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ETpro's avatar

If we raise the Medicare eligibility age to 67 or 70, where do the costs for those extra years of Medicare "savings" get transferred to?

Asked by ETpro (34247 points ) December 13th, 2012

The common fantasy that there really is a Santa seems to muddy the waters of all our political debates. Liberals often make the mistake of thinking Santa will cover the costs of gifts bestowed on We-the-People by Washington. Conservatives seem to believe that Santa covers the costs of everything Washington does not do. Both beliefs are as absurd as thinking that a big fat man lives eternally at the North Pole and travels in an airborne sleigh drawn by flying reindeer to every Christmas celebrating household on the entire Earth in a single night, coming down chimneys even in buildings that have none to deliver free goodies to one and all.

For instance, if Washington did not build our Interstate highway system, it probably wouldn’t exist. If no governmental agency built or maintained roads, those built by private enterprise as for-profit toll roads would cost us far more than taxes to build and maintain roads do. And our transportation system would be crippled. There would be no roads in areas that weren’t profitable for tolls. States would squabble over where and how to connect roads that crossed their border.

Likewise, the cost of healthcare delivery through Medicare is substantially less than delivery of the same care through for-profit insurance. People forced to retire at 65 or under would, unless wealthy, be unlikely to be able to afford private insurance even if it were offered. Employer funded healthcare would cost business far more if it had to apply to our aging population. Rising business costs just get passed on to us all as consumer prices.

We originally set up Medicare because private insurers, mandated to protect their profitability, simply refused to sell policies to elderly Americans because the risks of high-cost care needs were simply too great. Those without any insurance are often forced to go to the emergency room for the highest cost care available, and when they cannot pay, the rest of us pick up the tab. AARP “presents a ballanced debate by representatives of The Heritage Foundation (conservative) and The Brookings Institution (liberal) here looking at the pros and cons of raising the eligibility age for Medicare.

So given all that, would raising the Medicare eligibility age really save us money, or cost us more?

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10 Answers

zenvelo's avatar

It will collectively cost us more. Those who are deferred in eligibility will need to carry private insurance longer.

Thank goodness everyone will be able to get health insurance in 2014!

wundayatta's avatar

People will have to work longer and get employer-provided insurance. Laws mandating age 65 retirement will have to change. Of course, if people choose to retire early, they will have to pay for their own health insurance.

marinelife's avatar

Back to the individuals. It sucks.

zenvelo's avatar

@wundayatta There are no laws mandating retirement at age 65 except for certain jobs like airline pilot or air traffic controller. Those of us born after 1937 don’t get full Social Security benefits until older than 65, on a sliding scale the delays it a month or so every year.

burntbonez's avatar

I think the principle is the same, no matter what the specific numbers are. If you push the age of eligibility back, people will most likely have to work longer. I think that in some professions, this won’t matter. But in physical professions, it will. People’s bodies tend to start breaking down sooner or later, but most certainly by age 60.

For people who have been doing physical work, to keep working, they may have to change to a different kind of work, work they aren’t prepared for or may be unable to do. What will happen to them? We will see a new kind of young elderly poverty, I would think.

janbb's avatar

People just won’t be allowed to get sick from age 67 – 70 any more. At least poor people won’t.

WestRiverrat's avatar

I think the scale will have to slide upwards. When Medicare was established the life expectancy of the average American was about 73, it is currently 82. They have already done this with Social Security.

YARNLADY's avatar

The point is that now more and more people are going to receive benefits, so the proposal cuts down on that number. There is no savings as such, but it will help increase the number of years the Social Security Administration can continue paying out benefits.

ETpro's avatar

@zenvelo Yes, at least private insurers will be required to cover those who can afford it. When I was 64 and my wife was 55, a Blue Cross & Blue Shield policy to cover us, both in excellent health, was $2,500 per month. So either the insurers pass the extra costs of insuring a high-risk population on to all, raising costs for all, or they price coverage for the elderly at prices only the truly well-to-do can pay. That would force many onto the publicly funded private, for-profit insurance which will cost taxpayers FAR more than just giving them Medicare. There is no Santa Claus in the equation. Oh, maybe a big, pricey present for the private insurance industry. But everyone else looses.

@wundayatta & @marinelife Thanks. Shared concerns.

@zenvelo Perhaps they will have to reevaluate how long pilots and air-traffic controllers can productively work. But even where employer base insurance is available, its costs will go up due to insuring an ever older population, and those costs will be reflected in prices to goods and services we buy.

@burntbonez Yes, manual laborers won’t be able to carry on into their late 60s or till 70. And they also won’t have the kind of money it takes to buy private insurance. So taxpayers will be picking up their tab at rates well beyond what we currently pay to cover them under Medicare. It’s really just free taxpayer money for big insurance.

@janbb There’s always the emergency room.

@WestRiverrat We’re talking about Medicare here, not Social Security. Yes, you can slide the eligibility age up, but the OP is where does the cost of doing that go, and does it reduce or increase overall costs?

@YARNLADY As mentioned above, we’re talking about Medicare here, not Social Security.

YARNLADY's avatar

@ETpro oops, sorry, I seem to always take one for the other

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