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Tuesday, 11 December 2012

Raise the Medicare Eligibility Age?

category_bug_journal2.gif The current age at which Americans are eligible for Medicare is 65.

There are strong indications from the fiscal cliff negotiations in Washington that in exchange for a (low) two percent increase in the tax rate on high-income earners, the Republicans will ask for – and get from President Barack Obama - an increase in the Medicare eligibility age to 67.

Since people are living longer these days, you might ask, what's so wrong with raising the age for Medicare? Before we get to that, here's a short background on where the talks sit now.

I regularly disagree with Washington Post pundit Ezra Klein but I don't doubt his backdoor connections to the Obama administration. Last Friday, he wrote about the trade-offs we are likely to see in the fiscal cliff deal [emphasis added]:

”The harder question is what Republicans will get on the spending side of the deal. But even that’s not such a mystery.

“There will be a variety of nips and tucks to Medicare, including more cost-sharing and decreases in provider payments, and the headline Democratic concession is likely to be that the Medicare eligibility age rises from 65 to 67.

As firm as the president continues to stand on tax cuts for the wealthy, he has always been wobbly on what he calls “entitlements.” This is what he said last week (not for the first time) in a speech to the Business Roundtable [emphasis added]:

“We’ve seen some movement over the last several days among some Republicans. I think there’s a recognition that maybe they can accept some rate increases as long as it’s combined with serious entitlement reform and additional spending cuts.”

In other words, of all the things that could be cut from the U.S. budget, the Obama administration goes straight for old people first.

Now as to why not increase the Medicare eligibility age, here are a couple of thoughts:

Some say that because we live longer nowadays, it's no big deal to raise the Medicare eligibility age. The problem with that argument is that only the rich are living longer. Life expectancy is closely related to income and while it has increased dramatically for the highest earners, it has barely changed for the bottom half for many decades – the people who most need Medicare coverage.

Raising the age would also cost you and me and all Medicare beneficiaries higher Part B premiums. Removing the youngest - and, therefore, healthiest – eligibles, would create a higher average cost.

Adding 65- and 66-year olds to employers insurance rolls would create the need for across-the-board premium increases in workplace health coverage. And, of course, those elders who sought coverage at the new state and federal exchanges would raise premiums for the same reason.

As I have mentioned here in the past, big changes to Medicare (and Social Security) should never be done as hastily as these cliff talks are taking place. Economist Jared Bernstein agrees:

”But bigger, structural changes, like raising the Medicare eligibility age or switching to the chained CPI are more complex and deserve more discussion and debate.”

Bernstein offers some sound advice on what some sane savings in Medicare might look like:

”That doesn’t mean some changes, including cuts, shouldn’t be part of the cliff negotiations. The President’s team, I think, could bring to the table around $400 billion in Medicare cuts over 10 years that largely come out of more efficient drug purchasing, other delivery side savings (paying for quality over quantity), and increase premiums on higher income seniors. Those look to me like smart savings and important negotiating material.”

It always amazes me that the experts who seem to me to have the best, most logical solutions are never the ones Congress or the White House talk to.

And finally, here is Ezra Klein again when he subbed for Rachel Maddow last Friday and explained in under two minutes why increasing the Medicare eligibility age is nothing more that a wildly expensive cost shift:

Visit NBCNews.com for breaking news, world news, and news about the economy

A deal probably needs to be struck by the end of this week to go into effect in time to avoid the fiscal cliff so time is short.

Sixty-seven percent of Americans oppose such cuts as raising the Medicare eligibility age. You might want to reinforce that point with the White House. You can call them directly at 202.456.1111. Or email the White House here.


At The Elder Storytelling Place today, June Calendar: The Fourth Quarter


Posted by Ronni Bennett at 05:30 AM | Permalink | Email this post

Comments

Thanks for making this point so clear. I'm calling the White House.

PS. I waited on the phone for 5 minutes, then gave up. Instead, I left the comment at the Web site Whitehouse.gov, an alternative option.

Thanks for the update, Alexandra. I think that's good news - lots of people calling.

I am in total agreement with you on your basic point. However, I have a question.

After the Affordable Care Act is totally implemented, isn't everyone theoretically going to have health care coverage at a price they can afford? So...will that make the age at which we switch over to Medicare a moot point? I'm just asking.

It seems generally agreed that raising the Medicare age is stupid, only shifts costs but doesn't lower them, and generally serves no human or policy purpose. ALL it would do is give idiot Republicans a scalp they can wave when their dopey constituents say they should block anything the Prez wants.

So naturally we can expect it to happen.

The Prez better get a good chunk of change for this piece of foolery. And his policy wonks better build in good protections for the elders in the 65-67 bracket who live in states where Republicans have refused to phase in the parts of Obamacare that cover lower income people. Policy wonks reckon this little dodge will only leave about half a million people without any insurance option and raise costs for everyone.

But, hey, we must appease the knuckle-draggers.

Yes, I get hot about this stuff. The Republican policy on health care reform remains: "Just die quickly."

Thank you Ronni and Janinsanfran. I couldn't have said it as well. You state my feelings completely. I will call.

What about tackling the fraud that exists in the healthcare programs? What about the excessive dollar-payments made to the physicians and hospitals? What about the stranglehold the pharm industry has on the system? What about the excessive premiums and discriminatory practices of the insurance providers? (Are these in effect untouchable job and wealth creators?)

I realize, too, that additional regulation and much needed ENFORCEMENT of these newer regulations creates a further drain on our precious resources - but isn't job creation also an issue here?

Here we have a benevolent government that provides student loans to physicians - some never repaid. Billions of research dollars pumped into the pharm industry - only to charge excessive prices - that other countries do not pay for the same drugs.

When, if ever, will this lunacy begin to stop?

Went on WhiteHouse.gov (thanks Alexandra) A piece of cake to put in my two cents worth about BOTH Medicare and Social Security. As an aside why do the networks constantly lump them together in charts, etc. as 'entitlements.' Grr.

@Eliza: And we have to remember to try to protect Medicaid too! We think of it as as program for poor people, but an awful lot of its expenditures are on nursing home care for elders who have no other viable option.

Thank you for the video.

Raising the Medicare eligibility age to 67 would, in effect, raise retirement age also. Anyone who is working and has health coverage will continue to work to receive the health insurance. This is not necessarily a bad thing.

The situation is different for people who are not working or work without health care benefits. As good jobs continue to be lost – through outsourcing and automation – more people will be affected.

The real problem is not an arbitrary age. It is the cost of the medical care. The Medical Industrial Complex has a stranglehold on this country – with the aid and blessing of the government. Whether your medical care comes out of your own pocket, from your insurance company, or through your taxes (government programs) the prices being charged are outlandish compared to the prices in other countries for the same services and products. This is where reform is needed.

If Obama gives in to raising the Medicare age, then for the first time in my life, I'm going to consider leaving the party.

Because what's the point.

The process of moving toward Obamacare is making certain factors more obvious. One is the illogic of having health coverage tied up with a person's employment. Coupling the two makes no sense. Not good for employers, or employees.

Another is the redunduncy of insurance companies. Explain to me why we need a third party that shuffles paper in the middle? Oh yes, they also skim off a layer of profit.

I'm with Yellowstone: "What about tackling the fraud that exists in the healthcare programs? What about the excessive dollar-payments made to the physicians and hospitals? What about the stranglehold the pharm industry has on the system? What about the excessive premiums and discriminatory practices of the insurance providers?"

Complex problems in a massive, complex system cannot be adequately defined, much less fixed, with brinksmanship and a Band-Aid. Yet that's what Washington keeps doing.

Although I've voted for him twice, I don't trust Obama to do right by our health care system(s). He sold out to Big Pharm before the ACA talks even began. He'll do it again.

Steal from those who make it, give it those who don't.

Destroy every American's incentive do do anything in the process.

Better learn how to say "yes sir" in Chinese if you keep this crap up.

God I can't stand Liberals.

Just let me know where to send the check because I'd like to buy you all some free birth control.

I agree waste and fraud should be taken out of the system.

I agree it's illogical to tie medical benefits to employment.

I agree it's an exercise in futility to raise the eligibility age to 67.

I also wonder: After the Affordable Care Act is implemented, isn't everyone going to have health care coverage at a price they can afford?

But I do NOT think it serves anyone's purpose to call people who disagree with us idiots, dopes and knuckle-draggers.

I am in favor of universal health care. Having said that, I think that even if the Medicare eligibility age is raised to 67, the ACA may help bridge the gap for people who want to retire before age 67.

I am also hopeful that the ACA is only the beginning.
We can only hope.

Thanks for the White House e-mail address and phone number Ronni. I'll be sending something each day until the message gets through.

Jeri raises an important point.

As of 2014, people can buy insurance on the exchanges mandated by the ACA. I checked into the costs because my COBRA coverage (I was laid off from my job) eligibility will end Nov. 30, 2013, and I will be only 63.

I consider my COBRA premium hideously expensive: $679 per month, which includes a $50 premium for a middling dental plan.

As I now live in Oregon, I checked out this state's ACA health-exchange plan, the most advanced in the U.S. at this time. The web site I checked, run by the state, appeared to say I could start buying that insurance by October 2013 and it would cost more than $800 per month. Oof.

When I plugged my expected income into the web site's calculator, I only included my Social Security (the job market for women 62 years old is kinda nil). Because of the federal subsidies -- also the result of health-care reform -- the web site said my premium would cost me just $45 per month.

Now, I don't know what the actual coverage would look like. Let's say it's best-case: either equal to Original Medicare or my current BCBS plan. That's a much better deal for me as a consumer than Medicare and all its parts, and if it really is what it looks like, I wouldn't mind forgoing Medicare coverage for an extra two years.

But in my opinion this path WON'T save the country any money; rather, it looks like it would cost taxpayers more and of course provide another boon to the insurance industry.

I'm not saying I've got it right, only commenting on what I've turned up and how I've interpreted it.

Posted by: payforeveryone
"Just let me know where to send the check because I'd like to buy you all some free birth control."

pay--I think you've come to the wrong discussion group LOL.

Something else younger adults don't know is that patience, ability to make quick transitions, physical flexibility and strength, more medical issues or difficulty with sight or hearing can gradually emerge around the mid-60s. That qualifies why retirement at 65 makes sense for those lacking perfect health.

However, I think it's a bit too optimistic to imagine workplace health benefits will continue to be offered indefinitely. When companies no longer see the value of holding on to private plans vs. the government alternative, a single payer health care system. I suspect much will change.

I certainly agree that the only way your readers can make their concerns known is to contact their legislative representatives by phone or email and explain.

Sorry, everyone. I've been out of the house at meetings all day. I don't have time to track it down right now, but from Hullabaloo, here is some information on how many people will NOT be insured via ACA for a long time [emphasis added]:

"Health care reform will extend health insurance to 14 million more people in 2014 and as many as 30 million people by 2022, according to the report. The report predicts 30 million people will remain uninsured in 2022, which is three million more than analysts projected before the Supreme Court ruling."

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