AARP supports and strongly encourages incentives for employers to maintain and safeguard retirement health benefits. Most recently we supported the employer incentives included in the Medicare Modernization Act of 2003. Policies affecting retirement health benefits should incorporate features that prevent deterioration of health benefits. AARP also believes the time is right for Congress to reignite the debate over health systems reform so that we can begin to control rapidly rising health care costs and make affordable health care coverage available to all Americans.
Closely associated with overall healthcare coverage is protection against long-term care costs. Long-term care is a critical element of retirement planning that is often overlooked. AARP members have indicated that there is a great deal of resistance to thinking about long-term care. This may be because individuals have misperceptions about long-term care: they may believe it is limited to nursing home care; are often under the mistaken impression that Medicare will cover long-term care; or are in denial about the likelihood they will require future services. Yet, men turning 65 face a 44 percent chance of needing help with at least two activities of daily living for at least three months or more. For women turning 65, the percentage is much higher—72 percent.
However, current long-term care financing options are limited; they are often too expensive and too complex. That's why Americans need more and better options to plan and pay for long-term care. For example, long-term care insurance should be more affordable, accessible, and have strong consumer protection standards. Improved tools to compare policies would also be helpful. In addition, consumer education on long-term care is vital. Americans should understand the likelihood of needing long-term services and support; the types, cost and availability of services; the options available to help plan and pay for services; why it is their interest to plan; and where to go for further information and assistance.
Planning for and managing resources in retirement is difficult enough, but it has become much more complicated over the years as we move towards a "do it yourself" retirement. New retirees will need a more sophisticated knowledge of investment options and ways to preserve assets through retirement. Gone are the days when boomers' grandparents retired with Social Security, a company pension, savings in the bank, and a paid-off house. There is much that can and should be done to make accumulating and managing retirement assets easier and more secure for workers and retirees. And, although times have changed, Social Security remains the critical and basic pillar of lifetime retirement income and more than ever the only one that can be counted on to provide a lifetime income stream.