We’ve turned the page on a new year. What will 2024 hold for America’s seniors? In interviews, four of the country’s leading senior advocates outlined their priorities and stressed one constant — the urgent need to bolster the long-term viability of Social Security and Medicare.
The clock is ticking
“Social Security and hospital benefits in Medicare are funded by trust funds that, to put it bluntly, are going broke,” warns Maya MacGuineas, president of the Washington, D.C.-based Committee for a Responsible Federal Budget. With both programs’ trust funds scheduled to run out within a decade — which would mean projected cuts of 23% for Social Security and of 11% for Medicare hospital-insurance payments — she warns that time is running out for lawmakers to act.
Hard choices and trade-offs are inevitable, MacGuineas says, and by that she means what’s needed is “a combination of revenue increases and spending cuts to bring the two in line.” There is still time to act, she says, but not much.
“The worst option is to do nothing and let these automatic cuts happen,” says MacGuineas. “And the path we’re on right now would cause that to happen.”
She is encouraged, meanwhile, by some developments in 2023, which she said was “the largest year for deficit reduction in a decade with the passage of the Fiscal Responsibility Act, which will reduce 10-year projected debt by $1.5 trillion. But much more is needed to prevent trust-fund exhaustion and stabilize the debt.”
2023 saw progress, but gaps remain
“Retired Americans on average did better, with higher interest rates and a peppy stock market,” says Teresa Ghilarducci, an economics professor and director of the Schwartz Center for Economic Policy Analysis at the New School. “But gaps between the haves and have-nots increased as food insecurity increased, and so did elder poverty rates.”
Ghilarducci urges Congress to pass the Retirement Savings for Americans Act, which would create portable, tax-advantaged savings accounts — with federal matching contributions — for an estimated 70 million low- and middle-income workers who currently lack access to a retirement plan. The plan has bipartisan sponsors in both the House and Senate.
Insulin capped at $35 a month
For the millions of Americans with diabetes, the new year began with very good news: a ceiling on insulin prices.
“Insulin is now capped at $35 per month for people on Medicare,” says Nancy Altman of Social Security Works, an advocacy group. That’s a huge cost savings. But that’s not all. “The White House also announced the first 10 drugs eligible for Medicare negotiation, which will lower the prices of these drugs in the future,” she adds. “Lower Medicare costs are an indirect increase in Social Security benefits, and very good news for seniors.”
Altman also praised the continued expansion of Medicaid under the Affordable Care Act, which saw South Dakota and North Carolina become the 39th and 40th states to expand their programs. “This is very good news for older Americans in their 50s and early 60s, who are not yet eligible for Medicare,” she says.
In terms of bolstering Social Security, Altman urges the lifting of the cap on earnings that are subject to taxes. This year, the cap — which is adjusted for inflation annually — is $168,600, meaning that income beyond that is not subject to Social Security taxes. Lifting the cap — a tax hike that faces largely Republican opposition in Congress — would go a long way toward bolstering the solvency of the program, she argues.
Affordable housing is crucial
“Housing requires about 49% of the household budget of adults age 65 and up,” points out policy analyst Mary Johnson of the Senior Citizens League, an advocacy group. “This is a huge problem when someone needs long-term care. Our long-term-care industry has commodified the upper-income senior but slams the door in a hurry when faced with lower-income seniors. Our aging nation faces a terrible housing and care crisis — a crisis that often falls on other family members who are struggling to provide care and support.”
Johnson also says healthcare costs in general remain a huge problem for seniors.
“Many private Medicare Advantage plans impose annual out-of-pocket caps up to $8,000 in 2024,” she points out, “which can leave the average enrollee underinsured if a hospitalization or decline in health occurs. These plans frequently require prior authorization for almost every service, even when standard Medicare would not do so.”
And all this talk of inflation coming down? Johnson says that doesn’t mean that savings are passed along to consumers.
“For example, there are some categories of prices that frequently climb but rarely, if ever, go back down,” she says. “Think rent, housing, medical costs [including premiums] and costs of many types of services that require humans to perform, such as auto repairs or dental cleanings.”
These issues aren’t going away, and given how rapidly the number of Americans over the age of 65 is growing — it is now the fastest-growing segment of the U.S. population — problems are becoming more acute by the day. The problems facing Social Security and Medicare have been well known for years, and yet nothing has been done. Decent healthcare remains out of reach for many, and surging housing prices may squeeze people even further.
Lawmakers must act, but other institutions must act, too. Just one example: Instead of discriminating against older workers — an all-too-common occurrence in America — employers should recognize, particularly in an era of severe labor shortages, that those workers can bring valuable skills and experience to the table, and that they should be paid accordingly.
And who says seniors don’t want to learn new skills? Institutions from universities to community colleges are more welcoming to seniors than ever before, offering all sorts of breaks to return to campus, and more than a few older students are retooling their skills in hopes of taking on new challenges.
