AARP sounds alarm on looming Social Security, Medicare risk

For the nine decades since the Social Security Act was passed in 1935, Social Security has delivered every check to American retirees on time, but the program’s long‑term finances can no longer be ignored.

Anxiety is rising, as only 36 percent of adults in AARP’s latest Social Security survey said they felt very or somewhat confident about the program’s future.

AARP, the nonprofit advocacy group for Americans over 50 years old, is urging Congress to move quickly to shore up the system.

The trust funds that help ensure full benefit payments are projected to be exhausted by 2034, according to the most recent Social Security Board of Trustees’ report. If lawmakers fail to act before then, the program will have enough revenue to cover only 81 cents of every dollar owed to beneficiaries.

​​“It’s something that Congress needs to fix, but it’s an absolutely fixable problem,” said Bill Sweeney, AARP’s senior vice president for government affairs.”

“The longer Congress waits, the worse their options are, so we’ve really been pushing [them] hard … to get focused on this,”  Sweeney emphasized.

Myechia Minter-Jordan, AARP CEO, discussed the widespread popularity of Social Security.

“AARP members and older Americans nationwide consistently say that the future of Social Security and Medicare are the issues they care about most, and they stand ready to hold politicians across party lines accountable to strengthen these programs for the long term,” she said.

AARP warns Americans on Medicare penalties to avoid

Social Security manages enrollment for Medicare Part A, which covers hospital care, and Medicare Part B, which pays for outpatient medical services.

In carrying out that responsibility, the Social Security Administration works alongside the Centers for Medicare & Medicaid Services to explain Medicare enrollment choices to older adults, handle their applications and collect certain premiums.

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The AARP has a warning for people who wait too long to enroll in Medicare.

“You can be charged up to 10 percent more for Medicare Part B — the part of Medicare that provides standard medical insurance — for each full year past the eligibility age of 65 that you delay enrolling,” wrote AARP. “That is, 10 percent if you waited 12 months, 20 percent if you waited 24 months, and so on.”

“The penalty is applied permanently to your premiums, and it adds up,” AARP cautioned. “Medicare Part A, which covers hospitalization, costs nothing for most recipients, but Part B carries premiums.”

“The base rate in 2026 is $202.90 a month. If you’re carrying a one-year late fee, you’ll pay an extra $243.48 for Part B in 2026 and bigger surcharges in future years as premiums rise.”

Important notes on Medicare enrollmentYou can delay enrolling in Part B at 65 without a late penalty if you are still employed and covered by a group health plan offered by an employer with at least 20 workers.You can postpone Part B without a penalty if you are covered under your working spouse’s group health insurance, following the same rules that apply to your own employer coverage.You can avoid a late fee if you already have Part A and later develop end‑stage renal disease.You will be enrolled automatically in Medicare Parts A and B at 65 if you are already receiving Social Security benefits, although you may decline Part B by contacting the Social Security Administration.You have a seven‑month initial enrollment window surrounding your 65th birthday to sign up for Medicare if you are not yet collecting Social Security.

(Source:AARP)

AARP explains financial challenges Americans face regarding Social Security and Medicare.

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Social Security solvency options

Congress will need to take action to ensure Social Security can continue paying the full benefits Americans have earned and to chart a long‑term plan for strengthening the program’s finances.

Any effort to do so could involve a range of potential adjustments.

A U.S. Government Accountability Office (GAO) report outlines for Congress four categories of options, focusing on their financial implications.

Policymakers could strengthen Social Security’s finances by reducing program costs, which could involve changing eligibility rules or adjusting benefit amounts for current or future beneficiaries.Policymakers could improve the program’s outlook by increasing revenues, either by raising additional payroll tax income within the current structure or by bringing in new funding from outside existing Social Security revenue sources.Policymakers could adopt reforms with mixed or uncertain financial effects, such as extending Social Security coverage to state and local government workers who are currently excluded, a change that would boost revenues at first but increase long‑term costs.Policymakers could pursue reforms aimed at nonfinancial goals, such as protecting vulnerable beneficiaries or modernizing benefits, even though these steps could make it more difficult to resolve Social Security’s long‑term funding challenges.

(Source:U.S. Government Accountability Office)

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