Key Seniors Group Backs Raising Age of Retirement : Benefits: Changing threshold to 70 would affect Medicare, Social Security eligibility. The comments mark shift in debate on programs.

In a startling policy change, the president of a major senior citizens lobbying group Friday endorsed an eventual increase in the age of Social Security and Medicare eligibility to 70.

The higher retirement age should be combined with significantly increased funding on biomedical research to help older Americans stay healthy longer, said Martha McSteen, 71, president of the 6-million-member National Committee to Preserve Social Security and Medicare.

McSteen’s willingness to discuss altering the most basic terms of the popular programs--the age of eligibility--represents a major shift in attitude. The National Committee and most seniors groups traditionally have strongly opposed any significant changes in Social Security or Medicare.

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Her endorsement was offered at a time when Medicare is under siege. Congressional Republicans have proposed trimming more than $250 billion from future Medicare outlays to stave off bankruptcy of the Medicare trust fund that helps pay hospital bills. That fund is likely to go broke in 2002, according to a trustees’ report issued last month.

And an even greater long-range financial threat is posed by the costs of providing heath care for the huge baby boom generation, which will start drawing benefits in the year 2011.

McSteen said that the Republican Medicare savings proposals go “too far, too fast.” She suggested in a letter to members of Congress that the Medicare age of eligibility could be boosted, starting in 2003, as part of a Medicare fiscal rescue package that would include a tobacco tax increase and some savings in payments to hospitals.

She gave an unexpectedly friendly reaction to a new proposal by Sens. Alan K. Simpson (R-Wyo.) and Bob Kerrey (D-Neb.), who want to raise the age for full Social Security benefits to 70, from the current level of 65.

Raising the eligibility age for both Medicare and Social Security in the next century could be vital to ensuring their fiscal soundness as the millions of baby boomers, the biggest generation in U.S. history, begin retiring and claiming benefits, McSteen said in an interview.

A healthy population facing the prospect of 20 or 30 years of retirement will be eager to keep working, she argued, if business and society can expand flexible arrangements such as part-time work.

She described a deal in which today’s youngest workers would wait longer than their parents or grandparents to get their benefits. But they would be healthier because the country has invested heavily in research to keep them from the chronic ailments from which many elderly persons now suffer, she said.

“Tying the Social Security retirement age and Medicare together is a good idea,” because the programs fit together as a single package of universal, compulsory social insurance, she said. “We at the National Committee feel it is appropriate to look at how changing the entitlement age date would work.”

Under current law, the age for full Social Security benefits will increase gradually, starting in the year 2000. It will reach 66 in the year 2009, and 67 in the year 2027.

The proposal by Simpson and Kerrey would boost the age even higher, to 70. The gradual phase-in means that the age 70 rule would apply only to workers who are now under the age of 30.

They also proposed raising the early retirement under Social Security--which provides those retirees with 80% of benefits--to age 65 from the current level of age 62.

The plan “needs to be studied in great detail to be sure individuals of all ages would have opportunity to adjust to it,” McSteen said. For example, it would be unfair “to tell someone who is 60 years old now, you must continue to work til 70 to be entitled to benefits,” said McSteen. “Many people would say: ‘There is no place I can go, my company encourages early retirement.’ ” Society’s philosophy of work and age “has to be looked at differently” to give people meaningful, well-paid work until they reach a new retirement age at 70, according to McSteen.

Her willingness to consider age 70 for Medicare could open a serious new debate among hesitant lawmakers about the best way to deal with the long-range problems of the federal program that helps pay the medical bills of 32 million persons over 65 and 4 million disabled persons.