Transcript On the Edge: Facing a Challenging and Uncertain Future

“I see one-third of a nation ill-housed, illclad, ill-nourished…
The test of our progress is not whether we
add more to the abundance of those who
have much; it is whether we provide
enough for those who have too little.”
Franklin Roosevelt's second inaugural speech, from
January 20, 1937
CA Senate Aging & Long Term Care Public Hearing
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“Myth of the Golden Years:
Introducing an Alternative to the
Flawed Federal Poverty Line”
State Senate Subcommittee on Aging & Long
Term Care
February 26, 2008
Presentation organized by Susie Smith
Director of California Elder Economic Security Initiative,
Insight Center for Community Economic Development
(www.insightcced.org); [email protected]; (510) 251-2600 x108)
Introduction
• Insight Center for Community Economic
Development is a national non-profit
research, consulting and legal
organization
• Established as a War on Poverty program
in 1969
• Economic security issue focus since the
mid-1990’s
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What is the
“Myth of the Golden Years”?
• “I work hard, pay taxes, the system will
take care of me in my
older years”
• Not true anymore!
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The CA Elder Economic Security
Initiative™ program
• Statewide, data-driven coalition to
raise awareness and shape policy
to help the elderly make ends meet
• Part of a national movement
• Builds on the work of the nationally
acclaimed Family Economic SelfSufficiency Standard Project, and
the California arm of that:
Californians For Economic Security
• Guided by state and region steering
committees
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Long Term Goals & Strategy
• Close the gap between elders’ income and their basic
expenses
• Paradigm shift in policy, advocacy and direct services
for the elderly
• Strategy: coalition-building, education, advocacy and
outreach using a new, research-driven framework of
income adequacy
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California Research Partner:
UCLA Center for Health Policy Research
To understand where we are, we need to
understand where we’ve come from…
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No “Hard” Data on Poverty
I see one-third of a
nation ill-housed,
ill-clad, and illnourished…
Franklin Roosevelt's second
inaugural speech, from
January 20, 1937
http://c250.columbia.edu/dkv/extracts/0711_f
dr_newdeal.html .
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War on Poverty required “hard”
numbers…
• To measure progress
required a standard
methodology
• The number
calculated as poor
had to be high
enough to make
progress possible
• But not so high as to
look bad
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The Federal Poverty Line
• Developed in 1963-1964 by Mollie
Orshansky of the Social Security
Administration
- Department of Agriculture's 1955 Household
Food Consumption Survey = 1/3 of after tax
income spent on food
- Multiplied economy food plan (designed for
temporary or emergency use) x 3 = poverty
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Federal Poverty Line, continued…
• Varied by family size
• Same amount in every state
• Indexed in 1969 to the Consumer Price
Index (CPI)
• Some additional fine tuning subsequently,
but has basically remained the same
See http://aspe.hhs.gov/poverty/papers/hptgssiv.htm
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Measure Now Widely Used
• To track trends
• Evaluate economic
policy
• Discussed in
presidential
campaigns
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Eligibility
• Many public programs now
use the poverty line for
eligibility
• 135% FPL used by
Medicare for low-income
subsidy of Part D
• Some eligibility categories
of Medi-Cal are tied to FPL
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Funding Programs
Older Americans
Act requires priority
to “greatest social
and economic
need” areas …
many states use
FPL in formula
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Implicitly, as a Yardstick
• When evaluating policies, the poverty line
is often used as a reference standard
• Elizabeth Hill recently recommended,
“reducing the grants for SSI/SSP couples
down to 125 percent of the federal poverty
level.”
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Why We Need to Change
• Based on 1950’s consumption patterns
• Incorporates outdated and inadequate
food measure
- Food plan was updated in 1975, 1995, and
2005 but FPL does not reflect those changes
• The food plan chosen was designed only
for short term use
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Why change, continued…
• Does not account for regional differences
in cost of living
• The inflation adjustment (CPI)
- Does not reflect costs experienced by elders
- Does not reflect increased standard of living
• Even Orshansky admitted that her
measure undercounted poverty
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Time to move to the 21st century
• Just because some of
us learned to type on a
manual typewriter
does not mean it is still
an adequate tool
• We need to use
current knowledge and
adopt a modern tool to
measure income
adequacy
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Elder Economic Security
Standard Index
• Based on actual spending by older adults in this
century
• Relies on credible publicly available data
• Is specific to retired older adults
• Provides a measure of income adequacy = the
amount needed to cover basic needs
• Developed by UMass-Boston & Wider
Opportunities for Women, refined in
collaboration with UCLA CHPR
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Cost Components
• Housing, the largest cost
for most
• Medical Care, a major cost
for elders
• Food at home
• Transportation, local
• Miscellaneous, including
telephone, clothing, home
repair
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High Housing Costs Threaten the
Economic Security of Seniors in California
Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When
Income in Retirement Falls Short: Washington, DC. The Elder Standard Index was tabulated by the UCLA Center for Health Policy
Research using the WOW-UMass Gerontology Institute national methodology.
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Elder Economic Security Standard
Index: Santa Clara and Humboldt Counties
SANTA CLARA
Monthly Expenses
Owner w/o
Mortgage
Renter,
One
Bedroom
HUMBOLDT
Owner w/o
Mortgage
Renter,
One
Bedroom
Housing
$421
$1,068
$368
$551
Food
$308
$308
$231
$231
Transportation
$202
$202
$202
$202
Health Care = Good
$293
$293
$378
$378
Miscellaneous @ 20%
$245
$245
$236
$236
Elder Standard Index
Per Month
$1,469
$2,116
$1,415
Elder Standard Index
Per Year
$17,632
$25,391
$16,985
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$1,598
$19,176
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Income and Expenses:
Gaps in California
Elder Standard Indexes and Benchmark Annual Incomes for Single Elders in Los Angeles County, 2007
Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When
Income in Retirement Falls Short: Washington, DC. The Elder Standard Index was tabulated by the UCLA Center for Health Policy
Research using the WOW-UMass Gerontology Institute national methodology.
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Our National Partner: Wider
Opportunities for Women (WOW)
• A national non-profit advocacy organization celebrating
over 40 years of helping women and their families
achieve economic independence and equality of
opportunity. www.wowonline.org
• Directs the National Elder Economic Security Initiative™
program
• Expanding across the country w/nat’l database
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Who comprises the
National Advisory Board?
National Research Partner: Gerontology Institute at UMass Boston
• State EESI partners
• AARP
• National Council on the Aging
• The Urban Institute Income Benefit and Policy Center
• National Committee to Preserve Social Security and Medicare
• Women's Institute for a Secure Retirement
• Health Policy Institute at Georgetown Public Policy Institute
• Institute for Women’s Policy Research
• ACCRA-the Council for Community and Economic Research
• The National Council of La Raza
• The National Caucus and Center on Black Aged, Inc.
• The Pension Rights Center
• National Academy of Social Insurance
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Where is the Elder Economic
Security Initiative?
Blue: Current State Partners
Green: Potential Targets for Future State Partners
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What is happening in other states?
Massachusetts
- Raised asset limits on Medicaid
from $2,000 to $10,000
- Governor to reawaken the
statewide LTC commission
- Outreach to seniors – “Its not your
fault!”
- Undersecretary of Elder Affairs
has agreed to formally encourage
service providers to use Elder
Standard Index in planning and
evaluation
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Other states, continued…
Illinois
- Support home/community-based LTC programs
Pennsylvania
- Spend down on Medicaid
- Director of the Interagency Council on LTC
- Merge aging and LTC state offices
- Use the Elder Standard Index in Area Agency on
Aging strategic plans
Wisconsin
- Senior Care Program – prescription drug
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Long Term National Policy Goals
1) Shift the national, state, and local
dialogue from one the that focuses on
elder poverty to a discussion on elder
economic security.
2) Promote equitable and rational policy
by using the Index in evaluating
existing policies and developing new
policies for older adults.
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National Policy Agenda
1)
Income and Health Security for All
-
Support employer-based retirement savings programs
including pensions
-
Social Security – leveling the playing field between
men and women: crediting caregiving
-
Revise asset limits and income eligibility levels to
reflect the findings of the Elder Standard Index (e.g.
FS, LIS, HEAP)
-
Support the creation of affordable housing for seniors
and housing supports
-
Support traditional Medicare
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National Policy Agenda,
continued…
2) Home and Community-based Long-term care
- Universal social long-term care insurance
of home and community-based
LTC services
3) Supporting Older Workers
- Eliminate penalties to working
longer at fewer hours
- Support Medicare as first payer for workers 65+
- Support workplace accommodations for older workers
- Create education and training opportunities for older workers
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California Policy Recommendations:
Short-term
1) Encourage local and statewide use of Elder Standard
Index by other policymakers, CDA, public agencies, nonprofit organizations, and foundations
2) Promote savings and asset accumulation opportunities for
younger workers
3) Allocate funds to support the annual
update of the Elder Economic Security
Standard Index
4) Support and expand outreach efforts
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Benefit Cliffs:
The Result of Outdated Policies
Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When
Income in Retirement Falls Short: Washington, DC.
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Policy Recommendations,
Long-term
1) Adopt the Elder Economic Security Standard to
evaluate the impact of existing policies and measure
economic needs of older adults California
2) Pass a resolution to urge the federal government to
recognize the flaws of FPL & adopt the Elder Standard
as a new, improved way to measure and address income
adequacy for older adults
3) Expand the allocation of low-income housing tax
credits for elders and increase the supply of
affordable, supportive housing
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When Retirement Income Falls Short:
The Impact of California Support Programs
Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When
Income in Retirement Falls Short: Washington, DC
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Building the Movement:
Californians For Economic Security
1. Expand local and statewide coalitions
2. Unite family and elder economic security
coalitions
3. Expand research
4. Convene leaders in housing, food,
health, and aging to develop next set of
policy proposals
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Contact Information
For more information on Cal-EESI, contact:
Susie Smith, Director California Elder Economic Security Initiative
Insight Center for Community Economic Development
Oakland, CA
[email protected]; (510) 251-2600 x108
For more information on the National EESI Program, contact:
Ramsey Alwin, Director of the National Elder Economic Security Initiative™ program
Wider Opportunities for Women
Washington, DC
[email protected]; (202) 464-1596 x107
For more information on the methodology, contact Steve Wallace
Steve Wallace, Professor and Associate Director Center for Health Policy Research
UCLA Center for Health Policy Research
Los Angeles, CA
[email protected]; (310) 794-0910
Statewide average and county-specific Elder Economic Security Standard Index can found at:
1) www.insightcced.org
2) www.healthpolicy.ucla.edu/ elder_index08feb.htm
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Acknowledgements
Insight Center for Community Economic Development would like to thank the
California Elder Economic Security Initiative™ Steering Committee for their
tireless support of older adults in California
The California Elder Economic Security Initiative is funded through the
generous support of the following organizations:
Area Agency on Aging of the County of Los Angeles, The California
Endowment, California Community Foundation, California Policy Research
Center, The California Wellness Foundation, City of Los Angeles Department
of Aging, Council on Aging - Silicon Valley, Health Trust, Wider Opportunities
for Women, UC-Program on Access to Care, United Way of the Bay Area, and
Y & H Soda Foundation.
The national project is funded with generous support from the Retirement
Research Foundation and The Atlantic Philanthropies.
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