Ten Miles Square

Blog

December 12, 2012 9:28 AM Raising the Medicare Age of Eligibility Will Make Seniors Pay More for their Medicare

By Aaron Carroll

Yep. It will.

See, Medicare doesn’t work like your typical insurance company, which rates different people differently. It’s not making a profit, or advertising, or paying out dividends. Whatever it pays out in benefits is what it asks taxpayers and seniors to kick in. If Medicare costs more, then seniors pay more. Take Medicare Part B as an example. Whatever the amount it is projected to cost (or “premium”),the government pays 75% and seniors pay 25%.

So if Medicare B spending is calculated to be $5,000 a person, it’s $3750 to the feds and $1250 to seniors.*

But if we remove the cheapest seniors from the pool (65 and 66-year-olds) and put them in the Obamacare market, then the remaining seniors are going to cost more than $5,000 a person. I don’t know what the number will be, but it will be higher. Whatever that number is, seniors will be paying 25% of it in premiums.

So this awesome plan will not only do lots of bad things to those who are 65 and 66, but it will also make people 67 and older pay more for their Medicare every year.

*I imagine co-pays and deductibles will go up, too. I just don’t know how much.

[Cross-posted at The Incidental Economist]

Aaron Carroll ,MD, is an associate professor of Pediatrics and the associate director of Children’s Health Services Research at Indiana University School of Medicine.
tags ,