Medicare has helped millions of seniors with their medical needs since its creation under President Johnson. Before Medicare was signed in as an amendment to the Social Security Act, only half of the country’s seniors had health care. The lack of coverage put nearly one-third of America’s elderly in poverty, as they often were forced to pay exorbitant hospital bills out-of-pocket.
The average person is healthier today than they were in the 1950’s, which is why life expectancies are higher. However, there is an unfortunate problem that accompanies high life expectancy: increased healthcare costs. The life expectancy in 1965 was only 70 years. Few seniors ever made it much past 70-years-old, so they only relied on Medicare for around five years. Today, a number of seniors make it past 80, leaving them on Medicare coverage for over 15 years.
Unless extreme changes are made by the new group of government officials we get in 2012, the cost of Medicare will continue to rise. With the aging baby boomers, there will be more people taking out Medicare benefits and fewer paying in to the program. The approved age for seniors to receive benefits is slowly inching up to 67, thanks to a decision made in 1983. However, several politicians feel that the Medicare age should be increased again in order to keep pace with changes in longevity.
The main advantage of increasing the age is that there wouldn’t be a decrease in benefits. Once seniors reach the new age of eligibility, they would receive greater coverage each month, instead of having the age younger with fewer benefits. This proposal allows the government to make a huge dent in the deficit while only asking seniors to sacrifice a year or two, as opposed to cutting monthly payments for the rest of their lives.
Seniors may be more willing to go along with an age increase because of the new health care bill. In the past, insurers could bump people off plans when they developed severe illnesses and those with pre-existing conditions could not even get decent coverage to begin with. Seniors are more susceptible to a variety of health conditions, so they are also the most likely to lose their coverage. When the new legislation goes into effect, insurance companies will not be able to deny people because of pre-existing conditions. As such, people will not have to spend their first few years as seniors without coverage if the Medicare age is increased.
Unfortunately, every Medicare proposal has its downsides, and there are some big problems with changing the eligibility age. Although the proposal would help with cutting the deficit, it would also shift the costs to other taxpayers. Employers would be forced to cover seniors for another couple of years, possibly making companies less willing to hire older workers. Retired and unemployed seniors would have to pay the extra costs out of pocket and with the increase in healthcare premiums, that would be a significant expense for a population with rapidly declining resources. Seniors who otherwise may have been on Medicare will instead have to apply for Medicaid.
The Kaiser Family Foundation believes that raising the eligibility age would increase overall healthcare costs. By removing the youngest and healthiest seniors out of the equation, more of the burden would be put on seniors above the age of 70. These beneficiaries would be required to pay higher premiums. Seniors under 70 would also have to pay higher premiums, as they would be the oldest in the regular insurance pool. The Kaiser Family Foundation estimated this would save around $6 billion, while adding another $8 billion in healthcare cost. If this estimated net gain of $2 billion in costs is true, it’s hard to argue that this proposal would be effective in slashing the deficit.
Given the complicated nature of the nation’s healthcare system, there is no such thing as a simple solution. If the government is going to cut Medicare costs, it will need to avoid simply shifting those costs elsewhere. This is just one of many viable proposals for reducing spending. Any proposal will need to be examined closely to determine whether the benefits outweigh the costs.
This guest post was provided by Russell Jensen, a writer for SatelliteInternet.com.
