The Hill Contributor
Looks like two of our nation’s social insurance programs dodged a bullet in the initial budget released by President Trump last week. (At least for now).
On the heels of the budget release, a recent Politico “Morning Consult” poll found that nearly half of Americans think Social Security and Medicare will require major changes.
Interestingly in that same poll, Americans also feel that the government should be spending more — not less — on these two critical components of economic security in retirement.
Two previous surveys conducted by the National Academy of Social Insurance reached similar findings with regard to Social Security: Large majorities of Americans, both Republicans and Democrats, say they are willing to pay more in taxes to stabilize the system’s finances and improve — not cut — benefits.
If and when Congress and the White House weigh changes to Social Security, Medicare, Medicaid, and the Affordable Care Act, policymakers’ deliberations should be grounded in the best available evidence.
In addition to budgetary considerations, they should take into account the effects that reforms would have on Americans’ health and retirement security in the context of growing economic disparities.
A recent report to the New Leadership and the American People on Social Insurance and Inequality, developed by the nation’s top social insurance experts under the auspices of the nonpartisan National Academy of Social Insurance, provides an evidence-based foundation for these deliberations.
For nearly a century, Social Security and other social insurance programs have been pillars of our economic and health security. Our nation’s social insurance infrastructure protects us against a common set of risks to which we are all potentially exposed — disability, injury at work, illness, unemployment, old age, and the death of a breadwinner. Social insurance programs are, by and large, extremely efficient and effective.
Like any infrastructure, however, they require strengthening and modernization, particularly in light of a changing economy and society. Such modernization needs to address three areas of risk which have become more widespread in recent years: the risk of requiring long-term care; the risk of needing to leave work or reduce work hours to care for a loved one or recover from an illness; and the suite of risks associated with nonstandard work, i.e., work where there is no clearly identifiable employer.
On the rise since the late 1970s, inequality in income and wealth among Americans is today at historically high levels. Compounding this broader economic disparity are persistent racial and ethnic gaps in income and wealth. Together, these have led to significant gaps in retirement wealth among Americans. Social Security has a strong mitigating effect on inequality in the distribution of retirement wealth, and provides a foundation of retirement security to tens of millions who would otherwise have little or nothing on which to retire.
As policymakers weigh Social Security reforms, it will be critically important to take into consideration the growing inequality in the distribution of retirement wealth and the role of Social Security in reducing it.
Medicare serves as a critical protection for millions of seniors and people with disabilities who would otherwise be uninsured and unable to afford even basic healthcare. Although the program faces long-term budgetary challenges stemming from the aging of the population and the continued growth in costs throughout the health care system, Medicare does not face immediate problems or require restructuring.
To strengthen its long-term finances, the most important approach policymakers might take is to continue to pursue measures to rein in the rise in healthcare costs, including the recently accelerated growth in prescription drug costs.
One particularly troubling feature of the U.S. healthcare system is that, despite having by far the highest costs in the world, our health outcomes have long lagged behind those of most other advanced industrial countries.
Part of the problem can be explained by the social determinants of health, which occur upstream of our health system. Medicaid does more than any other public program to improve social determinants of health, and a range of policy options are available to better leverage its potential in this regard.
Our nation’s social insurance infrastructure has stood the test of time. In an era of growing inequality, rapid social change and profound economic uncertainty, it is essential that reform discussions be evidence-based. These programs are too important to Americans’ economic and health security to be restructured on the basis of misinformation or myths.
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William J. Arnone is Chief Executive Officer of the National Academy of Social Insurance and Benjamin W. Veghte is Vice President of Policy. The National Academy of Social Insurance is a nonpartisan organization made up of the nation’s experts on social insurance.