Sunday, December 16, 2012

Explainer: Raising the Medicare age won't save money

The Overpass Light Brigade gets it right.

Our friends at Media Matters offer a great explanation for why raising the Medicare age of eligibility would cost Americans $2 for every $1 it saves the government.

And yet that's what Republicans in Congress are proposing.

Here's MM's take on why that would be a dumbass thing to do.
Forcing seniors to wait longer for Medicare means taking them out of the most efficient system and pushing them into wasteful and costly private insurance pools -- driving up costs for everyone. 
If you're a wealthy politician who doesn't worry about affording health care for himself or needing to retire after a lifetime of manual labor, sure, it's no big deal to you. 
But if you're serious about fiscal responsibility, this gets you the opposite of what you'd want: a health care system that gets us less value but costs everyone more. 
Medicare is a leader in controlling health costs system-wide. Let's make it even stronger and more efficient, not weaken its power to save us money and keep health care costs in check. 
It's not just wrong to cut the Medicare benefits of janitors and maids who aren't living longer just because the richest Americans in white collar jobs are. It also costs us all money. 
Raising the Medicare age: the world's worst 2-for-1 deal.
Media Matters further explains that only some Americans are living longer past age 65. Over the past 50 years, people in the bottom 50 percent of earnings had an increase in life expectancy of barely more than a year.

The federal government would save $5.7 billion a year by raising the Medicare age to 67, but costs would increase by $11.4 billion in other parts of the health care system. (That's because Medicare is vastly more cost-efficient and controls costs better than private insurance, which has administrative overhead as high as 17 percent.)

Specifically, more seniors won't have any insurance at all. Seniors who do have Medicare will pay higher monthly premiums because younger, healthier 65- and 66-year-olds will be removed from Medicare's insurance pool.

Everyone else with private coverage will pay higher premiums because older adults would stay with private insurance for two more years before moving to Medicare. Health care costs will rise for employers as older workers try to stay on company insurance plans.

Raising the Medicare age would hit millions of Americans -- hard.

The average person on Medicare already pays about $4,600 in out-of-pocket medical costs. The AFL-CIO estimates raising the eligibility age to 67 would cost 65- and 66-year-olds another $3.7 million in out-of-pocket health care costs. Consider that half of all Medicare beneficiaries had incomes below $22,000 in 2010.

Call your elected representative in Congress next week to tell them to reject this horrible proposal.