Consumer Sovereignty for the Elderly

A blog about business and economics.
Aug. 31 2012 11:37 AM

Clinton Eastwood and the Problem of Consumer Sovereignty for the Elderly

When you see Clint Eastwood up onstage acting bizarre at the Republican National Convention, the thought is unavoidable—this guy is old.

We all know that some cognitive impairment tends to be a part of the aging process, just as nobody expects 7-year-olds to be incredibly wise decision-makers. That's why elder fraud is a recognized problem. A great study by David Labison finds that about half of 80-somethings have "significant cognitive impairment, effectively rendering them incapable of making important financial choices." As the elderly share of the population grows, this is a problem we're going to have to confront as a society.

Advertisement

Unfortunately, we seem to be moving in the opposite direction. One example is the unfortunately named bipartisan Jumpstart Our Business Startups Act that passed this Congress. The JOBS Act does a few good things but is mostly dedicated to weakening paternalistic investor protections. That should make it marginally easier for legitimate entrepreneurs to raise capital but will also make it dramatically easier to get into the business of defrauding moderately confused middle-class senior citizens out of their savings.

A related problem arises with the Romney/Ryan plan to replace Medicare with a system of subsidies for the purchase of private health insurance on regulated exchanges. This is essentially the same idea as what ObamaCare will do for the non-elderly, but in the opposite direction. In the case of the Affordable Care Act, it's not clear to me that there are sound non-political reasons for doing it this way rather than constructing a single public program. But in the case of a program targeted at the elderly, the case for consumer sovereignty is clearly weaker. Insurance forms are confusing, and calculating the real actuarial value of different offers is difficult. This is not an ideal task to assign to a 92-year-old. It's impossible to make it work with adequate regulation, but you really are counting on building a very effective regulatory agency to manage the program. So why not just build an effective agency and manage Medicare?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

IOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.

Why Greenland’s “Dark Snow” Should Worry You

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Three Talented Actresses in Three Terrible New Shows

Science

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.

Foreigners

More Than Scottish Pride

Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 

The Ungodly Horror of Having a Bug Crawl Into Your Ear and Scratch Away at Your Eardrum

We Could Fix Climate Change for Free. What Exactly Is Holding Us Back?

  News & Politics
Politics
Sept. 17 2014 5:21 PM Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS But the next president might. 
  Business
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
  Life
Gentleman Scholar
Sept. 17 2014 5:10 PM Should Men Still Open Doors for Women? Or is it ungentlemanly to do so at all?  
  Double X
The XX Factor
Sept. 17 2014 4:36 PM Is Nonfiction the Patriarch of Literary Genres?
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
  Arts
Brow Beat
Sept. 17 2014 5:56 PM Watch Louis C.K., Dave Chappelle, Bill Hicks, Mitch Hedberg, and More on New YouTube Channel
  Technology
Future Tense
Sept. 17 2014 5:26 PM If Fixing Global Warming Is Free, What’s the Holdup?
  Health & Science
Jurisprudence
Sept. 17 2014 4:49 PM Schooling the Supreme Court on Rap Music Is it art or a true threat of violence?
  Sports
Sports Nut
Sept. 17 2014 3:51 PM NFL Jerk Watch: Roger Goodell How much should you loathe the pro football commissioner?