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  • hoozdik_hertz_9116 hoozdik_hertz_9116 Oct 25, 2013 5:29 PM Flag

    Raising The Medicare Age, Revisited

    Raising The Medicare Age, Revisited

    Back in 2011, we almost had a “grand bargain” whose centerpiece would have been a rise in the Medicare eligibility age. Liberals were horrified, but it actually would have happened if Republicans hadn’t balked at the idea of any revenue increases at all.

    Now we learn that it would have been not just cruel and a betrayal of promises, but bone-stupid too. Many of us pointed out that raising the Medicare age would actually raise the cost of health care, that any apparent savings to the Federal government would result simply from shifting costs onto others — and because Medicare has lower costs than private insurance, this would result in a net loss. But now CBO has redone its analysis, and finds that raising the Medicare age would barely reduce federal spending.

    The basic reason is selection bias: many seniors get Medicare before 65 because of disability or specific medical conditions. The ones who have to wait until the headline age are, on average, relatively healthy and hence relatively cheap.

    So here’s my question: will people stop talking about raising the Medicare age? My prediction is that they won’t — because it wasn’t really about saving money in the first place. Degrading the safety net and pushing people into more expensive private insurance weren’t bugs, they were features. The usual suspects, I predict, will just keep pushing for the same thing, and dismiss the evidence.

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