A new reality for seniors: The future of Medicare and Social Security

AARP is working hard to prevent cuts to Medicare and Social Security as the Congressional supercommittee wages war on the federal deficit. Millions of Americans nationwide, and the 992,968 Medicare beneficiaries and 1,137,581 Social Security beneficiaries in Missouri, would be greatly affected if cuts are implemented.

This could be a new reality for individuals who are 65 and older, especially when the recession has left thousands with higher expenses, lower incomes, depleted savings and reduced home equity or homes lost to foreclosure.

Here are 10 key realities that we are forced to face head on -- and reasons why cuts should not be made for this vulnerable population:

* Half of seniors had annual individual incomes less than $18,500. In essence, one in six seniors lives in poverty.

* Half of all Medicare beneficiaries spent more than $3,013 out of pocket on health care in 2006; the oldest and poorest beneficiaries spend about one-fourth of their income on health care.

* As of May, job seekers older than 65 spent an average of one year looking for employment. The unemployment rate for this age group was almost double what it was in 2007.

* An updated (2009) measure of poverty, taking health care costs into account, shows 16.8 percent poverty among seniors, almost equal to poverty among children who are at 17.5 percent.

* Poverty rates for older women are higher than those for men in all racial and ethnic groups.

* Heads of household age 65 to 74 has debt -- and that debt is growing. More than half owed at least $40,000.

* Daily living assistance is needed by thousands in the 65-plus population. Typical private-pay assisted living costs are more than $39,000 annually, based on 2009 data. Medicare pays for limited nursing home care and does not pay for assisted living.

* Medicare households spent three times more on health care, on average, than non-Medicare households.

* Heads of households age 65 or older had no money in retirement savings accounts and half of those with savings had less than $60,800.

* Social Security is the principal source of family income for nearly half of older Americans -- this program kept 36 percent out of poverty. For older minorities, Social Security is almost all of their family income.

Here are other realities that we urge our Congressional leaders to consider:

* Medicare does not cover all seniors' health care costs including long-term care.

* Medicare costs are increasing at a lower rate than the private sector.

* Medicare offers choices and can help improve the delivery of health care.

* Social Security is not a major contributor to the deficit -- it's separate from the rest of the budget, financed from employee and employer payroll tax contributions as well as the interest on bonds in the Social Security Trust Fund.

* Social Security has been running a surplus for decades and has not contributed to the nation's current deficit problem. Even in the midst of the recent economic crisis, the current $2.6 trillion Social Security Trust Funds continue to grow.

AARP urges Congress to avoid making cuts to these vital programs. We want to protect the seniors who have paid for benefits all of their lives. Let's not exacerbate the many challenges that our seniors now face by limiting the benefits they have earned.

Craig Eichelman is the AARP Missouri state director.