As the nation’s leaders grapple for a way to avoid the fiscal cliff they designed for themselves, a lot of ideas have popped up, both good and bad.
One of the worst — and, unfortunately, most persistent — is the idea of raising the eligibility age for Medicare from 65 to 67.
There are several ways to explain the problem with this proposal. For starters, Medicare is an insurance program and, like all insurance programs, its purpose is to spread costs by creating a risk pool.
Healthier people pay in more than they receive, so that those who get ill can expend more than they put in.
The larger and more inclusive the pool, the lower the individual cost.
Taking the 65- and 66-year-olds out of Medicare will remove the healthiest cohort from the risk pool, so the savings to Medicare will be minimal. At the same time, it will add to the private insurance program a new cohort of relatively unhealthy people, prone to relatively expensive medical conditions. That will drive up costs for private insurers, and premiums for everyone.
All things being equal, the proposal would just shift health care costs for the 65- and 66-year-olds from the government to those who buy private insurance. But because Medicare’s administrative costs and the reimbursement rates they pay health care providers are lower than private insurers, we’d likely end up paying more than the government would save.
The practical argument against this idea is more compelling than the theoretical one. Who are the people we would be depriving of health insurance? Men and women in their mid-sixties are more likely to be retired — or to have been laid off. Even if they are capable of working full-time at a job that provides health insurance, they are unlikely to find it. They are more likely to have health problems — especially compared to the people in their 20s the Affordable Care Act endeavors to cover. And they are prone illnesses that, unless they are discovered early — through the kind of preventive care people without insurance can’t afford — can become debilitating and expensive.
In short, people who are 65 and 66 are about the last slice of the population that should be deprived of health insurance coverage. It’s ridiculous to even think about it.
That this idea is being taken seriously is an indication that some people just don’t get it.
America doesn’t have a Medicare problem; it has a health costs problem that hurts businesses, families and individuals as well as straining government programs.
Shifting those costs from government to someone else doesn’t solve anything, and shifting them to people on fixed incomes with declining health makes no sense whatsoever.