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Changing Medicare Eligibility: Where’s the Savings?

Posted By Tamara Lytle On December 12, 2012 @ 2:54 pm In Washington Watch | Comments Disabled

If Medicare [1] stops offering coverage for 65- and 66-year-olds, who picks up the tab?

As Congress and the White House debate the menu for a new fiscal diet, raising the Medicare eligibility age to 67 is a favorite dish for some. And it’s certainly a favorite topic for Washington journalists, interest groups and opinion makers to dish on these days.

[2]The change would save the Medicare program 5 percent over the next 20 years, according to a Congressional Budget Office brief [3]. That would help both the debt-burdened U.S. Treasury and the Medicare program itself, which will soon struggle to handle coverage for boomers.

But while raising the eligibility age could save the program $5.7 billion in 2014, points out health policy reporter Sarah Kliff in her piece “5 Ways Raising Eligibility Could Change Medicare [4],” she cites a report by Kaiser Family Foundation that finds “other parts of the health care systems would spend $11.7 billion more providing the same health care benefits.”

Here’s who will pay instead:

  • Current Medicare beneficiaries. Excluding the youngest – and relatively healthiest – enrollees raises the average cost per person program-wide. That in turn could lead to higher premiums.
  • People ages 65 and 66. The newest senior citizens who don’t have other options will have to turn to the private market, though President Obama’s health care law [5] could soften the blow. The Kaiser Family Foundation estimates the tab [6] at $3.7 billion in 2014.
  • Employers. More older employees will stay on employer-sponsored insurance if they can’t get Medicare. The Kaiser Family Foundation estimates that tab [6] at $4.5 billion in 2014.
  • States. Lower-income seniors who can’t get Medicare will turn instead to the Medicaid system, which is funded by the states and federal government.

Here are two opposing points of view:

“We want to see improvements that actually lower health care costs, not simply change that makes seniors pay more for health care.” – David Certner, [7] AARP legislative policy director

“When people first began receiving Medicare benefits in 1966, the average 65-year-old old lived another 15 years; today that figure is 20 years. It’s little wonder that Medicare costs have grown 14-fold, in real terms, since 1970.” – Maya MacGuineas [8], president of the nonpartisan Committee for a Responsible Budget

As negotiations about the “fiscal cliff [9]” continue, we’re bound to have a heaping serving of viewpoints to sort out.

Article printed from AARP: http://blog.aarp.org

URL to article: http://blog.aarp.org/2012/12/12/changing-medicare-eligibility-wheres-the-savings/

URLs in this post:

[1] Medicare: http://www.aarp.org/health/medicare-insurance/

[2] Image: http://blog.aarp.org/wp-content/uploads/2012/12/medicare-pill.jpg

[3] Congressional Budget Office brief: http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-10-2012-Medicare_SS_EligibilityAgesBrief.pdf

[4] 5 Ways Raising Eligibility Could Change Medicare: http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/10/five-ways-raising-eligibility-could-change-medicare/

[5] health care law: http://www.aarp.org/health/health-care-reform/info-01-2011/health_law_benefits_2011_and_to_come.html

[6] estimates the tab: http://www.kff.org/medicare/8169.cfm

[7] David Certner,: http://www.aarp.org/politics-society/government-elections/info-11-2012/certner-nbc-medicare-issues-fiscal-cliff.html

[8] Maya MacGuineas: http://online.wsj.com/article/SB10000872396390443864204577623700185012824.html

[9] fiscal cliff: http://www.aarp.org/politics-society/government-elections/info-11-2012/what-is-the-fiscal-cliff.html

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