Increase Medicare Age

There are so many topics in the news right now regarding the United States deficit, the sequestration and funding issues for original Medicare, as well as many other issues facing Americans that it becomes difficult to determine where we actually stand on certain issues.  Medicare Pathways wants you to stay informed regarding the original Medicare program and potential changes to the Medicare program.  One specific suggested resolution to the original Medicare funding issue is the suggestion by Congress of raising Medicare eligibility from age 65 to age 67.  Congress has suggested that by raising the Medicare eligibility age would cut back on Medicare related expenses that burden the federal deficit.  However, is raising the Medicare eligibility age from 65 to 67 the answer to Medicare’s funding issues?

What are the potential outcomes of raising the Medicare eligibility age from 65 to 67?

Consideration is being given to the benefits and setbacks of raising the Medicare eligibility from age 65 to age 67. Supporters of raising the age of Medicare eligibility believe that this change could potentially cut $148 billion between 2012 and 2021 while opponents see these “savings” being shifted from the government back to the people, resulting in an increase of $5.6 billion in individual out-of-pocket costs.

Raising the Medicare eligibility age from 65 to 67 will force seniors to find health insurance elsewhere

Raising Medicare eligibility from age 65 to age 67 will result in 5.4 million seniors trying to find health insurance coverage elsewhere, and an estimated 435,000 seniors could be uninsured each year.  Removing 65 and 66 year olds from the Medicare beneficiary pool could result in higher original Medicare Part B premiums for the remaining original Medicare beneficiaries. Initially, fewer people enrolled in the original Medicare program would lower costs, but because this group of seniors accounts for the least expensive part of the original Medicare pool, the smaller number of remaining enrollees could see up to a 3% higher original Medicare Part B premium by raising Medicare eligibility from age 65 to age 67. 

Will raising Medicare eligibility age from  65 to 67 affect other federally funded programs?

Raising the Medicare eligibility age from 65 to 67 would put a strain on other federally funded health care programs, as well as affect employers who provide health insurance benefits their workers.  The employers may shift the costs of providing health insurance to the 65 and 66 year old individuals to all employees by increasing employees’ portion of the insurance premium.  Low-income seniors will most likely enroll in state-run Medicaid programs to cover their health care costs.  Raising the Medicare eligibility age from 65 to 67 could result in a $700 million annual increase in costs accrued by state governments.

What arguments are being made to support raising the Medicare eligibility age from 65 to 67?

Those who support raising the Medicare eligibility from age 65 to 67 often cite the Affordable Care Act and its requirement that insurance companies sell policies to everyone regardless of medical history. This 2010 Affordable Healthcare Act also limits how much more these companies can charge older Americans to only three times as much as younger customers. Those who favor the age increase also refer to the fact that life expectancies have grown since the inception of the original Medicare program in 1965; therefore, supporters believe that raising Medicare eligibility from age 65 to age 67 would have little to no effect on the overall health of older Americans. 

Supporters also refer to the Congressional Budget Office (CBO) report which reveals how Medicare spending would decrease by $148 billion if the eligibility age change were implemented between 2012 and 2021. Additionally, more people would choose to work longer and retire later, resulting in more 65 and 66 year old individuals getting health insurance through their employers.

What arguments are being made against raising the Medicare eligibility age from 65 to 67?

Opponents consider this tactic to be a cost shifting rather than a cost reducing solution. Although the government is expected to save money, original Medicare beneficiaries would see an increase of 5.6 billion in out-of-pocket health insurance costs that were previously covered through original Medicare Part A (hospital insurance).  Premiums for original Medicare beneficiaries enrolled in Medicare Part B (medical or doctor’s insurance) would also see an increase of around 3 percent as healthier enrollees switched from original Medicare to private insurance plans.

Raising the Medicare eligibility age from 65 to 67 may affect the health of many individuals waiting

Many older Americans wait until they are eligible for original Medicare to get health insurance, avoiding all preventive care measures and potentially prolonging and worsening any illnesses. Analysts believe that increasing the Medicare eligibility age from 65 to 67 will force older Americans to stay in the workforce, drive poorer seniors into Medicaid, and leave many without any health insurance coverage at all. In sum, raising the Medicare eligibility age from 65 to 67 would shift the costs from original Medicare to seniors and Medicaid which would barely reduce the costs the government pays for coverage of the 65 and 66 year old individuals.  Additionally, raising the Medicare eligibility age from 65 to 67 will result in individuals waiting even longer before seeing a physician for preventive screenings and possible development of certain health issues which could have been caught earlier.  Prevention is less expensive than treatment.  Therefore, without seniors taking advantage of original Medicare’s preventive screenings at age 65 until they become Medicare eligible at age 67 could result in more costly treatments of conditions that could have been caught during preventive screenings and dealt with at that time.

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