As the presidential election nears, Social Security and Medicare are at the forefront of many American's minds. Americans’ top priority for the President and Congress is to address Social Security’s funding shortfalls to help people have a financially secure retirement, according to a study from the Transamerica Center for Retirement Studies.
This makes sense, considering the Social Security trust fund is projected to become insolvent in 2035. Medicare's hospital insurance benefits are expected to run out of money in 2036.
More than 66 million people in the United States receive health care coverage through Medicare. As of June 30, 2024 (the most-recently available data), nearly nine out of ten people age 65 and older were receiving a Social Security benefit. Social Security benefits represent about 30% of the income of people over age 65.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's what the upcoming election could mean for both Social Security and Medicare.
Harris on Social Security and Medicare
Harris strongly supports Social Security and opposes any plan that would reduce or cut Social Security benefits. In August, she wrote on Facebook that if elected President, she would work to “protect and expand” Social Security benefits, claiming they’ve “made the difference between poverty or peace of mind for millions of seniors, people with disabilities, and other beneficiaries.”
According to the official policy proposal, Vice President Harris is committed to strengthening and protecting Social Security and Medicare. For one, she plans on making corporations and the wealthiest Americans pay their fair share in taxes to keep Social Security and Medicare solvent in the long run.
Additionally, Harris will expand savings on prescription drugs for all Americans by President by extending Medicare’s $35 monthly cap on insulin and the $2,000 annual cap on prescription drugs, initially implemented by the Inflation Reduction Act, to all Americans, as well as accelerate Medicare drug price negotiations to cover more drugs and lower prices faster.
The Harris-Walz Administration will also build on the Butch Lewis Act and protect millions of union pensions.
Read our article, Harris' Stances on Social Security and Medicare, to learn more.
Trump on Social Security and Medicare
According to Trump’s campaign platform, the administration says it will “fight for and protect Social Security and Medicare with no cuts, including no changes to the retirement age.” Trump has also proposed cutting taxes on Social Security, but that could potentially cause more harm than good. Entirely exempting taxes on Social Security benefits could drive the program into insolvency even faster, according to the Committee for a Responsible Federal Budget.
While in office, Trump made no significant progress in remedying Social Security and Medicare's funding issues. Each of his yearly federal budgets proposed cuts in Social Security, Medicare and Medicaid, primarily in reduced payments to healthcare providers and hospitals.
Additionally, in October 2019, then-President Trump published the Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors, which included an overhaul of the Medicare for All program.
Read our article, Trump's Stances on Social Security and Medicare, to learn more.
Impact of the election on Social Security and Medicare
Significant Medicare and Social Security changes are “unlikely without strong congressional support,” said Mark Friedlich (VP, US Government Affairs, Tax & Accounting North America at Wolters Kluwer).
“If Harris wins, expanding Social Security and Medicare benefits is possible but would likely face opposition in a divided Congress,” he said. “Significant cuts to Social Security and Medicare are unlikely if Trump wins, given his campaign promises. Some reforms to reduce ‘waste’ or ‘bad management’ might be proposed, but sweeping changes would face opposition."
Bottom line
Both candidates support Social Security and Medicare but have different approaches to protecting these programs. Harris plans to make corporations and the wealthiest Americans pay their fair share in taxes to keep Social Security and Medicare solvent in the long run, while Trump, on the other hand, has proposed cutting taxes on Social Security altogether.
However, Congressional gridlock could prevent major changes to these programs. The makeup of Congress will ultimately determine any changes to Social Security and Medicare, as significant reforms would need bipartisan support.
Related Content
-
Cord Cutting Could Help You Save Over $10,000 in 10 YearsHow cutting the cord can save you money and how those savings can grow over time.
-
The '8-Year Rule of Social Security' — A Retirement RuleThe '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
The '8-Year Rule of Social Security' — A Retirement Rule
The '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
Tips for Expat Retirees, From Expat RetireesYou may enjoy a lower cost of living by moving abroad, but it requires careful planning.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Why Retirees Need a Budget, According to a New RetireeA new retiree explains why retirees need a budget.
-
Hiring a Financial Adviser: 10 Questions to AskWhen hiring a financial adviser, ask these 10 questions to weed out the duds and find the right person to manage your nest egg. After all, you're the boss.
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
