A Medicare Law That Wasn't

Posted on Jan 11, 2013 by Ailee Slater (G+)

Since 1965, senior citizens in the United States have had access to public health insurance through the federal government. With Title XVIII of the Social Security Act, American citizens aged 65 and older were guaranteed insurance Medicare coverage, including hospital visits, doctor check-ups and prescription drugs. Medicare is not universal health coverage - on average, seniors still pay around half of their own healthcare costs. Still, Medicare is astoundingly important amongst U.S. entitlement programs; without Medicare, it's hard to imagine a United States wherein seniors live and thrive as they do, and life expectancy is nearly 80 years. In terms of acts passed by the government, Medicare was a historic one.

Just last year, Medicare nearly made political history once again. Due to impending budget shortfalls and America's possible drop off the Fiscal Cliff, lawmakers were for a time in talks about moving the Medicare enrollment age from 65 to 67. Changing this enrollment age would leave a huge number of seniors unable to access Medicare, but at the same time, the change would have saved the federal government an estimated $148 billion dollars over the next 10 years. The Medicare enrollment age would not have changed overnight - seniors a day away from their 65th birthday would not have been forced to forgo Medicare for another two years. Instead, the plan was to phase in the age-change slowly, starting in 2013 and going until 2021, at which point the 67-years-old enrollment barrier would have been firmly set in place. Those people in their late 50s and early 60s at the moment would have experienced little difference in getting expected Medicare benefits; however once the plan was fully in force, effects on the U.S. healthcare system would have become increasingly noticeable.

Of course, the plan did not pass. The Medicare enrollment age is still 65, and it seems that the federal government was able to find other ways to cut spending and increase revenue. Still, it is striking that lawmakers decided to forgo a plan with savings of $148 billion dollars. What prompted Washington to avoid the enrollment age change? One reason for keeping the enrollment age at 65 may have been that along with the financial gains of making such a change, many financial losses would have come as well. Thanks to Obamacare, federal and state governments are already responsible for providing insurance opportunities to more people than ever. If fewer seniors were able to get Medicare, those people might seek insurance through a government-subsidized plan, leaving healthcare costs once again in the hands of federal or state programs. Similarly, some of those low-income seniors no longer covered by Medicare would have joined Medicaid, leading to the potential for an increased financial burden on those services instead. Then again, many seniors might have chosen to simply remain at their jobs for two more years, taking employer-sponsored insurance until hitting the 67-years-old Medicare joining date.

Adults working longer is good for the economy, however employers would have been hit with higher costs in terms of providing more insurance for employees who are older and subject to higher premiums. Clearly, moving the financial burden from government back onto business was not a step that lawmakers were prepared to take. In fact, there were still more financial aspects in consideration by legislators; for instance, later retirement for seniors concerned about healthcare could easily translate into further unemployment in an already floundering job economy. What's more, raising the Medicare enrollment age may have created a different sort of medical crisis - at the moment, many low income seniors wait until they start receiving Medicare at age 65 to seek treatment for a disease or even go in for a diagnosis. If sick people with limited means waited yet another two years before seeking medical help, that eventual treatment would likely be much more costly due to the illness having plenty of time to worsen. More comprehensive Medicare treatment for further-developed medical problems would, of course, send financial struggles straight back into the system.

For seniors themselves, the proposed change of enrollment age would have affected some people very little, and some very greatly. People already approaching their 65th birthday would have been exempt from the age change, along with those soon to approach the Medicare cut-off date. For those seniors not exempt and looking for coverage after the age of 65, options would have included Medicaid for low income earners, and exchanges wherein insurance could have been privately purchased while waiting to join Medicare. For minorities, however, the stakes could have been much higher. Studies at the time showed that the proposal to raise the Medicare enrollment age would have affected minority Americans disproportionately.

Due to income levels and a statistical tendency to be in poorer health at earlier ages, minorities especially would be losing out on an important service from the government. Some researchers noted that raising the Medicare age based on an assumption of higher life expectancy could even be seen as discriminatory considering that high life expectancy trends apply primarily to the most white and the most wealthy Americans. In the end, the proposal to raise the Medicare age of enrollment to 67 did not become reality. Many say that's a good thing - the government should not solve a financial problem by simply shifting the cost back out to the private sector and the states. Still, it stands to reason that with ever-increasing life expectancy and more budget shortfalls a certainty in the future, we haven't heard the last of the plan to change when seniors can and cannot join Medicare.