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Medicare, Social Security may see changes thanks to super committee
The 12-person Joint Select Committee on Deficit Reduction, more colloquially known as the "super committee," recently met for the first time. While its recommendations will have far-reaching ramifications on much of the country, baby boomers may be the most affected. The group is tasked with a slew of issues, but two of the most pressing are Social Security and Medicare.
According to CBS Money Watch, there are a number of options on the table for how the committee can reduce the rising costs of Medicare, but few of them are attractive or easy-to-implement. Some of the options they are likely to consider are higher insurance premiums paid by retirees, increasing cost sharing or rising the age of retirement - none of which are likely to be well-received among baby boomers.
Instead, some experts have pushed for a greater conversation on the merits of living a healthy lifestyle that may reduce the number of people who require a lot of medical treatment. These measures include a greater tax on alcohol, cigarettes and fatty food. Additionally, CBS suggests offering an incentive such as insurance premium discounts to people who aren't smokers or heavy drinkers.
Unfortunately, Medicare is not the only program that might see some changes over the coming months. AARP reports that the committee is likely considering a number of changes to Social Security that could have a significant impact on the 77 million baby boomers.
Among the possible changes is a modification to the cost of living adjustment (COLA) that most beneficiaries receive now. This used to be based off the consumer price index, but the committee could suggest changing how it bases the adjustment, which would result in less money, the AARP reports.
Much like the changes to Medicare, the committee may also suggest raising the retirement age as a way to reduce Social Security costs. As it stands, the full benefits age is at 67, but some analysts have said that the committee could bump that up to 69 or even 70, which could reduce shortfall by about 30 percent.
The committee does not have an enviable task, as it has to figure out how to cut $1.5 trillion from the deficit by Thanksgiving.
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