NPR reported the hidden costs of raising the age eligibility for Medicare from 65 to 67. Tricia Neuman, senior vice president of the nonpartisan Kaiser Family Foundation and director of its Medicare Policy Project contends that “while federal spending will go down, costs to others will go up. In fact, total spending will rise” because if you lower costs for one group, you almost always raise them for another.
“Let’s focus on those 65- and 66-year-olds. In Medicare, they’re currently the youngest and healthiest people. So by delaying their entry into the program, says Neuman, you raise costs for everyone else already there.” The result would be that “people on Medicare pay higher premiums,” she said. “That’s because you’re taking the healthiest people out of the Medicare risk pool, leaving sicker people to pay higher premiums.”
At the same time, those same 65- and 66-year-olds would be the oldest and, likely, among the sickest people remaining in the insurance pools of the working-age population. “That means that they are raising the average risk of people in the exchanges, so that younger people in the exchanges, everybody in the exchanges, will see premiums rise, but especially so for those who are younger,” Neuman says.