in is such things as healthcare costs. Using an alternative poverty measurement called the “Supplemental Poverty Measure” that does account for healthcare costs and other living expenses, the poverty rate for this age group jumps to 16.1%.
Comparative studies paint an even grimmer tale. A study done in 2006 by Daniel Meyer and Geoffrey Wallace, research affiliates at the Institute for Research on Poverty in Madison Wisconsin, compared the US to 11 other rich nations using a relative poverty threshold of 50% median household income. Based on this study, US elderly poverty levels stand at an astounding 28.4%, ranking second only to Ireland. Their study concluded that the generosity of old age insurance programs fall well short of those in other rich countries.
Finally, there is the personal tale of my 90 year old grandmother “living” in an assisted living home off of my deceased grandfather’s pension and Social Security payments, but still $1,200 dollars short every month on necessary round the clock medical aide assistance. Luckily, her daughter Pat is there to sign over her own monthly Social Security checks to cover these additional expenses. Even more lucky for Pat, she will also be the one to pick up the increasing premiums on grandma’s doctors visits.
By just skimming the shallows of elderly poverty using various measures, real numbers, and medical dollar signs, one begins to see the realities of this not so ever after story of the American Welfare State. Rising Medicare costs or proposed changes to the system will only cut deeper into the pockets of elderly Americans, while pushing more to the edge of poverty. Perhaps, after all, they can’t afford it.
