Retirees May Well Worry About Health-Care Reform

Retirees May Well Worry About Health-Care Reform
Retirement health-care costs are steep -- are you prepared?

(Source Yahoo Finance, Market Watch) If things weren't bleak before, they certainly are now. Men and women retiring today will need truckloads of money to pay for health-care expenses over the course of their retirement, according to a new study.

And that was the case long before we learned that President Barack Obama plans to cut $313 billion in Medicare and Medicaid spending and reform this nation's health-care system. It's anybody's guess what retirees might need if those reform plans become a reality.
For the time being, at least, the reality is this: Men retiring at age 65 in 2009 will need from $68,000 to $173,000 in savings to cover health-insurance premiums and out-of-pocket expenses in retirement if they want a 50/50 chance of being able to have enough money, and $134,000 to $378,000 if they prefer a 90% chance, according to a study published last week by the Employee Benefits Research Institute.

Meanwhile, women -- with their greater longevity -- will need even more money. A women retiring at age 65 in 2009 will need from $98,000 to $242,000 in savings to cover insurance premiums and out-of-pocket expenses in retirement for a 50/50 chance of having enough money, and $164,000 to $450,000 for a 90% chance, said Paul Fronstin, an EBRI researcher, in the report.

But it gets worse. Many Americans may need even more money than the amounts cited above, Fronstin said, because his "analysis does not factor in the savings needed to cover long-term care expenses, nor does it take into account the fact that many individuals retire prior to becoming eligible for Medicare."

Simply opening one's eyes to the issue is key, said Stephen Huth of CCH Inc., a Riverwoods, Ill., publisher and unit of Wolters Kluwer. "Just knowing this is a problem is a good first step," he said. "Few individuals plan for retirement at all, and a small percentage of those even think about health-care costs.

"Even with all the talk about health-care reform, little has been said about the looming crisis for many older individuals," he said.

Next Steps Depend on How Old You Are.
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THE INFLUENCE GAME: Health bills prompt grumbles
THE INFLUENCE GAME: Grumbling gets louder as unveiling of health bills gives lobbyists targets

WASHINGTON (AP) -- For President Barack Obama, the MRIs and other medical scans for Medicare patients that cost the government billions are prime targets for cuts to help finance health care overhaul.

The response from physicians and industry: a lobbying counterattack accusing Obama of denying patients the lifesaving tools they need.

Patients, rural doctors and advocacy groups who back the procedures will gather in the House Wednesday for a panel discussion, part of the campaign.

The industry spearheaded a bipartisan letter to Obama from 57 House members objecting to the cuts. It has staged events in North Carolina and other states where senators face re-election next year. And it is using a Web site and newspaper ads to encourage people to complain to Congress about the proposal.

The fight highlights a pivotal moment for one of Obama's chief priorities, revamping the nation's health care system to reduce costs and cover the nearly 50 million uninsured Americans, while finding the roughly $1 trillion needed to do it over the next decade. As the president and lawmakers translate rhetoric into legislation, it is decision time for groups that so far have backed the concept of improving health care without knowing the fine print.

The specifics have sparked grumbling from interests like the insurance industry and the U.S. Chamber of Commerce who dislike what they see. They have also triggered intensified efforts by would-be winners -- like labor and advocates for low-income people -- to nail down potential gains.

World's 65 and older population to triple by 2050

World's 65 and older population to triple by 2050
USCensus: World's older population will triple by 2050, adding stress to government programs

WASHINGTON (AP) -- The world's 65-and-older population will triple by mid-century to 1 in 6 people, leaving the U.S. and other nations struggling to support the elderly.

The number of senior citizens has already jumped 23 percent since 2000 to 516 million, according to U.S. census estimates released on Tuesday. That is more than double the growth rate for the general population.

The world's population has been graying for many years due to declining births and medical advances that have extended life spans. As the fastest-growing age group, seniors now comprise just under 8 percent of the world's 6.8 billion people. But demographers warn the biggest shift is yet to come. They cite a coming wave of retirements from baby boomers and China's Red Guard generation that will shrink pensions and add to rising health care costs.

Germany, Italy, Japan and Monaco have the most senior citizens, with 20 percent or more of their people 65 and older.

In the U.S., residents who are 65 and older currently make up 13 percent of the population, but that will double to 88.5 million by mid-century. In two years, the oldest of the baby boomers will start turning 65. The baby boomer bulge will continue padding the senior population year after year, growing to 1 in 5 U.S. residents by 2030.

"The 2020s for most of the developed world will be an era of fiscal crisis, with a real long-term stagnation in economic growth and ugly political battles over old-age benefits cuts," said Richard Jackson, director of the Global Aging Initiative at the Washington-based Center for Strategic and International Studies.

"In emerging countries like China, they will face the real prospect of a humanitarian aging crisis," he said.

China's current ratio of 16 elderly people per 100 workers is set to double by 2025, then double again to 61 by 2050, due partly to family planning policies that limit most families to a single child, Jackson said. Without a universal pension system to cover all elderly, millions of older Chinese could fall into poverty, creating social and political unrest and shock waves that could ripple through the global economy given the country's economic heft.

The Census Bureau's international estimates also show:

--Only 5 percent of Africa's population is projected to be 65 and older in 2050. Sub-Saharan Africa, with high fertility and AIDS cases roiling parts of the region, is home to the youngest people. Leading the way is Uganda where the median age is just 15.

--About 1.53 billion, or 16 percent, of the world's estimated 9.3 billion people in 2050 will be 65 and older.

--Europe will continue to be the grayest region, with 29 percent of its population projected to be 65 and older by 2050. It aging population has prompted governments, including Austria, France and Russia, in recent years to provide incentives such as bonus payouts, tax benefits and free school books to couples who have children.

--In Latin America, known for its high fertility, youths ages 19 and younger outpace the 65-and-older group by more than 5 to 1. But by 2050, led by a dropoff in births in countries such as Brazil and Mexico, senior citizens will jump to 18 percent of the population compared to 25 percent for youths. Faced with its aging population, Cuba recently raised its retirement age by 5 years, delaying payment of pensions.

Ageing in the rich world
The end of retirement

Jun 25th 2009
From The Economist print edition
Demography means virtually all of us will have to work longer. That need not be a bad thing.

WHEN Otto von Bismarck introduced the first pension for workers over 70 in 1889, the life expectancy of a Prussian was 45. In 1908, when Lloyd George bullied through a payment of five shillings a week for poor men who had reached 70, Britons, especially poor ones, were lucky to survive much past 50. By 1935, when America set up its Social Security system, the official pension age was 65—three years beyond the lifespan of the typical American. State-sponsored retirement was designed to be a brief sunset to life, for a few hardy souls.

Now retirement is for everyone, and often as long as whole lives once were. In some European countries the average retirement lasts more than a quarter of a century. In America the official pension age is 66, but the average American retires at 64 and can then expect to live for another 16 years. Average spending on public pensions across the OECD is now the equivalent of more than 7% of GDP (they cost America just 0.2% back in 1935). In some countries the current figure could double by 2050, to say nothing of the cost of private pensions and extra spending on health and long-term care.
Grey and proud of it

Although the idea that “we are all getting older” is a truism, few governments, employers or individuals have yet come to terms with where longer retirement is heading: the end of the whole concept (see special report). Whether we like it or not, we are going back to the pre-Bismarckian world, where work had no formal stopping point. That reversion will not happen overnight, but preparations should start now—to ensure that when the inevitable happens it is a change for the better.

It should be for the better because it is being partly driven by a wonderful thing: people are living ever longer. Life expectancy has been rising by two or three years for every ten that pass, despite repeated forecasts that it was about to reach its limit. Centenarians used to be rarer than hens’ teeth; now America alone has 100,000 of them. By the end of this century the age of 100 may have become the new three score and ten.

This imminent greying of society is compounded by two other demographic shifts. First, in most rich countries women no longer have enough babies to keep up the numbers (a prospect that may please a lot of greens but not many governments); and the huge baby-boom generation, born after the second world war, has begun to retire. In 1950 the OECD countries had seven people aged 20-64 for every one of 65 and over. Now it is four to one—and on course to be two to one by 2050. That will ruin the pay-as-you-go state pension schemes that provide the bulk of retirement income in rich countries. Read on...
http://www.economist.com/opinion/displayStory.cfm?story_id=13900145&source=hptextfeature