The Fallacy of Raising the Medicare Eligibility Age: A False Promise of Savings

As policymakers grapple with the ever-increasing costs of healthcare, one proposal that often finds its way into the debate is raising the eligibility age for Medicare. Proponents argue that this move would help rein in government spending and encourage people to stay in the workforce longer. However, upon closer examination, this proposal reveals itself to be a misguided approach that would not only fail to address the root causes of rising healthcare costs but would also leave a substantial number of retirees without adequate coverage.

The Harsh Reality: More Uninsured Seniors and Higher Overall Costs

Contrary to the claimed cost-saving benefits, raising the Medicare eligibility age would actually increase overall healthcare spending and shift costs onto seniors, states, and employers. According to a study by the Kaiser Family Foundation, if the eligibility age were raised to 67 in 2014, it would have generated $5.7 billion in net federal savings, but at the cost of an additional $11.4 billion in higher healthcare expenses for individuals, employers, and states – a staggering two times the federal savings.

The crux of the issue lies in the fact that many 65- and 66-year-olds who lose Medicare coverage would struggle to find affordable alternative coverage. While some may qualify for Medicaid or subsidies through the Affordable Care Act’s health insurance exchanges, a significant portion would likely end up uninsured or forced to forgo necessary care due to high out-of-pocket costs.

The Center on Budget and Policy Priorities (CBPP) estimates that under this proposal, two-thirds of 65- and 66-year-olds – approximately 3.3 million individuals – would face an average increase of $2,200 per year in premiums and cost-sharing charges. This financial burden would be particularly challenging for those with modest incomes, potentially prompting many to become uninsured or skip essential medical treatments.

The Ripple Effect: Burdens on States, Employers, and the Insured

Moreover, the impact of raising the Medicare eligibility age would extend far beyond the affected seniors themselves. States would face increased Medicaid costs, as some of those who lost Medicare coverage would qualify for Medicaid instead, with the federal government shifting a portion of these costs onto the states over time.

Employers would also feel the pinch, as more 65- and 66-year-olds whose employers offer retiree coverage would receive primary coverage through their employer rather than Medicare. This shift would not only increase employers’ costs but could also lead to higher premiums for all employees as older, and typically less healthy, individuals are added to the insurance pool.

Even those who remain in Medicare would not be spared, as the removal of the relatively healthier 65- and 66-year-olds from the program’s risk pool would result in higher premiums for all beneficiaries, estimated to be around a 3% increase by the Kaiser Family Foundation.

Lastly, participants in the Affordable Care Act’s health insurance exchanges would face higher premiums as well, as the addition of 65- and 66-year-olds – who are generally less healthy and more costly to insure – would drive up costs for everyone in the exchanges.

A Shortsighted Solution with Long-Term Consequences

Proponents of raising the Medicare eligibility age often argue that it would align the program with Social Security’s full retirement age, which is gradually increasing to 67. However, this argument fails to take into account the complexities of how the two programs operate. Most Social Security beneficiaries claim benefits before reaching the full retirement age, and raising the Medicare eligibility age would only widen the gap between when individuals start receiving Social Security and when they become eligible for Medicare.

Furthermore, this proposal does nothing to address the underlying drivers of rising healthcare costs, such as inefficiencies in the healthcare system, the high cost of prescription drugs, and the prevalence of chronic diseases. Rather than addressing these root causes, it merely shifts the burden onto those least able to bear it – seniors with limited incomes and resources.

A Call for Comprehensive Healthcare Reform

Instead of pursuing piecemeal measures like raising the Medicare eligibility age, policymakers should focus on comprehensive healthcare reform that aims to control costs while expanding access to affordable, quality care. This could include initiatives such as:

• Promoting preventive care and disease management programs to reduce the incidence and severity of chronic conditions.
• Addressing the high cost of prescription drugs through negotiation and increased competition.
• Encouraging the adoption of value-based payment models that incentivize quality care and better health outcomes.
• Investing in healthcare infrastructure and technology to improve efficiency and reduce administrative waste.

By tackling the underlying issues head-on, policymakers can work towards a healthcare system that is sustainable, equitable, and provides comprehensive coverage for all Americans, including our most vulnerable seniors.

In conclusion, raising the Medicare eligibility age is a shortsighted and ultimately counterproductive approach that would leave many retirees without adequate healthcare coverage while driving up costs for seniors, states, employers, and the insured population as a whole. Instead of pursuing this misguided path, policymakers should prioritize comprehensive healthcare reform that addresses the root causes of rising costs and ensures access to affordable, quality care for all Americans, regardless of age or income level.