Ask Auntie Pinko
March 25, 2004

Dear Auntie Pinko,

I am in my thirties, a single parent, trying to make payments on my house and save for my kids' college tuition. I work a full-time job that has no health insurance, and a part-time job that has health insurance, but it's very expensive. Still, I get by and manage to save a little for the college fund. My worry is this:

I've had good luck in finding jobs where I can get health insurance so far, even when it costs so much (nearly $800 a month for a very basic plan.) But what am I going to do when I get too old to find jobs with health insurance? I read how employers that provide health insurance are more and more reluctant to hire older workers because they push up health insurance bills. Will Medicare be around when I retire? Will it be worth anything? Will I have to work until age eighty to get it?

What's the answer, Auntie Pinko?

Melissa,
Tupelo, MS

Dear Melissa,

Auntie Pinko wishes I had "the answer!" Not only would it help millions of Americans (including Auntie herself) but I could probably get rich as a 'beltway bandit,' consulting at $50,000 a pop to Congressional committees. I'm not sure there is an answer - because I'm not sure we really know enough about the questions yet, in spite of the amount of hot air and smoke that has been emitted on this issue.

Many people (who should really know better, in Auntie's opinion) are quick to write off the American people as unwilling, or unable, to make hard choices - especially choices that involve sacrifices. I think that's both unfair and untrue. When we have the facts clearly before us, Americans can usually make pretty good decisions. The problem arises when the facts are numerous, complex, and contradictory (which is certainly the case with the issue of providing for our older citizens) and/or when it is in the political and economic interests of people with power and money to obscure those facts, and the public officials we elected and trusted to work on our behalf collude with those people.

Sound familiar?

But I've been around long enough to remember when Social Security was a brand new solution, and there wasn't any Medicare yet. The issues were just as complex then, and the special interests just as noisy and powerful. It took a lot of work to make some facts emerge clearly. For what it's worth, I think that those facts are still true today:

• FACT: With the best will in the world to provide for their own long-term futures, a substantial majority of Americans cannot do so without some assistance, whether that assistance is in the form of 'coerced' savings programs like dedicated payroll taxes, subsidized benefits programs, or other means. The "whys" of this fact are numerous and complex, but the fact remains true, and short of Divine intervention, it won't change in the future. Auntie is old enough to remember when "the gummint" didn't provide any safety nets for the elderly, and everyone knew they had the responsibility to look after themselves and their own families. The results were pretty ugly, hopeless, and depressing for a great many Americans then, and there's no reason to assume it would be any different in the future.

• FACT: Aging Americans who do not have the resources to adequately meet their own needs for shelter, health care, and other basic needs constitute a severe challenge to the economy. They stress the ability of their families to ensure education for the younger generations following them, participate in an economy increasingly reliant on luxury consumption, and contribute productively to the workforce as elder-care demands escalate. When their families cannot or will not care for them (or they have no families) they disproportionately drain some of the most expensive types of resources-emergency rooms, nursing care facilities, psychiatric hospitals, etc.

• FACT: Elderly people who have worked hard all their lives and been raised in the American ethic of self-reliance and independence have deep difficulties accepting anything regarded as a "handout." In fact, many would rather suffer miserably and even die of cold, hunger, or neglected medical conditions than "take charity." This fact was critical in determining the structure of the payroll-tax mechanism as a way of funding the retirement-subsidy programs like Social Security and Medicare.

• FACT: Americans have a low tolerance for watching large numbers of elderly people suffer destitution and misery. No matter how logical the arguments of social Darwinism might be, or how attractive the arguments of libertarians and government-bashers, or even the anti-tax reformers' appeals to our cupidity, we will turn to government for remedies. Reliance on voluntary charity and the nonprofits supported by our generosity will never be able to adequately address the problems.

What does this mean to any "answer" we might formulate? It's too early to say, since there are a great many more facts and issues that have arisen in the last fifty years to complicate the debate further. What Auntie suspects is that the answer will not be an "either/or" solution. Here are my predictions, for what they're worth:

• The question of basic income support will be resolved by a combination of raising the retirement age (not unreasonable in the light of how greatly life expectancy and extended quality of life have increased since it was originally pegged at 65) increasing individual contributions through both individual and employer contributions, and some form of (hopefully) mild means-testing that will limit benefits to the wealthiest and best-provided-for seniors.

• The question of health care will escalate to a hellishly painful crisis, and ultimately be resolved by folding senior health care into an across-the-board national solution based on a combination of tax-subsidized basic care (with greater/more comprehensive levels of benefits for children and seniors than the adult population) and private-market supplements partially subsidized through some level of mandatory employer/employee cost sharing, plus sliding-scale subsidies for the indigent and/or unemployed.

• The question of other benefit subsidies (affordable housing, transportation, access to public facilities and services, independent living assistance, and end-of-life care) will be devolved to state level, but ultimately funded by a combination of revenue-sharing from the federal budget and subsidies to the private sector for the infrastructure investments required, combined with incentives for ongoing private sector participation.

This will all play out over the next thirty years as the baby-boom generation hits the retirement curve like a ton of bricks, and becomes increasingly impatient and intolerant of being used as the ball in a partisan Super Bowl. The party that recognizes this and comes to terms with the reality first will end up with the political boodle, but it will be a hard, costly fight in many ways.

Well, there you have it, Melissa. You read it here first, and Auntie's perfectly prepared to be proven wrong. But not very wrong, I bet. Thanks for asking Auntie Pinko!