What Will We Do With Poor Grandma?

Earlier this month, my wife and I took my grandmother out to lunch for her 89th birthday. “Mom-mom Rose” has lived on the same tidy South Philadelphia block since the 1940s. We were joined at the restaurant by her current “gentleman friend” (I’ll call him James) who, despite being at least 15 years her junior, looks, well, like an old man. My grandmother on the other hand, often passes for a woman in her 60s; she lives her life like one 10 years younger—an age-to-attitude discrepancy that often drives my mother (who actually is in her 60s) bat-crazy.

Watching her next to James as he shuffled behind us on his cane and struggled to communicate with the waitress, it was hard to imagine that next year my grandmother will turn 90. And research suggests that given her spunky disposition and supremely rosy outlook on life, there’s no reason to think she won’t make it another decade past that.

Mom-mom Rose’s story is playing out across America, and that story—compounded over time—is setting us up for a financial reckoning that will make the “fiscal cliff” look like a prairie dog mound.

Each year, more and more Americans are joining the ranks of the “very old.” By 2011, according to the Census Bureau, nearly two million Americans had celebrated their 90th birthday, a three-fold increase since 1980. By 2050, the total is expected to reach nine million.

But the surge in the elderly population is hardly limited to nonagenarians. Senior citizens are America’s fastest-growing demographic. Last year, the oldest of the baby boomers turned 65, putting them officially on the government dole. By 2030, when boomers are fully grayed, a fifth of the U.S. population will be 65 or older. Around the same time, the population of “very old” people, 90 and older, is projected to experience a 71 percent jump, according to the Census Bureau.

When Social Security was introduced in the 1930s, roughly half of those who paid into the program died before redeeming a single dollar; today, nearly 80 percent of Americans live long enough to receive benefits. When Medicare was enacted in the 1960s, the average life expectancy was 70 years old, compared to more than 78 today. What will it be when I’m 65?

We can talk all day about raising taxes and cutting spending but it won’t change the facts: America doesn’t just have a spending problem and a revenue problem. It has an aging problem.

The very day we were slurping up seafood fra diavolo and chicken piccata in South Philly, on the other side of the country, the Gerontological Society of America was considering this conundrum at the opening of its 65th annual scientific meeting in San Diego. Upwards of 4,000 geriatric professionals spent five days seeking workable solutions to the challenges facing America’s growing population of elderly and revealed some startling facts along the way.

According to Robert Harootyan, manager of research at Senior Service America—a quarter of all elderly people have no personal savings, and 60 percent of baby boomers lack confidence that they will be able to financially sustain themselves until they die.

The message is that for the foreseeable future, the bulk of their care will fall to the rest of us. I’m no economist but it’s pretty clear to me that the current regime is untenable, and fixing it will require sacrifices from all of us, myself included.

For one thing, if people like myself want Medicare and Social Security, we’re probably going to have to work a little longer to get it. Given that we live longer and stay healthy and fit farther into our senior years, I don’t see why this should be a problem (as long as there are jobs to sustain us; but that’s a different problem altogether). We also need to address rising health-care costs, which are forecast to grow faster than GDP. Under the Medicare Part D prescription drug program, the federal government is currently barred from directly negotiating with pharmaceutical companies on price. Changing this could save the government $30 billion in annual costs, according to one report. And we need to start looking at end-of-life care, which eats up the biggest portion of Medicare. More than half of Medicare dollars are spent on patients who die within two months, data shows—which is as clear an indication as any that Americans—patients and doctors both—need to learn to accept death as a natural process that can be embraced gracefully instead of fought tooth and nail.