Elders Living on the Edge

Policy Brief Elders Living on the Edge When Basic Needs Exceed Income in New York 2010 Wider Opportunities for Women

New York Statewide Senior Action Council, Inc. The New York StateWide Senior Action Council (StateWide) is a grassroots advocacy organization founded in 1972 with government support. It is now funded by member contributions, private foundations, and government support for particular projects. Its main office, located in Albany, New York, serves regional chapters throughout the state. Each regional chapter is entitled to equal representation on a policy setting board of directors elected biannually to supervise carrying out the social and legislative priorities identified by its membership. For more information, please visit www.nysenior.org. Wider Opportunities for Women (WOW) Wider Opportunities for Women (WOW) works nationally and in its home community of Washington, DC to achieve economic independence and equality of opportunity for women and their families at all stages of life. For over 40 years, WOW has been a leader in the areas of nontraditional employment, job training and education, welfare to work and workforce development policy. Since 1995, WOW has been devoted to the self-sufficiency of women and their families through the national Family Economic Security (FES) Project. Through FES, WOW has reframed the national debate on social policies and programs from one that focuses on poverty to one that focuses on what it takes families to make ends meet. Building on FES, WOW has expanded to meet its intergenerational mission of economic independence for women at all stages of life with the Elder Economic Security Initiative. For more information about WOW s programs please visit www.wowonline.org. The Elder Economic Security Standard Index for New York was tabulated by the Gerontology Institute at the University of Massachusetts Boston and Wider Opportunities for Women (WOW) as part of the National Elder Economic Security Initiative at WOW. Elders Living on the Edge: When Basic Needs Exceed Income in New York 2010, Wider Opportunities for Women.

Elders Living on the Edge When Basic Needs Exceed Income in New York The New York Elder Economic Security Initiative New York is home to a diverse community of older adults. Elders with a wide variety of backgrounds, experiences and income levels live, work, and volunteer in the state. Their contributions to New York s culture and economy are vast. However, financial challenges threaten the economic security of New York elders with modest incomes and limited assets who choose to remain in their communities. Economic insecurity limits the ability of older New Yorkers to participate in the cultural, social and political affairs of their communities. The national Elder Economic Security Initiative (Initiative) is a multi-year, research-driven campaign to raise awareness of the financial challenges facing low-income and moderateincome elders. The Initiative offers a conceptual framework and tools to advance policy and program change to allow elders to age in place with dignity. The Initiative combines coalition building, research, advocacy, education and outreach at the national, state and community levels to promote the economic well-being of elders, caregivers and families. New York Statewide Senior Action Council, Inc. (StateWide) leads the New York Initiative in partnership with Wider Opportunities for Women (WOW). Through the use of an economic security lens, StateWide and WOW are working to ensure that New York s seniors are able to age well in their communities. Policy Recommendations Increase Income Raise the federal share of SSI. Raise the Social Security replacement rates for low and average wage earners. Increase opportunities/incentives for older workers. Encourage retirement planning. Establish Universal Saving Accounts for small businesses and non-profits. Provide credit and support programs for unpaid caregivers. Reduce Costs Increase housing trust funds, affordable housing development, heating, weatherization, and housing assistance. Expand programs that keep seniors living independently at home and engaged in their communities. Provide higher income limits in the SCHE, SCRIE and DRIE programs. Establish a cap on out-of-pocket medical expenses, including premiums, for all Medicare beneficiaries. Maintain EPIC s wraparound of the Medicare Part D benefit for all medically necessary drugs. Disregard medical expenses when determining financial eligibility for federal and state programs. Provide federal and New York State funding to promote wellness and preventative activities. When Basic Needs Exceed Income In New York 1

Measuring Economic Well-Being How much income do New York s elders need to meet the real costs of living? How much do public support programs food, prescription, medical, utility and housing assistance help elders meet their rising expenses? To answer these questions, service providers, advocates and policymakers need an accurate measure of elders economic security. In response, the Initiative has created a new benchmark the Elder Economic Security Standard Index (Elder Index). The Elder Index measures the minimum income older adults need to make ends meet and remain in their own homes. The Elder Index helps workers and retirees plan for the future. It also quantifies the effectiveness of state and national public policy and programs in preserving economic security for older adults. The Elder Index helps pre-retirees, elders, advocates, policy makers, philanthropists and direct service providers: quantify elder economic security; examine the components of economically secure elders basic expenses; measure the gaps between typical incomes and economic security; measure how well public policies can help fill those gaps; and evaluate current income support programs ability to move individuals toward economic security. What does it take to age in place with dignity? To arrive at a measure of income adequacy, the Elder Index adds up the five major monthly expenses which constitute the basic elder household budget. As a measure of basic needs, the Elder Index includes only those goods and services essential to health and welfare: Housing: Rent or mortgage payments and all housing-related costs (heat, utilities, insurance, property taxes), as applicable Food: Costs of food prepared at home, based on the USDA Low-Cost Food Plan for older adults 1 Health Care: Premiums for Medicare, supplemental insurance and average outof-pocket costs, including co-payments and deductibles Transportation: Costs of private auto ownership and use, or public transportation where widely available Miscellaneous: Essential household and personal items such as clothing, paper products, cleaning products, etc. Miscellaneous expense for all housing statuses is estimated at 20% of all other expenses of a homeowner without a mortgage, based on Department of Labor Consumer Expenditure Survey data. As an example, table 1 displays the Elder Index expenses for a single elder and elder couple living in New York City. Varied housing and health statuses, and local differences among the Elder Index s five expense components create a broad range of minimum 2 Elders Living on the Edge

Table 1: Elder Economic Security Standard Index, New York City, 2009 Single Elder Elder Couple Monthly Expenses Owner w/o mortgage Renter, one bedroom Owner w/mortgage Owner w/o mortgage Renter, one bedroom Owner w/mortgage Housing $702 $1,195 $1,979 $702 $1,195 $1,979 Food $232 $232 $232 $428 $428 $428 Transportation $209 $209 $209 $368 $368 $368 Health Care (Good Health) $228 $228 $228 $456 $456 $456 Miscellaneous $274 $274 $274 $391 $391 $391 Total Monthly (Elder Index) Expenses $1,645 $2,138 $2,922 $2,345 $2,838 $3,622 Total Annual (Elder Index) Expenses $19,740 $25,656 $35,064 $28,140 $34,056 $43,464 Note: Annual values equal monthly values multiplied by 12. Source: Gerontology Institute and Wider Opportunities for Women, The Elder Economic Security Initiative : The Elder Economic Security Standard Index for New York (Washington, DC: Wider Opportunities for Women, 2009). retirement income requirements. Table 2 displays the Elder Index annual expenses for a single elder and elder couple (in good health) living in several regions of New York. 2 Table 3 exhibits the range of annual Elder Index values for New York elders (also in good health), and in selected counties. For more information on county Elder Indexes and further explication of the Elder Index methodology, see The Elder Economic Security Initiative : The Elder Economic Security Standard Index for New York, available online at www.wowonline.org. Housing Expenses Dominate Budgets in New York In every New York region and county, however, housing costs are the greatest determinant of elder economic security. In New York City, transportation, health care and food costs consume very similar portions of an Elder Index budget. Budget composition is more diverse outside of the New York metro area; health insurance costs are the second largest expense in North and Western New York. Table 2: New York Elder Economic Security Standard Index, by Region and Housing Status, 2009 Single Elder Elder Couple Regions Owner w/o mortgage Renter, one bedroom Owner w/mortgage Owner w/o mortgage Renter, one bedroom Owner w/mortgage Long Island $26,076 $30,528 $39,228 $36,960 $41,412 $50,112 Lower Hudson River Valley $26,988 $31,428 $41,484 $37,872 $42,312 $52,368 New York City $19,740 $25,656 $35,064 $28,140 $34,056 $43,464 North and Western New York $18,204 $20,232 $25,680 $27,996 $30,024 $35,472 New York Statewide $19,380 $24,516 $29,652 $28,872 $34,008 $39,144 Note: Elder Indexes are those for elders in good health. Source: Gerontology Institute and Wider Opportunities for Women, The Elder Economic Security Initiative : The Elder Economic Security Standard Index for New York (Washington, DC: Wider Opportunities for Women, 2009). When Basic Needs Exceed Income In New York 3

Table 3: Elder Economic Security Standard Index for Select New York Counties, by Housing Status, 2009 Single Elder Elder Couple County Owner w/o mortgage Renter, one bedroom Owner w/mortgage Owner w/mortgage Oswego County (Low, Owners w/o Mortgage) $16,116 $18,048 $22,884 $31,632 Erie County $17,364 $18,768 $23,700 $32,760 Monroe County $17,772 $19,764 $25,248 $34,464 Lewis County (Median, Single Renters) $18,204 $20,208 $25,320 $36,516 Nassau County $26,880 $30,816 $40,956 $51,852 Westchester County (High, Owners w/ Mortgage) $27,348 $31,284 $42,732 $53,616 Note: Elder Indexes are those for elders in good health. Source: Gerontology Institute and Wider Opportunities for Women, The Elder Economic Security Initiative : The Elder Economic Security Standard Index for New York (Washington, DC: Wider Opportunities for Women, 2009). The 18% of seniors with mortgages in New York State will spend, on average, nearly two and one-half times more on housing as elders who have paid off their mortgages whether they live in lower-cost areas (Allegany County, Broome County, Herkimer County, Oneida County, Orleans County, Oswego County, Washington County) or higher-cost areas (Nassau County, Putnam County, Rockland County, Suffolk County, Westchester County). Elder homeowners with mortgages in counties such as Bronx County (The Bronx), New York County (Manhattan) and Sullivan County currently pay up to two times as much for housing as those without mortgages, and face economic security thresholds 75% higher than those faced by elders who have paid off mortgages. Approximately 36% of New York State seniors are renters, well above the national average. Typical monthly rents for 1-bedroom apartments in New York State vary widely, from $549 per month in Herkimer County to $1,507 per month in Putnam County. In counties with the least expensive rents, a typical economically secure senior will still allocate approximately 34% of her or his income to rent. In New Figure 1: New York City Average Elder Economic Security Standard Index Expenses for a Single Elder Renter, 2009 Transportation 10% Food 11% Health Care (Good Health) 10% Miscellaneous 13% Housing 56% Figure 2: North and Western New York Average Elder Economic Security Standard Index Expenses for a Single Elder Renter, 2009 Transportation 14% Food 15% Miscellaneous 17% Housing 33% Health Care (Good Health) 21% 4 Elders Living on the Edge

York counties with the most expensive rents, a typical economically secure renter will devote over 50% of his or her spending to housing. While rents are lower in New York City than in the five most expensive counties (Nassau County, Putnam County, Rockland County, Suffolk County, and Westchester County), economically secure senior renters in New York City will devote 56% of their incomes to rent, the highest proportion in the state. Neither Social Security Nor Median Incomes Allow Elders Economic Security Social Security is the sole source of income for more than 25% of New York elders. 3 However, average Social Security payments do not meet average Elder Index expenses for single women in any of the state s counties, whether the elder is a renter or a homeowner. Average Social Security payments meet Elder Index expenses only for single male homeowners in good health without mortgages in the least expensive counties. Even for elder homeowners who have paid off mortgages, Social Security payments fall far short of economic security as defined by the Elder Index. In 2009, a single elder in North and Western New York who rented and relied entirely on the average Social Security payment for men fell nearly $3,000 short of economic security. A single elder woman in the North and Western New York region who rented and relied entirely on average Social Security fell more than $7,100 short of economic security. Average Social Security payments are high enough, however, to disqualify New York elders from participating in some critical public assistance programs. As shown in Figures 3 and 4, many of those who live on New York retirees median incomes also live below regional and county Elder Indexes. Even those with retirement incomes that include personal retirement accounts, private savings and pensions may fall short of economic security. 4 This problem is most severe for single elder women. In 2009, single women s median annual retirement income fell short of the Elder Index for renters by over $4,000 in North and Western New York and by over $13,000 in New York City. Figure 3: The Elder Economic Security Standard Index vs. Benchmark Annual Incomes for Single Elders in North and Western New York, 2009 $20,232 Annual Elder Economic Security Standard Index for Renters $10,830 Federal Poverty Level $13,587 $17,987 $16,088 $19,696 Average Social Security, Women Average Social Security, Men Median Income in Retirement, Women Median Income in Retirement, Men Note: Income in retirement includes all personal income, other than public supports, of those without earnings. Sources: US Census Bureau, 2008 American Community Survey PUMS data. Median income values inflated using BLS CPI inflator. Social Security Administration, OASDI Beneficiaries by State and County, 2008. Average Social Security values are inflated using SSA COLAs. When Basic Needs Exceed Income In New York 5

Figure 4: The Elder Economic Security Standard Index vs. Benchmark Annual Incomes for Single Elders in New York City, 2009 Typical New York City Elders Can t Make Ends Meet $25,656 Annual Elder Economic Security Standard Index for Renters in New York City $10,830 Federal Poverty Level $13,313 $15,645 $12,502 $15,064 Average Social Security, Women Average Social Security, Men Median Income in Retirement, Women Median Income in Retirement, Men Note: Income in retirement includes all personal income, other than public supports, of those without earnings. Sources: US Census Bureau, 2008 American Community Survey PUMS data. Median income values inflated using BLS CPI inflator. Social Security Administration, OASDI Beneficiaries by State and County, 2008. Average Social Security values are inflated using SSA COLAs. Bridging Gaps: A Snapshot of Public Support Programs Once gaps between income and economic security have been measured, the following questions arise: Can the gaps be bridged? Are there public support programs that can provide economic security? Using the Elder Index and Wider Opportunities for Women s Economic Security Simulator (Simulator), which calculates public support levels based on program eligibility rules and support level formulas, one can measure change in economic security as elders obtain or lose public supports. The Elder Index and Simulator provide a valuable snapshot of economic security and rapidly changing public support program availability, eligibility rules and support levels. The Simulator models the impact of the following major federally- and state-administered support programs available in the last quarter of 2009. See the Appendix for additional program details. Income Assistance: Supplemental Security Income (SSI) Food Assistance: Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) Prescription (Rx) Assistance: Medicare Part D Low Income Subsidy (LIS) and Elderly Pharmaceutical Insurance Coverage (EPIC) Medical Assistance: Medicare Savings Programs (MSPs) and Medicaid Long-Term Care Assistance (LTC): Expanded In-home Services for the Elderly Program (EISEP) Energy Assistance: Home Energy Assistance Program (HEAP) Housing Assistance: Housing Choice Voucher Program (HCVP, formerly known as Section 8) and the Section 202 Supportive Housing for the Elderly Program 5 6 Elders Living on the Edge

As this brief demonstrates, public supports can play a major role in helping elders reach or maintain economic security. Nevertheless, many elders who do qualify for public supports, particularly housing and long-term care services are currently unable to receive these nonentitlement benefits, as demand for services exceeds funding. In such cases, elders are often placed on waiting lists or simply turned away. Case Study One: The Impact of Public Supports on an Elder Renter Low-income elders who live on Social Security payments alone have trouble making ends meet in New York. Older adults with even lower incomes may face even more difficult circumstances, despite receiving income assistance. To qualify for Supplemental Security Income (SSI), single older adults must have countable annual income of less than $8,088; a couple must have less than $12,132 annually. For older adults with very low incomes, income assistance can prevent destitution, homelessness, poor health, or institutionalization. In December 2009, 133,699 New York elders received SSI, about 5% of the total population over 65. 6 Table 4 illustrates the importance of public supports to the economic security of an elder woman renter who lives alone in New York s Sullivan County. Her annual income of $6,036 ($503/month before income assistance) is the average Social Security benefit for New York elders who also receive federal income assistance. 7 Her countable assets of $1,500 approach, but do not exceed, the asset requirements for SSI. In addition to Social Security she receives $278 per month in SSI, which brings her annual income from all sources to $9,372 ($781/month). Her basic expenses are the 2009 Elder Index expenses for a typical single elder renter in Sullivan County. 8 Table 4 exhibits the elder s budget shortfall and the elder s economic security the ratio of monthly income to monthly expenses. Each column illustrates the change in monthly shortfall and economic security that accompanies the elder s receipt of supports. The table assumes receipt of all supports for which she is eligible, other than housing assistance, which has long waiting lists throughout the state. Receipt of SSI moves the elder from 27% economic security to 42% economic security. She is also income- and asset-eligible for food, Table 4: The Impact of Public Supports (w/o Housing Assistance) on Economic Security for a Single Elder Renter Living on a Very Low Income, Sullivan County 2009 Monthly Income $503 Monthly Elder Economic Security Standard Index $1,843 Income Assistance (SSI + State Supplement) Income + Food Assistance Income Plus Income + Food + Rx Assistance Income + Food + Rx + Medical Assistance Income + Food + Rx + Medical + Energy Assistance Monthly Shortfall -$1,340 -$1,062 -$862 -$803 -$461 -$419 % Economic Security 27% 42% 48% 49% 63% 65% Amount of Support $278 $200 $59 $342 $42 Note: Single, retired woman renter in good health living in Sullivan County on average Social Security payment for New York elders who also receive federal income assistance ($503/mn, $6,036/yr before income assistance), 2009. Source: Social Security Administration, Supplemental Security Record, 100 percent data, December 2008. Average Social Security value inflated using SSA COLAs. When Basic Needs Exceed Income In New York 7

Those who live on very low fixed incomes may approach or attain economic security if they receive all major supports, including scarce housing assistance. prescription, medical, energy and housing assistance. Receiving all available supports moves the elder to 65% economic security as defined by the Elder Index, with the largest increases coming from SSI, and Medicaid. She is aided to a lesser extent by the Medicare Part D Low Income Subsidy and the Supplemental Nutrition Assistance Program. Because she pays her own utilities, her very low income makes her eligible for a substantial and potentially crucial annual Home Energy Assistance credit of $500, which is similar to the 2009 statewide household average credit of $596. 9 The Home Energy Assistance credit is paid in one lump sum to the utility companies, and decreases the elder s heating bills to $0 for three months, increasing the elder s economic security by 10.5% in each of those three months. When that single annual Home Energy Assistance payment is divided by twelve and expressed as a monthly average, the assistance comprises less than 2% of the renter s Elder Index but it is a critical support in the winter months. Figure 5 demonstrates that very low-income elder renters in New York who receive multiple public supports fall short of the Elder Index. As Figure 6 illustrates, those who live on very low fixed incomes may approach or attain economic security if they receive all major supports, including scarce housing assistance. Those with 80% area median income (AMI) ($33,100 for a single person in Sullivan County) are eligible for federal housing assistance. However, those with extremely low incomes, below 30% area median income ($12,540 for a single person in Sullivan Figure 5: The Impact of Public Supports (w/o Housing Assistance) on Economic Security for a Single Elder Renter Living on a Very Low Income, Sullivan County 2009 $1,843, Monthly Elder Economic Security Standard Index $1,382 $1,424 $981 $1,040 Total Monthly Income and Support $503 $781 Income (Social Security) SSI/SSP Food Rx Medical Energy Note: Single, retired woman renter in good health living in Sullivan County on average Social Security payment for New York elders who also receive federal income assistance ($503/mn, $6,036/yr), 2009. SSI plus State Supplement = $278/mn, $3,336/yr. Source: Social Security Administration, Supplemental Security Record, 100 percent data, December 2008. Average Social Security value inflated using SSA COLAs. 8 Elders Living on the Edge

Figure 6: The Impact of Public Supports on Economic Security for a Single Elder Renter Living on a Very Low Income, Sullivan County 2009 $1,843, Monthly Elder Economic Security Standard Index $1,896 $1,216 $1,258 Total Monthly Income and Support $503 $781 $815 $874 Income (Social Security) SSI/SSP Food Rx Medical Energy Housing Note: Single, retired woman renter in good health living in Sullivan County on average Social Security payment for New York elders who also receive federal income assistance ($503/mn, $6,036/yr), 2009. SSI plus State Supplement = $278/mn, $3,336/yr. Source: Social Security Administration, Supplemental Security Record, 100 percent data, December 2008. Average Social Security value inflated using SSA COLAs. County), are granted priority by law and receive 75% of available federal assistance. Because the supply of public housing and housing vouchers is limited, housing assistance recipients rarely have incomes above 50% AMI. The New York State Department of Housing and Community Renewal oversees county-level administered public housing and administers only approximately 38,500 Housing Choice Vouchers in a state where there are over 3 million rental units. As a result, eligible low-income elders are often unable to access New York s greatest potential contribution to economic security. For New York City elders who have limited income and live in rent-controlled, rent-stabilized, or hotel-stabilized housing, the Senior Citizen Rent Increase Exemption (SCRIE) may offer some protection from the high cost of housing not by subsidizing rents, but by preventing an elder s rent from rising above one-third of household income. Case Study Two: The Need for Long- Term Care Threatens Economic Security Expanded In-home Services for the Elderly Program (EISEP) The need for long-term care (LTC) dramatically affects an elder s ability to achieve economic security in old age no matter what their incomes are. A catastrophic health event or a chronic ailment or impairment can create significant financial difficulties for an elder who might otherwise be economically secure. Long-term care is required by those with chronic health conditions, disabilities or rehabilitative care needs. LTC most commonly helps with instrumental activities of daily living, such as grocery shopping and household chores, or with more complex activities of daily living, such as dressing and bathing. LTC has traditionally been received in institutional settings, such as When Basic Needs Exceed Income In New York 9

assisted living facilities or nursing homes, or provided by family members. With the increasing availability and cost-effectiveness of home and community-based long-term care, some elders can avoid the disruption and cost of moving to institutions by receiving LTC from professionals and volunteers who assist with activities ranging from homemaker services to skilled nursing care. The number of Americans currently requiring LTC is approaching 10 million, and by 2020, 12 million older Americans may need long-term care. In New York state, Medicare pays for medical care provided in nursing homes and short-term rehabilitative care, and, the Medicaid-funded Long Term Home Health Care Program provides in-home care to those who require nursing home levels of care and have incomes after medical expenses below the federal poverty line. Some Medicare (Part C) Advantage Plans pay claims for limited skilled nursing facility and skilled home care, but rarely pay for LTC. Most LTC is nonskilled custodial care, such as personal care and homemaker services, and traditional assistance options are rarely available to seniors who require this level of LTC. As a result, most LTC expenses are paid out-of-pocket. Table 5 illustrates the impact of worsening health on the economic security of a single elder homeowner with an income well above her county s average Social Security payments, or even New York women s median income in retirement. The elder lives alone in Monroe County, and has an annual unearned income of $17,782 per year ($1,481 per month) an income equal to the 2009 Elder Index for homeowners in good health. She maintains very limited countable assets, but participates in no public support programs. In her 70th year, the elder suffers a fall and breaks her arm. After a short stay in the hospital and a nursing and rehabilitation facility, she returns to her home, where she lives alone. The bulk of her medical costs are covered by Medicare. The elder is mobile and able to perform some activities of daily living, but requires a low level of assistance with her self-care and housekeeping tasks. She must also be transported to occasional medicalrelated appointments. Medicare will help pay for limited rehabilitation and skilled care after she arrives home, but will not support personal care. As a result, she must seek out home and community-based long-term care options. Her poor health and new care will create an additional expense beyond her normal monthly Medicare premiums and out-of-pocket expenses of $779 per month, the average LTC cost for a low level of care (6 hours per week) in New York, plus higher out-of-pocket expenses for Table 5: The Impact of Public Supports on Economic Security for a Single Elder Homeowner in Poor Health with LTC Needs, Monroe County 2009 Long-Term Care Needs Can Destroy Economic Security, but the EISEP LTC Program Can Prevent Impoverishment Income Plus... Income (= Elder Index) $1,481 Expenses (= Elder Index with Poor Health and LTC) $2,260 Food + Rx + Medical + Energy Assistance Food + Rx + Medical + Energy Assistance + EISEP Monthly Shortfall -$779 -$583 -$76 % Economic Security 66% 72% 95% Note: Single retired homeowner without a mortgage living on income equal to the Elder Index for homeowners without mortgages ($1,481/mn, $17,772/yr) in Monroe County, NY, 2009 10 Elders Living on the Edge

care covered by Medicare. 10 Her total health care and LTC costs more than triple and become her greatest expense. Her economic security falls from 100% to 66%. The elder is ineligible for Medicaid or the Medicare Savings Programs. But her income, adjusted for medical and long-term care costs, makes her eligible for food assistance, pharmaceutical assistance, and energy assistance. She qualifies for and receives a SNAP benefit of more than $100 a month and a one-time HEAP payment of $450. Her income exceeds 150% FPL, so she is not eligible for the Part D Low Income Subsidy (LIS), but she receives aid of $40 per month from the Elderly Pharmaceutical Insurance program, which provides valuable assistance to those elders with incomes ineligible for LIS or whose high drug bills are not fully covered by LIS. Because her medical costs have increased, however, the supports move her from 66% economic security to only 72% economic security. Public support programs other than LTC assistance programs cannot make up for the loss of security experienced by an elder who incurs long-term care expenses. If the elder maintains limited assets other than her home, her budget deficit will eventually prove unsustainable as LTC needs continue. If she is to age in place and avoid the great costs, complications, disruptions and emotional impact of moving into a nursing home, the elder must find a way to pay for home- and community-based long-term care services. New York s Expanded In-home Services for the Elderly Program (EISEP) holds promise for the elder. EISEP provides home- and communitybased non-medical services and care (such as housekeeping and personal care) as an alternative to nursing homes. 11 Because EISEP provides assistance on a sliding scale based on income, and does not limit eligibility based on assets, the program will subsidize the elder s needed longterm care services. If the elder were officially deemed in need of assistance to perform an activity of daily living, and able to participate, EISEP would allow the elder to approach, if not fully regain, the economic security threshold. However, if placed on a waiting list and forced to pay for LTC largely or entirely out-of-pocket for any length of time, the elder could be overwhelmed by a recurring monthly deficit of nearly $600. Due to the high cost of care $150 per week or more for even the most basic care many of those without family caregivers, or others available to offer assistance, find themselves unable to finance even short-term LTC needs. Table 6 demonstrates the challenges that would be faced by the above elder homeowner if she required more than a low level of LTC, and the Table 6: The Impact of Supports on Economic Security for a Single Elder Homeowner in Poor Health with LTC Needs, by LTC Level of Need, Monroe County 2009 % Economic Security Food + Long-Term Care Level of Need No Supports Food + Rx + Medical + Energy Assistance Rx + Medical + Energy Assistance + EISEP Low 66% 72% 95% Medium 45% 49% 88% High without Adult Day Health 29% 30% 72% Note: Single retired homeowner without a mortgage living on income equal to the Elder Index for homeowners without mortgages ($1,481/mn, $17,772/yr) in Monroe County, NY, 2009 When Basic Needs Exceed Income In New York 11

Public support programs other than LTC assistance programs cannot make up for the loss of security experienced by an elder who incurs long-term care expenses. importance of the EISEP program in preventing destitution and institutionalization. Without intervention, low income and even non-low income elders who require longterm care may be forced to give up or borrow against their homes. In particular, elder renters, 36% of seniors in New York State, rarely possess significant buffer assets, and only elders with uncommon assets and disability or LTC insurance are able to avoid institutionalization when they suffer catastrophic or chronic bad health unless LTC assistance is available. Without Housing Assistance, Gaps Between Income and Economic Security Persist, Even as Income Rises Because public supports begin to fall off after incomes exceed the federal poverty level, many New York elders living above the 2009 federal poverty level of $10,830 find themselves almost as far from economic security as those living below the federal poverty level. Figure 7 exhibits gaps between income and economic security across a range of incomes for elders who rent in New York s Tompkins County and do not receive housing assistance. At the lowest income shown, $8,000 per year, the value of supports exceeds income. The elder is left with a gap between annual income and annual Elder Index expenses of more than $5,900. Due to benefit cliffs incomes at which eligibility ends or the receipt of one support lowers the value of another increases in income are not always accompanied by increases in economic security. Given receipt of all available major public supports other than housing assistance, an elder with a $12,000 annual income which approximates average Social Security income for single elder women in some counties faces an economic security gap larger than that faced by an elder with just $10,000 in annual income. Nor are increases in income accompanied by proportional decreases in the economic security gap. A $4,000 increase in income from $8,000 to $12,000 actually increases an elder s economic security gap by $268. A $4,000 increase in income from $10,000 to $14,000 reduces an elder s economic security gap by $1,090. A $4,000 increase in income from $14,000 to $18,000 reduces the gap by just over $1,600. At no income level does an increase in income create an equal or proportional increase in economic security. Even assuming receipt of all major public benefits for which an elder is income and asset eligible, the gap between income and expenses is only fully eliminated when an elder is able to achieve economic security entirely through his or her own income. It is rare for elders to access all of the supports for which they are eligible. This is particularly true for those unaware of available help or swayed by disinformation, those to whom supports become unavailable due to budget cuts or a lack of administrative staff, and those who are simply ineligible for help due to modest assets or excess income. For many elders, the gaps illustrated in Figure 7 are made much larger by non-receipt of benefits. 12 Elders Living on the Edge

Figure 7: Annual Income, Public Supports and Economic Security Gaps for Single Elder Renters in Tompkins County, NY, 2009 $23,040, Annual Elder Economic Security Standard Index $5,968 $5,340 $6,236 $4,250 $3,620 $3,420 $2,632 $2,408 $1,565 $1,475 $4,790 $7,700 $4,804 $9,072 Gap $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 Supports Income Policy Recommendations The members of New York StateWide Senior Action Council recognize that the State faces an unprecedented fiscal future and are deeply concerned about the impact the economic turmoil will have on New York State s vulnerable senior citizens living on a fixed income. Older New Yorkers need access to the continuum of programs that can help persons when their incomes fall short of the basic costs of living in their communities. New York has a complex array of public and private supports to assist older adults struggling to make ends meet. Notwithstanding, New York State cannot fully respond to the demand for housing assistance nor fully meet our residents growing longterm care needs. Elders who receive available public supports often find themselves still living below the Elder Economic Security Standard Index (Elder Index), while those lucky enough to maintain economic security are constantly at risk of falling below the Elder Index as their health status changes or other contingencies occur. Current budget shortfalls provide opportunities for policymakers to evaluate policies and programs for older adults that make a critical difference for those whose income falls short. To ensure economic security for all older persons, federal, New York State and local governments should develop more realistic policies and programs by: Utilizing a percentage of the Elder Index, as opposed to 100% or 200% of the federal poverty level, to determine program eligibility; Utilizing the Elder Index to evaluate existing policies and to develop new policies for older adults; and Promoting the use of eligibility guidelines that adequately reflect geographic differences in cost-of-living across the state. The current gap between older persons actual incomes and what it would cost for them to achieve economic security can be bridged by When Basic Needs Exceed Income In New York 13

raising their incomes, reducing their costs, or in most cases a combination of the two. Increase Income Raise the federal share of the Supplemental Security Income (SSI) program to at least the federal poverty level, preferably using the Elder Index, augmenting the New York State supplement and instituting an automatic cost of living adjustment for the state share of this entitlement. Raise the Social Security replacement rates for low and average wage earners. Increase opportunities/incentives for older workers to remain employed. NN Encourage employers, both public and private, to redefine retirement. This means providing more flexibility in work options, including pro-rated benefits for part-time workers, telecommuting, and a shorter workweek. NN Improve access to education and training for older persons currently in or re-entering the workforce. Encourage retirement planning. New York should continue to embark on an educational campaign encouraging individuals to plan for their own and their families future long-term care needs. Establish Universal Saving Accounts allowing elders returning to the workforce the opportunity to save and contribute earnings to retirement accounts while working parttime or full-time for small businesses or non-profits. Provide credit and support programs for unpaid caregivers. Reduce Costs Housing costs in New York State are the largest contributors to elder economic insecurity, followed by out-of-pocket medical costs which are also a major driver of personal bankruptcies. Where raising incomes does not bridge the gap, federal and state actions are needed to drive down these costs for older New Yorkers. Increase housing trust funds, affordable housing development, heating, weatherization, and housing assistance, to all New York elders. Actions steps include: NN Increased income limit for New York STAR Exemption; NN Additional funding for Home Energy Assistance Program (HEAP); NN Expanded rent protections for senior citizens across the state; NN Stronger safeguards for elders facing eviction and foreclosure; and NN Reverse loan mortgage programs for seniors. Expand programs that keep seniors living independently at home and engaged in their communities. Action steps include increased federal and state funding for: NN EISEP (Expanded In-home Services for the Elderly Program) NN SNAP (Supplemental Nutrition Assistance Program) NN CSE (Community Services for the Elderly Programs) N N Expanded Services to NORCS and Neighborhood NORCS. 14 Elders Living on the Edge

Provide higher income limits in the SCHE, SCRIE and DRIE programs for households where a spouse, companion or family caregiver is residing with the older or disabled person. Establish a cap on out-of-pocket medical expenses, including premiums, for all Medicare beneficiaries. Maintain EPIC s wraparound of the Medicare Part D benefit for all medically necessary drugs. Disregard medical expenses when determining financial eligibility for federal and state programs. Provide federal and New York State funding to promote wellness and preventative activities. Broaden and deepen outreach and public information on all these programs, especially targeted to rural, minority and disabled populations, to improve program participation rates. For more information, please visit New York Statewide Senior Action Council (http://www. nysenior.org/) and Wider Opportunities for Women (www.wowonline.org) online. Appendix: Major Public Supports (Q4 2009) Supplemental Security Income (SSI) Supplemental Security Income, administered by the federal Social Security Administration, provides monthly cash payments to elders with no or very low income. SSI eligibility income and asset limits are the lowest of any work or income support available to New York elders. In 2009, qualifying elders had incomes less than $8,088, and qualifying elder couples had incomes less than $12,132. SSI payments fill the gap between recipients incomes and the countable income limits. Single and married elders must also maintain no more than $2,000 and $3,000 in assets, respectively, not including a home, one car, and household items. Supplemental Nutrition Assistance Program (SNAP) The Supplemental Nutrition Assistance Program, New York s food stamp program, provides low-income households with electronic benefits which participants use to purchase food. The U.S. Department of Agriculture funds the program through the Food and Nutrition Service, and New York administers the program, including determination of eligibility and distribution of benefits. Elders are eligible with incomes up to 200% FPL. Actual benefits are determined based on income less adjustments for medical expenses and uncommonly high housing costs. Elders are not required to meet asset limits. Medicaid New York offers complete Medicaid coverage to very low-income elders, including some LTC recipients, and pays participants Medicare Part A and Part B premiums. The annual income and When Basic Needs Exceed Income In New York 15

asset limits for a single elder are $9,204 and $13,800, respectively. For elder couples, the annual income limit is $13,404 and the asset limit is $20,100. Medicaid s Excess Income program offers Medicaid coverage to elders who exceed the Medicaid income limitations. To qualify, elders incomes less allowed medical expenses (not including Medicare premiums) must be less than the income limits described above. Medical Assistance Medicare Savings Programs (QMB, SLMB, QI-1) The Medicare Savings Programs (MSPs) include the Qualified Medicare Beneficiary (QMB), and Specified Low-Income Medicare Beneficiary (SLMB) programs. The QMB program helps low-income elders enrolled in Medicare Part A pay for Medicare Part B premiums, deductibles and co-payments. Premiums for Part C supplementary insurance are not covered. To qualify, an elder s gross annual income must be no more than 100% FPL ($10,830 for a 1-person household; $14,570 for a 2-person household). The SLMB and QI-1 programs pay for all or part of Medicare Part B premiums for qualified recipients. Recipients must be enrolled in Medicare Part A. To qualify as an SLM Beneficiary, an elder s gross annual income must be no more than 120% FPL ($12,996 for a 1-person household; $17,484 for a 2-person household). QI-1 recipients must have annual incomes of no more than 135% FPL ($14,621 for a 1-person household; $19,670 for a 2-person household). Federal Prescription Assistance Medicare Part D Low Income Subsidy (LIS) The Low Income Subsidy helps low-income elders with prescription drug costs. The federal government subsidizes participants private Medicare Part D drug (insurance) plan premium, and helps pay drug deductibles and co-payments. Those with Medicaid or participating in Medicare Savings Programs automatically qualify for LIS. For full eligibility, gross monthly income must be no more than 100% FPL ($10,830 for a 1-person household; $14,570 for a 2-person household); thereafter the program provides help on a sliding scale to those with incomes up to 150% FPL ($16,245 for a 1-person household; $21,885 for a 2-person household). Single and married elders must also maintain no more than $8,100 and $12,910 in assets, respectively, to receive full LIS benefits. In order to receive partial LIS benefits, single elders cannot have more than $12,510 in assets and couples must have no more than $25,010 in assets. Elderly Pharmaceutical Insurance Coverage Program (EPIC) EPIC helps low-income elders with prescription drug costs. The state government subsidizes participants private Medicare Part D drug (insurance) plan premiums, and helps pay drug co-payments. Participants must be enrolled in a private Medicare Part D drug plan, with limited exceptions. Those with a gross monthly income of no more than $20,000 for a 1-person household and $26,000 for a 2-person household are eligible for the fee plan and pay an annual fee (which is waived if the person receives LIS) based on income. Those with a gross monthly income between $20,001 and $35,000 for a 1-person household and between $26,001 and $50,000 for a 2-person household are eligible for the deductible plan and pay an annual deductible based on income. EPIC includes an out-of-pocket limit based on the income of the participants and will cover all prescription drug costs after the limit has been reached. 16 Elders Living on the Edge

Expanded In-home Services for the Elderly Program (EISEP) EISEP helps elders pay for basic long-term care services not covered by Medicare or Medicare Part C supplementary insurance. The program allows elders who require assistance with at least one Activity of Daily Living (such as cooking, shopping, etc.) to remain independent in their homes, and covers assistance such as: personal care, homemaking, respite for caregivers, adult day services, home-delivered meals, transportation, private duty nursing, personal emergency response systems, chore service, counseling, home injury control, medical equipment and supplies, client/caregiver training and nursing home transition. EISEP is administered by New York s State Office of Aging using statewide program regulations and standards, and administered and managed locally by the 59 Area Agencies on Aging. There are no income or asset tests for EISEP; however, customers may not be enrolled in Medicaid. There is no charge for the EISEP program for individuals with monthly incomes below $1,375 and couples with incomes below $1,852. There is a sliding scale fee rate for those with incomes above the limit. In state fiscal year 2008-2009, EISEP provided in-home services to over 13,540 New York elders and case management services to over 49,500. Waiting lists vary by county. Home Energy Assistance Program (HEAP) The Home Energy Assistance Program helps lowincome families pay for home heating. The credit is funded by the federal Low-Income Home Energy Assistance Program, and administered by the New York Office of Temporary and Disability Assistance. Claims can be submitted at the beginning of November of each year. For the 2009 2010 heating season, the recipient income limit was 60 percent of the state median income, $2,030 for an individual and $2,654 for a couple. There is no asset test for this program. HEAP benefits vary according to heat source and energy provider. Housing Assistance Eligible elders can receive direct or indirect housing subsidies from three programs funded by the U.S. Department of Housing and Urban Development (HUD) and administered locally by the New York State Housing Development Authority and county housing agents: The Housing Choice Voucher Program (HCVP, formerly Section 8), Public Housing, and the Section 202 Supportive Housing for the Elderly Program. Recipients of an HCVP voucher may select any market-rate rental housing with a property owner willing to accept the HCVP voucher, and voucher amounts are based on a local fair market rent established by HUD. The Section 202 program provides capital and operating funds to developers and operators of subsidized senior housing. Those with 80% area median income are eligible for assistance. However, those with very low incomes below 30% AMI are granted priority; because the supply of public housing and housing vouchers is limited, most housing assistance recipients have incomes below 30% AMI, and housing assistance recipients rarely have incomes above 50% AMI. In addition, the Senior Citizen Rent Increase Exemption (SCRIE) prevents rent prices from rising above one-third of household income for eligible elders living in New York City. SCRIE is administered by local agencies chosen by the municipalities that choose to participate in the program; in New York City, it is administered by the Department of Finance. To qualify in NYC, an elder must be 62 years of age, live in a rentcontrolled, rent-stabilized, or hotel-stabilized housing unit, have a total household income of less than $29,000 a year, and spend at least onethird of their disposable income on rent. When Basic Needs Exceed Income In New York 17