Back to The Fruits of Retirement: Health and Well-BeingFrom Planning for the Future
p. 41-48, published 2002
The level of public support for programs that help bolster the crumbling fourth pillar of preparedness for retirement—health care—will ultimately determine whether we invest in expanded services. For now, important social priorities have been overshadowed by the larger concerns of terrorism, war, and a flagging economy. Nevertheless, polls show that Americans believe our health care system is ailing, and it is up to government to fix it. A March 2002 poll by Gallup found that 62 percent of Americans believe it is the responsibility of the federal government to ensure that all Americans have health care coverage. A National Public Radio/Kaiser/Kennedy School poll reported in June 2002 also found wide public support for a prescription drug benefit for older citizens; nearly 60 percent of respondents from every age group voiced support for the benefit. Here in Kentucky, extending quality health care to all citizens has consistently ranked among the top three goals in citizen polls conducted by the Kentucky Long-Term Policy Research Center’s Visioning Kentucky’s Future project and consistently ranked last among 26 goals in terms of progress.
Substantial majorities of older Kentuckians believe government support for programs to assist seniors is very important.
How important is government support for...?
As shown, the overwhelming majority of older Kentuckians view government support as “very important” for medical care, prescription drug coverage, and long-term care.
The intensity of support wanes somewhat when it comes to less familiar services, such as those that help older citizens stay in their homes longer (hands-on help with such things as transportation, housekeeping, and cooking). Still, 89 percent of respondents view this service as important.
A substantial majority of respondents (88 percent) also assign importance to government support for assisted living, for which we currently have no public support in Kentucky.
Overall, current and coming retirees in Kentucky, a growing and potentially powerful constituency, believe that government support is important for each of these services to older citizens.
As previously shown, substantial majorities of current and coming Kentucky retirees believe government support is important to medical care, including prescription drugs, for older citizens. In short, they strongly favor what is essentially our current system of publicly financed health care for older citizens and an expansion of such care to include prescription drug coverage. Today, Medicare provides health insurance to the vast majority (97 percent) of those aged 65 and older, according to the U.S. Census Bureau. Partly state-financed Medicaid provides supplemental coverage to poor elders and finances all or part of the long-term care expenses for the majority of nursing home residents. But the budget implications of what some call the coming Baby Boomer tsunami could force reductions in entitlements, increase taxes on working-age Americans, increase costs to elders, or some combination of these outcomes.
Here we disaggregate the responses of current and coming retirees about government support for health care for older Americans and confidence levels in its future.
While both current and coming retirees believe government's role in health care for older citizens is key, neither group is confident about Medicare's future.
Attitudes about Government's Role in Health Care, by Retirement Status, KY, 2000
As shown, nearly identical and substantial majorities of older Kentuckians view government’s role in providing medical care for older citizens as very important.
Conversely, few current or coming retirees express real confidence in the future capacity of the Medicare system’s ability to continue providing benefits that equal those provided today.
The lack of confidence expressed here suggests that most aging Kentuckians do not believe that the Medicare system is sustainable in its present form in spite of their strong support for an expansion of the program to include prescription drug benefits.
While few current or coming retirees express confidence in the sustainability of current benefit levels, the percentage of current retirees who say they are confident of future benefit levels is nearly double that of Baby Boomers.
Government plays a substantial role in long-term care. According to the Urban Institute, about 68 percent or two out of three nursing home residents depend, at least in part, on partially state-financed Medicaid to pay for at least some portion of their care. NCSL estimates that 35 percent of all Medicaid spending is on long-term care services, expenditures that are expected to double by 2018, as the first wave of Baby Boomers enter retirement and costs continue to rise. At present, about 80 percent of Medicaid spending for long-term care goes to institutional care, but a shift toward family-centered and community-based care, which some research suggests reduces overall costs, is underway. A recent Supreme Court ruling, the Olmstead decision, which appears to extend a greater choice of services to certain elders, may hasten the shift. As it is, according to NCSL, long-term care of the frail elderly is delivered mostly by family and friends (78 percent).
Here, we asked aging Kentuckians if they believe government support is important in providing long-term care and whether they believe income should be used to determine access to that care.
Older Kentuckians believe government support for long-term care is important, but they are divided on how eligibility should be determined.
Attitudes about Government's Role in Long-Term Care, by Retirement Status, KY, 2000
Again, we find little variance in the opinions of current and coming retirees about the importance of government support for long-term care or nursing home needs for frail elders. As shown, more than two thirds of both groups indicate that it is “very” important.
Likewise, no real difference in the opinions of current and coming retirees is evident when they are asked if income or means testing should be used to determine how much public support frail elders receive for long-term care.
A majority of respondents also express support for means testing, that is, basing benefits to the elderly on income, something current policies, in effect, already do.
Nationally, among the 85-and-older age group, those most likely to be in nursing homes, the percentage who live in nursing homes declined sharply between 1990 and 2000, from 24.5 to 18.2 percent. Among all persons aged 65 and older, a slight decline also was seen, according to the U.S. Census Bureau. By 2000, only 4.5 percent lived in nursing homes compared to 5.1 percent in 1990. This decline is likely attributable to the improving functional capacity of older citizens, the growing reliance on home health, and the shift to home- and community-based care. Moreover, nursing home care is likely cost-prohibitive to many who are ineligible for Medicaid.
The balance between personal and public responsibility has become a key consideration as policymakers eye a demographic future that could jeopardize federal entitlements to the elderly. The question of how much financial and caretaking responsibility families should assume for the care of frail elders lies at the heart of a debate that promises to intensify with each passing year. Already, policymakers have curtailed the ability of older citizens to shelter assets for their heirs, then tap Medicaid to meet long-term care costs.
Interestingly, our survey respondents express the weakest levels of support for government assistance with in-home caretaking responsibilities, a possible reflection of the family strength we have historically valued in Kentucky. Yet services such as these are designed to enable older citizens to stay in their own homes longer and complement the care given by friends and family members—providers of the most long-term care for the elderly. To learn more about how Kentuckians believe we should balance responsibilities between family and government, we asked current and coming retirees who should be mainly responsible for the care of frail elders.
The largest percentage of respondents indicate that a combination of government and family support should provide care for frail elders.
The highest percentage of respondents (42 percent) express support for a balanced approach to supporting frail elders, most often choosing the combination of government and family support in response to the question.
When compared to government alone (19 percent), a larger percentage of our survey respondents (33 percent) felt that children (28 percent) or other family members (5 percent) should be mainly responsible for the care of frail elders.
While Kentuckians favor combining government and family support to care for frail elders, the expectations of government will almost certainly rise with the population of older citizens. Thus, developing the capacity to assist families with caretaking responsibilities appears not only to be the path those who will be most affected prefer but also potentially the most cost-effective approach as well.
When demographers began warning policymakers about the budget implications of an impending surge of retirees dependent upon federal entitlement programs, the possibility of means testing even Social Security benefits became a topic of considerable public debate. As the first major expansion of Medicare benefits in the form of a prescription drug benefit appears likely, means testing is again central to the debate. Without change in the Social Security, Medicare, and Medicaid programs, warns the Congressional Budget Office, the nation faces the prospect of “steep tax increases, big cuts in other government spending, or large budget deficits.”
At the heart of this issue and others to come is the central question of who should receive publicly financed benefits. Should all older Americans be entitled to medical care, regardless of their personal wealth? Or, alternatively, should we provide full benefits only to those who cannot otherwise afford them? We sought the opinion of aging Kentuckians, the key constituency on these issues, about whether financial need should be used to determine who gets Medicare, a prescription drug benefit, long-term care, and assistance with daily living.
Most older Kentuckians believe government support for the elderly—including Medicare—should be based on income.
"Financial need should be used to determine how much support older people receive from..."
A substantial majority of older Kentuckians agree that financial need should determine how much support older people receive from both current and proposed public programs, including Medicare, which, in its current form, is not means tested. As shown, about 80 percent of respondents agree somewhat or agree strongly with this statement in each category.
Except in the case of hands-on help, a large majority of respondents strongly agree with means testing compared to only about 10 percent who strongly disagree with it, an attitude that may reflect the disproportionate poverty here and the relative importance older Kentuckians tend to place on family caretaking.
Even in the case of hands-on help, less than 20 percent of older Kentuckians disagreed with the concept of using financial need to determine the level of public support.
Were benefits to older citizens based upon financial need, it would mark a dramatic policy shift away from entitlement based upon age. That older Kentuckians, on average, indicate strong support for basing a range of benefits to older citizens on financial need would, in theory, appear to reflect the relative poverty of our state. In 1990, Kentuckians aged 65 and older were far more likely to be poor than their counterparts at the national level; an estimated 20.6 percent lived below the poverty line compared with 12 percent nationally. By the close of the decade, poverty among elderly Kentuckians had declined sharply to a three-year average of 13.2 percent for 1998-2000, and the gap had narrowed considerably between Kentucky and the nation (10.1 percent).
Here, we analyzed responses to our series of questions about financial need in light of reported household incomes to determine whether income status influenced opinions. The opinions of older citizens are likely to become increasingly important on such issues as the fiscal pressure created by entitlement spending rises precipitously.
The more affluent Kentuckians are, the less likely they are to say government support for older citizens should be determined by need.
While a substantial majority of older Kentuckians agree that financial need should determine how much public support older people receive, those with higher household incomes who would be least likely to qualify are also the least likely to agree.
Conversely, those with the lowest incomes and therefore the greatest need are more likely to agree. Those in the lowest income quartile are, on average, 2.5 times more likely to agree that need should determine who gets benefits.
Only about a third of those with annual household incomes of $50,000 or more agree that financial need should determine how much support older citizens receive. The lowest percentage (29 percent) expressed this belief about Medicare, which is presently extended to all older Americans, regardless of income.
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