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November 02, 2011 11:20 AM Don’t raise the Medicare eligibility age

By Steve Benen

Members of the so-called super-committee got together for another chat yesterday, and heard plenty of suggestions from the likes of Alan Simpson, Pete Domenici, and Alice Rivlin, all of whom offered similar, center-right advice.

Of particular interest, though, was Erskine Bowles’ support for raising the Medicare eligibility age, which he believes would save billions.

In case anyone, including policymakers on the Hill, need a reminder, this is a very bad idea. Phil Longman addressed this in his piece for the print edition of the Washington Monthly.

Raising the Medicare retirement age to 67, a move favored by deficit hawks in both parties, might at first seem to be a reasonable adjustment. Since we are all living much longer, the idea goes, we can afford to wait longer to become entitled to Medicare. But the premise is false. For fully half of the U.S. population (specifically the poor and working-class Americans with earnings at or below the median), life expectancy at 65 is virtually unchanged since the 1970s. In many parts of the country, including much the South, life expectancy at birth for black males is not yet even 65, and in some places it is as low as 59.

As with plans to voucherize Medicare, the primary effect of increasing the age of Medicare eligibility would be to shift costs onto needy individuals, while also leading to worse health outcomes. Nor, in the grander scheme of things, would the proposal save the government much money, since most Medicare spending is concentrated on people well over the age of 67, and many of the people who would be cut from the Medicare rolls would wind up on Medicaid or qualifying for other means-tested government subsidies. The Kaiser Family Foundation estimates that if the proposal were fully in effect in 2014 it would generate only about $5.7 billion in net federal savings but would impose twice as much cost ($11.4 billion) on individuals, employers, and states.

Similarly, the Center on Budget and Policy Priorities tackled this over the summer, as did Paul Krugman, who described the proposal as “a terrible idea.”

First, the underlying notion — Americans are living longer, so retirement programs should start later — is true only of the upper half of the income distribution. Life expectancy for the other half has not risen much….

Second, raising the Medicare age would make America as a whole poorer — because while it might save the government some money (and even that isn’t totally clear, because treatment of some conditions would be delayed and impose higher costs when people finally do get on Medicare), it would push people into higher-cost private coverage. Austin Frakt estimates $2 of private costs for every dollar of budget savings.

This is, in short, a very poor idea — and obviously so. So naturally it’s hardening into orthodoxy among the VSPs.

VSP refers to Very Serious People — those dubious voices given undue credibility by the media and political establishment — including, in this case, Erskine Bowles.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • square1 on November 02, 2011 11:33 AM:

    those dubious voices given undue credibility by the media and political establishment � including, in this case, Erskine Bowles.

    Including Bowles. Including Rivlin. Including many Democrats. And including, apparently, the President, who, since before he was inaugurated, has been crowing about a Grand Bargain wherein "entitlement" recipients accept cuts in exchange for...I'm not sure at this point to be honest. I just know that the old and sick need to sacrifice.

    I know that it is taboo to say that Democrats, including the President, want these cuts. But it is pretty hard not to come to that conclusion when the same damn bipartisan benefit slashers get placed into decision-making positions and the Democrats keep setting up the conditions for a Grand Bargain to occur.

    After a while, you pretty much have to conclude that if the President didn't want to raise the Medicare eligibility age he would align himself with, say, Paul Krugman instead of Erskine Bowles.

  • sublime33 on November 02, 2011 11:35 AM:

    Pushing the age to 67 will also force a lot of people to retire at 67 instead of 65. This will not only hurt unemployment, it affects unemployment on the younger workers. The faster older workers leave the workforce, the sooner younger workers can fill the void.

  • walt on November 02, 2011 11:35 AM:

    I've seen liberals (say the guy who appointed the Simpson-Bowles Committee) who are also VSPs. Bill Clinton is one, too.

    We need either a new Democratic Party or the Democratic Party needs to die. We're being undercut by our leadership now in ways that are, if not despicable, certainly hurtful to the working and middle classes.

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  • stevio on November 02, 2011 11:37 AM:

    We have poor people in America? I thought we were Exceptional, God Trusting, Rich, and Powerful? Geeze, what a bummer...

  • Danp on November 02, 2011 11:37 AM:

    One more reason not to raise retirement age: when someone retires, a new job opens up. Should we really be discouraging that retirement, just for the sake of social security payouts? Means testing payments makes more sense, as does raising the FICA cap.

  • SW on November 02, 2011 11:40 AM:

    Go Greek! Time for a referendum on these fucking technocratic ass-wipes. Anyone who is numerate understands that raising the eligibility age will cost money because it amounts to cost shifting. You have to consider the system as a whole and medicare with all its problems is cheaper than the alternatives. Fucking clueless dingbats. Fix the problem don't fob it off onto somebody else and then congratulate yourself over how brilliant you are. Jesus Christ on crutches.

  • samsa on November 02, 2011 11:47 AM:

    Who is Mr. Bowles and why does he want to kill the people between 65 and 67?

  • bfr on November 02, 2011 12:01 PM:

    This has been proposed many times but the way to universal health care is to gradually DROP, not increase the the medicare eligibility age. Note that this would avoid the chief arguments against the current Obama plan: complexity and compulsory payments.

  • Trollop on November 02, 2011 12:02 PM:

    They need to set a limit on age in the House and Senate, say 65 as the cap, afterwhich you're catapulted into the Atlantic.

  • yoyo on November 02, 2011 12:23 PM:

    i think social security could move up to 67. we need to move from 70% consumer economy with easy credits to a more saving, investment economy.

    on the other hand, the more people are covered by medicare, the more saving lives and costs.

    i say, why not medicare for people over... 40?
    state exchanges programs could lead to a kind of federal program, maybe.

    Boweles-Simpson committee also wanted a public option. what about that?

  • Tom Allen on November 02, 2011 12:29 PM:

    "those dubious voices given undue credibility by the media and political establishment"

    Yeah, remind me who catapulted Simpson and Bowles of all people into the center of this debate? Oh, right. The Obama Administration, what with it being their deficit commission and all. And now, as if out of nowhere, this idea is being proposed seriously. Nobody could have predicted, etc., etc.

    Amazing how this happens.

  • bigtuna on November 02, 2011 12:32 PM:

    I used to kinda buy the VSP actuarial arguement on this, and then I either read, or was reminded of, the fact that there are still Americans who do hard, sometimes crappy, very physical jobs. These people are often the ones w/o much of a retirement plan, health care plan, etc. And despite all the medical miracles that the VSPs are able to benefit from so they can continue to sit on their VS asses, and sit in studios saying very serious things, no manner of medicine has negated the wearing out of our bodies with age and physical exertion. THere are many many many Americans for whom 65 is a decent, and in some cases, even too old, a target, and raising the age to 67 may in fact, cut costs fo Medicare and SS. Lots of people will be dead by the time they reach 67.

  • jjm on November 02, 2011 12:41 PM:

    They should be LOWERING the eligibility age for pity's sake!

    Lowering it would put premium paying younger people who do not need as much care, thereby allowing the program to become more solvent.

  • emjayay on November 02, 2011 12:49 PM:

    Unless the Rethugs manage to derail it, when the ACA is in full effect in a couple of years, that will change a lot of equations for everyone. Not that it makes any sense at all to have two separate systems. While we do, shouldn't ACA and Medicare and the prescription drug plan and Social Security all coordinate at least?

  • Keith on November 02, 2011 12:58 PM:

    First off, this is not an issue I usually follow; so please excuse my innocence.

    From reading the article, why not lower the age that Medicare starts and begin decreasing the amount available when you reach the upper ages? For instance, at 60, you start getting benefits but at 90 your benefits start decreasing. Not to zero; but as the article says we are spending most of the money on people way over 67, so bring it down to 50% of full benefits by 100 (or whatever). The United States spends far more in the last few years of life than any other country (I have no idea the reference and may just be a Wikipedia talking point) and that seems a tad wasteful.

    It just seems we need to stop "delaying death at any cost".

    As I think of it, we have really stepped out of bounds of natural selection with our heroic efforts to delay death. Yes, medical science is totally awesome but do we really need to save everyone? Can we not put at least a little bit of cost/benefit analyses into such medical decisions? A tiny bit?

  • Roddy McCorley on November 02, 2011 1:02 PM:

    The problem with raising the official retirement age to 67 is that business has already lowered the defacto retirement age to 50.

  • AndThenThere'sThat on November 02, 2011 1:08 PM:

    ...it would push people into higher-cost private coverage.


    And therein lies 100% of the motive behind this push. Follow the money trail behind the asswipes pushing this proposal (both in Congress and punditeering on TV) and I bet it leads back to our vaunted best-in-the-world, for-profit, mega-healthinsurance corps. Guaranteed.

  • berttheclock on November 02, 2011 1:20 PM:

    Many in this nation have been forced to "retire" at that magic age of 50. So, the mantra has become for those between 50 and 67, "Just survive by the kindness of strangers".

    Seeing and hearing Harold Ford on MSNBC, trying to position himself for another political run in Tennessee makes me gag. Ford, for years, has wanted to dismantle both Medicare and Social Security. He is NO Democrat.

  • Roger the Cabin Boy on November 02, 2011 2:36 PM:

    @berttheclock

    This, to me, is the thing that really needs saying but is hardly heard in the debate over raising the Medicare age. With so many companies downsizing and the general tendency to shed older (and more expensive)employees, what are these people supposed to do for healthcare once their working live essentially end (except for lower paying jobs that provide few or no benefits)? These "Catfood Commissioners" have neither hearts nor souls.

  • N.Wells on November 02, 2011 3:04 PM:

    The life expectancy values may not be saying what you think they are. Black males suffer high death rates as young adult males, and poor people suffer higher neonatal and childhood mortality. Very early deaths like these drag the average lifespan way down for those groups. Life expectancies for those who reach age 30 (or something similar) would be a far better basis for arguing whether or not to extend the retirement age. I don't know those data, however.

  • Jenny on November 02, 2011 6:42 PM:

    Unless the Rethugs manage to derail it, when the ACA is in full effect in a couple of years, that will change a lot of equations for everyone.
    --------------------------------------

    But, but, but Obama is worse than Hitler!!

    9/11 was an inside job! WTC7!

    Occupy Steve Benen! Shut him down!

    Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaarugh!

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