NPR’s Julie Rovner makes a novel argument: Raising the Medicare eligibility age would actually increase the cost of Medicare.
Let’s focus on those 65- and 66-year-olds. In Medicare, they’re currently the youngest and healthiest people. So by delaying their entry into the program, says Neuman, you raise costs for everyone else already there.
The result would be that “people on Medicare pay higher premiums,” she said. “That’s because you’re taking the healthiest people out of the Medicare risk pool, leaving sicker people to pay higher premiums.”
At the same time, those same 65- and 66-year-olds would be the oldest and, likely, among the sickest people remaining in the insurance pools of the working-age population, particularly in the new health insurance exchanges.
“That means that they are raising the average risk of people in the exchanges, so that younger people in the exchanges, everybody in the exchanges, will see premiums rise, but especially so for those who are younger,” [Tricia Neuman, senior vice president of the nonpartisan Kaiser Family Foundation and director of its Medicare Policy Project] says.
That’s because under the federal health law for the first time, insurance companies won’t be able to charge older people many times more than younger people for the same insurance coverage.
Presumably, though, this would keep more 65- and 66-year-olds working and paying into Medicare. And, while the relative costs for those remaining in the pool might increase marginally, a rather sizable cohort would be kept from draining the pool for an entire year. And, of course, not all of them will make it to 67 to start collecting; my father didn’t.
Regardless of the economics, I’m not sure raising the eligibility age makes sense. Indeed, we’d almost certainly be better off as an economy if we radically lowered the eligibility age and simply pooled the entire country into a single payer system in lieu of the expensive and porous hodgepodge we have now.
