Report links deficit cuts to Medicare, Social Security

Increasing the eligibility age for Medicare to 67 would take a big chunk out of seniors' Social Security, according to a new report that aims to link the two unpopular proposals together.

The group Strengthen Social Security calculated that increasing the eligibility age, as some have urged the deficit-cutting supercommittee to do, could consume up to 45 percent of middle-class seniors' Social Security check. The numbers are based on a previous Kaiser Family Foundation analysis that found that 3.3 million people ages 65 and 66 would pay more out of pocket for healthcare if they were no longer eligible for Medicare.

"As a result," the new report says, "out-of-pocket health care costs would take a larger bite out of affected seniors' already modest Social Security checks, and hand more of seniors' hard-earned income over to private insurance companies. For example, out-of-pocket health care costs' claim on many 65- and 66-year-old Social Security beneficiaries with a history of middle-class earnings — $69,629 in 2011 — would increase from 28 percent to 45 percent."

The report also concludes that:

• Out-of-pocket costs would increase, on average, by $1,200 for 240,000 people ages 65 and 66 who would have to purchase coverage through a health insurance exchange and have incomes between 300 percent and 400 percent of the federal poverty level. Their out-of-pocket healthcare costs would go from consuming 26 percent to 32 percent of their Social Security check.

• Out-of-pocket costs would increase, on average, by $2,200 for 1.1 million retirees with employer-sponsored retiree health plans.

• Out-of-pocket costs would increase, on average, by $500 for 1 million retirees with employer-sponsored health plans.