Category Archives: Older People

Warning: Short-Term Health Plans = Higher Premiums for Older Adults

Source: Jane Sung and Lina Walker, AARP Blog, Thinking Policy, March 21, 2018

You might have thought that efforts to unravel the Affordable Care Act (ACA) were over, but newly proposed regulations and legislation are once again threatening to have similar harmful effects for older adults ages 50-64 who rely on individual market coverage. On February 21, 2018, the Trump Administration proposed new federal rules calling for significant expansion of a category of insurance products known as “short-term limited duration” insurance plans. More recently, Congress is considering legislation that would block states, who typically regulate these plans, from taking steps to protect consumers from the harms of these proposed federal rules once they are finalized. Unfortunately, these changes would result in much higher premiums for older adults and people with preexisting health conditions buying individual policies through the ACA Marketplace.

Inside IBM’s Purge of Thousands of Workers Who Have One Thing in Common

Source: Peter Gosselin, Ariana Tobinmar, Mother Jones & ProPublica, March 22, 2018

….But when high tech suddenly started shifting and companies went global, IBM faced the changing landscape with a distinction most of its fiercest competitors didn’t have: a large number of experienced and aging US employees.

The company reacted with a strategy that, in the words of one confidential planning document, would “correct seniority mix.” It slashed IBM’s US workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its total US job cuts during those years. (Read more about how ProPublica got the story here.)

In making these cuts, IBM has flouted or outflanked US laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees…..

Does Paid Family Leave Reduce Nursing Home Use? The California Experience

Source: Kanika Arora, Douglas A. Wolf, Journal of Policy Analysis and Management, Volume 37, Issue 1, Winter 2018
(subscription required)

From the abstract:
The intent of Paid Family Leave (PFL) is to make it financially easier for individuals to take time off from paid work to care for children and seriously ill family members. Given the linkages between care provided by family members and the usage of paid services, we examine whether California’s PFL program influenced nursing home utilization in California during the 1999 to 2008 period. This is the first empirical study to examine the effects of PFL on long-term care patterns. Multivariate difference-in-difference estimates across alternative comparison groups provide consistent evidence that the implementation of PFL reduced the proportion of the elderly population in nursing homes by 0.5 to 0.7 percentage points. Our preferred estimate, employing an empirically-matched group of control states, finds that PFL reduced nursing home usage by about 0.65 percentage points. For California, this represents an 11 percent relative decline in elderly nursing home utilization.

To tally seniors in poverty, go beyond income

Source: Jason Maderer, Futurity, January 12, 2018

More older Americans live in deprivation than official US statistics suggest, according to research in a new book.

In her research, Shatakshee Dhongde, associate professor at Georgia Institute of Technology, found that 12.27 percent of senior citizens were deprived in two or more crucial areas, including multiple disabilities, low income, a lack of education, and severe housing burden.

Dhongde says the research illustrates a shortcoming in the official measure of poverty in the United States, which focuses solely on income.

The federal government reported that 9.5 percent of older Americans were living in poverty in 2013. That’s below the 12.3 percent rate found in Dhondge’s new multidimensional poverty index. ….

Same-level fall injuries in US workplaces by age group, gender, and industry

Source: Kenneth A. Scott, Gwenith G. Fisher, Anna E. Barón, Emile Tompa, Lorann Stallones and Carolyn DiGuiseppi, American Journal of Industrial Medicine, Volume 61, Issue 2, February 2018
(subscription required)

From the abstract:
Background
As the workforce ages, occupational injuries from falls on the same level will increase. Some industries may be more affected than others.

Methods
We conducted a cross-sectional study using data from the Bureau of Labor Statistics to estimate same-level fall injury incidence rates by age group, gender, and industry for four sectors: 1) healthcare and social assistance; 2) manufacturing; 3) retail; and 4) transportation and warehousing. We calculated rate ratios and rate differences by age group and gender.

Results
Same-level fall injury incidence rates increase with age in all four sectors. However, patterns of rate ratios and rate differences vary by age group, gender, and industry. Younger workers, men, and manufacturing workers generally have lower rates.
Conclusions

Variation in incidence rates suggests there are unrealized opportunities to prevent same-level fall injuries. Interventions should be evaluated for their effectiveness at reducing injuries, avoiding gender- or age-discrimination and improving work ability.

Graham-Cassidy Legislation Threatens Affordable Coverage for Older Americans

Source: Lina Walker, Jane Sung, Claire Noel-Miller, and Olivia Dean, AARP Public Policy Institute, Fact Sheet, September 2017

The Graham-Cassidy (GC) bill, as proposed on September 13, 2017, threatens to make health care unaffordable and inaccessible for millions of older Americans. The bill eliminates two sources of financial assistance—premium tax credits and cost-sharing reductions—critical to ensuring that low- to moderate-income older adults are able to afford the coverage they need. For a 60-year-old earning $25,000 a year, premiums and out-of-pocket costs could increase by as much as $16,174 a year if they wanted to keep their current coverage. The bill may also allow states to charge older adults age 50–64 significantly higher premiums than under current law on the basis of their age by waiving federal protections that limit the practice known as age rating…..

Pension Plan Types and Financial Literacy in Later Life

Source: Yang Li, Jeffrey A Burr, Edward Alan Miller, The Gerontologist, Advance Articles, September 9, 2017
(subscription required)

From the abstract:
Background and Objectives:
The ongoing shift from defined benefit (DB) to defined contribution (DC) pension plans means that middle-aged and older adults are increasingly being called upon to manage their own fiscal security in retirement. Yet, half of older Americans are financially illiterate, lacking the knowledge and skills to manage financial resources. This study investigates whether pension plan types are associated with varying levels of financial literacy among older Americans.

Research Design and Methods:
Cross-sectional analyses of the 2010 Health and Retirement Study (HRS) (n = 1,281) using logistic and linear regression models were employed to investigate the association between different pension plans and multiple indicators of financial literacy. The potential moderating effect of gender was also examined.

Results:
Respondents with DC plans, with or without additional DB plans, were more likely to correctly answer various financial literacy questions, in comparison with respondents with DB plans only. Men with both DC and DB plans scored significantly higher on the financial literacy index than women with both types of plans, relative to respondents with DB plans only.

Discussion and Implications:
Middle-aged and older adults, who are incentivized by participation in DC plans to manage financial resources and decide where to invest pension funds, tend to self-educate to improve financial knowledge and skills, thereby resulting in greater financial literacy. This finding suggests that traditional financial education programs may not be the only means of achieving financial literacy. Further consideration should be given to providing older adults with continued, long-term exposure to financial decision-making opportunities.

Special Issue: Reforming State and Local Tax Systems

Source: Public Finance Review, Volume: 45, Number: 4, July 2017
(subscription required)

From the introduction:
State tax reform is fundamentally different than federal tax reform. States are continually modifying their taxes to meet revenue challenges and to cope with the changing structure of the national and regional economy. Most state tax reforms are modest affairs and not major rewrites of the tax codes. Reforms must consider the existing institutional structure of the state, state economic policies, and current state politics. Nonetheless, there are some common themes in reforms across the states, including an expansion of the sales tax base to include services and a broadening of the base for income taxation.

Articles include:
What Drives State Tax Reforms?
James Alm, Trey Dronyk-Trosper, Steven M. Sheffrin

State tax reform is fundamentally different than federal tax reform. States are continually modifying their taxes to meet revenue challenges and to cope with the changing structure of the national and regional economy. Most state tax reforms are modest affairs and not major rewrites of the tax codes. Reforms must consider the existing institutional structure of the state, state economic policies, and current state politics. Nonetheless, there are some common themes in reforms across the states, including an expansion of the sales tax base to include services and a broadening of the base for income taxation.


Personal Income Tax Revenue Growth and Volatility: Lessons and Insights from Utah Tax Reform

Gary C. Cornia, R. Bruce Johnson, Ray D. Nelson

In order to reduce the volatility of the personal income tax in Utah, review and reform efforts recommended a simple flat tax that disallowed all deductions or exemptions. Among the reasons for the recommended flat tax was the argument that it would result in a more stable year-over-year tax revenue stream. This was especially important for education financing. The tax system that was finally adopted retained exemptions and deductions through a tax credit. Using a series of simulations based on twenty-one years of tax returns, we establish that by retaining exemptions and deductions, tax reform efforts failed to appreciably reduce the volatility of personal income tax revenues. These simulations also show that the initially proposed flat income tax with no exemptions or deductions would have decreased volatility at the cost of reducing the growth rate. This study contributes insights, caveats, methodology, and potential alternatives for future individual income tax reforms by focusing on the growth and volatility of three different tax systems.

Reducing Property Taxes on Homeowners: An Analysis Using Computable General Equilibrium and Microsimulation Models
Andrew Feltenstein, Mark Rider, David L. Sjoquist, John V. Winters

We consider a proposal that reduces by half the taxes on homesteaded properties and replaces the lost revenue by increasing the base and rate of the state sales tax. We develop a computable general equilibrium (CGE) model and a microsimulation model (MSM) to analyze the economic and welfare effects of such a proposal if adopted in Georgia. The results from the CGE model suggest that the proposed reforms have a substantial negative effect in percentage terms on Georgia’s economy. The MSM suggests that such a policy has no effect on the distribution of consumption by income class but increases the percentage of owner-occupied housing relative to rental housing by 20 percent in the aggregate.

Does Perception of Gas Tax Paid Influence Support for Funding Highway Improvements?
Ronald C. Fisher, Robert W. Wassmer

The issue for this research is whether perception of the rate and amount of fuel taxes paid by an individual influences his or her support for funding highway improvements from any source of revenue. A survey of likely California and Michigan voters demonstrates that they often overestimate the rate of their state’s gasoline excise tax and the subsequent amount they are likely to pay for this tax in a month. Regression analyses show that voter misperceptions concerning the magnitude of state fuel taxes affect their views regarding an increase in funding to support highway investment proposals. A reasonable policy implication is that the adoption of proposals to generate additional funds for highway investment is more likely if accompanied by a campaign identifying the existing rate of the state’s gasoline excise tax and the relatively small amount of this tax paid by the state’s typical driver.

State Export Promotion and Firm-level Employment
Andrew J. Cassey, Spencer Cohen

Most US states have export promotion programs, but it is unknown if these programs create long-term employment, which is often the policy’s stated goal. We merge administrative export promotion and employment data from Washington State to test the effect of firm-level export promotion on firm-level employment using the differences-in-differences estimator. We believe we are the first to have US state data at this level of detail. We find firm participation in an export assistance program increases firm-level employment fleetingly, but not in subsequent periods. Thus, we do not find a statistically significant impact to long-term employment from program participation.

Protecting the Vulnerable or Ripe for Reform? State Income Tax Breaks for the Elderly—Then and Now
Ben Brewer, Karen Smith Conway, Jonathan C. Rork

State governments have a long history of providing income tax relief to their elderly constituents. Our research investigates the current distributional and revenue effects of these tax breaks, as well as the economic status of the elderly, and explores how these measures have changed since 1990. Using data from the 1990 Integrated Public Use Microdata Series and the 2013 American Community Survey, combined with the TAXSIM calculator, we calculate current state income tax liabilities and revenues and simulate the effects of removing all age-related tax breaks. Our analyses reveal that the economic well-being of the elderly has grown substantially relative to the nonelderly and that state tax breaks primarily benefit the middle- and upper-income elderly. Revenue costs of these tax breaks have also grown substantially, and their modest and mixed effects on income equality, measured by changes in the Gini, cast doubt on equity as a justification.

Our Aging, Caring Nation: Why a U.S. Paid Leave Plan Must Provide More Than Time to Care for New Children

Source: National Partnership for Women & Families, Issue Brief, June 2017

From the press release:
The nation’s aging population, increases in demand for family members to care for loved ones, and gender gaps in labor force participation are powerful forces aligning to make time for family care and serious personal medical issues essential components of any national paid family and medical leave plan. These are some of the findings of a new report released today, following the inclusion of a very limited paid parental leave proposal in the Trump administration’s FY 2018 budget proposal, and one week after a bipartisan group of scholars came together for the first time ever to announce core paid leave principles.

The report, Our Aging, Caring Nation: Why a U.S. Paid Leave Plan Must Provide More Than Time to Care for New Children, was prepared by the National Partnership for Women & Families. The group analyzed research on the health, financial and economic effects of paid leave policies, along with demographic and labor force data from all 50 states and the District of Columbia. The analysis highlights the significant deficiencies of public policy proposals for paid leave that exclude certain types of care, and specific states in which providing for family care and serious personal medical needs would be especially important.