The long-reaching impact of COVID-19 includes the financial stability of elders, according to a brief released by The Commonwealth Fund. About 11 percent of people 65 and older, or about 1.1 million people, have lost their jobs during the pandemic. By contrast, in 2018, prior to the pandemic, more than one in six Medicare beneficiaries, or 10.1 million people, were employed, including nine million beneficiaries age 65 and older and 1.1 million under age 65.
The far-reaching consequences include job losses that could result in many older workers shifting from employer-sponsored health insurance to Medicare, increasing federal spending for Medicare.
The job losses and income reductions among Medicare beneficiaries also could threaten their financial security, resulting in more beneficiaries qualifying for Part D low-income subsidies, Medicare Savings Programs, or even Medicaid.
Although Medicare often serves as an important safety net, policies encouraging the continued employment of older workers could have long-term effects on Medicare spending and people’s financial security for the remainder of their years.
Historical data suggests that unemployment has posed longer-lasting challenges to income security for older workers than for younger people. Older workers are more likely to face longer periods of unemployment, and if they find new jobs, the income is likely to be less than the previous job.
Their proximity to retirement makes them particularly vulnerable to the suspension of employer pension contributions and any decline in the value of their retirement savings.
It may force older workers to draw on their Social Security benefits earlier than planned, substantially permanently reducing their retirement incomes.