Raising the ages at which people can collect Medicare and Social Security would reduce federal spending and increase federal revenues by inducing some people to work longer. However, raising the eligibility ages for those programs also would reduce people's lifetime Social Security benefits and cause many of the people who would otherwise have enrolled in Medicare to face higher premiums for health insurance, higher out-of-pocket costs for health care, or both. This issue brief reviews how ages of eligibility affect beneficiaries under current law and how delaying eligibility would affect beneficiaries, the federal budget, and the economy.
Among CBO's findings:
Long-Term Budget Impact
Implications for Beneficiaries
Raise the Medicare eligibility age from 65 to 67
Medicare spending declines by about 5 percent
Access to Medicare would be delayed for most people; many of the affected people would pay more for health care
Raise the full retirement age for Social Security from 67 to 70
Social Security spending declines by about 13 percent
People would face reduced benefits over a lifetime
Raise the early eligibility age for Social Security from 62 to 64
Social Security spending changes little
Access to Social Security benefits would be delayed for many people, but their monthly benefit amounts would increase
By inducing people to work longer, raising any of the ages of eligibility would increase the size of the workforce and the economy. Although the magnitude of those effects is difficult to predict, CBO estimates that:
Raising Social Security's early eligibility age to 64 or the full retirement age to 70 would, in the long term, boost the size of the workforce and the economy by slightly more than 1 percent.
Raising Medicare's eligibility age to 67 would also boost the size of the workforce and the economy, but by a much smaller amount.