Photograph by Annabel Oosteweeghel
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As Good As It Gets
By Mike Edwards, November & December 2004
What country takes the best care of its older citizens? The Netherlands rates tops in our exclusive survey of 16 nations. But no place is perfect
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Every week, Anna Sophia Fischer greets a clutch of tourists in the medieval
central square of Utrecht and, with a spring in her step, guides them on a
stroll among 14th-century Dutch monasteries and houses. She knows every arch,
garden, and alley and, at 75, goes about her daily business by bicycle, as do
the swarms of people around her. "You have to go by bike if you live in
town," she says. (Could this be one reason that the Dutch live longer than
we do—an average 78.6 years, compared with 77.3 in the U.S.?) A retired
physician, Fischer is living her dream. "I wanted to do something
different," she says. "I'm not rich, but I can do the things I
want to do."
Wim van Essen, 69, is a former teacher, tall, vigorous, an ardent hiker, a
fanatical chess player—and a one-man pep squad for the Dutch way of
retirement. "You see how we live," he says, inviting a guest into his
brick home in the leafy city of Amersfoort. There's a fireplace in the
living room, a wildflower garden out back. Extra bedrooms upstairs await
visiting grandchildren. On a coffee table are photos of Van Essen trekking in
the Austrian Alps with his wife, Lamberta Jacoba Maria, nicknamed Bep. (Every
year, the two of them take a major trip, partly subsidized by the government.)
The couple receive government and work pensions and various perks. All told,
it's a wonderful life, based on what Van Essen calls "a beautiful
pension," which, when everything is added up, comes to about $45,000 a
year.
In a world that is rapidly aging, the Netherlands, perhaps more than any
other country, has created a society in which people have the luxury of growing
old well, according to a survey conducted by AARP The Magazine. We
weighed 17 criteria (see the PDF chart "And the Winner
is…") in selected industrialized nations that approximate
as closely as possible the lifestyle of most AARP members. We focused on key
quality-of-life issues such as health care, work, education, taxes, and social
programs.
For Researchers
To learn more about this exclusive survey, click into the following pages:
• Methodology for Ranking the Countries
• Detailed Explanation of the Criteria Used in Our Rankings
• Resources Used in Our Research
But if you're already thinking of packing your bags, stop right there.
The purpose of this report is not to encourage American retirees to immigrate
to the Netherlands or to some of the other top scorers in our study. Most
nations aren't keen to share their pensions and health care benefits with
noncitizens just off a plane. Rather, our goal is to shed light on what
retirees enjoy elsewhere in the world as a reference point for our own
country's policies.
In the Netherlands, all citizens receive the full old-age pension at 65 if
they've lived in the country for a minimum of 50 years between ages 15 and
64. Unlike our Social Security, however, the pension doesn't require a work
history. The full amount per month is nearly $1,000 for singles and nearly
$1,400 for couples, married or not. The old-age pension is in addition to an
occupational, or employer-provided, pension, based on payments over the years
by worker and employer. And every pensioner gets a "holiday
allowance" of about $700, thoughtfully paid in May, just in time for
spring.
Pension generosity is a major reason that, by international measurements,
only 6.4 percent of the elderly fall in the bottom quarter of income
distribution, as compared with the U.S. percentage of 20.7. Although the U.S.
has a far larger per capita income than the Netherlands—$26,448 a year
versus $17,080—it scores poorly in two other comparisons: First, all
Dutch citizens have government insurance for medical conditions and
nursing-home care; 45 million Americans have no health insurance at all.
Second, prescription drugs are available to all Dutch citizens, with few if any
copayments; Americans get drugs in many different ways and those without
insurance pay top dollar. Even when Medicare drug coverage begins in 2006, most
enrollees will still face substantial out-of-pocket costs.
'The European attitude is, we're all in this
together and sooner or later we're all going to become older and need some
help. The U.S. attitude is, we're all rugged individualists and we're
going to take care of ourselves, not others.'
How do the Dutch do it? How do their euros stretch further than our dollars?
The key factor is lower costs. Although medicine isn't completely
socialized—physicians and pharmacists, for example, aren't state
employees—the government regulates almost all health expenses. That helps
explain why, in the view of Professor Gerard F. Anderson of the Johns Hopkins
Bloomberg School of Public Health, "in the U.S. we pay a lot more than
anybody else for pretty much the same stuff." In analyzing health systems
in the Netherlands and other industrialized nations, Anderson found that drugs,
hospitals, and physicians' services were from 30 to 50 percent more
expensive in the U.S., "and their health status is as good or better than
ours."
Another factor is attitude. A strong feeling of "social
solidarity," as Anderson sees it, makes Europeans inclined to be generous
to older people, more willing to support them. "Their attitude is,
we're in this together and sooner or later we're going to become older
and we'll need some help," he says. "The U.S. attitude is,
we're all rugged individualists and we're going to take care of
ourselves, not others."
The Netherlands demonstrates its attitude toward older citizens (2 million
are over 65) by showering them with numerous friendly perks, in addition to the
big-ticket items such as pensions and health care. One example: seven days of
free travel a year on the efficient rail system. "I go as far as
possible," says Joris Korst, a 65-year-old civil servant in Nieuwegein.
That's never very far in the Netherlands, which is only a third the size of
Pennsylvania, but the destinations can be exhilarating—like the windswept
beaches that Korst strolls in the West Frisian Islands. Museums, movies,
concerts, campgrounds, and holiday bungalows are discounted, too. All this and
a country that's worldly, prosperous, tolerant, steeped in art, and graced
by canals, windmills, and tulip fields. What's not to like?
Health Care
The Dutch are accustomed to paying minuscule copayments for expensive
treatment.
Dutch health insurance took care of teacher Van Essen when he needed a heart
pacemaker. "He never saw a bill," his wife, Bep, recalls. Neither did
civil servant Korst, who remembers that there were no charges when his wife,
Trees, had cancer surgery followed by 32 chemotherapy treatments. "The
whole country paid," he says, referring to the state-regulated insurance.
In the U.S., those 32 treatments alone could have cost $30,000 or more,
depending on the type and number of drugs used. Medicare might cover 80
percent, but the patient still could owe thousands.
Compare Trees's experience with that of Harold Powers, 79, and his wife,
Ozelle, 82, retired educators in Tennessee. Powers paid about $200 of the bill
for his bypass heart surgery because Medicare picked up 80 percent of the tab
and his private Medigap insurance (which costs extra) paid most of the rest.
But, in addition, he and Ozelle spend about $3,000 a year for medicines, and
Medicare won't cover any of that until 2006. Van Essen, on the other hand,
pays nothing for the medicine he takes to prevent migraines. In 2003, however,
the Dutch health ministry proposed that everyone make a copayment of $1.75 for
each prescription—but backed down when the people protested.
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