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.
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.