Securing the Safety Net for America's Vulnerable Populations

america's population is aging rapidly as the Baby Boom Generation reaches retirement. By 2029, 75 million baby boomers will have reached age 65 and older adults will represent more than 20 percent of the U.S. population, up from 13 percent in 2010 (Cawthorne, 2008; U.S. Census Bureau, 2011). An aging population will increase pressure on the health and social service programs that are so vital to protecting its economic security and health. Particularly vulnerable is the means-tested Medicaid program, which provides a critical safety net for those who reach old age with low incomes, for growing numbers of older Americans with limited resources at retirement, and for those who outlive their resources or exhaust them to pay for medical expenses.A Bleak Retirement Outlook for Older AmericansMany older Americans have insufficient retirement income and assets to protect them through retirement. They often rely on Social Security (SSA) for retirement income, but Social Security only provides an average of $16,000 per year for retired workers (SSA, 2016). Many do not qualify for Social Security or receive very small Social Security payments and rely on Supplemental Security Income (SSI), which provides monthly benefits well below the Federal Poverty Level (FPL) (in 2016, the FPL was $11,880 for an individual and $16,020 for a couple). In addition, almost half of retirees surveyed in the 2016 Retirement Confidence Survey reported having less than $10,000 in savings and investments, and more than a quarter reported having less than $1,000 saved (Helman, Copeland, and VanDerhei, 2016). Lack of savings will present a major challenge for people as they age. As of 2013, the median savings held by those nearing retirement (between ages 55 and 65) was only $14,500; however, estimates show that couples who retire at age 65 will require an average of $260,000 for healthcare costs alone during retirement (Rhee and Boivie, 2015; Fidelity Investments, 2016). Almost all older adults have Medicare coverage, but Medicare has gaps in coverage (most notably for LTSS) and substantial out-ofpocket costs. Those with low incomes are "dually eligible" for both Medicare and Medicaid; they receive healthcare coverage through Medicare, with Medicaid filling gaps in coverage, including LTSS, and paying out-of-pocket costs. Those who reach age 65 without enough work history to qualify for Medicare will rely on Medicaid for both their healthcare and LTSS coverage.Older Americans living below 75 percent of the FPL (about $13,000 a year for a couple) automatically qualify for Medicaid in most states (though the eligibility levels vary somewhat by state) (Kaiser Family Foundation, 2015). Some of those not eligible for Medicaid when they turn age 65 become eligible as a result of spending down their savings or income to cover medical expenses. Nearly 13 percent of people ages 65 and older in 1998 spent down savings or income and became eligible for Medicaid within ten years, and more than half of these people did so to pay for LTSS (Redfoot and Fox-Grage, 2013). In the absence of other public and private financing options for LTSS, Medicaid assumes the role of default payer of these costly services for more than 6 million elders. This is a role that reaches beyond providing health coverage to low-income families-and one the program was never intended to fill. In 2014, total federal and state Medicaid LTSS spending was $152 billion, or a third of total Medicaid spending. National estimates project the rate of LTSS spending growth to be more than three times that of Medicaid overall, and rising state expenditures for Medicaid LTSS over the next few decades will put substantial pressure on state budgets and threaten the quality of and access to all Medicaid services (Anthony, Nevitt, and Raphael, 2016). Recommendations to the President: A Seven-Point Action PlanThe new President must address the looming challenges that increasingly threaten Medicaid's ability to protect older adults, and fulfill the program's assumed responsibilities for LTSS. …