Two weeks ago, a USA Today story revealed that the U.S. has the fourth most uneven income distribution in the developed world. We rank just behind Chile, Mexico, and Turkey with one of the developed world's largest income gaps. While income inequality in America is not news, few are paying attention to how income inequality impacts America's older adults.
A recent report from the Kaiser Family Foundation begins to shine a light on what inequality looks like among older adults. According to the report, while 25 percent of Medicare beneficiaries have incomes below $14,400 (the federal poverty level is $11,670) and half have incomes below $23,500, 1 percent have incomes exceeding $171,650. And, while eight percent of Medicare beneficiaries had no savings or were in debt, and 25 percent had savings below $11,300 (per capita income and savings rates were even lower for both black and Hispanic beneficiaries), five percent of beneficiaries had more than $1.1 million in savings.
Unfortunately, for Medicare beneficiaries who have little savings, their financial insecurity is unlikely to improve. The Kaiser study showed that in the future income inequality may become even more pronounced, even if public programs like Medicare, Social Security, Medicaid or Supplemental Security Income are spared from cuts.
These numbers stand in contrast to perceptions among policymakers that seniors as a group are getting by just fine and that now is a time to begin cutting the public programs they rely on. While Kaiser's report demonstrates that some seniors (a smaller and smaller group) are doing quite well, the report also shows that a much larger number struggle to get by and that the gap between these two groups is only growing.
A senior's life at the bottom of the income scale is a difficult and silent struggle to make ends meet. Living on $14,400 or less a year means daily decisions about whether to eat or pay a utility bill, whether to pay for a prescription or for gas needed to go to a doctor's visit. The Kaiser Family Foundation's video, "Old and Poor: America's Forgotten," puts a face on this struggle. Seniors in Baltimore, West Virginia and Los Angeles tell their stories and provide a context for discussions about any policy changes that might address income inequality as it affects our aging nation.
These stories and the Kaiser report confirm what we encounter in our work every day -- more and more seniors are having trouble making ends meet. Proposals to increase Medicare cost sharing , to use a Chained CPI for Social Security or to block grant Medicaid, will only make life harder for those seniors with little income or savings.
We need to talk about senior poverty. And we need to develop policies that acknowledge that income inequality exists and reflect the economic reality facing older adults today. Now is not the time to cut the very programs that provide economic security to our country's seniors. Instead, we must update and modernize those programs to ensure they continue to provide our seniors the support they need.