The difference 730 days can make

What would happen if we didn’t get Medicare until we were 67, instead of 65?  Theories abound, ranging from doom to nirvana.  The truth is somewhere in the middle, and it depends who you are.

You are poor:

Forbes columnist Avik Roy argues that the poor age 65 and 66 will get subsidized health insurance through the exchanges.  Well before Obamacare was in the lingo, a 2003 Health Affairs paper estimated that 91 percent of people age 65 and 66 would still have health insurance and could wait until they hit age 67.  With discounts on health insurance costs, the percentage uninsured could go even lower.

The Incidental Economist argues that the poor will be punished by higher Medicare Part B costs – this is the part of Medicare that charges a monthly premium.  The average Medicare member will be older and sicker, so per-member costs will go up.  Co-pays and deductibles could also go up.

Since Medicare Part B costs are not strictly based upon how much the program is spending, this impact would be watered down.  Congress simply decides how much to charge for Medicare Part B.  It’s done by politicians with constituents, not actuaries with calculators.

You are uninsured:

For some people, Medicare is their rescue from being uninsured.  Once they get their Medicare card, they have a ticket to ride and ride, they do.  They cost an extra $580 per year, meeting their pent-up demand for medical care (Economic Research Initiative on the Uninsured).

The two-year delay in Medicare will, some argue, simply bottle up more demand and delay care for people who need it.  The Incidental Economist has some graphs showing the health improvement for people who go from being uninsured to being Medicare insured.

The improved health for new-formerly-uninsured Medicare members is interesting, but not likely to sway the argument.   There simply isn’t more money to put into health care to chase after non-financial gains.

You come from a short-lived family:

If your kin tend to die in their 60s, you are a boon to Medicare: you pay your Medicare taxes but collect few if any benefits from it.  Raising the Medicare age to 67 will mean that it escapes more of these early deaths.  People who are lower social-economic status and minorities tend to die younger, for a multitude of reasons.  Most of the reasons have nothing to do with access to medical care.  It’s the human condition.

In the end, raising the Medicare age is just one more bargaining chip on the fiscal cliff table.  Wherever it lands, it will have a complicated ripple effect.

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