Proposals to raise the eligibility ages for both Medicare and Social Security keep surfacing in news accounts of the ongoing fiscal-cliff negotiations. The idea has "first blush" appeal—Americans are, on average, living longer and societal longevity gains have added 30 more years of life in just the past century. Among mankind's many achievements, this one deserves far more accolades than it receives.
Averages, however, are just that. And there are few places where not being average exacts a higher toll than in looking at human longevity. Social scientists have assembled an increasingly powerful record that shows longevity gains have not been doled out equally. Well-educated and higher-income people of all races are, indeed, living longer. But despite major gains in treating and even preventing life-shortening diseases, lifespans among Americans with low levels of education and income have been moving in the opposite direction.
"In 2008, U.S. adult men and women with fewer than twelve years of education had life expectancies not much better than those of all adults in the 1950s and 1960s," researchers concluded in a recent study published in the journal Health Affairs. "When race and education are combined, the disparity is even more striking."
[Read: Retirement Plan Tips for 2013.]
"White U.S. men and women with 16 years or more of schooling had life expectancies far greater than black Americans with fewer than 12 years of education—14.2 years more for white men than black men, and 10.3 years more for white women than black women," researchers said. "These gaps have widened over time and have led to at least two 'Americas,' if not multiple others, in terms of life expectancy, demarcated by level of education and racial-group membership."
These are enormous and disturbing gaps, and the age-related eligibility rules of Medicare and Social Security are simply not geared to effectively deal with them. Devising equitable policies would require extensive legislative collaboration and nuanced regulatory policies that are nowhere to be found in the fiscal-cliff negotiations.
Medicare, in particular, is simply not designed to meet the needs of an aging society, argues Michael S. Sparer, chair of the department of Health Policy and Management at Columbia University's Mailman School of Public Health. It is not equipped to help people retain their health but to provide acute care when they become seriously ill. Even then, it does not provide long-term care assistance, which will be needed by a projected 70 percent of our increasingly long-lived population.
The Affordable Care Act sets in motion numerous changes that would make Medicare more helpful to seniors, but most experts agree it falls far short of its potential, particularly in long-term care.
Social Security, for its part, has long recognized income differences in its benefits formulas. It provides lower-income beneficiaries with payments that replace much more of their preretirement incomes than is the case with higher-income retirees.
While lower lifetime incomes often translate into shorter life spans, Social Security's benefits rules need to be changed if the goal is to provide more support for shorter-lived seniors. Under current rules, Social Security reserves its highest payments to someone who defers benefits until age 70. At the program's earlier so-called "full retirement age" (now 66), beneficiaries are no longer penalized for outside earnings as they are if they begin benefits sooner. Early retirement, available as soon as age 62, includes those outside earnings penalties and also provides benefits that are sharply lower than for those who wait.
[Read: Top 10 U.S. Places for Healthcare.]
Despite these inducements to wait, the average age of people beginning Social Security is 63. Reasons for early elections vary, but many of those who do claim do so because they are worn out by years of largely physical labor at relatively low pay. Delaying retirement is just not an option for them.
David John, a Social Security expert with ties to both the Heritage Foundation and Brookings Institute, says he doesn't see the logic or need to raise the program's full retirement age. It's already scheduled to rise to 67 for anyone born in 1960 or later. Instead, he thinks it makes sense to increase the early retirement age from 62 to 65, but only if it's linked to expanding disability supports for people who cannot continue working for physical reasons.
For these (and a lot more) reasons, proposals to change eligibility ages for Medicare and Social Security require the kind of careful and extensive study and discussion that cannot be provided in the pressure-cooker atmosphere of the fiscal-cliff negotiations.