And that’s saying something!
The weekend was buzzing with hints that President Obama might be open to trade a slightly higher tax rate for the wealthy for raising Medicare’s eligibility age. The New York Times’ Paul Krugman had the best summation of just how bad an idea this truly is:
First, raising the Medicare age is terrible policy. It would be terrible policy even if the Affordable Care Act were going to be there in full force for 65 and 66 year olds, because it would cost the public $2 for every dollar in federal funds saved. And in case you haven’t noticed, Republican governors are still fighting the ACA tooth and nail; if they block the Medicaid expansion, as some will, lower-income seniors will just be pitched into the abyss.
The Kaiser Family Foundation did a detailed analysis of the impact of raising the age of Medicare eligibility, taking into account the implementation of health care reform.
Seven million people age 65 or 66. 42 percent would turn to employer-sponsored plans for health insurance, either as active workers or retirees, 38 percent would enroll in the Exchange, and 20 percent would become covered under Medicare.
Two-thirds of adults ages 65 and 66 affected by the proposal are projected to pay more out-of- pocket, on average, in premiums and cost sharing under their new source of coverage than they would have paid under Medicare.
Premiums in the Exchange would rise for adults under age 65 by three percent (an additional ($141 per enrollee in 2014), on average, due to the shift of older adults from Medicare into the pool of lives covered by the Exchange.
Medicare Part B premiums would increase by three percent in 2014, as the deferred enrollment of relatively healthy, lower-cost beneficiaries would raise the average cost across remaining beneficiaries.
In addition, costs to employers are projected to increase by $4.5 billion in 2014 and costs to states are expected to increase by $0.7 billion.
Raising the age of eligibility to 67 in 2014 is projected to result in an estimated net increase of $3.7 billion in out-of-pocket costs for those ages 65 and 66 who would otherwise have been covered by Medicare.
In sum, raising Medicare’s eligibility age costs $2 for every $1 saved. Seniors, including those already in Medicare and those 65 & 66 years old who’d no longer qualify, would pay more. Businesses would pay more and states would pay more.
Sound like a good deal to you?