Elderly Americans have fewer friends and family nearby than previous generations, which pushes Medicare and Medicaid costs up. Sen. Mike Lee (R-Utah) wants to know by how much.
“On nearly every measure we examined,” said Lee, the chairman-designate of the Joint Economic Committee (JEC) in Congress, “we found a steady decline over the past two decades in the number of social connections among those near retirement: fewer are married or partnered, fewer have children, fewer live near children, friends or relatives, and fewer are actively involved in a religious congregation.”
His comment came in a Jan. 29, 2019, letter to the heads of the Congressional Budget Office (CBO), and the Centers for Medicare and Medicaid Services (CMS) in the Department of Health and Human Services (HHS).
The declining social connections mean older individuals “will have fewer potential informal care-givers in the future,” with a result that demand for “institutional paid care” will increase, Lee continued in the letter.
The increasing demand for at least partially publicly funded care, in turn, will push taxpayer burdens higher as state and federal budgets expand to fund the growing Medicare and Medicaid spending that inevitably follows, according to Lee.
The problem, the Utah Republican said, is that spending projections for two of the federal government’s largest entitlement programs don’t take such factors into account.
Any change in Medicare costs has huge implications for the rest of the budget because the program consumed $583 billion in 2018, or about 14 percent of all federal spending, according to the Peter G. Petersen Foundation., while Medicaid expenditures topped $576 billion. Only Social Security is bigger than Medicare.
While the CBO currently projects Medicare spending to double in the next decade, even that will underestimate actual demand, according to Lee.
Lee’s letter was prompted by a JEC study made public in January entitled “An Invisible Tsunami: ‘Aging Alone’ and its Effect on Older Americans, Families and Taxpayers.”
The JEC study found that “the share of retiring adults with a relative in their neighborhood (outside their home) fell to 22 percent in 2014 from 34 percent in 1994.
“They also have fewer friends close at hand; the share with a good friend in the neighborhood fell from 69 percent to 59 percent between 1994 and 2012 (the last year for which comparable data are available).
“Finally, retiring adults may have fewer social connections outside their neighborhood than in the past. The share who attend religious services at least three times per month fell from 56 percent to 41 percent between 1994 and 2014.”
The JEC analysis was based on a nationally representative longitudinal database—the Health and Retirement Study—maintained by the University of Michigan and focused on the two decades between 1994 and 2014.
Jillian Wheeler, the JEC’s communications director, told The Epoch Times on Feb. 14 that committee officials will sit down next week with the CBO to discuss Lee’s concerns and possible approaches to incorporating social capital losses in Medicare and Medicaid spending projections.
“CMS has yet to respond, but we expect them to reach out sometime soon. Our next course of action will very much depend on how the conversation goes with CBO, but we haven’t ruled out the possibility of legislation,” Wheeler also said.
The government hasn’t entirely ignored the issues raised by JEC. A pilot program was approved by President Donald Trump’s administration in 2018 that allows Medicaid-approved health insurance plans in North Carolina to identify elderly individuals requiring services beyond those currently offered and guide them to available providers.