1

• I see one-third of a nation ill-housed,
  ill-clad, ill-nourished
• The test of our progress is not whether we add
  more to the abundance of those who have much it
  is whether we provide enough for those who have
  too little.
• Franklin Roosevelt's second inaugural speech,
  from January 20, 1937

2
Myth of the Golden Years Introducing an
Alternative to the Flawed Federal Poverty Line

• State Senate Subcommittee on Aging Long Term
  Care
• February 26, 2008
• Presentation organized by Susie Smith
• Director of California Elder Economic Security
  Initiative,
• Insight Center for Community Economic Development
  (www.insightcced.org) ssmith_at_insightcced.org
  [phone] x108)

3
Introduction

• Insight Center for Community Economic Development
  is a national non-profit research, consulting and
  legal organization
• Established as a War on Poverty program in 1969
• Economic security issue focus since the mid-1990s

4
What is the Myth of the Golden Years?

• I work hard, pay taxes, the system will
• take care of me in my
• older years
• Not true anymore!

5
The CA Elder Economic Security Initiative program

• Statewide, data-driven coalition to raise
  awareness and shape policy to help the elderly
  make ends meet
• Part of a national movement
• Builds on the work of the nationally acclaimed
  Family Economic Self-Sufficiency Standard
  Project, and the California arm of that
  Californians For Economic Security
• Guided by state and region steering committees

6
Long Term Goals Strategy

• Close the gap between elders income and their
  basic expenses
• Paradigm shift in policy, advocacy and direct
  services for the elderly
• Strategy coalition-building, education,
  advocacy and outreach using a new,
  research-driven framework of income adequacy

7
California Research Partner UCLA Center for
Health Policy Research

• To understand where we are, we need to understand
  where weve come from

8
No Hard Data on Poverty
I see one-third of a nation ill-housed,
ill-clad, and ill-nourished Franklin
Roosevelt's second inaugural speech, from
January 20, 1937 http//c250.columbia.edu/dkv/ex
tracts/0711_fdr_newdeal.html .
9
War on Poverty required hard numbers

• To measure progress required a standard
  methodology
• The number calculated as poor had to be high
  enough to make progress possible
• But not so high as to look bad

10
The Federal Poverty Line

• Developed in 1963-1964 by Mollie Orshansky of the
  Social Security Administration
• Department of Agriculture's 1955 Household Food
  Consumption Survey 1/3 of after tax income
  spent on food
• Multiplied economy food plan (designed for
  temporary or emergency use) x 3 poverty

11
Federal Poverty Line, continued

• Varied by family size
• Same amount in every state
• Indexed in 1969 to the Consumer Price Index (CPI)
• Some additional fine tuning subsequently, but has
  basically remained the same
• See http//aspe.hhs.gov/poverty/papers/hptgssiv.ht
  m

12
Measure Now Widely Used

• To track trends
• Evaluate economic policy
• Discussed in presidential campaigns

13
Eligibility

• Many public programs now use the poverty line for
  eligibility
• 135 FPL used by Medicare for low-income subsidy
  of Part D
• Some eligibility categories of Medi-Cal are tied
  to FPL

14
Funding Programs

• Older Americans Act requires priority to
  greatest social and economic need areas many
  states use FPL in formula

15
Implicitly, as a Yardstick

• When evaluating policies, the poverty line is
  often used as a reference standard
• Elizabeth Hill recently recommended, reducing
  the grants for SSI/SSP couples down to 125
  percent of the federal poverty level.

16
Why We Need to Change

• Based on 1950s consumption patterns
• Incorporates outdated and inadequate food measure
• Food plan was updated in 1975, 1995, and 2005 but
  FPL does not reflect those changes
• The food plan chosen was designed only for short
  term use

17
Why change, continued

• Does not account for regional differences in cost
  of living
• The inflation adjustment (CPI)
• Does not reflect costs experienced by elders
• Does not reflect increased standard of living
• Even Orshansky admitted that her measure
  undercounted poverty

18
Time to move to the 21st century

• Just because some of us learned to type on a
  manual typewriter does not mean it is still an
  adequate tool
• We need to use current knowledge and adopt a
  modern tool to measure income adequacy

19
Elder Economic Security Standard Index

• Based on actual spending by older adults in this
  century
• Relies on credible publicly available data
• Is specific to retired older adults
• Provides a measure of income adequacy the
  amount needed to cover basic needs
• Developed by UMass-Boston Wider Opportunities
  for Women, refined in collaboration with UCLA
  CHPR

20
Cost Components

• Housing, the largest cost for most
• Medical Care, a major cost for elders
• Food at home
• Transportation, local
• Miscellaneous, including telephone, clothing,
  home repair

21
High Housing Costs Threaten the Economic Security
of Seniors in California
Source Wider Opportunities for Women (2008),
Elders Living on the Edge The Impact of
California Support Programs When Income in
Retirement Falls Short Washington, DC. The Elder
Standard Index was tabulated by the UCLA Center
for Health Policy Research using the WOW-UMass
Gerontology Institute national methodology.
22
Elder Economic Security Standard Index Santa
Clara and Humboldt Counties
Monthly Expenses SANTA CLARA SANTA CLARA HUMBOLDT HUMBOLDT
Monthly Expenses Owner w/o Mortgage Renter, One Bedroom Owner w/o Mortgage Renter, One Bedroom
Housing 421 1,068 368 551
Food 308 308 231 231
Transportation 202 202 202 202
Health Care Good 293 293 378 378
Miscellaneous _at_ 20 245 245 236 236
Elder Standard Index Per Month 1,469 2,116 1,415 1,598
Elder Standard IndexPer Year 17,632 25,391 16,985 19,176
23
Income and Expenses Gaps in California
Elder Standard Indexes and Benchmark Annual
Incomes for Single Elders in Los Angeles County,
2007
Source Wider Opportunities for Women (2008),
Elders Living on the Edge The Impact of
California Support Programs When Income in
Retirement Falls Short Washington, DC. The Elder
Standard Index was tabulated by the UCLA Center
for Health Policy Research using the WOW-UMass
Gerontology Institute national methodology.
24
Our National Partner Wider Opportunities for
Women (WOW)

• A national non-profit advocacy organization
  celebrating over 40 years of helping women and
  their families achieve economic independence and
  equality of opportunity. www.wowonline.org
• Directs the National Elder Economic Security
  Initiative program
• Expanding across the country w/natl database

25
Who comprises the National Advisory Board?

• National Research Partner Gerontology Institute
  at UMass Boston
• State EESI partners
• AARP
• National Council on the Aging
• The Urban Institute Income Benefit and Policy
  Center
• National Committee to Preserve Social Security
  and Medicare
• Women's Institute for a Secure Retirement
• Health Policy Institute at Georgetown Public
  Policy Institute
• Institute for Womens Policy Research
• ACCRA-the Council for Community and Economic
  Research
• The National Council of La Raza
• The National Caucus and Center on Black Aged,
  Inc.
• The Pension Rights Center
• National Academy of Social Insurance

26
Where is the Elder Economic Security Initiative?
Blue Current State Partners Green Potential
Targets for Future State Partners
27
What is happening in other states?

• Massachusetts
• Raised asset limits on Medicaid from 2,000 to
  10,000
• Governor to reawaken the statewide LTC commission
• Outreach to seniors Its not your fault!
• Undersecretary of Elder Affairs has agreed to
  formally encourage service providers to use Elder
  Standard Index in planning and evaluation

28
Other states, continued

• Illinois
• Support home/community-based LTC programs
• Pennsylvania
• Spend down on Medicaid
• Director of the Interagency Council on LTC
• Merge aging and LTC state offices
• Use the Elder Standard Index in Area Agency on
  Aging strategic plans
• Wisconsin
• Senior Care Program prescription drug

28
29
Long Term National Policy Goals

1. Shift the national, state, and local dialogue
   from one the that focuses on elder poverty to a
   discussion on elder economic security.
2. Promote equitable and rational policy by using
   the Index in evaluating existing policies and
   developing new policies for older adults.

30
National Policy Agenda

• Income and Health Security for All
• Support employer-based retirement savings
  programs including pensions
• Social Security leveling the playing field
  between men and women crediting caregiving
• Revise asset limits and income eligibility levels
  to reflect the findings of the Elder Standard
  Index (e.g. FS, LIS, HEAP)
• Support the creation of affordable housing for
  seniors and housing supports
• Support traditional Medicare

31
National Policy Agenda, continued

• 2) Home and Community-based Long-term care
• Universal social long-term care insurance
• of home and community-based
  LTC services
• 3) Supporting Older Workers
• Eliminate penalties to working
  longer at fewer hours
• Support Medicare as first payer for workers 65
• Support workplace accommodations for older
  workers
• Create education and training opportunities for
  older workers

32
California Policy RecommendationsShort-term

• 1) Encourage local and statewide use of Elder
  Standard Index by other policymakers, CDA, public
  agencies, non-profit organizations, and
  foundations
• 2) Promote savings and asset accumulation
  opportunities for younger workers
• 3) Allocate funds to support the annual
  update of the Elder Economic
  Security Standard Index
• 4) Support and expand outreach efforts

33
Benefit Cliffs The Result of Outdated Policies
Source Wider Opportunities for Women (2008),
Elders Living on the Edge The Impact of
California Support Programs When Income in
Retirement Falls Short Washington, DC.
34
Policy Recommendations, Long-term

• 1) Adopt the Elder Economic Security Standard to
  evaluate the impact of existing policies and
  measure economic needs of older adults California
• 2) Pass a resolution to urge the federal
  government to recognize the flaws of FPL adopt
  the Elder Standard as a new, improved way to
  measure and address income adequacy for older
  adults
• 3) Expand the allocation of low-income housing
  tax credits for elders and increase the supply of
  affordable, supportive housing

35
When Retirement Income Falls Short The Impact of
California Support Programs
Source Wider Opportunities for Women (2008),
Elders Living on the Edge The Impact of
California Support Programs When Income in
Retirement Falls Short Washington, DC
36
Building the Movement Californians For Economic
Security

• Expand local and statewide coalitions
• Unite family and elder economic security
  coalitions
• Expand research
• 4. Convene leaders in housing, food, health, and
  aging to develop next set of policy proposals

37
Contact Information

• For more information on Cal-EESI, contact
• Susie Smith, Director California Elder Economic
  Security Initiative
• Insight Center for Community Economic Development
  
• Oakland, CA
• ssmith_at_Insightcced.org [phone] x108
• For more information on the National EESI
  Program, contact
• Ramsey Alwin, Director of the National Elder
  Economic Security Initiative program
• Wider Opportunities for Women
• Washington, DC
• ralwin_at_wowonline.org [phone] x107
• For more information on the methodology, contact
  Steve Wallace
• Steve Wallace, Professor and Associate Director
  Center for Health Policy Research
• UCLA Center for Health Policy Research
• Los Angeles, CA
• swallace_at_ucla.edu [phone]
• Statewide average and county-specific Elder
  Economic Security Standard Index can found at

38
Acknowledgements

• Insight Center for Community Economic
  Development would like to thank the California
  Elder Economic Security Initiative Steering
  Committee for their tireless support of older
  adults in California
• The California Elder Economic Security
  Initiative is funded through the generous support
  of the following organizations
• Area Agency on Aging of the County of Los
  Angeles, The California Endowment, California
  Community Foundation, California Policy Research
  Center, The California Wellness Foundation, City
  of Los Angeles Department of Aging, Council on
  Aging - Silicon Valley, Health Trust, Wider
  Opportunities for Women, UC-Program on Access to
  Care, United Way of the Bay Area, and Y H Soda
  Foundation.
• The national project is funded with generous
  support from the Retirement Research Foundation
  and The Atlantic Philanthropies.