The Congressional Budget Office (CBO) has issued a brief analyzing how raising the eligibility age for Medicare and Social Security would affect beneficiaries, the federal budget, and the overall economy.
The Congressional Budget Office estimates that an increase in the Medicare eligibility age of two years, from 65 to 67 would decrease Medicare spending from 2012 through 2021 by 148 billion dollars and long term Medicare spending by five percent. The CBO estimates that five percent of the individuals affected by the change would go uninsured while approximately fifty percent would receive private insurance. The rest of the individuals would rely on government programs, like Medicaid, for their insurance, which would offset much of the cost savings generated through Medicare. An increase in the eligibility age would encourage many Americans to remain in the workforce longer in order to maintain health insurance benefits through their employers.
Increasing the full retirement age from 67 to 70 for Social Security would reduce long term spending on the program by 13 percent. This change would cause many people to work longer to offset the decrease in benefits they will receive over their lifetime. The CBO estimates that both the labor force and the nation’s GDP would be one percent larger if the eligibility age was raised. More seniors, however, would likely live in poverty. Seniors as a whole would experience a decrease in disposable income, with low income elders hit significantly hard.
Read the full brief: Raising the Ages of Eligibility for Medicare and Social Security or the CBO blog post analyzing the results.
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