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Biden’s plan for older Americans: What you should know, according to experts

Biden’s plan for older Americans: What you should know, according to experts

Older adults in the U.S. face some of the most significant health and economic challenges that could potentially be addressed by the federal government. As we enter a new presidential era, many seniors are hoping to see lawmakers enact concrete fixes.

“Seniors are among the most vulnerable populations in the United States from both a health and financial perspective,” says Chris Orestis, a long-term care and retirement expert and senior advocate. “On the health side, seniors are exposed to risks in their daily lives that have now become much more deadly during the pandemic. On the financial side, the damage to the economy and the volatility in the stock market has wreaked havoc on seniors’ investments and income.”

Aware of these concerns, now President-elect Joe Biden is offering older Americans a plan with a variety of possible solutions, such as combatting the pandemic, protecting the payroll tax income streams to Social Security and Medicare and putting $50 billion in new tax revenue — generated from raising the corporate tax rate — toward research on cancer, diabetes, Alzheimer’s and Parkinson’s diseases. Now that he and Senator Kamala Harris are set to take office on January 20, older adults and family caregivers plan to hold them accountable on these vows.

Here’s what you need to know about President-elect Biden’s key proposals for older Americans, according to Orestis and other experts. 

Protect seniors against COVID-19

A recent AARP investigation found that nursing home residents and staff accounted for almost half — 43% — of total deaths from COVID-19. And overall, older Americans are at greater risk of death from the virus: The Centers for Disease Control and Prevention (CDC) reports that among adults, 8 out of 10 deaths have been 65 years of age and older.

That’s why when it comes to vaccination, seniors and caregiver are the highest risk and highest priority, notes Orestis. To address this, the new administration is aiming to distribute 100 million vaccine shots (enough to cover 50 million people) within their first 100 days in office. And they’ll prioritize vaccinating residents of long-term care facilities, as recommended by vaccine advisers to the CDC. 

In addition, the administration is forming a COVID-19 Racial and Ethnic Disparities Task Force, which will address the inequities leading to the disproportionate infection and killing of minority seniors.

Bolster the Affordable Care Act

Thanks to the Affordable Care Act (ACA), which was signed into law by President Obama in 2010, more than 20 million people gained health insurance. According to AARP, the uninsured rate among older adults has fallen 39% since 2013, as coverage has increased in the nongroup market. Older Americans also benefited from the law’s limitation on the extent to which insurance companies can charge a person higher premiums just because of their age, among other benefits.

Now, the Biden-Harris administration is proposing reducing the costs for virtually all participants in ACA plans, says Orestis. “Monthly contributions could be reduced for qualified participants by as much as 30% while premium tax credits could be available and cost sharing requirements could be reduced based on participant income levels,” he explains. “For seniors not yet 65, this is a very important bridge to help them enroll in affordable coverage until they reach Medicare eligibility.”

Support for Social Security and working seniors

More older Americans are working or looking for work than ever before. A 2019 report found that this applied to more than 20% of adults over age 65, compared with 10% in 1985. And that percentage is only projected to grow to over 25% in another five years. Acknowledging this, President-elect Biden plans to offer favorable tax credits that encourage seniors to stay in the workforce, so that they can save and delay taking their Social Security benefit.

“Seniors can qualify to start at age 62, but the longer they wait up to age 70, the higher the monthly benefit they will receive,” says Orestis. “Once you elect to take Social Security, you lock in that benefit amount for life. The Biden-Harris Administration understands that the more they can do to incentivize seniors to work, save and delay taking their Social Security benefit, the more secure a retirement they will have and the more fiscally stable they can keep the program.”

And keeping Social Security solvent is crucial, given that roughly 90% of retirement-age Americans receive Social Security benefits, and one-in-four rely on Social Security for all, or almost all, of their income, as Biden’s campaign points out.

The incoming administration also plans to bolster Social Security in other ways, like providing the oldest beneficiaries with a higher monthly check, creating a true minimum benefit for lifelong workers, protecting widows and widowers and eliminating penalties for teachers and other public sector workers. 

Protect and expand Medicare and Medicaid

The president-elect aims to protect Medicaid funding. He’ll also make sure the program gives those who need long-term care the flexibility to choose home– and community-based care.  

The Biden administration also wants to encourage the 12 states that have not yet expanded Medicaid under the ACA to move forward, helping those who can’t afford Medicare copays. 

He also vows to keep Medicare as a separate and distinct program that would be available to people 60+ as opposed to 65+.  

Tax breaks to support long-term care and retirement

The president-elect is proposing a variety of tax benefits and breaks for older Americans. A couple highlights:

Long-term care challenge

This plan aims to help Americans pay for long-term care by creating a $5,000 tax credit for family caregivers, explains Terry Hokenstad, Jr., a worldwide leader in social work education and research and distinguished university professor emeritus at Case Western Reserve University in Cleveland, Ohio. “This means a person can remain in their own home and receive the care they need to rather than go into a clinic or a hospital,” he notes. 

Additionally, Biden wants to increase the generosity of tax benefits for older Americans who choose to buy long-term care insurance and pay for it using their savings for retirement. The credit would be 30% of eligible expenses above $2,000. 

“That means a lot to older people who can’t afford to pay entirely out-of-pocket for long-term care insurance,” explains Hokenstad. 

Expand the Earned Income Tax Credit (EITC)

The EITC is intended to reduce the amount of taxes owed by, or provide a refund to, low- to moderate-income earners. (You can find out more about the qualifying criteria for the earned income tax credit here.) But the EITC is not available to workers once they turn 65. As president, Biden plans to allow low-wage older workers to claim the tax credit.  

Reduction of high prescription drug costs

The skyrocketing costs of prescription drugs has a variety of negative downstream effects for older Americans. “Many people address the high costs of prescription drugs by rationing care and dosage,” explains Orestis. “This practice is not healthy and actually exacerbates the costs of health care with people’s health declining instead of improving, which is ultimately more expensive for themselves and all of us.” 

A few solutions proposed by the president-elect include allowing the Centers for Medicare and Medicaid Services (CMS) to negotiate lower prescription drug rates, making it possible for Americans to buy prescription drugs from other countries and creating an independent review board that would assess the value of specialty drugs that enter the market without competition.

The enactment of these proposals and others, which will rely on the support of Congress, could be huge for older adults. As Orestis puts it, “The lowering of prescription drug costs would have one of the most meaningful economic impacts for seniors possible.”

Plan oppositions we can expect 

It bears noting that a wide variety of hurdles could prevent many of these proposals from becoming law. A few to consider, according to Orestis:  

  • House and Senate Republicans have voted over 100 times to eliminate the ACA since it was first enacted.

  • The pharmaceutical industry are massive financial supporters of the slim Senate majority and do not want to see Medicare implement price controls. 

  • There continues to be opposition to Medicaid expansion in many Republican-controlled states. 

  • There is also much division and mistrust around the COVID vaccines with many people not willing to get the vaccine.

That said, the incoming administration will likely have an uphill battle to enact plans that benefit not only older but all Americans. 

But it could ultimately be well worth the fight. “The president-elect’s plan for older Americans addresses long-standing inequities based on age and income when it comes to accessing quality, affordable healthcare and living in a financially secure retirement,” says Orestis. “It is a reflection of the Democratic party philosophy that healthcare and living with dignity after retirement are an inalienable right for all.”

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