Raising Medicare Eligibility Age: Who Gets Hurt?
Raising Medicare’s eligibility age from 65 to 67, which the new Joint Select Committee will likely consider this fall as a deficit-reduction measure, would not only fail to constrain health care costs across the economy; it would increase them.
While this proposal would save the federal government money, it would do so by shifting costs to most of the 65- and 66-year-olds who would lose Medicare coverage, to employers that provide health coverage for their retirees, to Medicare beneficiaries, to younger people who buy insurance through the new health insurance exchanges, and to states.
The report is based on the Kaiser Report I've cited previously: [More....]
The Kaiser Family Foundation, estimates that its increased state and private-sector costs would be twice as large as the net federal savings. If the proposal were fully in effect in 2014, Kaiser estimates, it would generate $5.7 billion in net federal savings but $11.4 billion in higher health care costs to individuals, employers, and states.
Here's what happens if you raise the eligibility age:
* 65- and 66-year-olds would face higher out-of-pocket health care costs, on average. Two-thirds of this group — 3.3 million people — would face an average of $2,200 more each year in
premiums and cost-sharing charges.
- State Medicaid costs would rise as some of those who lost Medicare coverage (those with the lowest incomes) would obtain coverage through Medicaid instead.
- Employer costs would rise as more 65- and 66-year-olds whose employers offered coverage to their retirees received primary coverage through their employer rather than Medicare.
- All Medicare beneficiaries would pay higher premiums because the removal of 65- and 66-yearolds, who are typically healthier than the overall Medicare beneficiary population, would leave the Medicare beneficiary population costlier, on average, to cover.
- People under age 65 who buy coverage through the new health insurance exchanges would face higher premiums to help cover the cost of insuring the many 65- and 66-year-olds who would enter the exchanges; the 65- and 66-year-olds would be less healthy, and more costly to cover, on average, than other people who bought coverage through the exchanges
As to the effect of Obama's health care law:
Under the health reform law (the Affordable Care Act, or ACA), seniors no longer eligible for Medicare could obtain coverage through Medicaid or the exchanges. But raising the age of eligibility for Medicare would substantially boost out-of-pocket costs for 65- and 66-year-olds, which many of them with modest incomes could have difficulty affording, prompting some to become uninsured and others to forgo needed care. It also would raise health care costs overall.
Policymakers could take some steps, outlined below, to limit — but not eliminate — these harmful impacts. Moreover, if Congress repealed health reform, as the House has voted to do, large numbers of 65- and 66-yearolds who lost Medicare coverage would likely wind up uninsured.
The option that the Congressional Budget Office has considered:
The Congressional Budget Office (CBO) has examined an option that would raise Medicare’s eligibility age by two months every year starting with people born in 1949 (who will turn 65 in 2014) until it reaches 67 for people born in 1960 (who will turn 67 in 2027), remaining at 67 thereafter.1
Under this option, CBO assumes that Congress would make 65- and 66-year-olds with incomes below 138 percent of the poverty level eligible for Medicaid, to match the new Medicaid income limit for other adults that the Affordable Care Act establishes starting in 2014.
The Kaiser report is based on full implementation in 2114 rather than the CBO's gradual two month implementation.
Seven million people age 65 or 66 at some point in 2014 would be affected by the policy change for one or more months. This number is equivalent to five million people affected for a full 12 months.
Obama is preparing to toss 7 million people under the bus. Dumb, just dumb.
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