The cost of raising Medicare's eligibility age to 67

[flpoljunkie]

08/24/2011
The cost of raising Medicare's eligibility age
By Sarah Kliff



Raising the Medicare eligibility age to 67 from 65 would cost states and private payers about twice as much as it would save the federal government, according to this graph from the Center on Budget and Policy Priorities’ Paul Van de Water. The change would net the federal government $5.7 billion in savings if enacted in 2014. But it would also increase health care costs for many other health care payers, to the tune of $11.4 billion. You can see how that breaks down above.

It’s little surprise that raising the Medicare eligibility age would shift costs to the private sector; someone would still foot these health bills. But how does the change suddenly double the cost of caring for the same group of seniors? That price difference likely stems from Medicare’s efficiency as a health delivery system. The program has consistently seen lower cost growth than private insurance plans.

As I’ve written previously, raising the Medicare eligibility age would also be a blow to health reform’s insurance exchanges, causing premiums there to rise. And here’s more from Van de Water, who draws largely on a Kaiser Family Foundation report last month, on what else it would do:

●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-year-olds, who are typically healthier than the overall Medicare beneficiary population, would leave the Medicare beneficiary population costlier, on average, to cover.

http://www.washingtonpost.com/blogs/ezra-klein/post/chart-of-the-morning-the-cost-of-raising-medicares-eligibility-age/2011/08/23/gIQABlm8aJ_blog.html#pagebreak

[cbayer]

1. Interesting and a very good argument for Medicare for All - K & R

[flpoljunkie]

2. Definitely one to bookmark.

[cbayer]

4. Centers for Medicare/Medicaid Services are doing some excellent work right now to

improve quality, decrease costs and make the system much more accessible and efficient.

It is slowly but surely becoming a template for exactly what we want and need.

Please lobby your congresscritters to keep Dr. Don Berwick in place, as the republicans are going to try and remove him at the end of this session.

Thanks for posting this.

[flpoljunkie]

7. Jared Bernstein, who also works for CBPP, suggests to lower the age by two years

So here’s the follow-up study I’d really like to see: how much would we save, system-wide (i.e., private and public combined), if instead of this bad idea of raising Medicare’s eligibility age by two years, we lowered it by two years.

I realize this violates principle #2—my hypothesis in this case is that lowering the Medicare eligibility age would generate savings in that gov’t spending would rise but that increase would be more than offset by the decline in private spending. But it’s an exception I’m happy to make.

C’mon—there must be some wonk out there with some time on her hands. And, assuming sound methodology, I will feature your work in an OTE post, even if I’m wrong!

http://jaredbernsteinblog.com/cost-shifting-is-not-cost-saving/

[Mr Deltoid]

3. There is another cost

People will have to stay in the workforce an additional two years. In Europe they do things like retire people EARLIER to free up jobs for younger people. This will cost us jobs in the long run.

[LiberalFighter]

5. Link to Center on Budget and Policy Priorities article

Raising Medicare’s Eligibility Age Would Increase Overall Health Spending and Shift Costs to Seniors, States, and Employers

[LiberalFighter]

6. This needs to be shared with everyone. Put it on your website,

tweet it, facbook, etc.

[applegrove]

8. Krugman pointed this out a few months ago.

[woo me with science]

9. K&R