America’s rapidly aging society puts financial pressure on its two core programs for the elderly, social security and health care. Now, as Republicans vie to regain control of Congress in theSome lawmakers are embracing plans to overhaul the programs — including raising the age for seniors to claim benefits to age 70.
Under a plan developed by the Republican Study Committee, a group of conservatives in the House, seniors would face a five-year delay in claiming Medicare, the government’s senior health program that currently gives people access to the program when they turn 65. Social Security retirement age would also rise to 70, compared to the current full retirement age between 66 and 67.
The reason for the push? The “miracle” of longer life expectancy, according to Republican Study Commission documents. But while Americans are living longer than in previous generations, the median retirement age is 61 — or 5 years earlier than workers say they expected to step back, Gallup said. In other words, people may think they will work longer, but on average, Americans take a step back five to six years before they even reach the current full retirement age.
Therefore, raising the age to claim benefits would likely lead to more hardship and poverty for older Americans, especially for low-income rural Americans and those who have had to retire because of health problems or to care for relatives. , experts say.
That means either missing out on benefits for three years compared to current retirees, or choosing to claim benefits earlier — which Social Security allows retirees to do — in exchange for a permanent cut in benefits. In general, according to the Social Security Administration, retiring three years earlier than full retirement age equates to a 20% decrease in monthly benefits.
“That means that even for those people who work until age 70, you never catch up on the benefit cut,” said Nancy Altman, the president of Social Security Works, an advocacy group for the benefits program.
She added: “It hurts especially those with low incomes and physically demanding jobs,” who are more likely to stop working due to health problems.
Republicans say changes are needed in Social Security and Medicare due to projected funding shortfalls, with the Social Security trust fund expected to be exhausted by 2035. At that point, the beneficiaries would still receive monthly checks, but the benefits would be reduced to about 75% to 80% of their full amount. Medicare also faces funding shortfalls as the ranks of U.S. seniors rise.
In the Republican view, the best way to reinstate the program would be to cut spending by reducing the number of years seniors can claim these programs. They also want to link the retirement age to future changes in life expectancy, which could mean the age for claiming Social Security could creep even higher than 70.
“Most people don’t even work until their full retirement age, let alone 70,” Altman said. “This would increase uncertainty and contribute to the pension crisis.”
If Republicans gain control of Congress, it’s likely that these and other proposals, such as turning Social Security into a discretionary spending program, could make headway, experts say. President Biden pushes against the proposals, but Democrats face headwinds as votersin 40 years and other economic issues.
“From the time you are 16, you have withdrawn money to pay Social Security,” Biden said at a recent event in November. “But guess what? There’s someone breaking their neck, or you just lost your husband or your wife. You’re 66, 68 years old, and they want to take your Medicare and your Social Security.”
Life expectancy in red state
Americans living in Republican states are likely to be more affected by the retirement age increase than those in so-called blue states, experts say.
Depending on the country of residence, there is a considerable difference in life expectancy for people over 65. Residents of states where voters predominantly elect Republicans generally have a lower life expectancy at age 65 than people living in states where residents vote for Democrats.
Mississippi, Alabama and Oklahoma, for example, have the lowest life expectancy in the country for people over 65, and according to government data, those residents are expected to live about 16 more years. But 65-year-olds in Hawaii live an extra 21 years on average, while those in California and Vermont live an additional 19.5 years.
Raising the retirement age “would really hurt rural areas, who tend to age and have lower incomes, and they tend to be Republican voters,” Altman said.
Moving the Medicare eligibility age to 70 would also hurt many of these voters, especially since low-income workers in their 60s may not be able to stay in the workforce due to disability or other issues, and may struggle to apply for health insurance. to pay until they turn 70, she added.
In the long run, delaying access to Medicare could also increase the program’s health care costs, as more people would not only join the program in old age, but could potentially become sicker after delaying health care treatments for several years. Altman said.
Other Social Security Solutions
There are other options for restoring Social Security and Medicare to financial health, other than raising the retirement age and lowering benefits, experts say.
One is raising the limit on income taxed for Social Security. Currently, income over $147,000 is not subject to payroll taxes (althoughto $160,200 in 2023). Another idea is to increase the tax rate for the program.
Both methods would increase revenue for the program, although the first idea would only affect about 6% of employees earning more than $147,000 a year, while the second would affect all employees, the Congressional Budget Office said. in a June report. (In 2023, the cap on earnings will increase to $160,200, with the amount revised upwards for inflation.)
“From a political standpoint, public opinion on different options can vary by constituency,” the CBO report said.
But, the report added, policymakers must act quickly to avoid benefit cuts for the roughly 70 million people who receive Social Security benefits — a group that includes retirees, disabled workers and survivors of Social Security recipients.
But raising the retirement age and taking Medicare out of reach until people turn 70 could only exacerbate income inequality and exacerbate poverty among American seniors, Altman noted.
“This is an incredibly serious threat right now,” she noted.