REPORT: Raising Medicare Eligibility Age On The Table In Debt Ceiling Negotiations

Inside Health Policy’s Sahil Kapur is reporting that negotiators may be considering raising the Medicare eligibility age from 65 to 67 as part of an effort to reach a deal with Republicans on increasing the debt ceiling:

Key negotiators in the debt limit talks are mulling a proposal to raise the Medicare eligibility age from 65 to 67, a source familiar with the discussions says. Due to the volatility and sensitivity of the negotiations, Inside Health Policy could not confirm whether the White House and Republicans have agreed to include the provision in a final deal.

The idea was floated in a deficit reduction plan recently offered by Sens. Joe Lieberman (I-CT) and Tom Coburn (R-OK). The Congressional Budget Office found that raising the Medicare age to 67 would save $124.8 billion between 2014 and 2021.

Although House Democratic leaders say they’ll reject any Medicare benefit cuts, Republicans are eager to scale back the program and President Obama reportedly hasn’t taken any aspect of Medicare off the table.

If the provision ends up in the final package, Democrats won’t only cede the political debate about the efficacy of privatizing Medicare, they’ll be accepting a portion of the Paul Ryan budget and effectively forcing Americans between 64 and 65 years of age to purchase coverage from private insurers in the state-based exchanges. As a recent study from the Kaiser Family Foundation points out, this would “result in an estimated net increase of $5.6 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health-care costs.” The influx of older people into the exchanges would increase premiums by 3 percent in the exchanges and Medicare Part B, the study concluded.

And the savings themselves are slim. According to the Congressional Budget Office, “this option would have little effect on the trajectory of Medicare’s long-term spending…because younger beneficiaries are healthier and thus less costly than the program’s average beneficiary.” Even if policy makers increase the age to 70 in 2043, “outlays for Medicare would rise to 7.7 percent of GDP by 2050.”