Thursday, January 12, 2012

Raising the Age for Medicare Eligibility - First Prize Dumb Idea

This week the Congressional Budget Office released a report on proposals to raise the age of eligibility for Medicare and Social Security.

The CBO concludes that raising Medicare eligibility to 67 would reduce federal spending by $148 billion between 2012 through 2021. By 2030, Medicare's net spending would be reduced by 5% - 4.7% of GDP rather than 5%. Those numbers sound good.

But reducing federal expenditures doesn't reduce the need for medical care. Some lucky folks (I'm in that category) (a) have employment that provides health insurance and (b) are happy to continue working. Some who would rather retire will continue to work, increasing health care costs for their employer (and fellow employees). Some will scramble to find alternatives which will cost them more than Medicare would. And some will become uninsured, at an age when this is progressively risky. Overall costs - to individuals, employers and other government programs would probably go up more than the $148 billion reduction in Medicare outlays.

The CBO does not comment on the fact that employers are not clamoring for ready-to-retire employees to stay on the job simply to avoid being uninsured.

Raising the Medicare eligibility age isn't meaningful cost reduction - it's simply a form of hot potato, dumping the costs into other accounts. It intensifies the fragmentation of our health system, and worsens overall quality of care.

In my view, the proposal is born out of despair about achieving constructive Medicare reform in which health professionals, patients and families collaborate on behalf of improved care (basically more compassion and less technology) and reduced costs. From 35 years of practice in a not-for-profit HMO setting I know this kind of collaboration is possible. But it requires a spirit of cooperation and trust that is not easy to find in our toxic political environment. 


Anonymous said...

The same can be said for young people now being able to stay on their parents insurance until age twenty five. This also places more burden on employers. This takes the stress off the fact that there are no jobs. People think of young people not having health issues, but this may not be true. Psychiatric issues are fairly prevalent and can be costly.

Jim Sabin said...

Dear Anonymous -

Thank you for your comment. You make several excellent points.

As a psychiatrist I've seen first hand how important access to care can be for young adults in their early 20s. Apart from the widely prevalent adjustment reactions that occur, it's the age at which serious ailments like schizophrenia and bipolar issues often surface. And, of course, substance misuse problems can often be crippling.

In our absurdly fragmented health care non-system, putting this additional burden on employers (and employees, who pay their share of the increased premiums), is part of what we have to do to "fix" the problem of uninsured
young adults. I hadn't thought of your point about how this "fix" can take our eye off of the problem of too few jobs as well as the problems created by basing access to insurance on employment status for those who don't quality for Medicaid, Medicare, or other publicly supported programs.

Again, thank you for your very thoughtful comment!