Medicare Watch

Raising the Medicare Eligibility Age Would Increase Total Health Care Costs

In a recent blog post, Paul Van de Water of the Center on Budget and Policy Priorities (CBPP) discusses why raising the Medicare eligibility age from 65 to 67 would save the federal government money only by shifting expenses to older adults and employers. In fact, Van de Water explains, this change would cause total health care costs to increase, as costs to consumers would be twice as large as any net federal savings. Citing a study conducted by the Kaiser Family Foundation, Van de Water pinpoints the reasons for these increased costs: 

• 65- and 66-year-olds, who could no longer depend on Medicare, would pay more on average for premiums and cost-sharing;
• Employers who provide retiree coverage would become primary payers for their retirees under the age of 67;
• Medicare beneficiaries over the age of 67—as well as younger people who purchase health insurance through the state exchanges that will be implemented in 2014—will have higher premiums. As 65- and 66-year-olds seek insurance through the exchanges, the beneficiary pools of both the exchanges and Medicare itself would be older, sicker and more costly;
• State Medicaid costs would rise, as people without Medicare would depend on Medicaid for coverage. 

Policymakers who support raising the Medicare eligibility age argue that under the Affordable Care Act (ACA), older adults no longer covered by Medicare would have adequate insurance through state exchanges or Medicaid. Many proposals to raise the Medicare eligibility age assumed that states would be required to expand Medicaid coverage to everyone with incomes below 133 percent of the federal poverty limit up to age 67. However, according to Van de Water, the recent Supreme Court decision that upheld the constitutionality of the ACA, but ruled that the federal government could not withhold states’ existing Medicaid funds for not expanding Medicaid coverage, means a significant number of poor 65- and 66-year-olds would lack affordable health insurance. Moreover, Van de Water writes, more states may refuse to expand Medicaid coverage because they would bear the costs for these individuals, putting the health and financial security of low-income older adults at risk.

Read the CBPP blog post, “Raising Medicare Age: Supreme Court Makes the Proposal More Problematic.”

AARP Report Outlines Boomers' Struggle to Recover During Great Recession

Since the “Great Recession,” Boomers have had difficulty keeping jobs, finding jobs and responding to economic hardship, according to a new report by AARP. The report, “Boomers and the Great Recession: Struggling to Recover,” outlines the results of two surveys conducted by the AARP Public Policy Institute of people aged 50 and over who were in the work force during the Great Recession. The surveys found that almost half of boomers who are no longer working lost their jobs in the recession. In addition, the survey found that between one-third and one-half of boomers who had recently looked for work had faced some sort of age discrimination. The surveys also found that even boomers that were able to find jobs had a difficult time rebounding from the recession due to lower pay, depleted savings, and major unforeseen expenditures, such as illness or hospitalization.

Most boomers suffering economic hardship due to the recession resorted to cutting expenses more than anything else. Boomers also withdrew money from savings, or delayed medical or dental care or stopped taking medications. The report also found that almost half of boomers believe their standard of living in retirement will be less secure than that of their parents.

Half of today’s Medicare beneficiaries have annual incomes of $22,000 or less per year and less than $53,000 in savings. Many deficit reduction proposals championed by members of Congress shifts health care costs to future Medicare beneficiaries who are already suffering economic hardship due to the Great Recession. These same boomers are likely to fall short of economic security in retirement. Proposals that increase out-of-pocket health care costs for current and future beneficiaries are short sighted. Instead, policies that aim to save money in the Medicare program should be based on solutions that preserve access to affordable health care and protect beneficiaries from the burden of added health costs.

Read the report.

Medicare Reminder

This year, the Fall Open Enrollment Period begins on Monday, October 15, and ends on Friday, December 7. The following are important questions for people with Medicare to ask during this period:

• What do I need to know about Fall Open Enrollment in 2013?
• What are my Medicare coverage options? And how do those options compare?
• What insurance can I buy to fill the gaps in Original Medicare?
• Can I change my Medicare private health plan at any time?
• Questions to ask before joining a Medicare private health plan
• How do I compare Medicare private drug plans?
• What are my options if my Medicare private health plan is ending at the end of the year?

Read more about Fall Open Enrollment Period and your coverage options at www.medicareinteractive.org, or call our helpline at 800-333-4114.

Spotlight

Last week, New America Media featured commentary written by Joe Baker, President of the Medicare Rights Center, and Judith Stein, Executive Director of the Center for Medicare Advocacy The commentary explains the specific consequences of the Romney-Ryan Medicare on diverse older adults, many of whom live on low or modest incomes. Poverty rates among African-American and Hispanic seniors are more than twice as high as those among white seniors. The Romney-Ryan plan would shift costs to people with Medicare, many of whom cannot afford to pay more, to save the federal government money..
 
In addition, under the Romney-Ryan plan, which repeals the Affordable Care Act (ACA), older adults and people with disabilities in ethnic communities would be disproportionately harmed by reduced access to preventive services and wellness benefits. These individuals are more likely to suffer from multiple chronic conditions, including diabetes, hypertension, obesity and asthma. The ACA also attempts to close health care disparities between, for instance, white and ethnic or racial minority populations.
 
Read the commentary, “Debate Exposed Gap Between Candidates’ Health Plans for Ethnic Communities.”