The Medicare eligibility age debate…

Will the fiscal cliff discussions in Washington, DC end up raising the Medicare eligibility age?

Any raise in the Medicare age would be terrible policy (Here’s the AARP and Matt Yglesias at Slate.) Such a change would increase health care costs and shift those costs to seniors and the states. Such a move would impose real costs on those 65 or 66 year olds in a big way. And still-cash-strapped California and other states would have to pick up more costs for low-income elderly patients.

Medicare provide basic coverage effectively and efficiently, and is actually something that makes sense to lower the eligibility age–as was proposed to go to 55 during the negotiations of the Affordable Care Act, and has been proposed to allow everyone in, by those of us who support single-payer.

The Affordable Care Act has come up in these conversations, both as making such a change easier, but also less likely as well.

At one level, the ACA makes the Medicare-age-raise proposal less harsh. In the current world, such a change was unthinkable: Folks in their early 60s without employer-based coverage have a very difficult time accessing or affording health coverage. Many by definition are denied coverage for pre-existing conditions. Those who do have coverage are charged astronomical prices, with no limit on how much they can be charged due simply for their age. Raising the eligibility age in Medicare would have left many of those seniors uninsured–and having the entire retirement savings at risk.

In 2014 and beyond, no one will be allowed to be denied for pre-existing conditions, or even charged differently based on their health status. Older folks won’t be charged more than 3 times what younger folks are charged for the same health plan. And we will get subsidies–through Medicaid or the new Exchanges–if our coverage cost more than a certain percentage of our income.

But by having something in place for those 65 and/or 66 years olds, it also makes clear the cost of such a proposal as well. Yes, the raising the Medicare age will shift costs to seniors–they’ll be paying up to 8% of their fixed incomes on premiums, plus cost-sharing. But it also means any money the federal government saves in Medicare would be offset by money the federal government would have to pay in additional Medicaid spending and in added Exchange subsidies–in the latter, paying more for private coverage. Raising the Medicare age no longer really makes as a money-saver, given all the additional costs, not just for the country, but even for the federal government itself.

One of the good things about the ACA is that establishing the right to health care, it takes away the game of “hot potato” by both government and the health industry–each party trying to offload the cost of care, leaving millions uninsured and uninsurable. By acknowledging that most everyone needs to be in the system, the ACA hopefully puts the focus not on avoiding giving people care, but the real work of figuring out how to provide the care the most efficiently and effectively.

UPDATED: Here’s John McDonough, at the Boston Globe’s blog, on this subject as well.

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