CA Senate Aging & Long Term Care Public Hearing2/26/08Page No. 1 “I see one-third of a nation ill-housed, ill- clad, ill-nourished… The test of our progress

CA Senate Aging & Long Term Care Public Hearing 2/26/08 Page No. 1

“I see one-third of a nation ill-housed, ill-clad, ill-nourished…

The test of our progress is not whether we

add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

Franklin Roosevelt's second inaugural speech, from January 20, 1937

State Senate Subcommittee on Aging & Long Term Care

February 26, 2008

Presentation organized by Susie SmithDirector of California Elder Economic Security Initiative, Insight Center for Community Economic Development (www.insightcced.org); [email protected]; (510) 251-2600 x108)

“Myth of the Golden Years: Introducing an Alternative to the Flawed Federal Poverty Line”


Introduction

• Insight Center for Community Economic Development is a national non-profit research, consulting and legal organization

• Established as a War on Poverty program in 1969

• Economic security issue focus since the mid-1990’s


• “I work hard, pay taxes, the system will take care of me in my older years”

• Not true anymore!

What is the “Myth of the Golden Years”?


• Statewide, data-driven coalition to raise awareness and shape policy to help the elderly make ends meet

• Part of a national movement

• Builds on the work of the nationally acclaimed Family Economic Self-Sufficiency Standard Project, and the California arm of that: Californians For Economic Security

• Guided by state and region steering committees

The CA Elder Economic Security Initiative™ program


Long Term Goals & Strategy• Close the gap between elders’ income and their basic

expenses• Paradigm shift in policy, advocacy and direct services

for the elderly • Strategy: coalition-building, education, advocacy and

outreach using a new, research-driven framework of income adequacy


California Research Partner: UCLA Center for Health Policy Research

To understand where we are, we need to understand where we’ve come from…


No “Hard” Data on PovertyNo “Hard” Data on Poverty

I see one-third of a nation ill-housed, ill-clad, and ill-nourished…

Franklin Roosevelt's second inaugural speech, from January 20, 1937 http://c250.columbia.edu/dkv/extracts/0711_fdr_newdeal.html .


War on PovertyWar on Poverty required “hard” required “hard” numbers…numbers…

• To measure progress required a standard methodology

• The number calculated as poor had to be high enough to make progress possible

• But not so high as to look bad


The Federal Poverty Line

• Developed in 1963-1964 by Mollie Orshansky of the Social Security Administration- Department of Agriculture's 1955 Household

Food Consumption Survey = 1/3 of after tax income spent on food

- Multiplied economy food plan (designed for temporary or emergency use) x 3 = poverty


Federal Poverty Line, continued…

• Varied by family size• Same amount in every state• Indexed in 1969 to the Consumer Price

Index (CPI)• Some additional fine tuning subsequently,

but has basically remained the sameSee http://aspe.hhs.gov/poverty/papers/hptgssiv.htm


Measure Now Widely Used

• To track trends• Evaluate economic

policy• Discussed in

presidential campaigns


Eligibility

• Many public programs now use the poverty line for eligibility

• 135% FPL used by Medicare for low-income subsidy of Part D

• Some eligibility categories of Medi-Cal are tied to FPL


Funding Programs

Older Americans Act requires priority to “greatest social and economic need” areas … many states use FPL in formula


Implicitly, as a Yardstick

• When evaluating policies, the poverty line is often used as a reference standard

• Elizabeth Hill recently recommended, “reducing the grants for SSI/SSP couples down to 125 percent of the federal poverty level.”


Why We Need to Change

• Based on 1950’s consumption patterns• Incorporates outdated and inadequate

food measure- Food plan was updated in 1975, 1995, and

2005 but FPL does not reflect those changes

• The food plan chosen was designed only for short term use


Why change, continued…

• Does not account for regional differences in cost of living

• The inflation adjustment (CPI)- Does not reflect costs experienced by elders- Does not reflect increased standard of living

• Even Orshansky admitted that her measure undercounted poverty


Time to move to the 21st century

• Just because some of us learned to type on a manual typewriter does not mean it is still an adequate tool

• We need to use current knowledge and adopt a modern tool to measure income adequacy


Elder Economic Security Standard Index• Based on actual spending by older adults in this

century• Relies on credible publicly available data• Is specific to retired older adults• Provides a measure of income adequacy = the

amount needed to cover basic needs• Developed by UMass-Boston & Wider

Opportunities for Women, refined in collaboration with UCLA CHPR


Cost Components

• Housing, the largest cost for most

• Medical Care, a major cost for elders

• Food at home• Transportation, local• Miscellaneous, including

telephone, clothing, home repair


High Housing Costs Threaten the Economic Security of Seniors in California

Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC. The Elder Standard Index was tabulated by the UCLA Center for Health Policy Research using the WOW-UMass Gerontology Institute national methodology.


Elder Economic Security Standard Index: Santa Clara and Humboldt Counties

Monthly Expenses

SANTA CLARA HUMBOLDT

Owner w/o Mortgage

Renter, One

BedroomOwner w/o Mortgage

Renter, One

Bedroom

Housing $421 $1,068 $368 $551

Food $308 $308 $231 $231

Transportation $202 $202 $202 $202

Health Care = Good $293 $293 $378 $378

Miscellaneous @ 20% $245 $245 $236 $236

Elder Standard Index Per Month

$1,469 $2,116 $1,415 $1,598

Elder Standard IndexPer Year

$17,632 $25,391 $16,985 $19,176


Income and Expenses: Gaps in California

Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC. The Elder Standard Index was tabulated by the UCLA Center for Health Policy Research using the WOW-UMass Gerontology Institute national methodology.

Elder Standard Indexes and Benchmark Annual Incomes for Single Elders in Los Angeles County, 2007


Our National Partner: Wider Opportunities for Women (WOW) • A national non-profit advocacy organization celebrating

over 40 years of helping women and their families achieve economic independence and equality of opportunity. www.wowonline.org

• Directs the National Elder Economic Security Initiative™ program

• Expanding across the country w/nat’l database


National Research Partner: Gerontology Institute at UMass Boston • State EESI partners• AARP• National Council on the Aging• The Urban Institute Income Benefit and Policy Center• National Committee to Preserve Social Security and Medicare• Women's Institute for a Secure Retirement• Health Policy Institute at Georgetown Public Policy Institute• Institute for Women’s Policy Research • ACCRA-the Council for Community and Economic Research• The National Council of La Raza • The National Caucus and Center on Black Aged, Inc. • The Pension Rights Center• National Academy of Social Insurance

Who comprises the National Advisory Board?


Where is the Elder Economic Security Initiative?

Blue: Current State Partners

Green: Potential Targets for Future State Partners


What is happening in other states?

Massachusetts - Raised asset limits on Medicaid from

$2,000 to $10,000- Governor to reawaken the statewide

LTC commission- Outreach to seniors – “Its not your

fault!”- Undersecretary of Elder Affairs has

agreed to formally encourage service providers to use Elder Standard Index in planning and evaluation


Other states, continued…Illinois

- Support home/community-based LTC programs

Pennsylvania- Spend down on Medicaid- Director of the Interagency Council on LTC- Merge aging and LTC state offices- Use the Elder Standard Index in Area Agency on

Aging strategic plans

Wisconsin- Senior Care Program – prescription drug


Long Term National Policy Goals

1) Shift the national, state, and local dialogue from one the that focuses on elder poverty to a discussion on elder economic security.

2) Promote equitable and rational policy by using the Index in evaluating existing policies and developing new policies for older adults.


National Policy Agenda1) Income and Health Security for All

- Support employer-based retirement savings programs including pensions

- Social Security – leveling the playing field between men and women: crediting caregiving

- Revise asset limits and income eligibility levels to reflect the findings of the Elder Standard Index (e.g. FS, LIS, HEAP)

- Support the creation of affordable housing for seniors and housing supports

- Support traditional Medicare


National Policy Agenda, continued…

2) Home and Community-based Long-term care- Universal social long-term care insurance

of home and community-based LTC services

3) Supporting Older Workers- Eliminate penalties to working

longer at fewer hours- Support Medicare as first payer for workers 65+- Support workplace accommodations for older workers- Create education and training opportunities for older workers


1) Encourage local and statewide use of Elder Standard Index by other policymakers, CDA, public agencies, non-profit organizations, and foundations

2) Promote savings and asset accumulation opportunities for younger workers

3) Allocate funds to support the annual update of the Elder Economic Security Standard Index

4) Support and expand outreach efforts

California Policy Recommendations:Short-term


Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC.

Benefit Cliffs: The Result of Outdated Policies


1) Adopt the Elder Economic Security Standard to evaluate the impact of existing policies and measure economic needs of older adults California

2) Pass a resolution to urge the federal government to recognize the flaws of FPL & adopt the Elder Standard as a new, improved way to measure and address income adequacy for older adults

3) Expand the allocation of low-income housing tax credits for elders and increase the supply of affordable, supportive housing

Policy Recommendations, Long-term


When Retirement Income Falls Short: The Impact of California Support Programs

Source: Wider Opportunities for Women (2008), Elders Living on the Edge: The Impact of California Support Programs When Income in Retirement Falls Short: Washington, DC


1. Expand local and statewide coalitions 2. Unite family and elder economic security

coalitions3. Expand research4. Convene leaders in housing, food,

health, and aging to develop next set of policy proposals

Building the Movement: Californians For Economic Security


For more information on Cal-EESI, contact:Susie Smith, Director California Elder Economic Security InitiativeInsight Center for Community Economic Development Oakland, [email protected]; (510) 251-2600 x108

For more information on the National EESI Program, contact:Ramsey Alwin, Director of the National Elder Economic Security Initiative™ programWider Opportunities for WomenWashington, [email protected]; (202) 464-1596 x107

For more information on the methodology, contact Steve WallaceSteve Wallace, Professor and Associate Director Center for Health Policy ResearchUCLA Center for Health Policy ResearchLos Angeles, [email protected]; (310) 794-0910

Statewide average and county-specific Elder Economic Security Standard Index can found at:1) www.insightcced.org2) www.healthpolicy.ucla.edu/ elder_index08feb.htm

Contact Information


Insight Center for Community Economic Development would like to thank the California Elder Economic Security Initiative™ Steering Committee for their tireless support of older adults in California

The California Elder Economic Security Initiative is funded through the generous support of the following organizations:

Area Agency on Aging of the County of Los Angeles, The California Endowment, California Community Foundation, California Policy Research Center, The California Wellness Foundation, City of Los Angeles Department of Aging, Council on Aging - Silicon Valley, Health Trust, Wider Opportunities for Women, UC-Program on Access to Care, United Way of the Bay Area, and Y & H Soda Foundation.

The national project is funded with generous support from the Retirement Research Foundation and The Atlantic Philanthropies.

Acknowledgements

Documents

CA Senate Aging & Long Term Care Public Hearing2/26/08Page No. 1 “I see one-third of a nation ill-housed, ill- clad, ill-nourished… The test of our progress