Why Hospitals Are Urging Congress To Raise The Medicare Eligibility Age

Politico’s Susan Jaffe reports that just as progressives are trying to pressure President Obama to back off his support for raising the Medicare eligibility age, the American Hospital Association will be lobbying Congress to do just that — gradually raise the age to 67 and push more seniors to “buy their own health insurance through state insurance exchanges starting in 2014”:

Nevertheless, some state hospital officials traveled to Capitol Hill during the recess to pitch the idea to one House Democrat, ignoring a staffer’s stern warnings that the boss was firmly against it. “Every week we hear from someone who is just hanging on, waiting for Medicare coverage,” the staffer said.

The message was clear, the staffer says: “If you’re going to cut money out of Medicare, cut them, not us.” If budget negotiators don’t come up with $1.2 trillion in alternative cuts, Medicare payments to health care providers would be automatically reduced by two percent. AHA estimates that its members would lose an estimated $45 billion over nine years. And that’s on top of the $155 billion in Medicare cuts hospitals are facing under the health law.

You can read why raising the Medicare age is such a bad idea here, but the AHA’s push for the measure goes beyond simply avoiding painful cuts — the industry is also looking to make more money. The truth is, pushing 65 to 66 year olds off of Medicare — which can negotiate far lower reimbursement rates with providers — means that hospitals can score higher reimbursements from private payers in the exchange and earn more for providing the same services to the same patients.