More Economic Relief Being Sought for Seniors

Continuing rise in medical expenses and slow recovery anchor arguments for new payments.

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AARP last week sent a letter to Congressional leaders asking them to approve emergency one-time payments of $250 to seniors. The reasons are plain enough. The recession continues to make things tough for everyone. And, due to low inflation, seniors will not be getting a cost-of-living increase next year (and, likely, in 2011 as well) in Social Security payments. Although overall inflation is modest, healthcare costs continue to rise. This will raise insurance premiums and out-of-pocket costs for people on Medicare. The U.S. House of Representatives has already passed a measure to keep a lid on premiums for the portion of Medicare that covers doctors fees and other non-hospital expenses. But this will only address a small component of the typical senior's healthcare expenses.

[See Double-Digit Medical Expense Trend to Continue.] AARP's pitch is to be expected from an organization based on representing the interests of older consumers. The price tag for the payments is estimated at $8 billion to $14 billion, it says, with the range presumably reflecting income and other eligibility decisions that Congress would make. In the context of a $780-billion overall stimulus program, it's a small number.

The economic recovery is very slow and modest, and appears to be occurring without creating new jobs. So, it's pretty clear there will be a growing line of people and groups making strong cases for more government help. Extended unemployment benefits? Continued subsidies for COBRA health-insurance premiums? Food stamps? Rent subsidies? They all make sense when the holes in the safety net threaten to get larger, not smaller.

"The economic security of millions of Americans, particularly retirees who have significantly less time to make up substantial 401(k) and stock market losses, has drastically changed since 2008," Cristina Martin Firvida, AARP's director of financial security, said in a statement. "It will soon be 2010 and seniors are in need of real relief as they are particularly facing the skyrocketing costs of healthcare, prescription drugs and other necessities."

The U.S. Census Bureau recently reported that seniors fared better last year than other age groups. Their incomes actually increased. Their poverty rate remained unchanged, and was the lowest among major age groups. AARP says the Census poverty measures are flawed and that older people are hurting much more than the official statistics suggest. There is an alternative measure used by the bureau that includes the cost of out-of-pocket medical expenses, which are a big cost item for seniors but much less so for other groups. Once those items are included, the poverty rate for seniors nearly doubles to about 19 percent.

A Census Bureau official says the alternative measure probably does a more accurate job of reflecting real-world poverty conditions for seniors, although he said the year-to-year gains in senior income remain an accurate reading, and thus supports the idea that the safety net has performed better for seniors than other groups. Arloc Sherman, a senior researcher and poverty expert for the Center on Budget and Policy Priorities, notes the alternative measures actually may paint too negative a picture of senior poverty. These measures do not, he said, reflect the fact that many seniors own their own homes and thus have lower housing costs than other groups. "All that aside, many of the elderly certainly live close to the poverty line -- whether just above or just below -- and live on tight budgets," Sherman said.

To date, there has not been an ugly intergenerational component to the economic recovery. We remain a rich country. Helping all needy groups remains a priority. But the national lifeboat is leaking, and there may just not be enough life preservers to go around.

Who should get them?

[See Poor Social Security Knowledge Has Big Costs.]