Can we afford old age?
Assuming that science indeed offers us the possibility of significant life extension, can society afford it? We list here some of the key challenges currently facing our aging society in the United States.13 By understanding the major challenges facing the richest nation on Earth today, we can start to appreciate the numerous economic, social, and moral burdens posed by a much older society, especially one in which many people live beyond 100.
- Long-term care financing deficit—The current U.S. system of paying for long-term care is mired in inconsistent regulations and legislation that fragment health and social services for the elderly. Medicaid is the largest public payer of long-term care services, but individuals qualify only if they are impoverished. Medicare is the second-largest public payer, restricted to those over age 65. It will explode the U.S. federal budget in years to come. The largest source of private financing is out-of-pocket payments by those who need care. The next source is private insurance, which finances less than 7% of long-term care.
- Insufficient resources for assisted living—Assisted living is the fastest-growing segment of the aging services continuum. More than one million people reside in assisted-living environments in the United States. Medicaid currently covers the cost for only 2% of these residents, with the rest paid via insurance, through other programs, or privately. Monthly rates ranging from $2,000 to $4,000 make this type of care unaffordable for the poor and near-poor. Older adults often want to remain in their own homes as long as possible. Funding for home services is fragmented and often inadequate to meet demand.
- Staffing crisis—Service providers for the elderly are experiencing an acute staffing shortage. Nursing homes, assisted-living facilities, and home-health agencies all require qualified staff to provide suitable-quality care and services. Yet they are hampered by a tight labor market, noncompetitive wages, and benefit levels limited by current Medicare and Medicaid reimbursement rates. Negative public perceptions about the field and limited opportunities for career advancement further exacerbate the problem. Accusations of abuse and neglect of the elderly by caregivers are increasing. In addition, geriatrics fellowships for training doctors remain open, while more lucrative fields such as dermatology attract young doctors.
- Liability insurance crisis—State laws provide nursing home residents with a bill of rights, and rightly so. But this has also spawned the growth of law firms specializing in nursing home liability claims, with the danger of excessive litigation, as has happened in medicine generally in the United States. Elder law will become a growing field to protect senior citizens and could impose another large litigation burden on society if unchecked.
- Informal and family care—The typical caregiver for the elderly is a married woman in her mid-40s who works full time, providing care to one person, most likely a relative. These informal caregivers often provide intense care that involves extensive personal and financial sacrifice, as well as physical and emotional stress. The impact on the workplace is enormous, with absenteeism among caregivers on the rise. Corporate America loses more than $11 billion a year because of absenteeism, turnover, and lost productivity among full-time employees who care for elderly people.