Spotlight: Sen. Herb Kohl, D-Wis.

As Chairman of the Senate Special Committee on Aging, Herb Kohl is charged with investigating many of the issues that affect older Americans. Everything from long-term care, the rights of older workers and affordable senior housing falls under the committee’s purview.

Of course, health care is another major issue for seniors. Medicare and lowering health care costs in general have been the focus of Kohl’s efforts on behalf of consumers. He spearheaded the initiative to beef up the Medicare Prescription Drug Benefit, protecting seniors from unexpectedly high drug costs. He has also authored two bills to increase the availability of affordable generic drugs: “Preserve Access to Affordable Generics Act” and the “Citizen Petition Fairness and Accuracy Act.”

Bankrate.com asked Sen. Kohl how the Senate’s Special Committee on Aging works to help current and future retirees, and what some of their legislation will mean for Americans.

At a glance
Name: Sen. Herb Kohl, D-Wis. 

Hometown: Milwaukee

Education: B.A., University of Wisconsin; M.B.A., Harvard University

Career highlights:
  • President of Kohl’s grocery and department stores from 1970 through its sale in 1979.
  • Elected to the Senate in 1988; won his fourth six-year term in 2006.
  • Serves on the Senate Appropriations Committee and the Judiciary Committee.
  • Chairman of the Agriculture Appropriations Subcommittee.
  • Chairman of the Judiciary’s Subcommittee on Antitrust, Competition Policy and Consumer Rights.
  • Chairman of the Special Committee on Aging.

You recently introduced a bill called the Confidence in Long-Term Care Insurance Act of 2009. As baby boomers age, the need for long-term care is bound to become more acute. How would your bill affect the long-term care system?

It is important as we debate health insurance reform that we also protect those consumers who are making an effort to plan for the costs of their own long-term care in advance. In recent years, long-term care insurance has gained popularity. Over 40 states have initiated programs to encourage residents to buy long-term care insurance in an attempt to ease the burden of Medicaid costs on state budgets.

I believe we have a duty to make sure these policies, which may span several decades, are financially viable.

Many long-term care insurance companies have been raising their policyholders’ monthly premiums, which can be devastating for older persons who are living on a fixed income.

Our bill would protect consumers by ensuring that premium increases are kept at a minimum, insurance agents receive adequate training, and complaints and appeals are addressed in a timely manner.

Our bill would also make it easier for consumers to accurately compare policies from different insurance carriers, particularly with regard to what benefits are covered and whether the plan offers inflation protection.

The Senate Aging Committee looked at target-date funds earlier this year and found that it may be investing too aggressively for its stated objectives. Workers now near retirement who invested solely in target-date funds have seen their savings erode. What do investors need to know about mutual funds that are targeted for their year of retirement before they put any money into them?

Regrettably, our committee investigation found that there is “no set it and forget it” when it comes to retirement savings. Participants still need to be aware of what they are investing in.

But from a policy viewpoint, we also need to recognize that many participants are auto-enrolled, and therefore placed into these type of funds by default, and we need to ensure that they are defaulted into good options.

It is projected that target-date funds will be the primary type of savings vehicle for millions of Americans in the future, and while their stated goal is a good one, we need to make sure they are being designed and implemented correctly.

I applaud the Securities Exchange Commission and Department of Labor for beginning their examination into this marketplace, and I will continue to investigate issues such as fees and fund composition at an Aging Committee hearing later this month.

A recent poll by the Kaiser Family Foundation found that 34 percent of those over 65 believe that they would be worse off with health care reform, but you support President Obama’s plan to make over the nation’s system of health care. What are the implications of health care reform for the elderly and baby boomers, as you see them?

For months Congress has considered a wide range of options for reforming our health care system because we do not have a choice. We simply cannot afford to wait another 10 or 20 years until health care costs engulf our economy and break the banks of American families and businesses, both large and small.

The U.S. spends nearly two-and-a-half times what other developed countries spend on health care per person, per year. It is unacceptable that we have so much more of our money tied up in health care when we are not delivering demonstrably better health care than many of these countries.

It is unacceptable — and it is unsustainable.

American health care is breaking the bank, and making us less competitive in the world’s economy. Money that should be going to wage increases is instead going to pay for health care coverage.

In terms of how health reform will affect seniors, for those 65 and older who are on Medicare, not much will change. We know that most seniors are happy with Medicare. In fact, Medicare boasts a higher satisfaction rate than private insurance. The reform proposals to date will work to strengthen Medicare, and will not make significant changes to the way seniors receive their health care services.

Because the elderly tend to be heavy consumers of health care, many of the improvements to our health system brought about by reform will be of benefit to them.

For instance, the expanded use of health information technology will save lives by reducing medical errors and save money by promoting efficiency in testing and communication. Insurance reform will ensure that those who have suffered from a health problem in their past should not be denied insurance that will protect them for the future.

In general, what are some of the health care issues that need to be addressed for the aging population?

I have been pushing for health reform to include improvements to our long-term care system. Our nation’s population is aging at a record rate, and with every passing year, more elderly Americans find themselves in need of long-term care.

Most of us will, at some point, struggle with the high and rising costs of caring for a loved one. These, too, are costs we must get under control as part of health care reform.

One way to get long-term care costs under control is by promoting a move toward home and community-based long-term care services in Medicaid. These programs break away from a one-size-fits-all approach, offering flexibility and choices tailored to an individual’s needs. And, even better, they save a lot of money that would otherwise be spent on nursing home care.

The funding of care is not our only concern. It’s been 22 years since we raised the standard of care in nursing homes, and quality improvements are long overdue.

Every year, as part of our Medicare and Medicaid reimbursement system, our government collects information about all 16,000 nursing homes across the country. We should make this information available to consumers, so that they can judge a home’s track record of care for themselves before deciding where to place a loved one.

And we should make nursing homes safer, by instituting a comprehensive background check system for long-term care workers. Pilot programs have shown that this would keep thousands of predators out of nursing homes, where they could cause terrible physical, financial and emotional harm to residents and their families.

I am pleased that the Senate Finance Committee included provisions to do all these things in their health reform legislation.

You are one of the lead sponsors of the Elder Justice Act. As seniors are often the targets of scams and fraud, what are some steps older people need to take before investing money with someone?

In these tough economic times, seniors are discovering that their life savings have lost so much value they may not be able fund their retirement. Desperate for advice, they look toward investment advisers for strategies to ride out this economic storm. More and more, individuals are representing themselves as certified “senior” investment specialists when they often have limited or no education and experience in extremely complicated financial matters.

It’s estimated that there are thousands of individuals holding themselves out as “senior” specialists. Although some of them may have legitimate credentials, far too many do not.

Older Americans should be wary of these salesmen using elaborate titles to pass themselves off as impartial advisers with a particular expertise. We held a hearing last Congress on this subject and introduced the Senior Investor Protection Act to encourage states to adopt standards related to which legitimate designations can be used by financial advisers when selling annuity or security products to seniors.

You’ve worked to bring more protections to American’s 401(k) plans, bringing more transparency to the fees charged to plan participants. How viable do you believe the 401(k) plan is as the sole savings vehicle for most people’s retirements? Is it really enough?

Though we appreciate that the 401(k) system has helped make it easier for millions of Americans to save for retirement, the system has several weaknesses. Through the 401(k) system, the U.S. foregoes $46 billion in tax revenue each year, with the highest tax-break incentives to save going to the wealthiest Americans.

Meanwhile, individuals are forced to make vital decisions — such as participating in a plan to begin with, how much to contribute, where to invest their money and so on. And then they must resist the urge to tap into their accounts with hardship withdrawals and loans.

But with defined benefit (traditional pension) plans on the decline, 401(k)s are at present the main retirement savings vehicle for most Americans, and as such we are working hard to improve this system.

Bankrate recently sponsored a survey that reveals that 75 percent of Americans plan to work through their retirement. Why is that? Do people enjoy working or are there problems with funding their retirements?

According to another recent survey, 80 percent of boomers expect to work past traditional retirement age. Whether they do so for the physical and mental benefits, for additional income to help stretch their retirement savings or simply because they want to remain active and contributing members of our society, we must provide support to them as they choose to continue to work during what is the second act of their careers and their lives.

I have been joined by several of my colleagues in introducing legislation to make it easier for older Americans to either re-enter or remain in the work force by extending health benefits and encouraging employers to provide part-time work opportunities.

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