America’s aging population poses a major and growing challenge to the nation.
The increasing needs of older people for financial aid, care and assistance, as well as the rising costs of medical treatment, health care and drugsnot only burden household budgets, but also increasingly strain government resources for the elderly.
The directory reports Social Security and Medicare administrators released in June revealed that Health Insurance hospitalization insurance and Social Security trust funds are rapidly approaching insolvency, which is expected in six and 13 years, respectively.
The elderly in America are the fastest growing age group. Since the turn of the 21st century, the population in the 65+ age group has increased by approximately 58 percent. In contrast, those in the 20-64 and under-20 age groups increased by 17% and 1%, respectively.
The proportion of Americans aged 65 and older has increased dramatically. For example, since Medicare was created in 1965, it has almost double from about 9% to 17%. Moreover, by mid-century, 1 in 5 Americans — 21 percent — should be 65 years of age or older.
Also majority of the elderly population is made up of women, with the proportions increasing at older ages. The proportion of women aged 65 to 79, for example, is 53% – this figure rises to 61% for those aged 80 and over.
In addition, life expectancies for older Americans have also increased. Male and female life expectancies at age 65 have increased from 13 and 16 years in 1965 to 17 and 20 years in 2020, respectively.
A significant economic consequence of the aging US population is the declining number of workers per retiree. In 1960 there were approximately six 20-64 years for each person aged 65 and over. This figure is now close to three and is expected to continue to decline to around two by the middle of the century.
Most older people in America, approximately 61 percent, live with their spouse. However, the proportion residing with a spouse or partner is significantly higher for men than for women, 73% versus 50%.
Also, approximately 27 percent of people aged 65 and over live alone. And about 5% reside in retirement homes and 2% live in assisted living facilities.
Social Security is the largest program in the federal budget, accounting for almost a quarter of total federal spending, or about $1.135 billion in fiscal year 2021. Social Security provides benefits to approximately 20% of the U.S. population, or approximately 65 million beneficiaries.
Health insurance accounts for approximately 12 percent of the federal budget, about $776 billion. In 2020, nearly 63 million people enrolled in Medicare, triple the number in 1970. By mid-century, the number of Medicare enrollees is expected to reach about 87 million.
Congress must act responsibly, as soon as possible, to address the expected funding imbalances and insolvency of Social Security and Medicare programs. Failure to do so will result in reductions in benefits or sudden changes in benefits or tax levels.
Possible changes of Social Security include the gradual raising of the full retirement age to 70 and the elimination of the option of early retirement with reduced benefits. Other changes would be to reduce benefitshave more income limits and to increase payroll tax rates.
With regard to health insurance, possible measures include increasing the monthly premiums paid by the elderly and increasing social charges. However, these measures in themselves would be insufficient to fill the expected financing gap of the program, since contributions and social charges together cover about half the cost of the program.
Another policy change that would help solve Medicare’s financial problem is to raise the Medicare eligibility age from 65 to 70. Individuals should continue to rely on private health insurance programs until they reach Medicare’s revised eligibility age of 70.
In addition to Congressional actions, educational, public health, and community policies and programs should encourage behaviours in Americans in preparation and in old age. Men and women need to take action and develop habits that promote their personal health, economic security and general well-being, which will not only reduce costs, but also contribute to the quality of life of older people.
America is not alone in meeting the challenge of an aging population. Almost all developed countries and many developing countries with low fertility rates and increasing longevity are experiencing a crisis unprecedented in the 21st century. demographic aging.
Japan and Italy, for example, have about A quarter of their current population is aged 65 and over, and this proportion is expected to reach more than a third by the middle of the century. Similarly, the proportion of elderly people in China is expected to increase from one eight of its current population to a quarter by 2050.
To deal with the expected financial deficits, the Democrats, who took the initiative to establish Social Security and Health Insuranceundertake to maintain and reinforcement funding for these two programs. However, the Republican Party is reluctant to raise the taxes and generally adheres to a guiding principle articulated by one of its revered leaders about 40 years ago, namely: “Government is not the solution to our problem; government is the problem.”
Because of these significant differences, the actions of Congress to address the forecasts insolvencies health insurance in 2028 and social security in 2035 will involve difficulties negotiations and are likely to take place later than earlier.
Joseph Chamie is a consultant demographer, former director of the United Nations Population Division and author of numerous publications on population issues, including his recent book, “Births, deaths, migrations and other important demographic questions.”