Differences in Aging Policy Internationally

Introduction

One of the long run fiscal issues that have faced many countries across the world is the aging of the population. There has been an increasing ratio of the elderly and the working population within the first half of the 21st century. The paper seeks to understand international perspective on public policies that are directed to these aged population and the potential implication of these policies. In the modern day, the issue of aging population has become a subject of much attention across the world. “Today, demographers note that population aging is a trend spreading across the world. Global life expectancy reached about 47 years by 1950, has reached age 67 today, and is projected to rise to 75 by 2050” (Ageing, 2002). Population aging can simply be considered as a change in the country’s population composition towards older ages (Ageing, 2002). The world has currently experienced an increase in the total number of older people who are approximately the age of 65 years and above with a decreasing number of younger generations. Studies have pointed out that the trend for the aging population will continue to rise significantly in the next sensory. The aging of the population has, on the other hand, has presented a serious issue to the government, and this is specifically regarding its healthcare effect, care services, labor supply in the future and pensions.

According to Crampton (2009), the aging population has thus represented a significant demographic change that has significantly affected the entire American society. Studies have pointed out that it has generated major challenges and consequences to the entire economic, social and even health sectors in all countries. As people live longer, various chronic illnesses that are commonly associated with middle and old age have emerged resulting in disability and functional dependency that requires services and effective policies that in some ways have affected the economy regarding income security, housing health and recreation (Dobriansky, Suzman & Hodes, 2007). Chronic illness burden has created a major challenge, especially for policy makers. The essay will critically analyze the different aging policies internationally. Evidently, every country has established an aging policy that is aimed at addressing the needs of these groups of the population with the aim of improving their health, wellbeing and empowers them economically.

Review of literature

Policy makers are preoccupied with a various negative economic impacts of the elderly on the public health in addition to the pension entitlement such as Medicare and social security. Studies have pointed out that the massive unfunded future obligation of these government programs has crowded other core considerations (Johnson, 2012). These entitlement programs have shown to require significant modification to ensure and enhance their sustainability and fairness. “There are good economic reasons for enacting policies and programs that promote active aging regarding increased participation and reduced costs in care,” (Crampton, 2009).

The goal of most government is to establish and execute policies that will guarantee a smooth shift to a unified prolific elderly society. The government’s failure to attain this goal will result in a community rife with an intergenerational tension which will massively be characterized with gaps between the haves and have not in terms of quality of life and opportunities which will make the government unable to prove for the needs of the progressively older population comprising of highly depended population (Fernández-Ballesteros et al, 2013). There is the need to establish policy measures in place to fortify the future labor force, enhance older individual productive commitment while enhancing family capacity to support this population. Such policies have been established to be effective in that they will significantly lessen the great burden on social security.

The Albania government has put in place a social protection policy that comprises of the social insurance, health services, and healthcare insurance in addition to social assistance and services especially targeting the aging population (Johnson, 2012). Further, the legal package in Albania including the social inclusion of the aged consists of the general health insurance system. Policy responsibilities for the aged population include prevention of early abandonment of these groups, targeting economic assistance for aged households, improving all social care services, ensuring social shelter for the aged and institutionalization of the free legal assistance. Additionally, “the government alleviate economic hardship in addition to social dispossession of the aged population, developing an opportunity for a civilized living and wellbeing at their old age and lastly, facilitate economic issues in addition to social deprivation of the aged” (Crampton, 2009).

In Australia, the major challenge of the aging population is the country’s need to maintain their productivity. Aging programs that are financed by the Government Department of Health and Ageing play a key role regarding contributing to an enabling and supporting opportunities for the aged to be socially included (Dobriansky, Suzman & Hodes, 2007). The provisions of the Aged Care Act 1997 together with the Aged Care Principles and other arrangements for programs that are financed outside this Act are all established to ensure that there is easy access to care. In the year 2009 to 2010 aged cares, funding was about $AUD1 billion. There is also a retirement income arrangement to enable older citizens to uphold their potential crucial for the continuing economic and social contribution (Ageing, 2002). It is comprised of three core pillar and entails contributions from the state, employers, and individuals. The age pension is made available to all the citizens. Medicare policy, on the other hand, offers collective access to highly subsidize medical and pharmaceutical services in addition to free of charge treatment. The government has further encouraged participation by all the aged population in Australia with a productive aging package.

In Europe, demographic change and the aging population have been argued to be a major challenge for policy makers. The aging population has been established to be a key area for examination particular from the fiscal sustainability perspective. For instance, “1994 EU summit was the first effort to underscore the government’s need to improve employment opportunities especially for older workers” (Johnson, 2012). The major scope of policies that addresses population aging in Europe was advocated in the year 2001 by the Stockholm European Council . The policies are aimed at, reducing the public debt, raise employment rates and reforming the country’s pension plan and health care in addition to coping with various challenges that are posed by the aging population. Stockholm European Council focused on raising employment rates of the older workers to approximately 50 percent by the year 2010 (Hashimoto, 2000). 

The Barcelona European Council focused their policies to address issues that might arise from the aging population and the responsibilities have to be shared between generations. It was decided that, “simultaneous increase in 5 years in the effectual average age that citizens should stop working within the European Union had to be sought by the end of 2010,” (Wendin, 2014). Based on the 2004 assessment that was made in the Commission communication that was aimed at increasing employment for the aged population and delaying their exit from labor established that the progress attained was significantly inadequate, and the policy makers were asked to develop “an effective active ageing strategies and this included moving away from the culture of an early retirement policies” (Liebig & Rajan, 2003).

According to Feng et al. (2012), China is one of the developing countries with a huge elderly population. The country faces charges associated with rapid growth of the elderly, deranged demographic change of the aged populace particularly in the urban and rural areas. There is the need for a tactical policy for China to handle issues associated with aging population. It has been approximated that there will be approximately 30 million elderly individuals of age 80 and above by the year 2020 which will account for about 12.37 percent of the elderly population. Since 2006, China National Commission on Ageing encouraged local authorities to carry out home care service programs across the country, and this was after a success from a 6-year pilot program that was done in the eastern China development region (Gruber & Wise, 2001). The government attaches much significance to shielding the rightful rights of the aged individuals enhancing their contribution in the country’s social development. Since the 1990s the government formulated a national plan on aging, and this has currently been integrated into the planning of the national development. The aging population has presented one of the primary worries related to putting pressure on the public spending program and how healthcare system can have enough money to sustain all aged individuals. After years of efforts, the country has significantly made obvious development through establishing the administration system on aging and has further formulated legislation and policies aimed at improving age care and medical services.

A recent survey by Pew Research Center on the global attitude towards aging has established that about 26 percent of all the American citizens believe that the aged population has presented a key problem. “Adding to this refutation are two pervasive and disabling myths about aging in the US including the effect of the baby boom and the second that assumes that the aging society is concerned with only the elderly” (Waite, 2006). It is worth noting that the impact of the baby boom in the US is not temporary. The passing of baby boomer has no effect in terms of eliminating the elderly or even return the country to the age structure of the previous time in the history of US. Demographic changes have occurred in the previous century and are enduring, and age structure of both the present and prospect population have been transformed and are about to shift lastingly. The second myth focuses on the aspect that the aging society is solely concerned with elders fail to notice the critical fact that an efficient unit of analysis for policymakers is not only one specific age cohort but the entire society (Johnson, 2012). There is the need for policy makers to take into consideration intergenerational impact on policies and further design a solution that will significantly benefit the entire society rather than one interest group.

In US health care has been considered as a priority that the government has been supporting by legislating efficient healthcare policies. Further, the US government spends a huge amount of fund to sponsor healthcare, but the increasing number of the aging population has posed a huge challenge (Johnson, 2012). It has been shown that caring for the aging population has posed a greater challenge to the future of the healthcare industry. It would be difficult for the government to afford healthcare for this aged population unless it adopts effective policies that will change the practice of medicine aimed at reducing cost in the future (Martin, 1991). An aging population will require after-life care, and this must be comfortable and affordable (Wendin 2014). The dilemma for the government is to find an appropriate source of funds that will care for the elderly. The majority of these populations become deficient of necessary financial security on retiring at the age of 65 years hence encounters financial challenges as a result of poor monetary policies. The report has shown that the US government spends a huge amount of its revenue on social security and Medicaid to care for the old-age programs. The government further plans to increase this spending from about 4.2 percent to 6.0 percent, and this will double the spending on the GDP share squeezing out various federal funding priorities (Waite, 2006). Without an effective reform in place, the government will be forced to increases taxation and spend less on other core priorities such as national security. A potential solution to this challenge is for the government to determine the required amount of resources to be set aside by the working population for the aging (Waite, 2006).

Statements of Fact

One of the critical fiscal policy questions in most of the developed countries is how the public spending on the aged population will significantly evolve as demographic transition continues. According to Dobriansky, Suzman, & Hodes, (2007), the projections on aging and spending provide a vital benchmark against which policy makers can analyze future aging trends. Understanding the implication of dramatic increases in the spending on aged population has had massive implication for government finance. First, this has been the case where it has reduced spending in various areas, raise tax or even increase debts. An increase in elderly population has been associated with increased health spending. In a more general view, increases in elderly population will translate into significant increases in the transfer to aged people. Therefore, it has been that in the next 50 years, spending on the elderly will lead to about 11.4 percent of the GDP being directed to pending on these groups on average especially in the developed countries (Waite, 2006).

Data

According to (Dobriansky, Suzman, & Hodes, 2007), “between 2006 and 2030, the number of older people in less developed countries is projected to increase by 140 percent as compared to an increase of 51 percent in more developed countries.” The US has been considered as an aging society, and by 2000 to 2050 it has been projected that the total number of older population will rise by about 135 percent (Wendin 2014). More specifically, the pollution between 85 and above a group that demands healthcare the most has been projected to increase from approximately 12.7 percent in 2000 to about 20.3 percent in the year 2050. According to Johnson (2012), while a significant number of the US population is elderly, it has been shown that much of the Europe has the greater proportion of their population that is above the age of 65. By the year 2000, about 16 percent of the entire population in the UK and 16.4 percent of the Germany population was from the age of 65. This implies that most countries have been forced to cope up with the aging population together with the impact brought about by aging society (Dobriansky, Suzman & Hodes, 2007).

Albania, the total population, is approximately 3,200,000, and among this population, it was established that aged population makes up to 7.42 percent by the years 2001. In the year 2009, the aging population was approximated to be about 12.80 percent implying that this aging group is increasing significantly (Waite, 2006). Based on this population structure of the country, it was established that the country’s population would experience a great change younger generation will be reduced and at the same time old age population will not reproduce.

Australia has also been reported to experience challenges related to aging population. It has been shown that by the years 2050, the total number of individuals aged between 65 and 84 years will double while those above 85 years will be more than quadruple. “We are aging—not just as individuals or communities but as the world. In 2006, almost 500 million people worldwide were 65 and older. By 2030, that total is projected to increase to 1 billion—1 in every 8 of the earth’s inhabitants. Significantly, the most rapid increases in the 65-and-older population are occurring in developing countries, which will see a jump of 140 percent by 2030,” (Dobriansky, Suzman, & Hodes, 2007).

Opinion of Others

Public spending on the elderly population has been shown to do very little to raise the incomes on average of these aging groups in the society particularly as result of early retirement, but this has significantly protected them against poverty. Each country has its own unique set of programs and policies that are aimed at supporting the elderly. Most of the developed countries have a universal income support program that is directed to the elderly population. For instance, in the US, those claiming social security benefits early are believed to be subject to an actuarial reduction of benefits (Dobriansky, Suzman & Hodes, 2007). Most of the developed countries do not access special care under the healthcare system. Therefore, health care or even health insurance has been established to be a universal entitlement where elderly benefit just like the rest of the population. Additionally, developed countries utilize variety if mechanisms aimed at controlling medical cost. For instance, focusing on USS, the public insurance cost through the Medicare is specifically controlled through cost sharing and this if often on patient’s side and a restrictive provider reimbursement (Dobriansky, Suzman & Hodes, 2007).

Further in Germany and Italy, it has been argued that there is little cost sharing but at the same time a stricter control on the provider reimbursement together with various rationing mechanism including expenditure cap and the global budget. Most of the expenditure on the non-health in kind programs meant for the elderly goes to the residential care, rehabilitation services and even home-help services. Therefore, the majority of the countries have at least one of the programs that fall into these categories specifically for the elderly population (Dobriansky, Suzman, & Hodes, 2007).

Conclusion

From the above analysis, it has been established that the major worry related to the growing number of elderly population in the country and which has put huge pressure on the public spending programs is how a country’s healthcare system can afford to support the old people. Further, the aging population has further created a huge challenge socially, economical and in the health sector where they have strained the available resources. It has been established that the extra money spends on hospitals to care for the elderly population might result to lack of funds for various social activities or even economic growth. The government has been forced to provide shelter and economic incentive to ensure that these groups are well cared for. The aging population has further affected the demand for various social services, such as pensions. Medical progress has greatly lengthened in the recent years within our life expectancy. Further, aging will affect the future labor supply. Irrespective of the fact that there is no impact on the average elderly income, it has been argued that larger transfers to the elderly population are highly successful regarding keeping them out of poverty. Findings have pointed out that an important priority, especially for the future work, is to thoroughly explore mechanism through which that aging population impacts spending on the non-elderly. This can be understood clearly by determining whether the policies in place and the gains regarding elderly health significantly matches the costly losses experienced regarding health, education or overall well-being of the rest of the non-elderly population. The national priority to all countries experiencing issues related to elderly is to find effective ways to ease the mounting imbalances that the elderly are forcing on non-elderly.

References

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