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The Impacts of an Increase in the Social Security Retirement Age and the Medicare Eligibility Age on Social Security Disability Insurance, Medicare, and Employment

A combination of rising health care costs, aging baby boomers, and increasing life expectancy has led to substantial increases in the cost of Medicare. Raising the Medicare Eligibility Age (MEA) from 65 to 67, in conjunction with the increase to age 67 for full Social Security retirement benefits, has been offered in a number of reform proposals as one way to contain Medicare costs. In this Public Policy Institute issue paper by Dave Wittenburg et. al., the authors use a very detailed methodological approach to estimate the impact of increasing the age of Medicare eligibility. Using data from the Survey of Income and Program Participation (SIPP) and the Medicare Beneficiary Survey (MCBS), they developed micro-simulation models to generate forecasts of how many people aged 65-66 would retain their benefits under Social Security Disability Insurance, how many in this age group would retain their Medicare eligibility, and how many would remain employed. The report also projects the amount of Medicare savings from the increase in eligibility age. (104 pages)