People are reaching the retirement age of 65 at a rate of almost 10,000 people per day. By 2040 there will be over 79 million people aged 65 and up in the U.S.. It is becoming one of the biggest age groups in today’s society. Many of these seniors do not have the proper resources to take care of their homes or aren’t able to buy healthy food. In some cases, during the winter months, they have to choose between heating their homes and putting food on the table.
With an increasing elderly population in the U.S., there will more seniors living in poverty than ever before. It is important to take a moment to know the facts and to understand the myths concerning low-income seniors living in poverty.
Myth 1: Medicare pays for all of senior health care expenses
Reality: Medicare doesn’t cover all health care costs. Seniors have to pay out of pocket or with expensive supplementary health plans for fees not covered or partially paid for by Medicare. The National Council on Aging reported that a senior in good health pays on average $381/month on health care and seniors in poor health pay on average of $511/month.
Chairman of the House Budget Committee, Paul Ryan, proposed a voucher system be used for Medicare, which would result in a higher cost of health insurance. Under this proposed plan, seniors would spend even more of their income to pay premiums and to purchase basic medical care.
Myth 2: Poor seniors can live well on Social Security
Reality: Social security was never intended to cover all the expense of retirement. The average income on social security is $1,262/month, which equals $15,144/ year. For 1 out of 5 retired seniors in Illinois, social security is the only source of income, according to a report in Progress Illinois. Most seniors live off of social security and many are in debt after meeting essential expenses. What social security doesn’t account for are the growing living costs, which can include housing costs, medical costs, and having to take care of grandchildren. David Cooper, an economic analyst at Economic Policy Institute, wrote, “We can dispel the myth that most seniors are ‘greedy geezers’ with lavish retirements, however, almost half are either in poverty or close to it”.
Myth 3: Poverty isn't really that big of a problem in the U.S.
Reality: As of 2012, the Census Bureau reported there were 47 million people living in poverty according to the official poverty measure. In 2010 the Supplemental Poverty measure was implemented and under this poverty measure, 49.7 million people lived in poverty, which is 2.7 million higher than the official poverty measure. The Supplemental Poverty Measure provides a more comprehensive and more realistic measure that includes government assistance programs as well as burdens such as taxes, work expenses, and out of pocket medical expenses.
The Following story about John, further illustrates the differences between the Official Poverty Measure and the Supplemental Poverty Measure:
"John is a 70 year-old man in Louisville, Kentucky who owns a home with a mortgage and lives alone. In 2011, his sole source of income was $17,500 in Social Security benefits. John had a stroke that year, and incurred substantial out-of-pocket health expenses of $8,000 as a result.
Under the official poverty measure, John does NOT fall under the poverty threshold. In determining John’s poverty status, this measure only looks at John’s income of $17,500, which is higher than the nationwide official poverty threshold of about $10,800 for an elderly individual who lives alone.
Under the supplemental measure, however, John IS counted as being in poverty, mainly because of his high medical expenses. In determining John’s poverty status, this measure subtracts the value of his medical expenses ($8,000) from his income of $17,500, leaving resources of $9,500. The supplemental poverty threshold for a homeowner with a mortgage living alone in Louisville is about $10,700."
Myth 4: Even if you are poor in the U.S. you’re doing pretty well
Reality: In an article published in the New York Times, Annie Lowrey writes about how poor people are better off today, but are far behind. Critics would argue that the poor are better off due to the fact that many seem to have flat screen TV’s, cars, smartphones, and refrigerators. However, although the price for consumer goods have gone down, the price for crucial services such as education, health care, and child care has soared, making it harder for people to escape poverty.
According to the National Council on Aging, 23 million Americans aged 60 and up were financially insecure. Contributing factors include many seniors spending 30% of income on housing as well as high costs for medical expenses. What this means, is that a lot of senior’s income goes towards paying for housing and medical expenses, which contributes to living in poverty.
Myth 5: Everyone qualifies for Medicare at age 65
Reality: Nobody is automatically enrolled into Medicare. There are requirements that need to be met in order to qualify for Medicare. For instance, one must be an American citizen or have been a legal resident for 5 years. There is also a work eligibility, which requires 40 credits. According to the Social Security Website, one must make $1,200 in covered earnings to earn 1 credit or $4,800 to receive the max of 4 credits per year. If these requirements are not met, one can buy into Medicare, but again, it would depend on how many credits have been received.
An example would be to look at the immigrant population. Undocumented immigrants and immigrants who haven't worked long enough to gain credits, will have a hard time receiving Medicare.
Medicare can be confusing as there are many options and deadlines that have to be met, making it difficult for many seniors to use it.
Myth 6: Seniors who are poor must not have good jobs or worked hard during their working lives
Reality: According to a report in the Wall Street Journal, there are 1.31 million people aged 75 and older still working in the U.S. For some it was for the sake of enjoying work, but for the majority it is to have enough money to live. The recession in 2008 took a major toll on seniors as stocks fell, interest rates plummeted, and unexpected medical costs arose, all of which has forced many seniors to go back to work. When seniors have to go back to work, many of them struggle as newer technologies have made it hard for them to get jobs. Often times, they will have to start at bottom and work their way up. The reality is that many elderly workers can’t afford not to work.
H.O.M.E has been dedicated to low-income seniors in the city of Chicago for over 30 years. Take a moment to see how H.O.M.E. has been serving low-income seniors: