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Monday, October 15, 2018

Uninsured and underinsured risks in this millennium

William Arnone, CEO, National Academy of Social Insurance

As the Academy gears up for our 31st annual policy conference, Regenerating Social Insurance for Millennials and the Millennium, I am thinking back to what we have learned from our last few conferences.

Our 2016 conference premiered the Academy’s focus on inequality. Keynote speaker Marc Pearson, Deputy Director of Employment, Labor and Social Affairs at the Organisation for Economic Co-operation and Development (OECD), reminded us that:

  1. Poverty rates have fallen in the U.S. since the mid-1980s, but poverty rates across all age groups remain notably higher in the U.S. compared with the average across OECD countries;
  2. Poverty rates for the elderly, especially those 75+, remained stubbornly high at almost 25%, based on 2013 data;
  3. Meanwhile, poverty rates for those under 65 remained about the same or increased, with the poverty rate among those aged 18-25 at over 20%.

Another 2016 conference speaker, former Academy Board Member Bill Hoagland, Senior Vice President at the Bipartisan Policy Center, alerted us to the risk those statistics pose using the words of Louis D. Brandeis: “We must make our choice. We may have a democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.”

Peter Georgescu, former Chairman of Young & Rubicam, author of Capitalists Arise!, and the opening keynote speaker at our 2017 conference points out: “Nearly 60% of American households are technically insolvent and adding to their debt loads each year”. Current income inequality trends run the risk of threatening the stability of our democratic society.

In 2018, the Academy’s 30th annual policy conference focused on how the growth of alternative work arrangements is creating gaps in social protections and in social insurance coverage for a number of risks: health insurance; injury or illness at work; unemployment; retirement security; and the ability to take paid leave for caregiving.

Stephen Wandner, a 2018 conference speaker, reminded us that when it comes to unemployment insurance, very little assistance is available for the self-employed. Only eight states offer any kind of income support to the unemployed. What will happen if even more people across the country are self-employed or involved in alternative work arrangements when the next recession hits?

Our nation’s social insurance infrastructure offers a significant measure of “recession readiness.” This is the good news. Benefits accrue not only to individuals and their families, but also to the communities in which they live and to the country as a whole. 

However, there are a few more scary statistics to keep in mind:

  • An increase in the rate of working-age adults lacking health insurance;
  • At least 40% of U.S. adults report that they could not easily manage an unexpected $400 emergency expense;
  • Only 2/3 of workers have access to paid sick leave, which means millions might find themselves in a dire financial situation when they or a loved one becomes ill;
  • Too many Millennials have concluded, erroneously, that Social Security will not be there for them.

As the title of the Academy’s 2019 conference – Regenerating Social Insurance for Millennials and the Millennium – indicates, our country needs a better understanding of the risks facing people of all ages. In particular, the conference will take a deeper dive into the uninsured and underinsured risks facing Millennials and younger generations.

Please join us on January 31, 2019, as we assess policy options for strengthening and building on our existing social insurance infrastructure. Will we as a nation provide a minimally acceptable level of economic security for millions -- workers, individuals unable to work, and retirees and their families--today and in the future?

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