Analysis of the Pension Situation in the United States - Research Paper Example

?Running Head: CONSEQUENCES OF THE OLDER POPULATION IN USA This is a study about consequences of the older population in the USA. The study will explore the possible burden on the younger population to compensate for the cost of health care, lost income, and housing needs. In addition, the study will discuss the issue of a lesser population contributing to social security in order to support a larger population. The study will further addresspolitical embattlement in relation to programs for the aged as well as the options to relieve the potential burden. The United States of America financesthe provision of services such as healthcare, housing, and social security. Most of these funds go to the older population, who do not comprise the working population since they are beyond retirement age. While the population of older persons benefit from the government expenditure, the younger population is disadvantaged. This is because their contribution to the social security and healthcare services is much higher than that of the older population. The aging population in USA therefore affects the cost of healthcare and social security services. With people above the age of sixty-five years being prevalent in the population, policies are implemented in order to cater for the needs of the aged. These policies burden the younger population, as the young workforce is compelled to dig deeper in their pockets to ensure that the aged are provided for. Since the older population does not have an income, the burden of providing for the aged shifts to the young members of the society who are working and economically productive (Kevin and Wan, 2008 p95). An aging population in the United States has great implications on the delivery of healthcare services. As people age, they are likely to suffer from chronic illnesses. With the shortage of health care workers such as nurses to take care for the old, this burden is likely to fall on the young members of the society and especially the family members of the sick individual. Chronic illnesses are always associated with old age disability. This means that there will be the need to come up with long-term Medicare services such as personal care, nursing homes, adult day care, and homes for the aged (Wiener and Tilly, 2011). The services to cater for the aged are financed by the younger working population, since the old are not in a position to contribute towards the expenditure needed by the government to fund healthcare. The provision of healthcare mainly targets the aged, with policy implementation mainly focusing on the older population. Through taxation, the younger population bears the burden of compensating for the money needed to cater for the health of the old(Kevin and Wan, 2008 p96). Disability in old age is yet another problem that causes burdens to the younger population. The high numbers of older people in the society means that most of them are disabled and therefore they cannot contribute towards economic activities that benefit the country. The burden of having to work and bring economic growth passes on to the younger population. As a result, the younger population work for long hours and yet they do not enjoy similar benefits accorded to the aged. The government has some provisions for the aged population, which do not consider the young. The younger population works to supplement the government’s expenditure on programs that tend to favor the aged (Wiener and Tilly, 2011). Unlike the old, the younger population spends more money on healthcare. This is because there are no strong health policies that support the young to enhance their access to healthcare. The cost of healthcare in the United States is considerably high. High cost of health services means that people will have to spend more money on Medicare. The government subsidizes the older population and this makes their access to health easier than the younger population(Martha and Virpi, 2011 p325). In order to cover up for the finances used to fund the services that favor the old, the government charges high medical fees to the young.Since healthcare needs of the aged are more than those of the young, the government sponsors the costs of health for the aged. The older population purchases drugs at a much lower cost as compared to the younger population. The government caters for nursing and other healthcare services for the old, while Medicare for the young is not catered for and it is expensive. This burdens the young, as they spend much of what they earn for the sake of the old when it comes to healthcare. Income is lost,as the population grows old. There is potential for decline in income when people grow much older, since they are not entitled to a salary. Upon retirement, most old people in the United States do not engage in post-retirement vocations. Workforce mainly comprises of the young because they are the most productive (Wiener and Tilly, 2011). This means that there will be high dependence on the retirement benefits as well as welfare schemes designed by the government to cater for the aged.There is overreliance on the younger population as the welfare needs of old people have to be looked into. Most of the aged persons have lower income because they fail to save while working. As one grows older, the ability to save diminishes. In America the aged are uncertain about the future and as a result, they fear to invest or to save. Besides, the awareness that the government will provide for them once they grow older makes them reluctant to engage in investment activities. The young bears the burden of the old failing to invest in cases whereby children are forced to provide for their aged parents. Reluctance of the old to invest when they are working greatly affects the young as they cater for the government provisions to the aged. Consumption patterns change, as people grow older. Old people are fond of spending much of what they earned during their working years on housing. The housing needs of the older people are therefore high and they greatly affect the younger population. Demand for housing is high among the old as they focus on purchasing expensive and classy houses. This means that the old will have little money to spend upon retirement and this is an extra obligation to the government to provide for the needs of the older generation. As a result, the young are left outas more programs are designed to supplement the income of the aged since much of it has been used to for housing(Kevin and Wan, 2008 p96). Retirement benefits and pensions are partof social security, often funded through old age programmes. All the aged persons are entitled to income in form of pension once they retire. Government revenue to cater for the pensions and retirement benefits is usually from income tax. The burden of taxation affects the younger population since they are the majority of working population. With the rise in cost of pension, it means that the young will have to part with much of their earnings in form of taxes. As a result, income of the younger population becomes lower than that of the older population yet the old need to spend less as compared to the young (Wiener and Tilly, 2011). Nursing homes designed for the aged are very common in America. Fewer savings by the old means that they will quickly exhaust their income and be forced to enroll in nursing homes(Martha and Virpi, 2011 p326). Medicaid services areprovided in nursing homes as well as through home health payments; this accounts for more expenditure than costs on Medicare. For home health services, the young family members of the sick old persons spend their time providing home based care. This means they will not be able to attend to some of their duties. The younger population is highly burdened by the provision of Medicaid since there are high costs that are involved to finance the provision of care in nursing homes and home health payments. Thus, instead of directing the finances in projects that would benefit the young, the focus is on caring for the old. Home health payments also affect the young because the old people require attention and care while at home; which only the young can provide. The government subsidizes houses for the aged in order to ensure that senior citizens have access to affordable and decent housing. There are widespread efforts to ensure that the aged are capable of living in houses where they are comfortable, as they demand. The housing needs of the aged are a government consideration because failing to provide good housing to the old could adversely affect their health. In order to cater for the housing needs of the elderly, the younger population supplements government expenditure (Martha and Virpi, 2011 p326). Political embattlement related to programs for the aged Programs designed for the aged population in the United States are subject to differing political ideals. Politics play a role in determining services such as Medicaid, Medicare, Welfare for the aged and Supplemental security income. Politics also shape programs regarding disability. There have been debates regarding how the programs should be provided, particularly focusing on who to give the powers to provide the services. Political differences have arisen as to whether social security should be privatized or left to the public sector. Those who support the privatization of this program argue that making it private will enable the retirees to invest their money in ventures generate high returns than the government trust funds. On the other hand, there are those who oppose the idea of privatizing this program for the reason investing is risky and the retirees could easily lose their money by making wrong investment decisions (Wiener and Tilly, 2011). There have been political differences between the democrats and the republicans regarding the issue of Medicaid. Democrats are for the idea that the federal government increases spending on Medicare for the aged since the programs assists in supporting the senior citizens. On the other hand, the republicans are for the idea that government should stop funding the program. The argument raised by the republicans is that the program is not capable of sustaining itself in the end. Republicans are not in support of supplemental security income as the democrats do. The political differences between the two political parties is because the people aged sixty five and above cost the government a lot in programs that supplement pension schemes(Kevin and Wan, 2008 p96). The republicans were for the idea of privatizing Medicare, a plan opposed by the democrats. Republicans argue that by making Medicare private, the quality of health care would be improved, as the private sector will be more efficient and effective in dealing with issues of Medicare among the aged.Democrat politicians are not for the idea of privatizing Medicare for the aged because of the reason that doing so will lead to poor service provision and exploitation of the senior citizens(Palamino, 2011). The older Americans act The older American’s act aimed at enabling the senior citizens of the United States to attain their social economic needs. The act particularly gave attention to individuals with low incomes. With the enactment of the act, it would be easier to avoid institutionalizing the aged. Under the act, the services provided enable the older members of the society to be independent and maintain their dignity. The act that was passed by the federal government has established programs for the aged to be implemented by each of the states, with the federal government funding the programs. In each of the states, there is a department of agingthat serves to implement the provisions laid down by the act. The states also provide the additional funds t needed to cater for the senior citizens(Palamino, 2011). The act was designed to provide income to the aged after they retire, enable them to access physical and mental health as well provide housing which was suitable to their special needs. The act also gave older people the opportunity to pursue cultural and educational training as well as recreational facilities. Senior citizens were protected against abuse, neglect and discrimination under the act. The older American act has faced great political criticism with some politicians arguing that it was designed to favor some political groups such as the old. The republicans have worked towards the abolishment of the act for the reason that the aged should not be provided for by the state but they should instead take responsibility of caring for themselves (Palamino, 2011). Options to relieve the potential burden The potentialburden of the older population to the younger population should be addressed. The young population undergoes problems such as increased taxes to cater for the needs of the older population. Several measures can be undertaken to address the burden. The government should invest the contributions of the older population during their working years. By doing this, the old population will have enough to spend once they retire and hence reliance on the young population will reduce. Social security reforms should also target the younger population. This way, the younger population will benefit from similar services as those provide by the state to the old. Reforms should not only benefit the old while exploiting the young, since the young population is very crucial in the economy of the country. Taxes levied on the younger population should be reduced. Instead, there should be alternative ways of raising funds to cater for the needs of the aged. The older population should not be fully assisted in all aspects of welfare; the government should cut down the amount of expenditure on the old. This can be done by allowing the older members of the society to contribute towards the provision of services that are aimed at helping them. When subsidizing services such as healthcare, the cost should be equally shared between the beneficiary and the government. Measures should be put in place to ensure that the aging population is aware of the benefits of saving their income during their working years. To relieve the burden of overreliance on the younger population to take care of sick elderly individuals, there should be institutions for the aged, which provide care services to the older population. In conclusion, the older population burdens the younger population largely. The younger population finances most programs aimed at supporting the old. There are high taxes levied on the young who are working. The government has put in place a variety of programs to cater for the health and the welfare of the old. References: Kevin, K and Wan, H. (2008). An Aging World: U.S. Census Bureau, International PopulationReports. Government Printing Office. Martha, D and Virpi, T.(2007).Home care for ageing populations. Edward Elgar Publishing Limited. Palamino, J.N. (2011).The Older Americans ACT: Provisions, Funding, and Programs.Nova Science Pub Inc. Wiener, J, and Tilly, J. (2011). Population ageing in the United States of America: implications for public programmes. Retrieved 9 November ije.oxfordjournals.org/content/31/4/776.full Read More