It secures more long-term entitlement reforms. A worker’s age, education level and even ability to speak English became factors in determining eligibility.
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The deal on Medicare and Social Security Disability Insurance, potentially controversial in its own right, also offers a glimpse into the future.
Absent a deal now, roughly 11 million current recipients of disability benefits face a 20 percent reduction next year in what they have been getting.
National Active and Retired Federal Employees Association (NARFE) President Richard G. Thissen praised the news in a statement, saying, “Millions of federal retirees have been justifiably concerned that they would face a steep increase in Medicare premiums next year for no other reason than that they do not pay their premiums from a Social Security check”.
The deal paves the way for an agreement on a full-fledged budget before a short-term spending bill expires on 11 December. Boston University Professor Laurence Kotlikoff estimates that file and suspend can boost lifetime Social Security benefits for many couples by $50,000. Paul advocates a flat 14.5-percent income tax that would replace both Social Security’s FICA tax and the current personal income tax. Last year, I paid $1.50.
The new bill would also do great harm to households with disabled children.
About 55 million people receive Medicare and almost 60 million people receive Social Security benefits.
The strategies under fireknown as file-and-suspend and a restricted application for spousal benefitsattracted interest in the wake of a 2000 law that allowed Social Security beneficiaries to voluntarily suspend their checks after they had applied for benefits.
Under Mr. Bush’s plan, private payers, traditional Medicare and other entities would compete on a number of factors, including price. This means that seniors won’t see a large premium increase in 2016 – but will be stuck paying slightly higher premiums in years going forward, as they work to pay off this new loan. According to the Medicare Trustees, the program’s loss experience will require it to collect about 15% more in 2016 than it did in 2015. “Nothing has really changed the long-term trajectory….” Where would they get the money? Total enrollment is rising each year as baby boomers reach retirement age.
The flat and variable rate hikes are “both bad”, an ABC spokesperson told ThinkAdvisor Thursday, “but the flat rate is worse because you have to pay it no matter what – you can’t avoid it by funding up your plan, and unlike the variable, there is no cap”. In other words, Social Security loaned the money to the Treasury Department, which is using it for all kinds of things – to pay soldiers’ salaries, make grants to researchers, maintain highways and whatever else the government needs money for.
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The deal’s retirement provisions anger liberals and conservatives alike. By awarding benefits slightly less frequently, the deal lengthens the solvency of the disability benefits program. If there’s no cost of living adjustment by Social Security, any advantage to taking Social Security benefits later could be wiped out. But the increase will only impact a fraction of Medicare beneficiaries. On October 27, Bush posted idea on his official campaign site. And what would you like to hear the candidates say about the issue?
