Recent new analysis suggests that even if government cuts do not directly affect Social Security, Social Security beneficiaries may still feel the effects indirectly. The Super Committee tasked with finding ways to trim the federal deficit is considering raising the age for which Americans become eligible for Medicare from 65 up to 67. Those savings, some experts believe, would come at the expense of retirees’ Social Security benefits.
The Super Committee recently heard testimony from a Morgan Stanley executive who said that raising the age would be a good way to bridge the divide between Democrats and Republicans. He also noted that the Affordable Care Act (“Obamacare,” as some call it) would help 65- and 66-year-olds find coverage in the private sector. Raising the Medicare eligibility age has support from members of both parties, so it is a feasible change.
On the other hand, several think tanks and organizations believe that raising Medicare eligibility to age 67 would do more harm than good, because doing so would eat away at Social Security benefits. The organizations found that nearly a million Americans would face an extra $4,300 in health care costs each year as a result of raising the age. For these Americans, health care costs would jump from taking up 28 percent of their Social Security benefits to taking up nearly half of their benefits.
How important are your Social Security benefits for helping defray your health care costs? If you are worried about your benefits, a Social Security lawyer may be able to help you.