Raising the Retirement Age: Back on the Table

Minority Leader Nancy Pelosi and House Democrats hold a press conference to celebrate the one-year anniversary of the Affordable Care Act in Washington D.C. on March 17, 2011.Zhang Jun/Zuma

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


During the endless debate over raising the debt ceiling, President Obama reportedly floated the possibility of raising the Medicare eligibility age from 65 to 67 as part of a grand bargain to reduce the debt. That measure didn’t make it into the final bill.

But the proposal could have a second life. In his speech on Wednesday night, Obama said that his plan would make “modest adjustments to health care programs like Medicare”—an idea that could be taken up by the deficit supercommittee charged with finding $1.2-1.5 trillion in additional savings, Politico reports.

If the committee can’t come up with those savings, automatic cuts will be made to Medicare payments to hospitals and other health care providers, to the tune of $45 billion over nine years, according to the American Hospital Association (AHA), a lobbying group representing medical providers.

That threat seems to have spooked the AHA, which is resuscitating the idea of a gradual increase in the eligibility age for Medicare. Seniors ineligible for Medicare, they argue, will eventually be able to buy their own insurance through state insurance exchanges starting in 2014. There will also be subsidies for employers who provide health insurance for their retirees. So it’s a win for everybody, right? Not so much. Less than a third of retirees from 55 to 64 receive health coverage from their old employers.

And as Paul Van de Water of the Center on Budget and Policy Priorities has explained, raising the eligibility age is simply cost-shifting by another name. 65- and 66-year-olds who lose their Medicare coverage would pay more for their health care; two-thirds of these beneficiaries, or about 3.3 million people, would pay an average of $2,200 more in premiums, annually. But total health care spending would actually increase: 

So why is the AHA backing the age increase? Over at The Incidental Economist health economist Austin Frakt explains:

That the AHA backs Medicare retrenchment in this fashion makes perfect sense for them because prices paid to hospitals by private insurers are, on average, higher than Medicare’s . . . This is a “solution” in one, narrow sense: it would reduce federal outlays by about $125 billion over 10 years, according to the CBO. However, it would not reduce overall health spending by anywhere near that amount . . .

Raising the retirement age means that more old people will get health care through private insurers; thus it follows that doctors and AHA members get paid.

Who else is getting paid? Members of the supercommittee. According to the folks at MapLight.org, the AHA has paid almost $187,000 to members of the bipartisan awesomesquad. That’s good enough to rank the group among the top 15 biggest donors. And that’s why raising the retirement age is most definitely part of the conversation.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate