Helen Johnson gave a welcoming smile to the group of older men and women who had assembled at the senior center in the Maryland Eastern Shore town of Snow Hill on a recent evening. All of them were caregivers for spouses or parents with debilitating illnesses.
“We’re very concerned about you,” began Johnson, 74, who organizes support programs for a nonprofit agency serving the elderly. “You spend so much time tending to your loved ones, you don’t have time for your self.” But Johnson’s comforting message masked worries of her own. There was the gnawing pain in her arthritic knee, which gets so bad by late afternoon that she can’t stand up for more than a few minutes at a time. There was her dread of the drive home after dark, which has become difficult as her eyesight has weakened. And perhaps most wearying, there was the knowledge that despite her dislike of working evening hours, she had no alternative.
Nearly a decade after reaching retirement age and qualifying for Medicare, Johnson cannot afford to give up her job. Even with the paycheck it brings, her income is only a few notches above the federal poverty level. Her situation is so common that it presents an uncomfortable — and not always acknowledged — challenge for policymakers seeking to rein in spending on Medicare: Nearly half of Medicare recipients have incomes at or below 200 percent of poverty — $21,780 for an individual, $29,420 for a couple.
At a time of growing concern about federal deficits and the national debt, few dispute the need to take on Medicare. The health insurance program for seniors and others with certain disabilities already accounts for 15 percent of the federal budget — behind only Social Security and defense spending. And that share is expected to rise as health-care costs continue their upward spiral and more baby boomers retire, threatening the long-run solvency of Medicare.
Yet several of the most prominent solutions under discussion largely derive their savings by shifting a greater share of the cost onto beneficiaries. The Republican plan sponsored by Rep. Paul Ryan (R-Wis.) and passed by the House of Representatives in April, for instance, would substantially reduce federal spending on Medicare by capping the government’s contribution to the program and transforming it into a system of “premium supports” granted to seniors to partially subsidize their purchase of private insurance plans, with seniors responsible for any additional costs. This would more than double out-of-pocket health-care spending by a typical senior to $12,500 per year, according to estimates by the Congressional Budget Office.
And the ability of many seniors to shoulder that burden appears questionable. Only 5 percent of Medicare beneficiaries have incomes of $80,000 or above, a figure that includes any income from a spouse. As for the 47 percent who are at or close to poverty, on average they are already spending nearly a fourth of their budgets on health care, according to an analysis of Medicare survey data by the Kaiser Family Foundation.