New Congress, New President: Now What for Older Americans?
Checking in on proposed changes to Social Security benefits, Medicare choices and a potential tax credit for caregivers
This month, Republicans will control the White House, the United States House of Representatives and the U.S. Senate. Their legislation and policies have the potential to impact retirees' finances, including Social Security benefits and Medicare plan choices.
The 2024 Republican platform included a promise to "fight for and protect Social Security and Medicare with no cuts, including no changes to the retirement age."
President-elect Donald Trump also voiced support for eliminating taxes on Social Security benefits and for a caregiver tax credit. These ideas are popular, although experts have warned that cutting Social Security benefit taxes will negatively affect the program's funding unless additional revenue sources are found.
Meanwhile, many are watching to see what happens with Trump's selection of Dr. Mehmet Oz to run the Centers for Medicare and Medicaid Services.
If he's confirmed by the Senate, some experts think having Dr. Oz at the helm of CMS will result in greater federal emphasis on Medicare Advantage, the program under which older adults can get health insurance through Medicare-approved private companies.
In 2020, Oz co-authored a piece for Forbes proposing that all Americans not currently on Medicaid receive health insurance through Medicare Advantage.
The Project 2025 handbook organized by the conservative Heritage Foundation calls for making Medicare Advantage the default enrollment option, saying it "provides beneficiaries with a wide range of competitive health plan choices — a richer set of benefits than traditional Medicare provides and at a reasonable cost."
David Grabowski, a health care policy professor at Harvard Medical School, says making Medicare Advantage the default option seems unlikely. Instead, he says, further expansion of Medicare Advantage could be encouraged by enhancing payment rates to those plans, which would allow them to offer more benefits and lower premiums that would draw more consumers.
Already, "we've seen kind of amazing growth" in Medicare Advantage over the past few years, he says.
Pros and Cons
In 2017, about a third of Medicare beneficiaries were in Advantage plans. Now, it's more than half. Enrollees appreciate their simplicity, extra benefits and out-of-pocket limits. Advantage plans often include coverage for prescription drugs, vision, dental and hearing. Many charge no premium except for Part B.
However, people in these plans in many cases can only use in-network doctors and providers and may need referrals to see specialists. Experts say each type of plan has pros and cons and that consumers need to carefully consider their individual needs before choosing.
"These plans have been very popular with younger beneficiaries ... However, a lot of beneficiaries with greater needs have complained about some of the restrictions in those plans."
"These plans have been very popular with younger beneficiaries – I think they've liked a lot of the features and supplemental benefits," Grabowski says. "However, a lot of beneficiaries with greater needs have complained about some of the restrictions in those plans."
Retirees can switch from an Advantage plan to Original Medicare during open enrollment periods. However, some with more serious health problems can find that having been in an Advantage plan makes it more difficult to access the Medigap insurance they'd often need to shift to Original Medicare.
Project 2025 also calls for removing "burdensome policies that micromanage MA plans." Some organizations have said strong consumer protections are needed for the plans, which have faced scrutiny over issues like marketing practices.
Social Security Changes
Trump said during his campaign that he'd work to eliminate taxes on Social Security benefits. An analysis by the Tax Policy Center shows cutting those taxes could save U.S. households an average of $550 in taxes. The biggest beneficiaries would be middle- to upper-middle-income households, according to the analysis; those making between $32,000 and $60,000 would get an average tax cut of about $90 and those making $32,000 or less would receive no benefit.
The advocacy group Senior Citizens League likes Trump's suggestion of ending the tax and "will be most anxious to see what he does with that," Executive Director Shannon Benton says. "He has not, however, proposed any solutions for the impending shortfall."
The Tax Policy Center and other organizations point out that removing the tax on benefits would come at a cost, reducing funding for the program.
"At some point, Social Security reform is going to have to be addressed, and there's really only two things you can do – you cut benefits or raise revenue."
The nonpartisan nonprofit Committee for a Responsible Federal Budget has said the Social Security Old-Age and Survivors Insurance trust fund is "projected to be depleted by 2033, at which point the law calls for a 21% across-the-board benefit reduction." In October 2024, the Committee detailed how cutting taxes on Social Security benefits and several other Trump proposals could "dramatically worsen Social Security's finances," hastening the program's trust funds' insolvency by three years.
"At some point, Social Security reform is going to have to be addressed, and there's really only two things you can do – you cut benefits or raise revenue," says Bob Blancato, national coordinator of the Elder Justice Coalition and a former Next Avenue Influencer in Aging.
Conservative Republicans have suggested changes to Social Security including eventually raising the age at which retirees can start claiming full benefits to 69 from 67. Trump told AARP during the campaign that "I don't want to do anything having to do with increasing age," and that he would protect Social Security "through strengthening our country. We're going to protect it through growth."
Eric Kingson, founding co-director of advocacy group Social Security Works which advocates for protecting and expanding the program, finds Republicans' proposals concerning. At the same time, he says, "I think this program is too darn popular with conservatives and liberals" for politicians to make significant changes to it. "I think Americans recognize this is extremely important."
A Tax Credit for Caregivers?
In the waning days of the election, Trump said he'd support a tax credit for family caregivers.
"They're just extraordinary people," Trump told AARP. "They give up so much, and they get so little other than that they want to take care of their loved ones."
An October AARP survey found about 90% of Americans ages 50 and older support a federal tax credit for eligible family caregivers.
"Older voters are traditionally the most active voter there is — and the ones who remember what was said and what was promised."
Vice President Kamala Harris had proposed expanding Medicare for in-home care during the campaign. The fact that both candidates had suggested aid for caregivers "was finally a recognition it's a political issue and caregivers are a political force," Blancato says.
Older Americans will be watching to see whether the administration follows through on what was said during the campaign, Blancato says.
"Older voters are traditionally the most active voter there is — and the ones who remember what was said and what was promised," he says.
