Policies Make a Difference in Judging States as Good Retirement Choices
What is the best state for retirement and aging?
If you ask this question, you are likely to receive a listing of states with more favorable and less favorable tax policies. Rifle through the state tax policies and any number of tax breaks will pop up. Some policies benefit everyone—the states that don’t impose any income taxes or sales taxes are examples. Then there are the specific exemptions for older taxpayers—certain types or amounts of income, including Social Security, pensions and retirement savings, property tax exemptions, and even some long-term care insurance deductions. While the fairness, value and efficacy of these tax policies may be in question, it is clear that tax policy, alone, isn’t what people who ask about the best states for retirement are really seeking. They are more likely looking for places with amenities and affordable services that will keep them comfortable and safe as they age.
“We think a lot about affordability but not necessarily in relation to taxes,” said Susan Reinhard, primary researcher and author of the State Scorecard on Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers. The scorecard was first published
by AARP, The Commonwealth Fund and the Scan Foundation in 2011 then repeated in 2014 and is due again in 2017. Reinhard said the scorecard design turned the question about what state is the best for aging to focus on policies and practices directly focused on long-term care and services.
“Where you live really matters because there are very large differences across the states in how well they do the job of providing long-term care and services,” Reinhard said.
The scorecard is based on a vision of what a high-performing state would look like. The 2014 state scorecard measures states’ long-term care system performance across five key dimensions:
Affordability and Access;
Choice of Setting and Provider;
Quality of Life and Quality of Care;
Support for Family Caregivers; and
A total of 26 indicators are examined and for 19 of those the change across time is also measured.
Minnesota is the highest scoring state on both the 2014 and 2011 scorecard.
“Minnesota has had a strategic plan for years. In town hall meetings and the like, the question of where do you want to be has been asked for years. Long-term care is always high on the list,” Reinhard said. “The state keeps their eye on the ball. I expect that they will be high on the 2017 scorecard as well.”
One of the major conclusions of the scorecard is that shifting service delivery toward home- and community-based services is critical. In some policy circles this allocation of services—and of funding—has been called balancing or rebalancing. Statistics compare the proportion of Medicaid funding, which paid for 51 percent of all long-term care supports and services across the nation in 2013 according to the Kaiser Family Foundation, used for institutional services and home- and community-based services. Pressures to change funding priorities come from at least two factors. As the baby boomer generation ages, consumer demand will increase for home- and community-based services, as elders increasingly demand adequate services and policies to allow them to age in place. In addition, the 1999 Olmstead decision by the U.S. Supreme Court affirmed the right of individuals with disabilities to live in their communities.
Vikki Wachino, director of the Center for Medicaid and CHIP Services within the federal government, when she spoke to state legislators at the CSG Medicaid Leadership Policy Academy in September, pointed to 2012–2013 as a watershed time. For the first time, the percent of long-term care Medicaid spending for home- and community-based services exceeded the percent of Medicaid spending for nursing homes and other institutional long-term care settings for elders and persons with disabilities. Wachino called the crisscrossing of the spending lines critical to fulfilling Medicaid goals to build stronger systems of care, provide more consumer choice and promote community integration.
Reinhard called out a few other states as particularly progressive on one or more of the dimensions of the long-term care service system. Washington state has a quite complete set of community-based supports and services in place. The state also has worked on building a system of transportation with many options to reduce dependence on personal automobiles. The system is helpful for seniors who no longer drive, as well as for residents of all ages who do not wish to own, or cannot afford, cars.
Connecticut has wrestled with how to close nursing homes and transition residents to assisted living and other less restrictive living arrangements. Reinhard said it has been a big policy lift for the state.
In New Jersey, casino revenues have been used to create a respite care program to provide relief to family members who often provide unpaid personal care services to older relatives.
“Oregon is an interesting long-term care support story,” Reinhard said. Going back to the late 1970s, retired teachers pushed to change services available in the state, demanding greater choice, independence and dignity. “These three words still drive policy today in Oregon,” she said. Oregon took on change—policy by policy.
“There has to be a guide post, a declaration that these are Oregon’s values,” Reinhard said. “States can’t just tread water. They have to declare a direction to head and then pick up the pace of movement.” In the 2014 scorecard, Oregon ranked third in the nation overall, with top five rankings in eight separate measures.
Massachusetts state Rep. Denise Garlick, co-chair of the Joint Committee on Elder Affairs in her state, is looking to establish strategic recommendations to guide—and improve—supports and services for older residents. Her 2016 bill established a task force to set forward strategic recommendations to address the needs of older state residents of all income levels. She wants to bring together a new and different group of thinkers to battle ageism and set a plan for the future.
Garlick suggests that the underlying dynamics of ageism affect how older adults are perceived and have implications for policy and program development. It may be time to change the conversation from the negative descriptions of the “burden of aging” and the impending “silver tsunami” to identifying the magnitude of the economic engine of what some call the “longevity economy,” meaning the aggregate wealth of seniors and the impact of their spending and of the workers and industries that their activities and needs support.
“The state needs a vision for the healthy and active elders as well as those who are ill and frail,” she said. “We tend to look at older adults as patients, but they have vitality and are great sources of volunteerism and economic activity.”
“We have 1.4 million persons in my state who are over 60 but much of the state activity centers on the 200,000 older adults under MassHealth (Medicaid) and the 3.5 billion state dollars that provide them with services and supports. My sense is that everyone over 60 goes to bed at night, puts their head on the pillow, and worries about the uncertainty of their future,” Garlick said.
“I have visited 32 house districts—that is over 1 million people—and talked to older adults. The truth is they want to be home. We have a great deal of work to do. We need a whole range of services. They must be accessible, affordable and of high quality.”
Garlick is confident that the task force can develop a guiding vision that will reduce the uncertainty of older Massachusetts residents not just in the near future but for many years to come.
Providing Financial Security for Aging Generations
More than half of all Americans don’t have access to retirement accounts through their employer, but a handful of states have passed legislation to establish a state-sponsored retirement plan. These plans establish retirement savings plans for private-sector employees whose employers do not offer a workplace retirement plan. Neither the state nor the employer is required to contribute matching funds to the plan for employees’ benefit. The laws call for employees to be automatically enrolled in the plans, what some analysts called “nudging,” however, they are allowed to opt out of making contributions.
Illinois is closest to implementing such a plan. Called the Illinois Secure Choice Saving Program, it is to be fully implemented by 2017. Sponsor Sen. Daniel Biss explained the program as “an automatic enrollment IRA so that workers without employer-sponsored retirement plans still have an easy way to save for retirement using a payroll deduction and benefiting from low fees.”
“It’s still at a very early stage, because this is brand new. It’s not as if we can look to another state and copy what they’ve done,” said Biss in a January blog post. “I think the people are trying to be very conscientious about doing it in a way that they’re most likely to succeed so that other states can look at us and use us as a model and learn from us.”
The Sacramento Bee reported that California Gov. Jerry Brown signed into law Sept. 29, 2016, the final piece of legislation needed to establish a similar retirement savings program. In 2018, workers at employers with 100 or more employees will be able to participate. Within a year, it would apply to all companies with five or more workers.
According to the Chicago-based Sargent Shriver National Center on Poverty, Connecticut, Maryland, Massachusetts, Minnesota and Oregon are at various stages of planning or implementing a state-managed retirement plan. As many as half the states have considered legislation since California passed its first law in 2012.