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September 2, 2014, 10:41 am

Ill-conceived plan to raise Medicare age

Republicans are proposing to raise the age when seniors become eligible for Medicare from 65 to 67.

South Carolina Republican Senator Lindsey Graham recently proposed the idea on ABC’s “This Week.”

“I don’t think you can look at entitlement reform without adjusting the age for retirement,” said Graham. “Let it float up another year or so over the next 30 years, adjust Medicare from 65 to 67.”

It is not a surprise that Graham and others are proposing this ill-conceived idea.

A similar plan is already being phased in for Social Security.

Even President Barack Obama reportedly had proposed the idea during his informal negotiations with House speaker John Boehner during the summer of 2011.

While it is true that increasing the elibility age would immediately reduce federal spending it is not without serious negative consequences.

The president and Congress should look at the evidence before making drastic changes to a federal benefits program that is keeping many seniors healthy and out of poverty.

“It’s clear that it would reduce federal spending and it can do so in a very immediate sense, depend on how it’s phased in,” says Tricia Neuman, senior vice president of the nonpartisan Kaiser Family Foundation and director of its Medicare Policy Project. “However, while federal spending will go down, costs to others will go up. In fact, total spending will rise.”

That’s because if you delay entry into the program and reduce the 65 and 66-year-old, the youngest and healthiest people in the program, it raises the costs for everyone else.

The result would be that “people on Medicare pay higher premiums,” said Neuman. “That’s because you’re taking the healthiest people out of the Medicare risk pool, leaving sicker people to pay higher premiums.”

The other negative result is that now those same 65 and 66 year-olds would be the oldest and likely among the sickest people remaining in the insurance pool of the working-age population, particularly in the new health insurance exchanges.

Neuman said this means raising the average risk of people in the exchanges, so that premiums will rise for everybody, especially for younger people.

Under the new federal health care law, insurance company won’t be able to charge older people many times more than younger people for the same insurance coverage.

A recent poll showed that the suggestion to raise the age for Medicare eligibility from 65 to 67 drew wide-scale opposition across party lines.

A new ABC News/Washington Post poll released last week showed that some 69 percent of registered voters say they oppose such a plan.

When it comes to raising the eligibility age for Medicare, Congress should listen to the voters and reject this proposal.