Should the eligibility age for Medicare be raised?

    DAVID BLUMENTHAL: No. While raising the eligibility age for Medicare would nominally reduce federal expenditures, it would lead to an overall increase in national health spending by moving seniors from a relatively efficient program into more expensive insurance options. Economists generally agree that raising the eligibility age to 67, for instance, would increase state and federal spending on Medicaid, increase federal spending on exchange subsidies, lead to additional spending for employers, and generate added costs for older adults. In addition, removing 65- and 66-year-olds from Medicare’s risk pool would increase premiums for all current beneficiaries.

    The federal savings associated with such a policy are relatively minor. The most recent Congressional Budget Office estimate put the 10-year federal savings associated with raising the eligibility age to 67 at $19 billion—about two-tenths of 1% of total Medicare expenditures over the next decade. The CBO finds further that roughly two-thirds of these savings would be offset by higher federal spending on Medicaid and exchange subsidies. An earlier estimate by the Kaiser Family Foundation reached a similar conclusion, with federal savings largely offset by increased costs for older adults, employers, Medicare and exchange enrollees, and states.


     Read the latest Unleashing Innovation: Health Care Report.