The word in Washington is that President Obama has, in negotiations with Congressional Republicans, offered to raise the Medicare eligibility age from 65 to 67.
A report in the Washington Post quoted "a Democratic official familiar with the discussions," while other media outlets quoted multiple unnamed sources with knowledge of the talks the president and Congressional leaders have been engaged in with regard to raising the debt ceiling. All the reports suggest that Obama would trade the change in the eligibility age for a Republican agreement to accept some new taxes.
Obama essentially acknowledged as much Monday, when he said: “I’m prepared to take significant heat from my party to get something done."
He should take significant heat.
The president’s proposal does not resemble a plan that mainstream Democrats would suggest, let alone support. In fact, it roughly resembles a plan advanced last month by Senators Tom Coburn, R-Oklahoma, and Joe Lieberman, I-Connecticut.
That the White House appears to be peddling proposals that parallel those of conservative senators represents an exceptionally troubling development, as even considering a hike in the Medicare eligibility age represents the worst of Washington-insider thinking.
The problem with this play is four-fold:
1. Raising the eligibility age represents a huge benefit cut for older Americans.
The average life expectancy for an American who makes it to age 65 is in the range of 82 years.
That would give an American who reaches retirement age under the current system roughly seventeen years of Medicare coverage.
That number would under Obama’s proposal drop to fifteen years.
That’s a roughly 12 percent cut in benefits.
2. Raising the eligibility age would not save the money that proponents of the cut suggest.
Raising the eligibility age creates new pressures on a healthcare system that is already dysfunctional for older workers who are laid off or under-insured. Far from saving money, a spike in the eligibility age simply shifts the problem to other accounts. For instance, if the federal government is providing aid to the uninsured under the healthcare reform plan, folks aged 65 to 67 will just have to seek that aid —as opposed to tapping into the already functional and efficient Medicare program.
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Worse yet, the aid would be for the buying of insurance from the private sector, which will charge its highest prices for insuring the older and more vulnerable uninsured. Thus, more cost to the taxpayers.
3. Raising the eligibility age harms the struggle with unemployment.
The smartest move for older workers who do not have access to Medicare until they are 67 will be to keep working.
That means that jobs will not come open for younger workers who are entering the labor market or have been laid off.
4. Raising the eligibility age undermines the argument that Democrats want to preserve Medicare and helps Republicans such as Paul Ryan to define the debate.
When a Democratic president joins Republicans in advancing the largest cut in Medicare benefits in modern history, that takes the steam out of the argument that Democrats want to preserve Medicare, Medicaid and Social Security while Republicans want to make cuts.
Democrats had their most significant victory in the past two years when Kathy Hochul won the special election in New York’s 26th District. Hochul grabbed a traditionally Republican seat by campaigning as a stalwart and unyielding defender of Medicare, Medicaid and Social Security. She offered real alternatives for voters who were concerned about deficits and debts: arguing for fair taxation and a broad examination of waste, fraud and abuse in federal programs.
That was a powerful, winning argument. But it cannot be made by a president or a party that imposes deep and unnecessary cuts in Medicare. Accepting that so-called “entitlement” programs are the source of America’s fiscal challenges effectively endorses House Budget Committee chairman Ryan’s false premises.
The voters rejected those false premises in the New York special election, and they will continue to do so —unless Barack Obama hands the issue to Ryan and the Republicans on the silver platter of a proposal to raise the Medicare eligibility age.
