When you pay FICA or self-employment taxes, you earn retirement credits that lead to eligibility for Medicare and Social Security. This year, you receive one credit for every $1470 that you earn. You may receive a maximum of four credits a year.
After you have 40 credits, you qualify for these programs. Nearly all who have worked are eligible.
The program was established in 1966, and the age of eligibility is 65, although this could change.
President Joe Biden has proposed a reduction in the eligibility age to 60. Since the baby boomers are reaching their 60s, a large segment of the population would be positively impacted.
According to the Kaiser Family Foundation (KFF), a 60-year-old person that purchases a silver-level medical plan through an insurance exchange pays $4400 a year. If that bill were to go away, someone trying to make ends meet could receive quite a boost.
In addition, employers would save money. Workers that are 50 years of age and older are the most significant cost drivers for employer-provided health care insurance. If employers no longer had to cover employees in a high-risk age group, they would save money.
Of course, there are opponents to this measure led by the health care providers themselves. Medicare pays them less than private insurance companies, so they are concerned about lower revenue.
There is another argument against the expansion of coverage. Many people that are getting older could retire, but they continue to work because they need health insurance coverage. Critics say lowering the eligibility age will shrink the workforce and hurt the economy.
Expansion of Coverage
Senator Bernie Sanders is in favor of reducing the eligibility age 50. In addition, he proposes that Medicare begin covering vision and dental care. With these ideas expanding the spectrum of proposed changes, some observers see room for compromise.
When a “big idea” is introduced into the public consciousness, the public will weigh in, and this influences the lawmakers. KFF’s polling shows a strong 69 percent majority of Republican voters stated that they are in favor of a reduction to as low as 50 years of age, and they are joined by 85 percent of Democrats.
This is a matter that is very relevant to the elder population that we counsel, so we will continue to monitor the situation going forward.
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