Romney-Ryan Would Raise the Medicare Eligibility Age

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Who is helped by this? Not seniors who have to pay more expensive private insurance premiums for two more years. Not taxpayers, who lose some of the monopsony market power that keeps Medicare’s costs cheaper than private insurance. Not anybody. The way to really save everyone money is lowering the Medicare eligibility age to zero.

Aviva Shen explains:

Numerous studies have shown that booting 65- and 66-year-olds from Medicare would in fact have only modest savings, while raising health care costs across the board for seniors. Though Medicare spending itself would be reduced by 5 percent, the seniors taken out of the system would then have to turn to employers, other government programs and the states, increasing costs. As a result many of the people who would otherwise have enrolled in Medicare would face higher premiums for health insurance, higher out-of-pocket costs for health care, or both.

The Center on Budget and Policy Priorities (CBPP) estimates costs could “total $11.4 billion — twice the net savings to the federal government” in 2014 alone. Medicare’s market power would inevitably suffer as well:

Raising the Medicare age would shift costs to most of the 65- and 66-year olds who would lose Medicare coverage, to remaining Medicare beneficiaries, to employers that provide coverage for their retirees, and to states. These cost increases would, in total, more than offset the savings to the federal government. Moreover, by further shrinking Medicare’s share of the health insurance market, raising Medicare’s eligibility age would reduce its market power and weaken its ability to serve as a leader in controlling health care costs in the future.

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