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379

population. The elderly dependency ratio is a measure to compare the propor-

tion of those over age 65, or retirees, to the working population. At the begin-

ning of the twentieth century there were about 7 persons aged 65 and older for

every 100 persons aged 18 to 65. But by 1990 there were 20 persons aged 65 and

older for every 100 aged 18 to 65. The child dependency ratio compares the

proportion of those under age 18 to those working age. At the beginning of the

twentieth century the ratio was 73 children per 100 persons aged 18 to 65, but

by 1990 the number of children dropped to 42 (United States Bureau of the

Census, 1975; Hobbs and Damon, 1996). As figure 26.2 shows, the total

dependency ratio for 2020 is quite similar to that of 1900, but the proportion

made up by the elderly, rather than by children, has increased significantly.

Gender and Race Differences in Life Expectancy

While life expectancy rates from birth increased dramatically between 1900 and

1993, gender and racial differences in life expectancy remain significant (Treas, 1995). Figure 26.3 shows life expectancy at birth since 1900. In 1996, white men lived on average to age 74, white women lived to age 80, black men lived to age

66, and black women lived to age 74 (Hobbs and Damon, 1996). Generally,

women live seven years longer than men. Researchers attribute much of the

Figure 26.3 Life expectancy from birth by sex and race, 1900±1996.

Source: US Bureau of the Census, 65‡ in the United States, 1996, Current Population Report P23±190 and National Vital Statistic Report, volume 47, number 13, 1998.

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M. Harrington Meyer and P. Herd

ender difference in longevity to a combination of genetic differences and social and lifestyle differences. For example, women take better care of their health and are less likely to engage in high risk activities such as driving too fast or smoking.

Similarly, whites live significantly longer than blacks; white men outlive black men by an average of eight years and white women outlive black women by an

average of six years. Researchers link most of the racial gap in longevity to

social, economic, and lifestyle factors, particularly racial differences in education, employment, poverty, infant mortality, exposure to violence, pollution, and other health hazards, and access to health care (Preston and Taubman, 1994;

Treas, 1995; Ross and Wu, 1996).

Health

Health

`Àt least I've got my health.'' No matter what hardships fall on older persons,

you often hear them emphasize their gratitude that they have remained in good

health ± or carping loudly that they have not. No amount of savings and

planning for a happy retirement will save the day if health fails dramatically.

Most older people are in good health. Though the number of the oldest old has

increased dramatically, the proportion of those who are chronically disabled has continued to drop throughout the past century (Manton et al., 1993). Generally,

people are living longer and are in better health than ever before.

Most health problems in old age are the product of chronic conditions, namely

illnesses that cannot be cured, though some might have been prevented. Heart

disease is the leading cause of death among those aged 65 and over, followed by

cancer and strokes. The leading health problems in old age are no doubt

familiar; in 1991, 48 percent suffered from arthritis, 37 percent from hyperten-

sion, 32 percent from hearing impairments, and 30 percent from heart disease

(National Center for Health Statistics, 1992).

People's health status often impacts their ability to function in everyday life, from taking out the trash to taking a bath. Those who study aging divide these

functions of everyday living into two categories, Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs). ADLs are basic functional

activities, such as eating, dressing, and bathing. IADLs include higher level

activities like keeping track of money or going grocery shopping. Most older

people, however, do not face significant limitations. In 1995, only about 5 percent of persons aged 65 to 79 needed help with one or more ADLs. The likelihood of

needing assistance increases with age, however, and 15 percent of those 80 and

over needed help with ADLs. The number of people who needed help with one or

more IADLs was much higher, 11 percent among those aged 65 to 79 and 33

percent among those aged 80 and over (US Bureau of the Census, 1997).

Medicare

Most Americans obtain health insurance through their jobs, but because they are

generally not employed, few older persons do. How do the elderly meet their

Aging and Aging Policy in the USA

381

health care needs? Nearly all rely on Medicare, which is a national health

insurance benefit for the elderly and the permanently blind and disabled. Medi-

care is financed by the Health Care Financing Administration (HCFA) through

the FICA tax. If you worked in 1999, 1.45 percent of your salary went to finance Medicare, and this amount was matched by your employer (Social Security

Administration, 1998). Anyone aged 65 and over who receives Social

Security is eligible. Medicare Part A, which is fully funded by the FICA tax,

covers hospital stays and short-term nursing home stays for rehabilitation.

Medicare Part B, which is financed by premiums and some general tax revenues,

provides optional coverage of up to 80 percent of the cost of physicians' office visits (HCFA, 1998).

One of the largest drawbacks to Medicare is what it does not cover. Each year

Medicare recipients pay a deductible, co-payments, and any costs above those

Medicare allows. In addition, recipients cover those costs excluded under Medi-

care, notably prescriptions drugs, routine preventative care, and most dental,

aural, and visual care. Moreover, Medicare excludes most chronic care for

conditions, such as arthritis, Parkinson's, or Alzheimers's disease (HCFA,

1998). Because they are in worse health and have more chronic conditions, the

poor, women, and African Americans are particularly likely to have to pay out of pocket for care excluded under Medicare. While Medicare provides health

insurance for nearly all older people, its coverage is somewhat spotty (Ver-

brugge, 1990; Gibson, 1995). Indeed, in 1998 Medicare covered less than 50

percent of total health care costs for the elderly (HCFA, 1998). The economic

consequences of this limited coverage are severe for many elderly people; each

year one-third of the elderly with incomes between 100 and 150 percent of the

poverty line are pushed into poverty by their health care costs (Commonwealth

Fund, 1987).

To meet the costs of what Medicare does not cover, 66 percent of Medicare

beneficiaries paid for Medigap policies to cover things like prescriptions, eye

exams, or hearing aids (HCFA, 1998). Recent studies, however, show that access

to Medigap coverage will become increasingly difficult for older people as prices are expected to rise (Alecxih et al., 1997). Additionally, a study cited by the

Commonwealth Fund indicated race differences in Medigap coverage. While 48

percent of poor whites had coverage, only 17 percent of poor blacks and

Hispanics had coverage (HCFA, 1998).

Despite its limitations, expansion of Medicare seems unlikely given that

Medicare expenditures are expected to increase rapidly as the babyboomers

get older. By 2040, when the average babyboomer will be aged 85, economists

predict Medicare costs will have increased six times unless there are efforts

toward cost containment (Schneider and Guralnik, 1990).

Medicaid

Medicaid and Medicare were both enacted in 1965, but the similarities in their

names hide vast differences in their coverage. Medicaid provides health insur-

ance for the poor elderly, and the permanently blind and disabled. For the poor

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elderly, Medicaid mainly covers things that Medicare does not: prescription

drugs, co-payments, deductibles, and long-term nursing home care. Because

eligibility for Medicaid requires that income be well below the poverty line,

and assets be below $2000, fewer than one-third of the poor elderly receive it

(US Bureau of the Census, 1990, table 148:98). In 1995, two-thirds of the

Medicaid budget for the elderly went to institutional care, and only 8 percent

was spent on long-term care in the community (Wiener and Stevenson, 1998).

Greater resources devoted to home care would enable more elderly persons to

live independently longer (Hooyman and Gonyea, 1995). Like Medicare, how-

ever, Medicaid is facing increasing costs. Medicaid long-term care expenditures

are estimated to double between 1993 and 2018 (Wiener and Stevenson, 1998).

Cost Containment: Transferring the Costs of Long-term Care

The rising costs of Medicare and Medicaid have resulted in various cost contain-

ment policies. The Social Security Amendment of 1985 changed Medicare to a

prospective payment system by creating Diagnostic Related Groupings (DRGs).

The new structure of reimbursement provides a profit incentive for hospitals to

release patients as soon as is possible. Although DRGs have reduced unnecessary

medical treatments, and curbed rising medical costs, they have also lead to

patients being released ``quicker and sicker'' (Estes, 1993). Medicaid cost con-

tainment strategies have included tightening eligibility rules (Harrington Meyer and Kesterke-Storbakken, 2000). Another strategy has been lowering reimbursement rates, setting them below private pay patient rates. Physicians, however, are not allowed to bill the patients the uncovered portion of the bill. The result has been many physicians, hospitals, and nursing homes refusing to provide services

to Medicaid beneficiaries (Harrington Meyer and Kesterke-Storbakken, 2000).

Consequently, families are providing services that hospitals, nursing homes, and even home health care agencies once provided (Glazer, 1990).

In fact, family or informal care constitutes 80 percent of long-term care

provided in the United States. The term family care, however, as Hooyman

and Gonyea (1995) argued, hides ``the gendered nature of caring behind gender

neutral terms such as family, caregiver, parent, spouse, or child'' (p. 136). Overall, women provide 80 percent of informal long-term care (Stone et al., 1987).

Among children who care for their elderly parents, 70±80 percent are daughters.

In fact, studies have shown that daughter-in-laws are likely to provide more care than are sons; around 37 hours per week compared to 27 hours per week (Abel,