One of the bargaining chips floated in the effort to avoid the "fiscal cliff" is raising Medicare eligibility from 65 to 67. It's a lousy idea.
Republicans have demanded entitlement reform in exchange for an increase on tax rates for top earners. Many such programs have inefficiencies that both parties should be eager to fix. They will remain expensive because of high poverty rates, but we should make sure every dollar counts.
Medicare is an odd target. Its popularity among Americans stems in part from its efficiency.
Increasing the eligibility age is especially harmful to the working poor, because they have not shared equally in the increase in life expectancy. Since 1977, 65-year-olds with above-average incomes have enjoyed a five-year increase in life expectancy. Those with below-average incomes have had a one-year increase.
In Alabama — where the governor has announced his intention to reject a federally funded Medicaid expansion — the age increase would be especially harmful. Low-income seniors will be deprived of health care at the time they need it most.
Moreover, it's purely symbolic. The change would save the federal government $5.7 billion, but by shifting seniors to private insurance and increasing out-of-pocket costs, it would cost all Americans about $11.4 billion.
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