The Social Security debate: Considering aging, health disparities, and AAN stance

Article Outline

• Copyright

• 
  • View Large Image
  • Download to PowerPoint

• Joan L. Shaver, PhD, RN, FAAN, AAN President

As part of our American Academy of Nursing (AAN) strategic agenda, we have pledged to focus our attention along with 4 other topics on Promoting Healthy Aging and Reducing Health Disparities. Without careful consideration of who benefits from the current Social Security system and planning accordingly, both healthy aging and disparities affecting women and the disabled stand to be negatively impacted by recently proposed changes to the Social Security system. Fellow Shirley Chater, at one time Social Security Commissioner, contacted me to urge that we direct our attention to this matter as AAN fellows. I asked Shirley and our current AAN/Institute of Medicine (IOM) scholar, Veronica Feeg, to provide me with some “talking points” and I summarize in this article some of these points and end with recommendations regarding our AAN stance.

Designed as a responsible societal safety net system so that people do not live their retirement years in poverty, the Social Security system is a 70-year-old critical and, to date, successful program. Currently debated is the issue of long-term financial solvency. The major dynamic putting pressure on this program financed by working adults is the graying of Americans. There are currently 3.3 workers for each Social Security beneficiary, but by 2031 there is estimated to be only 2.1 workers for each beneficiary. By some estimates, by the year 2042 (or 2052 by other estimates), more money will be paid out of the system than is collected. However, also projected is that, even if nothing is done to the system, there is enough money by 2042 or 2052 to pay 70% of all benefits. The debate about how to “fix” social security ranges from personal accounts (taking money out of Social Security to be managed personally) to cutting benefits for beneficiaries. Little debate revolves around finding new sources of revenue or re-adjusting investments that can grow over time in concert with a predicted economic and actuary profile of the nation. A major question in the debate is how much should we reduce and put “at risk” access to benefits?

According to a fact sheet from the Social Security administration, Social Security is the major source of income for most older adults. More than 9 out of 10 individuals age ≥ 65 receive Social Security benefits that represent, on average, 39% of income for elders. However, about two-thirds of aged Social Security beneficiaries receive ≥ 50% of their income from Social Security, and it is the only source of income for approximately 22% of older adults. As well, Social Security provides more than just retirement benefits. Besides retired workers and their dependents, who account for 69% of total benefits paid, disabled workers and their dependents account for 17% of total benefits paid. About 91% of workers age 21–64 in covered employment and their families have protection in the event of a long-term disability. Almost 3 in 10 of today’s 20-year-olds will become disabled before reaching age 67. Survivors of deceased workers account for 14% of total benefits paid, an important element since 1 in 7 Americans will die before reaching age 67. All of these dynamics disproportionately affect women.

According to sources close to Dr. Chater, women represent 58% of all Social Security beneficiaries age ≥ 62 and approximately 70% of beneficiaries age ≥ 85. Women reaching age 65 in 2004 are expected to live, on average, an additional 20 years compared with 17 years for men. For unmarried women, including widows age ≥ 65, Social Security comprises 52% of their total income and is the only source of retirement income for 29% of unmarried elder women. Without Social Security benefits, more than two-thirds of unmarried elder women would live in poverty (Institute for Women’s Policy Research. Women and Social Security. Website: http://womenandsocialsecurity.org/Women%5FSocial%5FSecurity/). Widowed, divorced, and never-married women in general, from all backgrounds, depend heavily on Social Security, and for 1 in 4 (never-married), it is the only source of income (Social Security Administration, Income of the Population 55 or Older, 2000 Washington DC: U.S. GPO, 2002). Despite that increasing numbers of women are employed and have more lifetime earnings, 34% of women still rely on their spouse’s benefits (based on their husbands’ or ex-husbands’ earnings records) for their retirement security. In any policy shifts, spousal rights to accounts deserves consideration as does how gender earnings differences, generally smaller for women, will ultimately play out in benefits, particularly if benefits are calculated at a reduced federal level.

Currently, annual cost-of-living adjustments to reflect growing lifetime earnings of people in the workforce protect Social Security beneficiaries so that purchasing power is not eroded. Freezing future growth in Social Security benefits by fixing them to current living standards would be detrimental to low- and middle-income people. Since estimates are that American workers’ salaries are likely to grow faster than inflation over time, benefit-fixing would steadily and proportionately reduce the share of income that Social Security beneficiaries would get relative to wage earners, severely affecting low- and middle-income workers (Economic Snapshot [1/12/05] written by EPI Research Director Lee Price and research assistant David Ratner, Economic Policy Institute, http://www.epinet.org/).

I can think of at least 2 dynamics that would argue against the wisdom of expecting that private accounts are sufficient for improving the Social Security system. First, we have little evidence that leaving health and welfare programming to market forces works. Witness the huge numbers of people uninsured for health care. A Social Security system that fails to guarantee support for elders and vulnerable individuals and families could place greater hardship on accessing healthcare. Our semi-privatized healthcare system has unusually high overhead (costs for administering are twice that of other industrialized countries) and is priced to support the private sector health techno-business and supports hardly at all the kind of care that would make us healthier as a nation or even provide comprehensive, continuity of care for burgeoning chronic illness. Second, we hear almost daily that more individuals are taking on debt loads beyond their means to pay in their lifetime, provoking the questions about how much risk there is to leaving investing for older age in the hands of individuals. As well, we are hearing more dialogue about policies to relax accountability and allow forgiveness of personal bankruptcy claims faster. This means that society will be taking up more of the slack for those not managing their personal affairs well. One can envision that our government could be in the position of subsidizing people for poorly managed privatized Social Security accounts. It remains hard to feel comfortable that this solution will responsibly guarantee that elders and vulnerable women and children are supported financially into old age.

Regardless of where you personally stand on the means to ensure that the Social Security system is contemporary and viable, including the President’s idea of personally managed accounts, I think there are at least 2 clear stances for us as the AAN. One is that we must be the voice to reveal that reducing or jeopardizing Social Security benefits is pejorative for women, children and the disabled and, therefore, unacceptable. For any recommended changes, it should be our voice that calls for forecasting outcomes based on assumptions that realistically represent these groups and protect their vulnerable status. Second, we should urge our government officials to stand strongly behind a system that has the “lowest risk,” or the highest probability of guaranteeing the outcomes envisioned for the Social Security program 70 years ago. These stances resonate with our concern for promoting healthy aging and reducing health disparities. I welcome your comments.