Monday, December 3, 2012

Why Raising the Age of Medicare Eligibility Doesn't Fix The Deficit

By Dale Bowling

Republicans made it clear that if the US is going to avert the Fiscal Cliff, it's going to be primarily through government spending cuts.

They wouldn't list what they wanted to cut because they knew taxpayers would be up in arms -the things Republicans want to cut the most are the most popular programs that benefit the most Americans. Go figure.

Now we finally have an explicit policy idea from Republicans: raise the age of Medicare eligibility.

This sounds like a common sense idea. Medicare is expensive. It will be less expensive if fewer people are on it.

Well, that actually is true. Raising the age that seniors qualify for Medicare would save taxpayers $113 Billion over the next decade.

That sounds like a lot, but actually this $11.3 billion a year savings is less than NASA's budget.

The Bush Tax Cuts and the Wars in Iraq and Afghanistan added trillions to the Deficit. Trillions with a "T". Republicans think that $11.3 billion a year savings from raising the age Seniors can get Medicare is going to dent that? This is the party of fiscal discipline? Really?

By contrast, President Obama's plan of returning to the Clinton era tax rates for the top 2% of earners would produce $1.6 Trillion over the next decade. This is over ten times more than the savings to be had from raising the age of Medicare eligibility to 67.

To understand why raising the age of eligibility for Medicare doesn't save more money, you have to think for a second about how insurance works. Money comes from all policyholders and money goes to those who are sick right now. Healthier people help pay for the folks who are sicker in the pool of policyholders.

On average the healthiest are the youngest people in a given pool of policyholders. If you take the youngest out of the pool of Medicare patients, then the cost for the rest has just increased per person. The risk is spread over fewer, sicker people and this is going to mean higher costs to patients on Medicare.

Also, since most people retire before 67 nowadays there is going to be a few years where you're not covered by your current insurance, but aren't yet eligible for Medicare. Is it going to be cheap (remember- you're retired) to get coverage at age 65 from a private insurer? You're typically the least healthy of that pool and insurers charge accordingly.

Raising the age of Medicare eligibility is such a terribly bad idea when the benefits are weighed against the disadvantages that you have to wonder about it. It will hardly touch the Deficit, but it will cost Seniors big time. Shouldn't Republicans have thought of all that?

This could be another attempt by Republicans to Break Big Government, so that it doesn't work and then complain loudly about how Big Government doesn't work. Then maybe people will start to believe the Private Sector is always the way to go.

Or it could be that Republicans haven't really thought out all the consequences of their policy changes. As I have said before, not what you want from the people who are making huge decisions about your life and well-being.

Or it could be that they've come to believe their own propaganda. Government is always the problem, never the solution and basic mathematics and polls showing how satisfied Medicare patients are can't pierce the veil that Republicans have wound around themselves.

So there again are your choices with Republicans on the Fiscal Cliff: Dishonest, Clueless, Crazy.

An alternative put forth by President Obama is that Medicare should be able to use its buying power to get bulk discounts on prescription drugs. Medicare's prescription drug benefit created by Republicans didn't allow that or the purchasing of generics because it was largely a taxpayer-funded giveaway to Big Pharma. By eliminating that restriction, Taxpayers could get the same savings from Medicare age changes, but patients on Medicare wouldn't see their costs go up. If anything, they'd go down.

America needs to tell its Representatives what it thinks. Contact your Senators and Congressional Representatives and tell them what a terrible idea raising the age of eligibility for Medicare would be for America's Seniors.

Congresswoman Judy Biggert- Illinois 13th Congressional District

Judy Biggert
United States House of Representatives
2113 Rayburn HOB
Washington, DC 20515-1313

Phone: 202-225-3515




Congressman Peter Roskam- Illinois 6th Congressional District

Peter Roskam
United States House of Representatives
227 Cannon House Office Building
Washington, D.C. 20515-1306

Ph: 202-225-4561



Twitter: @PeterRoskam

Illinois Senator Dick Durbin

Sen. Dick Durbin
United States Senate
711 Hart Senate Bldg.
Washington, DC 20510
Ph: (202) 224-2152




Illinois Senator Mark Kirk

Senator Mark Kirk
524 Hart Senate Office Building
Washington DC, 20510

Phone: 202-224-2854



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