It looks increasingly likely that lawmakers will reach a deal on the “fiscal cliff” that includes a hike in the Medicare eligibility age – a concession to those on the right who seem determined to achieve very deep entitlement cuts, even if they take benefits away from vulnerable seniors.
One argument for raising the eligibility age is that seniors who lose benefits can get insurance through Medicaid or the Obamacare exchanges.
But a Center for American Progress (CAP) report released Tuesday undercuts that argument: It found that more than 400,000 seniors could lose insurance if the eligibility age is raised.
The report points out that seniors who lose Medicare could be seriously compromised by the Supreme Court decision allowing states to opt out of the Medicaid expansion.
The number of seniors who could be left without insurance would be inflated because many would fall into the category of lower-income seniors who would be expected to gain access to Medicaid through its expansion – and wouldn’t be able to do so in states that opt out.
CAP noted that the Congressional Budget Office recently concluded that a rise in the eligibility age could mean as many as 270,000 seniors are left uninsured in 2021. But that’s assuming Obamacare is fully implemented in all states.
The CAP report points out that 10 states have publicly declared that they will opt out of the Medicaid expansion, and more are undecided.
CAP then found that more than 164,000 seniors live below the poverty line in states that may opt out of the Medicaid expansion, using 2011 data.
That means approximately 434,000 seniors could be left without insurance annually by 2021. And this is a conservative estimate – it’s based on 2011 data, and the population of seniors will grow significantly over the next decade.
Many of these states may ultimately implement the Medicare expansion. But Republican state lawmakers are stalling in setting up the exchanges and resisting the law in other ways. With Obamacare implementation up in the air, it is risky to raise the eligibility age and hope Obamacare can pick up the slack.
The CAP report also found that raising the eligibility age could undermine a key goal of Obamacare by inflating medical costs and health-care spending for a range of reasons: cost-shifting, tampering with the health and age levels in insurance pools, and an increased reliance on private insurance (which isn’t as good as Medicare at controlling costs).
I think speculation that Democrats will ultimately agree to raise the eligibility age has been a bit overheated – it’s not clear this is definitely on the table. But it’s possible. Some on the right seem determined not to accept any entitlement reform as “real” unless vulnerable beneficiaries are harmed, and President Barack Obama and many Democrats prefer a deal to going over the cliff.
Anyone who doesn’t want to see this happen should be making noise right about now. There are a range of ways to cut Medicare spending without harming beneficiaries.
Greg Sargent blogs on domestic politics for The Washington Post.
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