• Getting to yes doesn’t have to mean terrible policy

    I’ve been following the tussle in the blogosphere between Jon Chait (and to a lesser extent Ezra Klein) and others with respect to “caving” on raising the eligibility age for Medicare. Jon’s argument is basically that this policy holds some special meaning for Republicans, and that giving in on it might allow Democrats to get things which are more important; those things may have a larger positive impact than what will be lost. I guess that’s possible. It’s also true that some of the criticism against him has that ring of “NEVER GIVE IN ON ANYTHING!!!!” I don’t care much for that kind of all-or-nothing gambling. I still get emails telling me it’s my fault we don’t have a single payer health care system in America.

    That said, I still disagree with Jon here. It’s not that I’m opposed to negotiation. I understand that sometimes you have to give something to get something. I just think this is the wrong thing to give.

    We need to find a way to control Medicare costs. That’s what everyone says they want. There are many, many ways to do that. This is one of the worst ways.

    Raising the eligibility age for Medicare will increase the number of uninsured in the United States. It will likely lead to some negative health outcomes for seniors. It will repressively hurt the poor more than the rich. It actually removes benefits from many Americans instead of adjusting for increased life expectancy. It will raise the price of health care insurance for the rest of seniors. It will raise the price of health care insurance for the rest of America. Oh – and it actually costs more than it saves.

    Seriously – what’s the upside again?

    There are ideas out there that I don’t favor, but that I don’t wholly oppose. I think premium support and competitive bidding, if done correctly, might reduce costs in some markets. But at least there was an argument that it might do some good. I think means testing Medicare won’t actually save much money, but I could see letting that one go to get some greater good. That wouldn’t be so regressive, and arguments against it are mostly political.

    But let’s face it. Raising the eligibility age for Medicare isn’t something most Americans want. It isn’t something that even most Republicans want. It seems this is something politicians want. If there was any good side to this, if it saved money, if it wasn’t so regressive, if it didn’t make people uninsured – then maybe I could understand the way that some seem to be so willing to do it.

    I’m totally willing to negotiate. I’m totally cognizant of the fact that I won’t get everything I want. I’m totally ready to concede on some issues. But on this one? It’s just such a bad policy. Pick another.


    • Raising the Medicare eligibility age has no redeeming qualities, as you’ve convincingly written. It’s a terrible policy, increasing healthcare costs and most likely decreasing health. It’s terrible politics.

      If we adopt it, when insurance costs go up and Medicare costs go up, Republicans will blame Obamacare and push for further cuts.

    • “Seriously – what’s the upside again?”

      The upside is that people can congratulate themselves for making “tough choices” to address the deficit. As you and Austin mentioned ad nauseum, the policy rationale for this decision is pretty weak. This is all about ideology and optics.

    • Why isn’t anyone proposing raising eligibility age to the wealthy or those who can afford it (i.e., apply some sort of means testing)? If someone can stay on their employer’s plan, why offer them Medicare?

    • When Medicare began, it covered 19 million persons and the average life expectancy once you got to age 65 was 14 years.

      Today Medicare covers almost 50 million persons, with a life expectancy after age 65 of 19 years.

      Yet the Medicare payroll tax has stayed at 2.90% for the last 20 years.
      The premiums paid by seniors for Part B cover less than 25% of the cost of the plan. Part D of Medicare has $62 billion of subsidies and no new taxes whatsoever.

      Americans would appear to be in denial about their longetivity and its costs. This is true on both a personal and a national level.

      The raising of the eligibilty age does give the appearance of a tiny bit of awakening to the actuarial realities. In fact it is the old syndrome of thinking that taxes are just ‘politics.’

      Taxes should be looked as paying the bill for growing older. And taxes must go up a lot.

    • Dr. Carroll,
      Are there any good ideas for ways to trim Medicare’s costs? Not just less bad ideas that can be negotiated, but ones where studies have shown better value, etc. The one that comes to my mind is to allow Medicare to negotiate drug prices, but if I remember correctly, you stated on #SUPD that would not really move the needle.

      Has anyone given thought to raising the Payroll tax on Medicare to increase the funding more in line with the costs?
      Great post as always!

    • Raising the Medicare payroll tax will only help the funding of Part A for hospital care. That is about one-third of the current cost problem.
      Seniors pay only 25% of the cost of Part B, and only about 10% of the cost of Part D.

      Reagah Republicans have looked on taxes as a barrier to economic growth, rather than as normal boring payments for what Congress has approved. It is as though you ordered a nice meal, but told the restaurant not to bill you because it would hurt your own business

      Incidentally, for what it is worth, I do not use the phrase that Medicare should negotiate drug prices. I believe that the FDA should dictate prices for drugs which have no substitute. (as happens in Canada, Germany, and many other nations.) The cost of Avastin would be ordered down to $500 a month or whatever by the FDA, and then Medicare would cover it.