fresh voices from the front lines of change







It's almost impossible to believe: With the private-sector economy struggling and politicians worried about government spending, the biggest proposal on the table is raising the Medicare age to 67. That would take far more out of household budgets than it would save in government spending - and the savings would be short-lived.

What's more, it would impose terrible hardships on lots of people. Why do the truly terrible ideas always seem to become the really Big Ideas?

Oddly, John Boehner won't come right out and say what he's proposing. Instead he throws out a large figure - $600 billion in cuts over ten years - and says somewhat obliquely that he supports a proposal from former Clinton White House official Erskine Bowles. Since that proposal discussed raising the Medicare age, journalists and insiders have inferred (undoubtedly rightly) that Boehner is endorsing that option.

But he won't speak the words. He'll only say "$600 billion" and some mumbo-jumbo that comes out sounding like he's saying "that thing that Bowles wants to do."

You know … that thing.

That "thing" -- raising the Medicare eligibility age -- is once again under serious discussion. It's an idea Yale Professor Jacob Hacker called “the single worst idea for Medicare reform" (if by reform we mean "slashing.") And it's not just a terrible thing to do to Medicare. It's also a terrible idea for health care costs, job creation … in fact, for the entire economy.

A Kaiser Foundation study showed that "raising Medicare’s eligibility to 67 in 2014 would generate an estimated $5.7 billion in net savings to the federal government, but also result in an estimated net increase of $3.7 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health-care costs."

So it would save $5.7 billion from the Federal budget in the first year, but it would cost everyone else $8.2 billion. That means it would increase overall health care costs by $2.5 billion.

"Among the estimated 5 million affected 65- and 66-year-olds," the Kaiser study reports, "about two in three would pay an average of $2,200 more for their health care in 2014 than they would have paid if covered under Medicare."

And those costs would skyrocket in the following years.

Raising the Medicare age would exert enormous cost pressure on employer health insurance plans, too. That can only lead to three possible outcomes:

1) Profits fall for companies with American jobs, leading to more offshoring/outsourcing and lowering corporate profits.

2) Unemployment rises as employers cut jobs to offset the added expense. It would be worst for 66 and 67-year olds, who will be considered impossibly costly job hires.

3) Health insurance benefits cover even less cost in coming years, as employers offset the cost by demanding higher copays and deductibles and limiting the types of services covered.

The likeliest outcome is some mixture of all three.

Why is Washington seriously considering such a foolish proposal?  Because government spending means less pressure to ask the wealthy to pay their fair share. And it means everybody pays the price.

You've heard of robbing Peter to pay Paul, haven't you? You might call this "an appalling robbery to pay Peterson" -- Pete Peterson, that is. He's the billionaire anti-government activist who's been working to cut Medicare and Social Security - and get lower tax rates for millionaires, billionaires, and corporations - for decades.

Billionaires: Heads they win, tails … well, you know the rest.

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