Posted on 06 December 2012
By Mark Miller
Congressional Republicans want to raise Medicare’s eligibility age as part of a deal with Democrats to avoid falling off the fiscal cliff. Raising the eligibility age from 65 to 67 would save some money for Medicare and low-income seniors.
But at the same time, it would boost out-of-pocket insurance costs for two-thirds of seniors in that age bracket and those who are younger, plus raise overall healthcare spending for the federal government, states and employers.
Start shifting insurance risk in one age bracket, and the effects ripple.
First, the youngest, relatively healthy seniors would move out of the Medicare risk pool, raising the cost — and premiums — of covering older beneficiaries.
Second, many of the younger seniors cut off from Medicare would instead shop for individual insurance plans under the new insurance exchanges that launch in 2014 under Obamacare. They’d be the relatively older and sicker people insured on these plans, which would push up the cost of premiums for younger enrollees.
Although any change of this kind would likely be phased in gradually over a period of years, an analysis by the Kaiser Family Foundation (KFF) looked at a full phase-in for 2014 — showing what the policy would do once fully implemented.
KFF found that overall savings likely would be far smaller — and that many seniors would wind up paying far more for health care.