social security and medicare changes

[LivingAlmostLarge]

Leave presidents out of it and political parties. What changes do you think are coming to social security and medicare? Do you think no changes? How will it affect the average person?

I was thinking you can now higher amount of wages are getting taxed by social security. It's now up from 2024 $168,600 to $176,100 in 2025. I mean that is a very hefty amount of income per person to be taxed. I think that possibly uncapping it and making all income social security taxable would be something that could happen. I'm not sure how much revenue it would generate though. The really rich don't work and earn income they live on dividends and capital gains or borrowing against assets.

I think another possibility is raising the age of ss so early is 65 and full retirement age is 70 and delayed is 75? Also raising medicare to age 70.

Another thing happening is keeping social security taxable by keeping the amount of income needed to make it taxable still $25k single and $32k MFJ.

I am 45 but I am not counting on SS. But I do think I'll get it. I'm just not sure in what shape or form.

[myrdale]

Leave presidents out of it and political parties. What changes do you think are coming to social security and medicare? Do you think no changes? How will it affect the average person?

I was thinking you can now higher amount of wages are getting taxed by social security. It's now up from 2024 $168,600 to $176,100 in 2025. I mean that is a very hefty amount of income per person to be taxed. I think that possibly uncapping it and making all income social security taxable would be something that could happen. I'm not sure how much revenue it would generate though. The really rich don't work and earn income they live on dividends and capital gains or borrowing against assets.

I think another possibility is raising the age of ss so early is 65 and full retirement age is 70 and delayed is 75? Also raising medicare to age 70.

Another thing happening is keeping social security taxable by keeping the amount of income needed to make it taxable still $25k single and $32k MFJ.

I am 45 but I am not counting on SS. But I do think I'll get it. I'm just not sure in what shape or form.

For what is coming change wise for social security and medicare, I'd assume nothing.

For raising the retirement age, you need to consider the average life span. For the United States of America, I'd seen a few numbers that said it was dropping. If the average lifespan is 77, then working till 75 probably isn't practical. Of course we're talking statistics and bell curves and there are people who can work at 100, but very few.

At 43 my age hasn't caught up with me yet. I was carrying tires out of a ravine over the weekend, and pushing myself hard. But physical and cognitive declines are real factors for many. Diet and lifestyle are probably the biggest factors.

[EasyMoney00]

Leave presidents out of it and political parties. What changes do you think are coming to social security and medicare? Do you think no changes? How will it affect the average person?

I was thinking you can now higher amount of wages are getting taxed by social security. It's now up from 2024 $168,600 to $176,100 in 2025. I mean that is a very hefty amount of income per person to be taxed. I think that possibly uncapping it and making all income social security taxable would be something that could happen. I'm not sure how much revenue it would generate though. The really rich don't work and earn income they live on dividends and capital gains or borrowing against assets.

I think another possibility is raising the age of ss so early is 65 and full retirement age is 70 and delayed is 75? Also raising medicare to age 70.

Another thing happening is keeping social security taxable by keeping the amount of income needed to make it taxable still $25k single and $32k MFJ.

I am 45 but I am not counting on SS. But I do think I'll get it. I'm just not sure in what shape or form.

The first sentence in your post is an impossible task. Even if people aren't throwing haymakers, they will get their jabs in. No way around it when you ask a question like this.

It's impossible to tell. Everyone will just be speculating. I don't think we'll ever need SS to survive, but it would be a nice perk.

What would be the benefit of raising SS age? Just to force people to work longer?

[ua_guy]

What would be the benefit of raising SS age? Just to force people to work longer?

Forces people to pay into it longer, provides a larger workforce for employers and reduces wage competition, and theoretically reduces the time beneficiaries draw it (assuming life expectancy stays the same). It's an easy way to make the existing (broken) setup last longer, without fixing any of its problems, and handing a win to business.

The fact that we are speculating and have no idea what might happen is an issue. Maybe the name should be changed to "Social Insecurity". The incoming party has talked about everything from cutting the program, to raising the age for eligibility, to privatizing the program and allowing companies to leverage that money and not have to give you any of the profit off of your money.

If I had to guess, any changes coming will benefit someone other than social security recipients who need it most.

[Drake3287]

I was under the impression that even before the election they had hoped to element SS from being taxed and of course Trump has mentioned the possibility of this happening also. I don't qualify for SS myself but I know my wife will be taxed on hers. Be nice if they could drop SS taxes for everyone just like it was years ago. Anyone making it to retirement doesn't deserve to be taxed on SS. (and yes, I realize lower earners don't pay anyway).

Like most things politicians say while running for office, I'm certainly not holding my breath for it to happen anytime soon.

[kork13]

Like most things politicians say while running for office, I'm certainly not holding my breath for it to happen anytime soon.

This X1000.

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Changes I could reasonably foresee? Whatever will help to keep the program alive & functioning. The problem will be that it's a 3rd rail issue from all sides, and half of this stuff would immediately send Congress & AARP & much of the American public into a tizzy. But here's my ideas:
1) Uncap contributions.
2) Increase % of contributions (ex: 7-7.5% vs. 6.2%).
3) Raise eligibility age, maybe up toward 70 based on life expectancy growth.
4) Reduce payouts if your income is above $X/yr.
5) Allow SS to invest a portion of their funds in the stock market (say, in the neighborhood of 30-40%).

My #1 & #5 are relatively easy wins IMO. #2 has been attempted (unsuccessfully) a couple times.

For some fun, take a few minutes to try solving the problem yourself! The "Committee for a Responsible Federal Budget" (non-public advisory organization from what I can tell) has an interactive tool that you can play with to see if you can stabilize the SS Trust Fund, with options for both +/- changes.

https://www.crfb.org/socialsecurityreformer/

My biggest question that I don't know about is what people are actually doing with their increased average life expectancy. When SS was created, I believe average life expectancy was in the mid-60s. Now it's in the mid-upper 70s. But are most people actually working for an extra 5+ years? Otherwise it would seem that increasing the eligibility age would either leave unprepared retirees in a lurch, or else force them to continue working until they can reach eligibility.

[EasyMoney00]

Can we change my screen name to Nostradamus?

[ua_guy]

We haven't stabbed Medicare in the eye yet, so here goes...

Upcoming changes probably look like more privatization. That looks like chopped liver from here; imagine a profit-heavy entity like Aetna stepping up to the plate to help solve Medicare problems using your taxpayer dollars. Cuts are dubious, that has real political risk, so it probably looks like tightening access or removing just enough benefit, or raising the bar for things like drugs or eligibility age to pull the wool over on people.

[disneysteve]

We haven't stabbed Medicare in the eye yet, so here goes...

Upcoming changes probably look like more privatization.

Yes, exactly the opposite of what should be happening. They want to push more recipients onto Advantage plans which are run by middlemen so they add a layer of cost and complexity to what is fundamentally a very efficient national system.

[myrdale]

They want to push more recipients onto Advantage plans which are run by middlemen so they add a layer of cost and complexity to what is fundamentally a very efficient national system.

If it was fundamentally a very efficient system, why are we discussing changes to it? What is the exact problem we are trying to fix?

[disneysteve]

If it was fundamentally a very efficient system, why are we discussing changes to it? What is the exact problem we are trying to fix?

Great question. 40% of Americans are already covered by government insurance. We should be working to get that number up to 100%, not going backwards, but that’s what some people are hell bent on doing.

[ua_guy]

Medicare is fundamentally a very efficient system. It's so efficient, and Medicare is so good at controlling cost that private insurers (Your Aetna's, United Healthcares, Cigna, etc) often use Medicare guidelines for medical necessity, and payment/reimbursement structure when it comes to their own plans they offer.

Current Medicare payroll tax is 1.45% for the employee, and 1.45% for the employer, for a total of 2.9%.
Contrast that with SS tax at 6.2%/6.2%.

"The problem" is Medicare taxes don't fully fund the program. Medicare represents a huge portion of the federal budget, just to keep it alive. Nobody wants to commit political suicide and raise Medicare taxes to cover the gap. Nobody wants to increase the deficit by continuing to throw money at the program. Nobody wants to be responsible for cutting the program. It's truly the third rail as described above. So, expect to see a lot of "shifting" to try to fix the problem, raising eligibility age, changing eligibility for certain benefits or types of care, or privatizing and complicating the benefit structures where members cover more of the cost out of pocket when they need care. And then there's problem of populist politics that call the program "socialism" while simultaneously refusing to relinquish it for themselves.

The private market has failed, failed again, failed forever to adequately provide healthcare in this country. When will we give up on the insanity?

[myrdale]

So if I understand what you're both saying:

1) Currently people take more out of Medicare than they put in.

2) We want to increase the people who receive benefits by 150%.

If I sell pies for $10 each, and they cost $12.75 to bake, I'm not going to be in business very long. Additionally I sell 50 pies a day, but you think I sell 150, presumably at the same price. Additionally I am the only person you're allowed to buy pies from.

In the same way your social security could be compared to a retirement account, maybe Medicare should be a personal health savings account.

But rather than worrying about managing the money, how about an actual focus on the cost.

Would you say my general assumption that most of the spending occurs in the last few years of life is accurate? That using the ER / ICU / hospital as a death bed isn't the best economic option? Hospitals have to charge higher prices based on the insurance cost the doctors must pay for malpractice?

[ua_guy]

Just raise the Medicare tax to more adequately fund the program, and have congress appropriate funds to provide the promised benefit rather than continue to beg/borrow/steal from that bucket and argue over it. It's actually that easy.

Malpractice insurance is a whataboutism. It's one part of total healthcare cost. As is drug cost. As is long term care cost - a lot of which isn't actually covered by Medicare, btw.

[LivingAlmostLarge]

Drugs in the us are substantially more expensive than every other country in the world. We're the only country that pays unlimited amounts of money. Every where else the government controls pricing.

That being said medicare is socialized medicine. Super efficient and cheap but it's definitely not funded enough. If people in the US hated socialized medicine so much I don't get how they love medicare.

Wasn't it back in 2006 that they tried to privitize SS? And people revolted. They don't want responsibility they want a pension. And SS is a pension.

In fact right about now it's starting to hit that most people are retiring without defined benefit pensions. It's taken a long time since 401ks really started in the 1980s. Until the 1990s companies had pensions but then they switched because it was a known debt what they owed for matching to a 401k. But in pensions you have no idea.

I don't think we can get rid of SS or medicare. I think we need to figure out how to raise the taxes to pay for two super popular programs. I don't know how you even cut those programs or trim?