Medicare & Social Security Number Crunching Just Isn?t Enough

2017-07-10T16:23:25+00:00January 12th, 2012|Aging Issues, Max Richtman, Medicare, Social Security|

We couldn?t help but scratch our heads a bit at all the attention generated by the latest CBO report on raising the eligibility age for Medicare and retirement age for Social Security. You really don?t have to be an economist to know that cutting benefits to millions of Americans saves the government money.Of course, it also shifts costs to seniors and employers, forces millions more into Medicaid or into private insurance exchanges (which will go away if conservatives have their way and repeal healthcare reform) and cuts benefits for those who can?t stay on the job until they’re 70 years old. However, those real-life consequences are never fully discussed by Washington?s fiscal hawks. Never.So?OK?let?s play Washington?s numbers-only game. Even then, as David Dayen at Firedog Lake reminds us, targeting generations of working Americans with benefit cuts isn?t the only way to save money:Yesterday, the Congressional Budget Officeestimated that raising the Medicare eligibility age from 65 to 67 would save the government $148 billion from 2012 to 2021. For context, letting the Bush tax cuts expire would save $3.6trillionover the same ten-year window. So anyone who tells you that we must increase the Medicare age to ?save the budget? should be shown those two numbers. Even just letting the tax cuts over $250,000 expire would save $800 billion, over five times as much. The other difference would be that letting the Bush tax cuts expire would mildly inconvenience wealthy people who can afford the hit, while raising the Medicare age would put a massive burden on 65 and 66 year-olds, increase health insurance premiums for everyone by changing the risk pools, and probably increase overall health costs across the system.Dean Baker at the Center for Economic and Policy Research says:?The cost of this savings is a much higher health care bill for beneficiaries. As it is now, millions of people in their 60s struggle to hang onto jobs that provide health care insurance or do without, hoping that they can make it until 65 without a major medical problem. This proposal pushes the magic age out two more years.And there should be no mistake; the cost of insurance for someone in his/her mid-60s is a real burden. The Congressional Budget Office (CBO) projected that the cost (in 2011 dollars) of insuring someone in the private sector at age 65 will be $15,500 a year in 2022. ?the proposal to raise the age of Medicare eligibility to 67 is a proposal to increase health care costs to our children and grandchildren by $2.7 trillion. The idea that this cut is being presented as somehow helping our children is a sick joke that would only be taken seriously in Washington political circles.On the Social Security side CBO claims GDP will increase 1% if Americans can?t retire until age 70 because they?ll have to remain on the job longer. But we?re wondering?what jobs? We certainly don?t know of any national effort to encourage companies to hire (or even retain) 67 year olds?do you? And what will that mean for our children and grandchildren struggling to enter an already depressing job market hoping to build their careers?These are the questions Washington should really be asking. Let’s see a CBO report with more detail on these issues.