At first blush, the idea of raising the Medicare age from 65 to 67 to make the program more sustainable longterm seems like a no brainer. Turns out, it would be an awful idea. The folks at the Center on Budget and Policy Priorities have run the numbers:
Raising the Medicare eligibility age to 67 from 65 would cost states and private payers about twice as much as it would save the federal government, according to this graph from the Center on Budget and Policy Priorities’ Paul Van de Water. The change would net the federal government $5.7 billion in savings if enacted in 2014. But it would also increase health care costs for many other health care payers, to the tune of $11.4 billion. You can see how that breaks down above.
It’s little surprise that raising the Medicare eligibility age would shift costs to the private sector; someone would still foot these health bills. But how does the change suddenly double the cost of caring for the same group of seniors? That price difference likely stems from Medicare’s efficiency as a health delivery system. The program has consistently seen lower cost growth than private insurance plans.
The article summarizing CBPP’s findings by Ezra Klein is from the Washington Post.