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Will You Need or Provide Long-Term Care?
The Trump Administration’s flouting of the U.S. Constitution brings to mind Benjamin Franklin’s often quoted statement that “[o]ur new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.” Taxes also may not be as certain as Franklin had thought, with the recently passed budget resolution allowing for $5.3 trillion in tax cuts over the coming decade. But that aside, almost as certain as death and taxes is the likelihood that sometime during our lives we will be either caregivers or care recipients – or both. The problem is that it’s difficult to predict when and for how long we will be receiving or…
May 15, 2025
401(k) Tax Subsidy and Matches Favor Higher Earners, Often White
The Social Security program was designed to support lower-income retirees more by replacing a larger share of their past earnings than higher earners receive. But the subsidies that encourage workers to save for retirement tilt in the opposite direction. For this reason, White workers – who tend to earn more than Blacks and Hispanics – receive a disproportionate share of the employer matches and federal tax breaks embedded in 401(k)-style savings plans, according to a study of workers with these plans. White workers start out saving more. They contribute 4.2 percent of their earnings, on average, and their employer matches add another 2.1 percent for a total saving rate of roughly 6 percent, the researchers at MIT, Harvard, Yale, and t…
May 8, 2025
A State Policymaker Discusses Lessons Learned from COVID
In a recent podcast, I had the opportunity to speak with Marylou Sudders, the Secretary of Health and Human Services for Massachusetts throughout the COVID-19 pandemic. But COVID was only part of what she faced during her eight-year term. Sudders pointed out that Massachusetts has an older population than most states and by 2050 almost a third of people will be 65+. As a result, she and Governor Charlie Baker created a Council to Address Aging in Massachusetts to get the entire cabinet to think about how to become an age-friendly state. The Commission’s approach was to urge every community to plan locally on how to help their residents age in place. Lack of Continuum of Housing Options One of the state’s…
May 1, 2025
Tax Credit Reduces Disabilities Among Older Workers
To improve low-income households’ economic well-being, the social safety net provides both cash assistance and additional resources to support a better lifestyle – safer housing, more education or training, or healthy but expensive fresh fruits, vegetables, and meats. The health and employment benefits of three programs passed in the 1960s and 1970s – food stamps, Medicaid, and the Earned Income Tax Credit (EITC) – are the focus of a University of Wisconsin study showing they reduce the prevalence of work-limiting disabilities and enable older Americans to remain in the labor force. The EITC was very effective in reducing disability. This federal tax credit for low-income and some moderate-income workers can reduce their tax bills by hundreds or thousands of dollars a year…
April 24, 2025
The Shrinking of Japan: A Harbinger of What Will Happen to the U.S.?
The graphic below (Figure 1) of the oldest societies in the world – from Visual Capitalist – is both striking and somewhat misleading. Monaco is far older than any other country, no doubt because you have to be old and rich to afford to live there. Many of the other places on the list are tropical island retirement paradises, including the U.S. Virgin Islands. Comparing Japan and the United States It’s worth taking a look at Japan’s demographics since they could paint a picture of what we and other developed nations will face in coming years. Their population today has an estimated median age of 49.8 years compared to 38.5 years in the United States. Japan has a fertility rate of just 1.2…
April 17, 2025
Workers Drop Health Insurance, Stabilizing Employer Costs
The cost to employers of providing their workers with health insurance has remained fairly stable for years. At first blush, this seems like good news for workers. When benefit costs rise, employers tend to take it out of their employees’ wages. But as costs stabilized, health insurance no longer exerted the downward pressure on paychecks that it did back in the 1990s. This had the added advantage of halting the erosion of wages on which Social Security levies its payroll tax. But to fully understand what all of this meant for workers requires digging into why employers’ insurance costs, measured as a percentage of workers’ total compensation, stabilized. A recent study delved into this question by examining the period 1996…
April 10, 2025
Losing SSI at 18 Might Impact Access to Medical Care
The families of more than 1 million children and teenagers with serious physical and intellectual disabilities are receiving Supplemental Security Income, or SSI. But a 1996 reform made it harder to keep those benefits when the child turns 18. The 18-year-olds who don’t meet the tougher requirement for eligibility lose not only SSI’s monthly cash payments but potentially the Medicaid health insurance that usually goes with it. Anywhere from 20 percent to nearly half of all 18-year-olds lose their SSI, depending on the state where they live. New research by Priyanka Anand at George Mason University shows that adults who had likely lost their benefits at 18 have fewer diagnoses of a range of health conditions than people who turned…
April 3, 2025
How Can We Better Support Family Caregivers? Pay Them
While the cost of elder care in the United States, whether paid for by Medicare, Medicaid or out-of-pocket, is substantial, most care is provided by family members for no compensation. Yet the burden on those family members can also be huge in terms of forgoing paid employment or work opportunities, time with family and friends, and general exhaustion. An issue brief recently published by the Center for Retirement Research at Boston College examines these costs, policies that can support family caregivers, and their preferences as expressed in focus groups. Here are some of its findings: In 2021, there were about 38 million family caregivers in the United States who are estimated to have provided 36 billion hours of assistance to their family…
March 27, 2025
Millions to Lose Health Coverage if ACA Tax Credits End
If providing healthcare to more Americans is the goal, the COVID-era tax credits for people buying insurance on the Affordable Care Act (ACA) marketplaces have been a big success. Enrollment in ACA policies has doubled to a record 24 million since 2021, when Congress approved the credits, which reduced monthly premiums by hundreds of dollars and ensured that health insurance was affordable during the pandemic. The Inflation Reduction Act of 2022 extended the subsidies through the end of this year. But the tax credits would not be renewed under some budget proposals being considered in the House. Without them, the Urban Institute has estimated enrollment in ACA policies would decline by more than 7 million and that 4 million of…