Over the final days of the campaign, CJR is running a series of pieces under the headline “Ask Obama This” and “Ask Romney This,” suggesting themes and questions that reporters and pundits can put to the presidential candidates. So far we’ve asked President Obama about his short term jobs plan and about housing, and Africa, among other things, and asked Governor Romney about his plans for the Middle East. This installment asks President Obama a big question about Medicare.
The vice presidential debate between Vice President Joe Biden and GOP candidate Paul Ryan offered no clarity on one important Medicare issue that has received far less press scrutiny than the bogus claim about Obama’s $716 billion Medicare cut. Does the administration support raising the eligibility age for Medicare benefits?
A close reading of the debate transcript shows that the vice president sidestepped the issue, never answering the question moderator Martha Raddatz posed to him: “If it could help solve the problem, why not very slowly raise the Medicare eligibility age by two years, as Congressman Ryan suggests?
Biden’s answer—or non-answer—offers a clue that the administration may favor making seniors wait until age 67 to receive Medicare coverage. Biden began his answer with a history lesson, about his role in negotiations over fixing Social Security in 1983, when Congress increased the eligibility age for retirement benefits gradually from 65 to 67 for people born in 1960 and after.
Said Biden: “We made the system solvent to 2033. We will not, though, be part of any voucher plan.” Then he launched into an explanation of how such a voucher arrangement would work. Raddatz didn’t follow up or demand an answer to her question, and the conversation shifted to Social Security and back to vouchers, leaving viewers to read the tea leaves.
On the campaign trail, the president has said, “I’m willing to work with anyone to keep improving the current system, but I refuse to do anything that undermines the basic idea of Medicare as a guarantee for seniors who get sick.” Okay, we know he doesn’t support vouchers, as the Romney-Ryan ticket does. But in September, Politico reported that the president was willing to work with Republicans to raise the eligibility age. Politico reported that, according to Bob Woodward’s new book The Price of Politics:
Obama and his top aides made clear that they were willing to swallow serious changes to Medicare in exchange for deficit reduction. There was agreement between the White House and congressional Republicans on raising the eligibility age for Medicare—the only question was on how fast to phase it in. Obama officials initially proposed raising the age from 65 to 67 ‘by one month a year, meaning the full two-year increase wouldn’t be complete until 2046.’
According to Woodward, House speaker John Boehner thought the phase-in was too slow, and the White House agreed to speed up the timetable.
Medicare changes, including raising the eligibility age, are also reportedly on the table in the coming discussions on the so-called “fiscal cliff,” and in the possibility of what has been called a “grand bargain” over social programs like Medicare and Social Security, taxes, and the deficit.
Although the administration doesn’t want to talk about this, the press should. Reporters should explain to ordinary people what a higher eligibility age would actually mean, and weigh the question: Who benefits from the change?
Raising the eligibility age would result in a cost shift from the federal government to seniors and employers. In other words, the government would pay less for medical care, and beneficiaries and their employers—if the beneficiaries have retiree coverage—will pay more. The total cost of the nation’s healthcare bill would remain the same, all other things being equal.
Is it reasonable to make seniors wait longer to get benefits? One thing to consider: People already put off needed healthcare until they are eligible for Medicare.
The rationale for the shift is this: If Obamacare is implemented, as scheduled, in 2014, seniors age 65 to 67 will be able to shop in the new state insurance exchanges and buy a policy. Or they might qualify for Medicaid, which the health law expands to include more Americans.
But wait a minute. This may not be as easy as it sounds.
Paul Van de Water, a senior fellow at the Center for Budget and Policy Priorities, points out that the Supreme Court decision upholding the law allows states to opt out of the Medicaid expansion called for by the Affordable Care Act. If they do, seniors in those states who might have been eligible for expanded Medicaid coverage would not be, and risk being uninsured. Those who could buy in the shopping exchanges would likely finding themselves paying far more for healthcare than they would have under traditional Medicare.
In fact, the Kaiser Family Foundation found that two-thirds of those 65 and 66-year-olds—more than three million seniors—would pay on average $2,200 more each year in premiums co-insurance, and co-pays. Employers that provide health coverage to retirees would face higher costs too, as older workers continued to receive their primary coverage from employers. (When a worker goes on Medicare, Medicare becomes the primary payer and the retiree plan is the secondary insurer.)
And while the press is asking the question of who benefits, they should take a look at the healthcare industry—particularly hospitals, drug companies, and insurers. Last year the Healthcare Leadership Council, a consortium of 47 of healthcare’s heavy hitters—like Pfizer, the Cleveland Clinic, Aetna—recommended raising the age for Medicare eligibility. The American Hospital Association rallied its troops, too. “It’s pretty much a no-brainer to raise the eligibility for future enrollees,” said Lynn Nicholas, president of the Massachusetts Hospital Association.
Washington Post blogger Sarah Kliff exposed a major reason health industry biggies are pushing for a higher age: Hospitals get larger reimbursements from commercial insurers than from Medicare.
So the more people you can take from Medicare and send to private insurers, the more money for hospitals—and for insurance companies, too, of course. And perhaps even more significant: shifting costs to beneficiaries will lower Medicare’s outlays. That, in turn, could mean less need in the future to reduce fees to hospitals, doctors, and other providers.
There is a debate to be had on this, and journalists should make sure both sides of it are aired. Asking seniors to pay more to protect the incomes of big health businesses surely is reason enough to investigate this story and press Obama on why raising Medicare’s eligibility age is such a hot idea.