Statement of the National Association of Orthopaedic Nurses
The National Association of Orthopaedic Nurses (NAON) is the professional nursing society composed of 8,000 nurses throughout the United States dedicated to improving the health of patients with orthopaedic and musculoskeletal problems. NAON is very concerned about any change to the structure of Social Security because such a large percent of our patients are women or individuals with severe disabilities who rely heavily on Social Security. These individuals are very vulnerable to any changes in the disposable income that they have for medical bills or medications. Many of the patients we care for have medical bills not covered by Medicare. In addition, many of our patients require numerous medications and assistance in the home. Any change in the amount of money received through Social Security could seriously impact our patient’s ability to pay for their medical needs, general health care and to remain in their own homes.
Vulnerable Patient Population
The patient population that our nurses care for may have suffered from falls, trauma, violence or degenerative and other musculoskeletal diseases. Many of the patients we care for are women, due to women’s longer life expectancy and higher incidence of chronic diseases. Nine in ten women age 65 and older report that they have one or more chronic conditions and approximately three out of four women have two or more chronic conditions. Many of our patients suffer from osteoporosis that can eventually cause fractures and falls. In 1996, 21% of women had osteoporosis or had broken a hip. Many of our patients have arthritis, including rheumatoid arthritis – a severely debilitating form of arthritis. In fact, arthritis is the most debilitating disease in this nation and in 1996, 61% of women reported having arthritis. In addition, a large number of our patients have degenerative and autoimmune diseases, such as lupus and scleroderma. Autoimmune diseases have a higher rate among women, and thus again are more vulnerable to changes in their Social Security income.
Social Security Provides Needed Disposable Income for Health Costs
Social Security provides economic security for older women and the medically poor. The median personal income for women age 65 or over is $9,355, but for men it is $16,484. Without Social Security, over half of all elderly women would be living in poverty as three-quarters of the nation’s elderly poor are women. Women represent almost 60% of all Social Security recipients aged 60 and over, and 72% of recipients 85 and over. Without Social Security, the poverty rate for all older individuals would rise from 9% to 50%. Forty-one percent of the total Social Security beneficiaries are kept out of poverty because of Social Security.
Women’s lifetime earnings, access to pensions and ability to save continues to be less than that of men’s. Women are far less likely than men to have substantial retirement savings and thus depend more on Social Security income than men do. In 1996, 45% of unmarried men age 65 or older had pension coverage while 33% of unmarried women had pension coverage. The average pension in 1995 for women was $6,684/year but for men it was $11,460. Social Security provides half or more of the income of nearly two-thirds of all women 65 and over, and 90% or more of the income of nearly one-third of such women. Seven out of ten of the poor elderly are women, and the poverty rate for women 65 and over is more than 60% higher than that of men.
These vulnerable populations that we have discussed require medications or assistance with their activities of daily living (ADL’s). Because Medicare does not currently cover the cost of medications, hiring someone to assist with ADL’s and only minimal coverage for home nursing assistance, women, the elderly poor and the disabled will be severly affected by any drop in the amount of Social Security income.
NAON urges Congress to consider the following:
1. Privatization: Privatization of Social Security into annuities or stock could lead to loss of money and ultimate loss of benefits to those most in need. As recently seen by the Enron scandal, investment in stock (even in companies that seem to be rock steady) can lower overall return investments and dividends to beneficiaries. Beneficiaries could lose significant amounts of benefits if money is invested in companies with poor performance.
2. Computation of earnings: Increasing the computation period would harm women and a large majority of our patients most in need of disposable income for health care costs. Any proposal that increases the computation period from 35 years to 38 years, based on increased life expectancy, could ultimately harm those most in need. Again, many women do not have the current 35 years of earnings used to calculate benefits because many women work part time or take time off to raise families or care for an aging parent. Women average 11.5 years out of the workforce to fulfill caregiving responsibilities. For each year that an individual does not pay into Social Security, a “zero year” is accumulated in the account. The zero years are included in the average when the benefit amount is being calculated, and women tend to be more affected by these “zero years” than men.
3. Earnings Limit on Seniors Age 62-64: This would again hurt those most in need. Because women often enter retirement with lower average lifetime earnings, their Social Security benefits often must be supplemented. For those women age 62-64, the tax punishment for working even a minimal amount in a year is still extremely heavy. Congress should end all earnings limits and lift this major financial burden from women and men.
4. COLA Changes: Privatizing Social Security so COLA is lost would harm those most in need of disposable income for health care costs. Any estimate of Social Security's “rate of return” must include the value of the protection against risk provided by its secure, lifetime, inflation-adjusted retirement. Cost of living increases are not typically provided for in private annuities. Social Security currently protects against inflation by annual adjustments to keep pace with inflation as measured by the Consumer Price Index. Reductions in the COLA would have the greatest impact on those who live longest – women. Women also have the most to lose by COLA reductions. Reducing the COLA by 1% would cut a person’s lifetime benefits by 10%. An individual who lives to age 80 would receive monthly benefit checks that would by 16% less than they would have been if full inflation protection had been maintained.
NAON urges the Subcommittee on Social Security, House Committee on Ways and Means to seriously consider any change in Social Security against the impact it would have on vulnerable populations. As shown here, any loss in the amount of disposable income available to vulnerable populations could increase the amount of individuals requiring Medicaid, thus increasing total federal expenditures in the long run. It would also place vulnerable populations, such as the disabled, infirm and women, to choose between eating and paying for medications or needed medical care. NAON looks forward to working with Congress on this important issue to assure that vulnerable populations’ needs are met for the future.