(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Mark Miller
CHICAGO Feb 23 When you hear a politician start
a sentence with the phrase "We’re all living longer," grab your
wallet. You are about to be told that Social Security or
Medicare benefits should be cut because of America’s rising
The argument is not only specious, but hazardous to your
health. That much is clear from a new report analyzing the
impact of raising the Medicare eligibility age from 65 to 67, a
favorite idea of U.S. House Speaker Paul Ryan and other
Republicans itching to push Medicare reform in currently chaotic
The report measures possible impact on patients if
Medicare’s eligibility age is raised to 67 in 2019. The findings
are grim: soaring rates of uninsured people age 66 and 67,
worsened health outcomes and rising use of expensive emergency
A higher eligibility age, if implemented, would almost
certainly not be phased in as soon as 2019. Proposals usually
boost the age gradually over 10 years. But the study
fast-forwards the age to 67 in order to illustrate the endgame.
Researchers engaged by the nonprofit advocacy group National
Committee to Preserve Social Security and Medicare Foundation
found that the uninsured rate in the 65-66 age band would jump
from nearly zero today to 18.7 percent - even if the Affordable
Care Act (ACA) remains in place and the law’s Medicaid coverage
were expanded to this age group.
If the ACA were repealed, the uninsured rate would soar to
37 percent. And that is with a Medicare age of 67; the
conservative Heritage Foundation, for example, has proposed
raising it to at least 68 over 10 years, with further indexing
for life expectancy.
You will often hear proponents argue for this policy by
citing soaring longevity rates in the United States. But the
data can mislead. At the start of the 20th century, average life
expectancy was 46 years for men and 48 years for women; now, it
is 76 for men, and 81 for women, according to Brookings
Institution research. But that measures longevity from birth,
and fails to factor in sharp declines in infant mortality.
For retirement policy, the more relevant figure is life
expectancy from age 65. Here, too, recent numbers are
impressive: expected longevity for men and women from age 65 has
risen more than 10 percent since 2000, according to the Society
of Actuaries; men who reach age 65 can be expected to live to an
average age of 86.6, and women to 88.8.
The longevity argument in favor of a higher Medicare age
also implies that everyone is living longer. But the gains are
not evenly distributed. Higher-income people tend to live
longer; geography and race also can be strong predictors of
That means some would be forced to wait longer to enroll in
Medicare but enjoy fewer net years of coverage. Some people
would work longer to stay on employer-provided health plans, but
that is not always possible, especially for lower-income workers
with physically demanding jobs.
One of Medicare’s enduring successes since the program’s
1965 enactment is that it covers nearly everyone over age 65.
Raising the age to 67 would force the newly uninsured either to
keep working, try to get covered through Medicaid or simply go
Even if the ACA remains intact and Medicaid coverage is
extended to age 67 - uninsured rates would jump, the report
finds, especially among people with incomes too high to qualify
for Medicaid, or who live in states that have not expanded
Medicaid coverage under the ACA.
“Others could obtain insurance through their employers or
would buy policies on the private exchanges, if they can afford
it,” said Peter Arno, director of Health Policy Research at the
political economy research institute at the University of
Massachusetts-Amherst and author of the report.
But here is the irony: cutting back Medicare may erode the
progress we have made on longevity. “These are people who are
going to experience health problems, but many are likely to
forego the medical care they need,” Arno said. "It would lead to
poorer health outcomes and well-being.”
It also would force people to rely on more expensive care in
emergency rooms and more frequent hospital admissions - just the
type of higher healthcare expense we need to avoid if the
country wants to rein in overall healthcare spending.
So the real challenges are demographics and rising
healthcare utilization, not Medicare. The aging boomer
generation will swell Medicare enrollment from 57 million last
year to nearly 90 million by 2040, according to the program’s
trustees. Spending will rise along with that, to 5.6 percent of
gross domestic product, up from 3.6 percent in 2015.
But Medicare spending on healthcare is not out of control.
Per-enrollee outlays rose at an average annual rate of 5.5
percent, somewhat slower than the 6.3 percent average annual
growth rate in private insurance spending per enrollee between
1989 and 2014. In addition, cost containment measures within the
ACA improved the outlook substantially, pushing the insolvency
date out by 11 years.
Let us deal with that through sensible Medicare reforms -
gradual increases in the payroll taxes and further efforts to
control healthcare costs.
(Editing by Matthew Lewis)