"The bill will put an 'age tax' on us as we age, harming millions of American families with health insurance, forcing many to lose coverage or pay thousands of dollars more for health care," the AARP said in a statement after Thursday's vote. "In addition, the bill now puts at risk the 25 million older adults with pre-existing conditions, such as cancer and diabetes, who would likely find health care unaffordable or unavailable to them."
The result is that Americans will need to save more for retirement to cover their health care bills. That will be a challenge. As defined-benefit pension plans disappear, 401(k)-style, defined-contribution plans still cover a minority of the population. The latest data from the U.S. Census Bureau suggest that only one in three workers are saving in a 401(k) or similar plan. Two in five U.S. workers say they aren't confident they will have enough money for a comfortable retirement, according to the Employee Benefit Research Institute's 2017 retirement confidence survey.
One possible solution: Get more Americans saving at work. That's the goal of new retirement programs in California, Illinois, Maryland, Connecticut, and Maryland. The states plan to require employers either to offer their own retirement plans or automatically sign workers up for a state-run retirement account.
On Wednesday, the Senate acted against these "Secure Choice" retirement plans and discouraged other states from joining them. Following in the footsteps of the House, it voted to block an Obama regulation that made it clear that states have the authority to set up the plans. The measure now heads to President Donald Trump, who has signed all other regulatory rollbacks approved by Congress this year.
"What the [state retirement plans] really add up to is more government at the expense of the private sector and American workers," Senate Majority Leader Mitch McConnell, a Republican from Kentucky, said Wednesday. "They would provide government-run retirement plans with a competitive advantage over private-sector workplace plans."
Democrats accused Republicans of doing the bidding of the financial industry. "Some of my colleagues are listening to Wall Street lobbyists who want less competition and want to take away retirement savings options from hard-working Americans," said Senator Tammy Duckworth, an Illinois Democrat.
States have said they'll proceed without the federal government's blessing. However, a legal fight is now more likely over whether the plans comply with federal retirement laws.
There are less-controversial proposals for getting Americans to save more for retirement, such as allowing small businesses to join forces to set up 401(k) plans. But such ideas, and Americans' growing need for retirement money, don't guarantee Congress will act.
"There are so many other legislative priorities on the agenda that it's hard for retirement security to get any air space, as pressing a concern as it is," said Shai Akabas, director of fiscal policy at the Bipartisan Policy Center.
This article was provided by Bloomberg News.