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Older eligibility for Medicare is not wiser

Written by Diane Archer

Older eligibility for Medicare is not wiser. Raising the Medicare eligibility age from 65 to 67 actually ends up costing twice as much as it saves according to the Kaiser Family Foundation. And, it would hurt millions of older adults who would need to wait two more years to be eligible for Medicare as well as increase costs for people with Medicare.

How would it affect you financially? It depends on where you live, where you work and how much you earn.  Kaiser estimates the net increase in out-of pocket expenses for people at $3.7 billion. An estimated third of older adults would save money; however the two-thirds of older adults would be faced with greater out-of-pocket expenses.

The average increase per person would be $2,200. People who qualify for Medicaid typically would pay less. People who need to enroll in a state health exchange may pay more or less based on income and eligibility for federal help paying premiums. People covered under their employers’ plan, both actively working and retired, would typically need to pay more.

Furthermore, if 65 and 66 year-olds are not paying into Medicare, Medicare loses their premium contributions. Since they are the youngest Medicare enrollees, they help subsidize the cost of older enrollees.  Without their enrollment in Medicare, premiums will also rise for everyone enrolled in Medicare. To make matters worse, if these 65 and 66 year-olds enroll in the state exchanges, as the oldest enrollees, their premiums will be the highest.How much does raising the Medicare eligibility age really help the federal budget?

By eliminating coverage of 65 and 66 year olds, it would save $31.1 billion over ten years. But overall health care spending would rise because individuals, employers and states would be spending substantially more. The net federal savings would actually only be $5.7 billion, and it would cost individuals (and their employers, and states) $11.8 billion in 2014.

Read more about this issue from the Kaiser Family Foundation here.

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