The Medicare Eligibility Age Debate Rages On

CNN Money, quoting the Kaiser Family Foundation, reports that during 2014 alone a two-year increase in the Medicare eligibility age would result in a $5.7 billion reduction in federal spending. But CNN Money goes on to report that such a $5.7 billion reduction in spending would add up to just half of the new costs that a Medicare age increase would bring. CNN quotes Juliette Cubanski of Kaiser: Raising the Medicare age “just shifts costs from the federal government to other payers in the system.”

Aaron contends that for every dollar of savings resulting from increasing the Medicare age, “other costs would go up by $1.10.” Specifically, he expresses concern about “increased federal and state Medicaid spending higher subsidy payments under the new health care law, and added spending by businesses and older people themselves.”

One reason for such an increase in overall healthcare costs, according to MedicareRights.org, is that “the absence of younger, healthier 65- and 66-year-olds in the Medicare program would leave an older, sicker, and more expensive group to cover. MedicareRights.org goes on to suggest that if an age increase is implemented by 2014, “employers would pay an increase of $4.5 billion in employer retiree health care costs.” Many concerned observers argue that if undue burden is placed on employers to offer health coverage that Medicare used to offer but no longer does, employers will be less able and willing to employ people 65 and 66 years old. As a result, they say, people 65 and 66 years old who are not eligible for Medicaid or disability insurance are likely to suffer.

MedicareRights.org asks, “Who is harmed by this across the board benefit cost?” Its answer: “Everyone is. Older adults, people of color, blue-collar workers and employers would be among those hardest hit. Estimates suggest the increased costs for these groups would be two times the cost savings for the federal government–$11.4 billion in cost shifting versus $5.7 billion in federal savings.”

Medicare Advocacy, Inc., reports that “34% of Hispanics and 26% of African-Americans aged 65 and 66 would become uninsured” if the Medicare eligibility age were raised by two years. Overall, according to the organization, “23% of Americans with incomes below 200% of the poverty line would become uninsured.”

Many who oppose changing the Medicare eligibility age are convinced that increasing the minimum age threshold for most Americans will only spread hardship or disadvantage across the board. Even among people over 67 who would seemingly be unaffected by increasing the eligibility age by two years, CNN Money quotes Kaiser as predicting modest increases in Medicare premiums if 65- and 66-year-olds are excluded from the program, leading only older individuals who may be more prone to illness.

States and businesses would have added responsibilities in providing some of the coverage and services that Medicare would deny those excluded from the program due to any increase in the Medicare age requirement. But it is generally argued that the primary burden would fall on the shoulders of the 65- and 66-year-old individuals who would be denied Medicare coverage if the age requirement were raised to 67.

Medicare Advocacy, Inc. and MedicareRights.org agree that many Americans may simply fall through the cracks if an age change is instituted. According to MedicareRights.org, “Despite advancements made by the Affordable Care Act (ACA), many low-income seniors ages 65 and 66 would still go without affordable coverage.” Although some of these individuals would qualify for Medicaid, critics view such a potential move simply as cost-shifting, or moving costs and responsibility from one government agency to another, and not as a solution likely to trim government spending in a meaningful way.