America’s rapidly aging society is putting a financial strain on two major aging programs: Social Security and Medicare.Now that the Republicans are on their wayIn the midterm elections, some lawmakers have adopted plans to overhaul the program, including raising the age at which seniors can claim insurance to 70.
Under a plan created by the Republican Research Committee, a group of conservatives in the House of Representatives, seniors are now allowed to access the program when they turn 65. face a five-year delay in applying for Medicare. Also, Social Security’s retirement age will be raised to 70 for him compared to her 66 to her 67 today.
Why? A “miracle” of longer life, according to documents from the Republican Research Commission. But while Americans are living longer than previous generations, the average age of retirement is 61, according to Gallup, five years earlier than workers expected to leave the workforce. . In other words, people may believe they will work longer, but on average, Americans are five to six years behind before reaching Social Security’s current full retirement age. increase.
This makes raising the age at which benefits can be claimed difficult for older Americans, especially low-income rural Americans, and those who have to stop working due to health problems or to care for family members. Experts say it is likely to increase poverty.
This means either not getting three years of benefits compared to current retirees, or choosing to claim earlier the benefits that Social Security grants to retirees in exchange for a permanent reduction in benefits. means In general, according to the Social Security Administration, if he retires three years before full retirement age, her monthly benefits will be reduced by 20%.
“This means that even if you work to 70, you won’t be able to keep up with the cuts in benefits,” says Nancy Altman, president of the Social Security Office, an advocacy group for benefit programs.
“It especially hurts people with low-income, physically demanding jobs,” she added.
Deferring Medicare eligibility “will endanger the finances and health of most older Americans, ages 65 to 70, who will be underinsured,” says American Advocacy Group. said Mary Johnson, senior Citizens League policy analyst for Social Security and Medicare.
Americans between the ages of 65 and 70 need to work longer to maintain health insurance through their employers or rely on the Healthcare.gov marketplace to purchase insurance, she noted. Even plans for people under 64 can be expensive, with premiums of $10,000 or more per year.
“People aged 65 to 70 will find it more difficult financially, especially given the fact that they need to use more care and spend more,” she said. pointed out. “Where will they find the money to pay for these new and unexpected medical bills?”
lack of funds
Republicans say changes are needed in Social Security and Medicare as the Social Security trust fund is projected to be depleted by 2035. Up to 80% of the full amount. As the number of older Americans grows, Medicare is also facing funding shortfalls.
The Republican view is that the best way to reset the programs is to reduce spending by reducing the number of years seniors can claim these programs. I would like to. This could mean that the age to claim Social Security could be beyond her 70s.
“Most people don’t work until retirement age, let alone 70,” Altman said. “This will add to anxiety and contribute to the retirement income crisis.”
Those proposals, and others like turning Social Security into a discretionary spending program, are likely to move forward if Republicans take control of Congress, experts say.Republicans decide which party will retain control of the Senate to win the House.
President Biden opposes proposal, but Democrats face headwinds as votersIn 40 years and other economic issues.
“Since I was 16, I’ve been pulling money out for Social Security payments,” Biden said at a recent November event. Or you just lost your wife, you’re 66 or 68, and they’re trying to take away your Medicare and Social Security.”
red state life expectancy
Americans who live in Republican-leaning states are more likely to be hit hard by a higher retirement age than those who live in so-called blue states, experts say.
Life expectancy at age 65 varies considerably depending on the state you live in. Residents of states where voters tend to vote Republican tend to have a shorter life expectancy at age 65 than those living in states where residents vote Democrat.
For example, according to government data, Mississippi, Alabama, and Oklahoma have the shortest life expectancy for 65-year-olds in the nation, and those residents are expected to live about 16 more years. But her 65-year-old in Hawaii has a life expectancy of 21 years longer, and her 65-year-old in California and Vermont will live another 19.5 years longer.
Altman said raising the retirement age “would hit hard in rural areas, which tend to vote Republican, tend to be older, and tend to have lower incomes.”
Raising the Medicare eligibility age to 70 means that low-income workers in particular may not be able to stay in the workforce in their 60s due to disability or other problems and may struggle to pay their health insurance premiums. will hurt many of these voters because of 70, she added.
Over the long term, delaying access to Medicare could increase the program’s medical costs, Altman said.
Other Social Security Amendments
Beyond raising the retirement age and cutting benefits, there are other options to get Social Security and Medicare back to financial health, experts say.
That includes raising the ceiling on income taxable for social security. Earnings over $147,000 are not currently subject to payroll tax (but$160,200 in 2023). Another idea is to increase the tax rate on the program.
Both methods boost program revenues, but the first idea only affects about 6% of workers earning more than $147,000 a year, while the second idea affects all workers. , the Congressional Research Service said in a June report. (In 2023, the income cap will be raised to $160,200 and the amount will be revised upwards for inflation.)
“From a political perspective, public opinion on various options can vary from constituency to constituency,” the CRS report notes.
However, the report said policy makers should avoid cutting benefits to about 70 million people receiving social security benefits, including retirees, workers with disabilities and survivors of social security benefits. He added that action must be taken immediately.
But raising the retirement age and keeping Medicare out of reach for people until they’re 70 may only exacerbate income inequality and exacerbate poverty among older Americans, Altman said. did.
“This is an incredibly serious threat right now,” she noted.