Build up better – what do seniors get out of it?
The House-approved Build Back Better plan would improve pension security in more ways than one – that is, if those pension-friendly regulations go through the Senate.
The $ 2 trillion spending bill, recently passed in the House of Representatives and now awaiting revision or approval in the Senate, includes proposals on climate change, universal preschool, Medicare expansion, and tax credits. Experts say older Americans could benefit from the bill – if certain regulations remain unchanged – in areas like healthcare, affordable housing, and long-term care.
Undoubtedly, one of the most important aspects of retirement planning is how much people save for their future – after all, the amount they can invest in a 401 (k) or individual retirement account over the course of their life determines how comfortable they are in life. But Americans also need to consider what health options are available to them, what type of insurance they will get, and what they will do when they can no longer fend for themselves.
Here are a few ways the Build Back Better plan appeals to retirees:
The Build Back Better Act would allow Medicare to negotiate drug prices for drugs available at a pharmacy or doctor’s office. The current process for determining drug prices varies depending on the type of drugs and their length of market. This bill introduces some changes, such as introducing a penalty fee for drug companies that raise prices faster than inflation and setting the framework for price negotiations.
“We’re finally going to put an end to the days when drug companies could raise their prices with impunity,” the White House said in a statement on its Build Back Better regulations for prescription drugs.
The plan would also lower the cost of insulin – a common expense for retirees and younger Americans, said Max Richtman, president and chief executive officer of the National Committee to Preserve Social Security and Medicare. That provision would begin in 2023 and require that insulin be no more than $ 35 per month. “I just spoke to someone who paid ten times as much for their insulin,” Richtman said.
The White House said it was working to cut out-of-pocket health care costs for seniors who currently have no cap on their medication. The plan would cap these costs under Medicare Part D, the section that covers prescription drugs, to $ 2,000 per year.
Medicare doesn’t currently cover hearing, dental, or eyesight, but the Build Back Better plan does cover the cost of hearing. The changes wouldn’t start before 2023, but it would enable hearing aid coverage – an expense that can range dramatically from $ 1,000 to a few thousand.
“We’d love to see vision and dentistry as part of Medicare, but hearing care is a positive move,” said Richard Fiesta, executive director of the Alliance for Retired Americans.
Long term care
The spending bill was for $ 150 billion in home and community services through Medicaid over the next decade.
Americans don’t always think about long-term care when planning their retirement plans, but they should. Already now, a 65-year-old retired couple could expect to pay $ 300,000 for retirement health care alone, but that doesn’t include the cost of a home help or nursing home, which serves thousands of U.S. dollars every month. Dollars could make up more.
The 6% increase in funding for these programs annually would help recruit skilled home and community care workers and provide grants to state and community organizations, Richtman said. The plan would also expand spousal impoverishment protection for those receiving home and community-based care.
Paid family vacation
If passed, the law would give caregivers four weeks of paid leave, which would benefit Americans with children as well as older relatives. “The need for more long-term care is important in an aging society, and so is the ability to maintain a stable workforce,” said Fiesta.
The Build Back Better plan provides an additional $ 500 million in funding for HUD 202 homes, a program that benefits low-income older people, said Lisa Sanders, director of media relations at LeadingAge, a professional network of organizations that focus on aging. Affordable housing for the low-income elderly is a sector that will continue to grow, Sanders said. “As people get older, more and more people cannot afford to live in their homes.”
While many Americans choose to age on the spot, such as spending the rest of their lives in their homes, not everyone can. For some, it’s a matter of health and support – they need to move to a place where they can get extra support in daily life, such as bathing or feeding. For others, it is a matter of cost, for example if one spouse dies and the other cannot afford the house, or if their retirement income, including social security and all savings, is insufficient to cover their current housing budget.
Many older Americans are already swaying on the poverty line. According to the New School’s Retirement Equity Lab, approximately 15 million people ages 62 and older were living in poverty in the United States in 2020. This number is expected to increase 67% – to 25 million Americans – over the next decade. Another analysis by the Center for Budget and Policy Priorities found that without social security, more than 40% of older people would live in poverty.