A group of CEOs is attempting to push the official US retirement age to 70, thereby making fewer Americans eligible to receive benefits such as Social Security and Medicare.
The Business Roundtable (BRT), a group of influential CEOs, on Wednesday unveiled its plan to partially privatize the health insurance program for older Americans and gradually reduce the benefits they currently receive by cutting entitlements. The plan calls for smaller annual Social Security increases, as well as reduced benefits for wealthy retirees.
“America can preserve the health and retirement safety net and rein in long-term spending growth by modernizing Medicare and Social Security in a way that addresses America’s new fiscal and demographic realities,” Gary Loveman, chairman, president and chief executive of Caesars Entertainment, told CBS News. Loveman is head of the Business Roundtable, which came up with the plan. The millionaire businessman hopes to convince Congress to enact the new measures in an attempt to cut US spending.
The BRT believes the eligibility age for both Medicare and Social Security should increase to 70. Some legislators have already proposed raising it to 67, but congressional Democrats have fought hard to prevent such an increase. Retirees can currently get reduced Social Security benefits starting at age 62, full Social Security benefits at age 66, and Medicare at age 65.
While the proposed changes would impact the younger generations, anyone who is currently over 55 would not be affected by those measures and could continue to receive their government benefits, regardless of the outcome of the decision.
The BRT believes that raising the age would help reduce the deficit. Its members also believe that the changes would cause traditional Medicare programs to compete with private insurance plans – something that Rep. Paul Ryan, chair of the House Budget Committee, has long advocated for.
But while raising the eligibility age would save the federal government money, it would also cause Americans’ expenses to increase dramatically, which would particularly devastate low-income individuals dependent on government assistance. CNNMoney reports that medical expenses would increase by $11.4 billion, even though federal spending would only drop by $5.7 billion.
“Raising the age doesn’t address the larger concern of reducing health care spending overall,” said Juliette Cubanski, associate director of Kaiser’s Program on Medicare Policy. “It just shifts costs from the federal government to other payers in the system.”
As Democrats and Republicans attempt to come up with a budget plan to avoid causing the country to fall into default, Medicare reform continues to be heavily debated. Although President Obama said he would support minor changes to Medicare, he would not support a plan as radical as that proposed by the BRT.
Increasing the eligibility age to 68 would put 435,000 seniors at risk of being uninsured – a number that would be higher if the eligibility age was set at 70.
“These ideas were soundly rejected in the last election only a few months ago,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
But the US could soon be struggling to pay its bills, and the CEOS of the BRT believe their proposal could gain congressional support among those most adamant about cutting spending.