Term Paper on "Future Implications of Improving Health"

Term Paper 15 pages (4236 words) Sources: 10 Style: APA

[EXCERPT] . . . .

Future Implications of Improving Health

In the past few decades, technological progress and economic growth have led to improvements in human health, causing a rise in the average age of the population as well as population growth. The rapid growth of the elderly in the population has emerged as a significant concern among taxpayers, elderly people, and government agencies alike, as social security and pension plans are no longer consuming the majority of incurred elderly debt. In the past, social security and pension plans were devised at a time when relatively few people reached the age of sixty-five, and these plans covered their support. However, this is no longer the case, as younger people are now required to pay the costs of their support, since most elderly people are retired and dependant on government assistance programs. As a result, many government agencies have called for reforms in their programs, attempting to find a medium between the growing aging population and the cost to support them. This paper will discuss the dilemma faced by the elderly population and the young taxpayers responsible for their support, offering comparisons and contrasts of the available literature. It will also discuss how the issue applies to my employment, and provide an analysis of my questions that were left unanswered by the literature.

Statistics predict that in the next 50 years, the proportion of people over age 65 will more than double, growing from 6.8 per cent of the global population to 15.1 per cent (UNFPA, 1998). In Western Europe, it is estimated that more than one person in four (27.5 per cent) will be over 65 in 2050. As a result, there will be many more people over 65 in 2050 than ever before; 1.42 billion, according to the United Nations' projections, or three and a half times as many as today, and over 10 times as many as in 1950 (UNFPA, 1998). Unfortunately, this growth will severely test the ability of families and societies to provide the financial, medical and social support the elderly population will need. Historically, children took care of their parents as they grew older, and often the parents even lived with them until their death. However, this has changed in the past few years due to a number of reasons. For example, relations between adult children and their parents are becoming more varied with increasing urbanization, mobility and incomes; and older people are increasingly choosing greater independence in living arrangements (UNFPA, 1998). As a result, a growing number of middle-aged people do not expect to live with or to be supported by their children when they are older.

In the next generation there will be fewer children to support their elderly parents and smaller extended family networks. Families will have more older members, and many will have both older and younger dependants at the same time.

As a result, formal and informal support systems for the elderly are becoming more important as the role of families decreases. Unfortunately, government programs responsible for supporting the growing number of elderly people have not been able to keep up with the growth of the aging population. The national government insurance program that covers nearly 41 million seniors and disabled citizens, Medicare, has raised many substantial concerns concerning its' state of financial crisis. The future obligations of young Americans as taxpayers will likely increase with the reduction of available Medicare funds; in just 10 years, one of the program's two trust funds will be paying out more than it takes in. Research indicates that Medicare could consume as much as 70% of all federal income tax revenue (National Center for Policy Analysis, 2004). Americans' obligation today as taxpayers is more than five times the $9.5 trillion they owe on mortgages, car loans, credit cards and other personal debt. This hidden debt equals $473,456 per household, dwarfing the $84,454 each household owes in personal debt (National Center for policy Analysis, 2004). A USA TODAY analysis found that the nation's hidden debt, a $53 trillion is what federal, state and local governments need immediately, beyond the $3 trillion in taxes collected last year, to repay debts and honor future benefits promised under Medicare, Social Security and government pensions (National Center for policy Analysis, 2004). That already-enormous amount also grows by more than $1 trillion every year.

Historical Background of Government Assistance Programs for the Elderly

The state-sponsored Medicaid program of today has origins that date as far back as 1945, when the idea of a state-sponsored health insurance program was initially proposed by President Truman. This concept did not become a reality until 1965, when it was authorized under Title XIX of the Social Security Act, which was enacted to provide health care services to low-income children deprived of parental support, their caretaker relatives, the elderly, the blind, and individuals with disabilities. Since then, there have been a number of key political, legislative and economic events which have impacted the Medicaid system over the last thirty years. A number of changes have been made to the Medicaid system over the years, and the agencies charged with implementing those programs have changed as well. These events have helped shape the current status of the state-sponsored Medicaid system.

After the Medicaid program was authorized in 1965, two other events quickly followed. In 1967, the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) comprehensive health services benefit for all Medicaid children under age 21 was established (U.S. Department of Health and Human Services, 2006). A few years later, in 1972, the Federal Supplemental Income program (SSI) was created, federalizing the existing State cash assistance programs for aged and disabled persons. Nearly all beneficiaries of SSI also received Medicaid coverage, and the outreach efforts undertaken with the implementation of SSI resulted in significant increases in enrollment among the aged and disabled in Medicaid, averaging nearly 8% per year during the period (Klemm, 2000). The 1972 amendments to the SSI program also added as optional Medicaid covered services intermediate care facilities for the mentally retarded (ICF/MR) and inpatient psychiatric services for beneficiaries under age 22 (Klemm, 2000). Residents of these facilities, and the disabled in general, became the most expensive groups in Medicaid, a factor that eventually led to other Medicaid reforms.

In 1996 and 1997, Congress passed two pieces of legislation that had significant impact on Medicaid; the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 effectively decoupled Medicaid from cash assistance for low-income families by replacing AFDC with a block grant program known as Temporary Assistance for Needy Families (Klemm, 2000). The welfare link to Medicaid was severed and enrollment of Medicaid was no longer automatic with the receipt of welfare cash assistance (U.S. Department of Health and Human Services, 2006). Families meeting the requirements for assistance under the old AFDC rules continued to be eligible for Medicaid, although there is evidence that many such families did not retain their Medicaid benefits. The growth of Medicaid during the first 6 years of its existence is typical of most State-based programs at their inception, a result of the economic pattern at their time of creation. Depending on the economic situation of each individual State, a number of States implemented programs immediately while others needed several years to get underway. By 1971, annual spending had reached 86.5 billion, and enrollment had topped 16 million; initial projections of Medicaid forecast less than one-half of this spending level, primarily because analysts greatly underestimated the extent to which States would offer coverage of optional eligibility groups -- especially the medically needy -- and optional services (Klemm, 2000).

These earlier acts affected the general population; the acts that came later have had the most significant impacts on the growing elderly population. The elderly population was most affected by the changes in medical care coverage and prescription drugs. The available research indicates that these changes in coverage and support are not enough to meet the predicted medical debt of the elderly in the next few years to come. This growing debt is illustrated in the predicted problems with even the reforms in Medicare. For example, the Medicare Prescription Drug Improvement and Modernization Act of 2003 created a new and complex universal prescription drug entitlement. However, according to the latest Medicare trustees report, the Medicare hospital insurance program will be exhausted in 2019, seven years earlier than the past year's estimate. The new drug entitlement will add $8.1 trillion to the program's long-term unfunded liabilities over the next 75 years. As a result, Medicare's massive costs will result in huge tax increases for young taxpayers. It is estimated that the Medicare program will consume 24% of all federal income taxes by 2019 and an additional 51% of all federal income taxes by 2042 (National Center for Policy Analysis, 2004).

The tremendous growth experienced in the first decade during which the state-sponsored Medicaid program was initiated led Congress and the Reagan Administration to consider ways to cut down on Medicaid spending. Although administration attempts to place caps… READ MORE

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