To Raise or Not To Raise?
Now that the United States presidential election is over, many people are eager to get back to their lives without fighting opponents from the other end of the political spectrum. While some people celebrate and others mourn the course of the next four years, Washington quickly settled back into business as usual; now with less of a stringent spotlight, as many Americans took a small breather from political engagement after such a lengthy and vicious campaign.
Nonetheless, the budget deliberations are in full swing, trying to avoid plunging the country over a scary-sounding ‘fiscal cliff’ in January; effectively, the government is trying to prevent another recession by outlining a budget for 2013, compromising on tax increases and spending cuts. And, one of the new ideas floating around the Senate and House floors is the possibility of raising the Medicare eligibility age from 65 to 67.
The idea has been floated by Republicans as a possible money-saving solution, and one that’s desperately needed; as it is, Medicare is a huge cash-guzzler. While the Affordable Care Act of 2010 aims to gradually reduce unnecessary program spending over time, it’s clearly not happening fast enough to prevent the spending cuts that the Democratic government wants to enact in 2013. Bloomberg News reports that an eligibility age increase by two years could save the United States government more than $100 billion by 2027. This is an attractive number for fiscal conservatives, who wish to prevent a tax increase. They would slowly increase the age, allowing near-retirees to benefit from their promised plan.
This idea is controversial, to say the least. The Medicare eligibility age hasn’t been changed since 1966, when the program was created. Since then, the average American lifespan has increased by roughly eight years; the financially bloated Medicare system must accommodate more people for longer periods of time, putting a strain on the program’s resources. Proponents for the age raise argue that the tactic has already worked for the Social Security program; in 1983, Congress agreed to gradually increase the full benefit age to 67. The change-over won’t be complete until 2022, ensuring that no one is unfairly denied their benefits now. Furthermore, the Affordable Care Act will aid the poorest seniors with subsidized premiums and Medicaid support.
But many pundits and economists are opposed to raising the Medicare eligibility age. Many seniors will be financially hit by the change, even if the implementation is gradual; the middle-income Americans who cannot qualify for Medicaid or get a good deal from private companies will end up uninsured. The move may actually raise costs for everyone; the regular health insurance exchanges would take on 65- and 66-year-olds, who tend to get sicker and require more care than other age groups. The Washington Post estimates that this move could raise premiums by 3% for everyone else.
While the age raise would save money overall, it may unfairly burden many other Americans in the process. Furthermore, the projected savings are not enough to fix all of the government’s budget issues for 2013. Luckily, the Democratic lawmakers in Washington seem to agree; there are other ways to reduce health care costs without putting our senior population on the chopping block.