U.S. Elders are a Massive Market for Government Funded Corporations, but They do not Have a Strong Lobby for Protection from Exploitation

One-fifth of the U.S. Population is 65+

    The so-called “baby boom” which ranged from 1946 to 1964 was a phenomenal spurt in the U.S. birthrate.  In 1950, the U.S. population had reached 150.7 million, eight percent of which was 65+.  By 2029, when individuals born in 1964 will reach age 65, the U.S. population is estimated to be 350 million. Twenty-one percent or 73.5 million Americans will be 65+ by the end of the current decade.

    The two most expensive needs of the 65+ demographic are health care and housing.  As the elderly population has expanded, the Wall Street sector of the economy (finance, insurance, & real estate) and the health care sector have developed into 40% of the U.S. economic system.  Furthermore, the two sectors are intertwined and together account for $10 trillion of the $24 trillion U.S. economy. A major share of FIRE and Healthcare revenue is channeled through government funded programs.

A Free Lunch – Not a Free Market – for the FIRE/Medical Industrial Complex

    Because of the power of the FIRE/Healthcare lobby in Washington, D.C. and the 50 state capitols, these industries have the power to maneuver legislation in a manner that places the interests of the elderly far below the interests of investors and corporate executives.  Indeed, in long-term care, a major segment of senior housing, government and corporations have merged into a “corporatocracy.”  Prices are set and revenue is guaranteed, protected, and enhanced by government.  Competition is restricted through a licensing system.

    Although a patina of regulation is in place, conditions are debilitating and life-shortening due to cost-cutting for the sake of cash flow.  Although price controls exist, wages are allowed to float on a market in which labor is exceedingly weak and hourly pay is pathetically low.  Hence, low paid labor and understaffed facilities are bound to provide substandard care while the system is geared to enhance shareholder value through tax subsidies, ancillary services, triple-net leases, and patient arbitrage, i.e., upping the number of Medicare patients in relation to Medicaid patients.

    The senior housing system is designed to transfer middle class wealth to the very top income stratum.  For instance, any assets accumulated by ordinary American families needing long-term care can be quickly exhausted by daily charges.  These assets flow through complicated legal structures that provide generous tax benefits. 

    After the “spend down” on long-term care and a family’s assets are exhausted, welfare medicine (Medicaid) is the only option.  Government reimbursement for Medicaid is substantially lower than it is for private pay and Medicare and often the care is worse.  Nevertheless, $180 or $200 for a bed is better than an empty bed returning $0.  The industry always has its lobbying juggernaut in action making hardship pleas to legislators.  Lobbyists claim that reimbursement is too low and are constantly lobbying for increased Medicaid and Medicare rates. However, nursing home corporations are for the most part privately held and operate behind a veil of financial secrecy. Legislators and government agencies have done absolutely nothing about that anti-democratic practice.

The Power Relationship Between Advocates and the Industry is Asymmetrical.

    Industry lobbying groups such as the American Health Care Association are aggressive and well-funded.  They have a strategy and a narrative with plenty of money to carry them out.  The AHCA plays fast and loose with the truth. 

    It appears that most organizations claiming to represent the elderly are not willing to confront industry propaganda and fight with the same ardor as industry. Unfortunately, the AARP often steps in to play that role, but will often excuse, ignore, or explain away the industry’s egregious violation of human dignity and unfair treatment.  AARP representatives provide testimony at legislative hearings that is ill-informed, lacks substance, and avoids critical issues such as the opaque nature of the finances of corporations receiving Medicare and Medicaid dollars.