Raising Medicare eligibility age is a bad idea


Raising the Medicare eligibility age is a proposed solution for a nonexistent problem.

Medicare trustees in 1990 forecast that the Medicare program would become insolvent in 13 years.  It was still solvent 21 years later, and they still were making the same prediction.  The 2013 projection of the Congressional Research Office, not shown above, pushes back the insolvency date to 2026—still 13 years in the future, still as far away as ever.

Insolvency would mean that there would be no reserves in the Medicare trust fund to pay benefits.  When those reserves are exhausted, the CBO estimates that Medicare would still be able to pay 87 percent of authorized hospital benefits out of income; if nothing changed.  Payments of hospital benefits would decline in the next 20 years to 71 percent of benefits.  Physician, outpatient and prescription drug benefits have their own revenue streams, and wouldn’t be affected.

Why does the insolvency of Medicare continually recede into the future?  It is partly because of the growth of the economy.   The key to keeping Medicare, and also Social Security, solvent is not by chipping away at benefits.  It is by promoting a full-employment, high-wage economy.


The other reason that increasing the Medicare eligibility age is a bad idea is that, according to the Kaiser Family Foundation, it would result in a net increase in costs to the public as a whole. Individuals and their employers would have to spend more, and more people would be eligible for Medicaid and for subsidies under the Affordable Care Act.

The above chart is based on analysis in 2011.  The Congressional Budget Office recently the net federal savings in raising the Medicare eligibility age would be much less than shown on the chart.  The saving would about $1.9 billion a year, not $5.7 billion.

While $1.9 billion is a lot of money, the United States is a nation of more than 300 million people, which means the saving comes to less than $65 per person.  I agree that would be an amount worth saving, if not for the fact that it is offset by increased costs and hardship to the American public as a whole.


Medicare: Insolvency Projections by the Congressional Research Office in July 2013.

Medicare Is Not “Bankrupt” by the Center for Budget and Policy Priorities.

Raising the Age of Medicare Eligibility by the Kaiser Family Foundation in July 2011.

Raising Medicare’s Eligibility Age Would Increase Overall Health Spending and Shift Costs to Seniors, States and Employees by the CBPP summarizing the Kaiser Foundation report.

Raising the Age of Eligibility for Medicare to 67: An Updated Estimate of Budgetary Effects by the Congressional Budget Office in October 2013

CBO: Medicare Eligibility Age to 67 Saves Little by Business Insider

Raising the Medicare Age to 67 Is a Lousy Idea by Kevin Drum for Mother Jones

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One Response to “Raising Medicare eligibility age is a bad idea”

  1. Chico Says:

    Reblogged this on The Deliberate Observer.


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