Raising Medicare’s eligibility age from 65 to 67 figures to be one option before the new congressional “supercommittee” on deficit reduction, and there’s speculation that the Administration will include it in the budget plan that it will release after Labor Day. As former Obama White House advisers Ezekiel Emanuel and Jeffrey Liebman argue in today’s New York Times, this proposal is a “classic example” of “cost-shifting cuts [that] don’t actually reduce health care spending, they just shift costs from the government to the private sector.” In fact, it would raise overall health care spending, as we explain in a new report.
Raising Medicare’s eligibility would save the federal government money by shifting costs to individuals, employers, and states. These increased costs would be twice as large as the net federal savings, according to a study by the Kaiser Family Foundation. (See figure.)
That’s not all. By shrinking Medicare’s share of the health insurance market, raising the eligibility age would reduce Medicare’s market power and weaken its ability to serve as a leader in controlling health care costs. Moreover, if Congress repealed the health reform law, as the House has voted to do, large numbers of 65- and 66-year-olds who lost Medicare would end up uninsured. For all of these reasons, raising the eligibility age would be a large step backward.