Dec 09 2012

The Great Debate on the Grand Sell Out of Medicare

(2 pm. – promoted by ek hornbeck)

Whether you voted for Barack Obama or not, the reality is he is on the same path he was on for the last four years and that is to sell out the majority of Americans to reach a “bargain” with Republicans, who lost the election, on the mythical “fiscal cliff” and the  unconstitutional “debt ceiling.” Part of that sell out is raising the eligibility age for Medicare recipients to 67. This little nugget has started a “great debate” and a bit of an internet dispute about whether or not this is a good, or even workable, idea.

In his article at AMERICAblog our friend Gaius Publius, who is just reporting it, quotes Paul Krugman’s reaction on his NY Times blog to Ezra Klein’s commentary in The Washington Post on Jonathan Chait’s article in The New Yorker, who thinks that raising the eligibility age by two years is an OK idea. What the Herr Doktor said:

Ezra Klein says that the shape of a fiscal cliff deal is clear: only a 37 percent rate on top incomes, and a rise in the Medicare eligibility age. [..]

First, raising the Medicare age is terrible policy. It would be terrible policy even if the Affordable Care Act were going to be there in full force for 65 and 66 year olds, because it would cost the public $2 for every dollar in federal funds saved. And in case you haven’t noticed, Republican governors are still fighting the ACA tooth and nail; if they block the Medicaid expansion, as some will, lower-income seniors will just be pitched into the abyss.

Second, why on earth would Obama be selling Medicare away to raise top tax rates when he gets a big rate rise on January 1 just by doing nothing? And no, vague promises about closing loopholes won’t do it: a rate rise is the real deal, no questions, and should not be traded away for who knows what. [..]

All that effort to reelect Obama, and the first thing he does is give away two years of Medicare? How’s that going to play in future attempts to get out the vote?

If anyone in the White House is seriously thinking along these lines, please stop it right now.

Meanwhile, Chait’s article, Go Ahead, Raise the Medicare Retirement Age, prompted David Dayen’s response at FDL and the Wanker of the Day Award from Atrios.

Dayen’s critique prompted some poutrage from Chait and Ed Kilgore at Washington Monthly, who was more concerned about “tone” than the consequences of raising Medicare’s eligibiliy age.

Which resulted in Dayens’ response to Chait, the ill informed Ezra Klein comment agreeing with Chait that the Affordable Care Act would “blunt the pain,” and a hat tip to Kilgore’s pique about “tone.”

Meanwhile, Karoli at Crooks & Liars gets it in her response to Klein’s interview with Peter Orzag, former director of the Obama Administration’s Office of Management and Budget, currently Vice Chairman of Global Banking at Citigroup:

Listen Up, White House! Take Medicare Eligibility Age Off The Table NOW.:

Raising the Medicare eligibility age is terrible, awful, horrible policy that plays right into the Republicans’ goal of killing Medicare altogether. Obamacare does not change that fact in substantive ways. Here’s why, in bullets:
  • Adverse selection – Obamacare or no Obamacare, raising the eligibility age means people enter the Medicare system with a higher likelihood of health problems. Even if they have health insurance before they’re eligible for Medicare, facts are facts: The older one gets, the more likely health problems become.

  • Administrative costs – Medicare’s administrative costs consistently come out to about 7 percent. Obamacare allows for administrative costs of 15 percent. Extending coverage via Obamacare means higher, not lower, costs to the government and the middle class. Subsidies will cost more for that older group as well as for the younger group, since insurers will set a higher baseline on young people in order to pad reserves for older people because of the 3:1 ratio requirement on rates between youngest and oldest.

  • Workforce phase-outs of older employees – This is the dirty little elephant in the middle of the room that no one talks about. Because of the high demand for jobs right now, older employees are being shoved phased out earlier. Beginning at around age 50 to 55, jobs become scarce for older workers, leaving them with a 10-15 year gap before they become eligible for Social Security and Medicare. That means they’re living on their savings, home equity, or odd jobs just to scratch their way to the social safety net. Moving that football means leaving them on the hook for 2 extra years, not only for living expenses, but also covering their health insurance, whether or not subsidized.

[..]I’ve been told by some pragmatic liberals who I usually agree with that I’m being unreasonable on this point. I beg to differ. It is not reasonable for Peter Orszag to say we’ve gotten a concession from Republicans because privatizing Social Security is off the table entirely. That’s a little like saying we’re really lucky that they’re holding the gun to our hearts instead of our heads. The impact of conceding any ground on Medicare eligibility is immeasurably negative for Democrats.

HELLO, Barack, raising the eligibility age for Medicare is a really bad idea.

1 comment

  1. TMC

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