Senior Income ResearchThis page relates to my page on Seniors and Prescription Drugs. This page here talks to the contention that seniors are the wealthiest they have ever been and can afford to pay for their own drugs.
"All age seniors" make up 28% of the US population, if we count people 50 and older. However, these pages are talking about people 65 and older, the REAL seniors. The "rich seniors" in news reports are usually those people 50-65 who are still working, who are not supporting kids any more, and who are living the jet-set life. Their mortgage is paid and their income easily covers their expenses. However, when those people STOP working and have to live on their investments and Social Security, it is also exactly when the medical problems become critical. The combination is disastrous.
From ZMag: "The average retired worker's Social Security benefit is just $922 a month--about $11,000 a year. Disabled workers average just $862. One out of three seniors depends on Social Security for 90 to 100 percent of their income. Two out of three seniors depend on it for more than half their income. Even with Social Security, many seniors find themselves choosing between eating and heating, paying the mortgage or paying for medicine. " Note in 2001 the average payout was $845/month.
So 1/3rd of seniors live on $922/month ($11,000/yr) to pay all bills including taxes. 1/3rd of seniors live on say $1600/month ($22,000/yr). Only 1/3rd have more than that coming in each year.
Most seniors (i.e. 65+) still have to pay for their homes' property taxes. A recent study showed that seniors making $25,000/yr or under (i.e. over 2/3rds of all seniors) pay 17% ($4,250) of that out to property taxes, even if they've fully paid off the mortgage. Maybe they should rent? I've checked out apartment costs across Massachusetts, just to use as a base. They are around $800-900/month and that doesn't include the higher city prices. That cost would literally take up the entire income of 1/3rd of all seniors, and take half the income of another third.
In an average subsidized housing for seniors, the income is $13k/yr (which means they had some savings too). The seniors there pay only 30% of their income for rent. So at under $1,000 takehome/mo, they pay say $350/mo rent (which of course is very low, the rest is subsidized for them). Even so, that only leaves $650/mo for other expenses (including taxes). So now to figure out how much of that is medication.
First, over half of the main drugs prescribed to seniors have tripled or more in price between 2002 and 2003 alone. Another quarter of them went up by at least 1.5 times. This takes inflation into account, too.
Medicare is not a "get well free" card. First, it costs $115/mo in premiums. Current estimates are that in only 2 years, by 2006, that the average senior citizen will pay a full 37% of their Social Security income to Medicare. I agree that seniors should have their own investments to live on and not depend on Social Security for their entire survival. But many do, and 37% is a very high percentage. For someone on $922/mo, they are paying out $115 + $341 on medical issues, i.e. $456. That leaves $466/mo to pay for all taxes, lodging, food, etc.
Seniors don't have much chance for non-SS income. Many companies have stopped giving pensions, and have even retroactively cancelled them for people who paid into them. Stocks fail. Savings accounts often barely keep up with inflation.
One example from recent press: a woman in Tennessee gets $700/month to live on. Even with Medicare, she pays out $400/month on her necessary medications. Taking out her monthly premium too, that leaves under $200 for all other bills (including lodging).
The average senior in 2001 had $4,000 out on credit card bills, using them to pay for expenses such as groceries and medication.
Note that these all assume a generally HEALTHY senior. If the senior has to go into nursing care, that averages at a cost of $50,000 a year - and all bets on paying any bills are off.
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