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Thursday, January 12, 2012

Raising the Age of 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. 

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