Your Weekly Medicare Consumer Advocacy Update
Raising Medicare Eligibility Age Not Worth the Cost
CBO Updates Estimate of Budgetary Effects of Raising Medicare Eligibility Age
The Congressional Budget Office (CBO) recently released a revised estimate of the budgetary effects of increasing the Medicare eligibility age from 65 to 67. Its original estimate, released in January 2012, estimated that increasing the eligibility age for Medicare would create a net savings of $113 billion. The revised report drastically reduces the projected savings to $19 billion.
The CBO considered a variety of factors in its analysis. It calculated the savings that would be created by increasing the Medicare eligibility age by two months every year starting with people born in 1951 until the eligibility age has reached 67 for people born in 1962 (who turn 67 in 2029).This change would create some savings for Medicare, since fewer people would be eligible. It would also slightly decrease Social Security payments because some people would either delay applying for benefits until they are eligible for Medicare or continue working until they are eligible for Medicare. Yet, increasing the eligibility age will also increase government costs by:
- Increasing Medicaid spending for:
- People who would have been dually eligible for Medicare and Medicaid under current law will become solely be covered by Medicaid for an additional two years; and
- People who would not have qualified for Medicaid when they turned 65, will have Medicaid for an additional two years (assuming Medicaid changes its age guidelines along with Medicare).
- Increasing spending for subsidies though the Marketplaces (insurance exchanges) for people who currently do not qualify for subsidies due to Medicare eligibility.
The CBO’s new estimate is much lower for a few reasons. First, the population that would no longer qualify for Medicare (people age 65 to 66) is relatively healthy, compared to the rest of the Medicare population. Their coverage would not cost as much as originally projected. Second, many people who are 65 to 66 years of age are still working, or have a spouse who is still working. They are usually covered by employer insurance. If the employer is considered a large employer, its insurance pays primary to Medicare, and their employees can delay enrollment into Medicare Part B until retirement. This means that they add very little coverage costs to Medicare.
The CBO’s inclusion of a more complete analysis provides a more accurate picture of the financial effect of increasing Medicare’s eligibility age. The analysis also estimates that this change would cause an additional 550,000 seniors to become uninsured. The CBO’s modified estimates provide further evidence that increasing the Medicare eligibility age would not benefit our seniors or significantly reduce government costs. Medicare Rights urges Congress and advocates to seek responsible adjustments to secure Medicare savings, not proposals that merely shift costs to people with Medicare or to states or to employers.
Advocates Urge Congress to Protect Older Adults during Current Budget Considerations
This week, the Leadership Council of Aging Organizations (LCAO), a coalition of 69 national advocacy groups including the Medicare Rights Center, sent a letter to the U.S. House of Representatives and the U.S. Senate advocating for the end of the sequester and the adoption of the Fiscal Year 2014 budget, absent proposals that cut benefits or shifts costs to older adults and people with disabilities.
The coalition cited specific proposal that should be excluded from the budget, including:
- Shifting health care costs to people with Medicare and
- Decreasing the Social Security benefit by implementing a chained Consumer Price Index (chained CPI).
Proposals that shift costs or reduce benefits fail to address the real threat to our nation’s economic health—rising costs throughout the health care system. At the same time, most people with Medicare cannot afford to pay more for their care—half of all people with Medicare live on annual incomes of $22,500 or less, and the average Medicare household already spends 15 percent of their household income on health care compared to only 5 percent among non-Medicare households.
In contrast, LCAO supports solutions that promote a strong economy, such as increases in revenue, as well as reducing spending in targeted ways that do not put at risk the health and economic security of older adults and people with disabilities.
Volume 4, Issue 43
There are currently four ways to qualify for Medicare:
- You have a disability and have been receiving Social Security Disability Insurance (SSDI) for more than 24 months.
- You have been diagnosed with Amyotrophic Lateral Sclerosis (ALS), commonly known as Lou Gehrig’s Disease.
- You have been diagnosed with End-Stage Renal Disease (ESRD) and you are getting dialysis treatments or have had a kidney transplant. You must also be eligible to receive SSDI or railroad retirement benefits, or be otherwise considered to be fully insured by Social Security.
- You turn 65 and you:
- Collect or qualify to collect Social Security or Railroad Retirement benefits; or
- You are a current US resident and either a US citizen or a permanent US resident having lived in the US for 5 continuous years.
Depending on how you qualify for Medicare, you may have to contact Social Security to actively enroll in Medicare or you may be automatically enrolled. Keep in mind that how much you have to pay for your Medicare coverage depends upon your work history (if and how long you have paid Medicare taxes).
A recent post on the New York Times New Old Age blog describes new dental coverage options for older adults, who do not typically receive dental coverage under Medicare. The post explains that some people with Medicare may find new dental coverage options in the Affordable Care Act (ACA) health insurance marketplaces. But the post warns that availability of plans varies and plans may have restrictions on coverage.
For example, dental plans in the marketplaces can limit the amount of coverage you receive in a year, they do not have to follow the out-of-pocket spending limits that health plans have to follow under the ACA, and they can reject adult applicants based on a pre-existing condition. Additionally, plan availability may be limited depending on the state in which you live. In most states where the federal government is operating the exchange, you can only get a dental policy as part of a health plan, making these unavailable to people with Medicare. In other states that do offer stand-alone dental plans, some are available to adults, but others are only available to children.