Would raising the Medicare age hurt health-care reform?
One key consequence of the debt ceiling debate — raising Medicare eligibility to 67 — emerged from the battle an increasingly acceptable policy proposal. The White House offered it to House Speaker John Boehner (R-Ohio) during their negotiations, and it is widely expected that the Joint Committee will consider it in their deliberations.
The policy, long opposed by Democrats, is being considered because of the Affordable Care Act: Those no longer eligible for Medicare, the thinking goes, could enroll in the new health insurance exchanges, where they would have premium subsidies and consumer protections.
But some health-care experts who support the Affordable Care Act have begun to worry that, though health-care reform makes raising the Medicare age more palatable, actually doing so undermines the law by causing premiums to rise on the exchanges as millions of older and sicker Americans flood into the new marketplace.
“It’s all interlocking,” said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities. “You have to understand that raising the Medicare eligibility age would also have implications for coverage and cost in the exchanges.”
A recent Kaiser Family Foundation report found that premiums in the exchanges would rise about 3 percent if all eligible 65- and 66-year-olds enrolled. Medicare would see a similar premium increase, with its youngest, healthier subscribers leaving the program.
That bump in premiums could put the exchange marketplace in a precarious position, driving away precisely the subscribers it needs to thrive: young, healthy Americans with low health-care costs.
“Every little thing that you do to increase rates increases the risk that young healthy people will pay the penalty or seek coverage outside the exchange,” said Sabrina Corlette, a research professor at the Georgetown Health Policy Institute.
Practically speaking, the exchanges are already in a delicate position: Fewer than a quarter of the states have passed legislation that allows them to build the new marketplace, while more have seen bills to do so fail in this legislative session. Park contends that as states with some of the largest insurance markets, including Floridaand Texas, push back against the health reform law, the Affordable Care Act’s success hinges on making the new marketplace as robust and appealing as possible.
“Anything early on that makes costs higher than they otherwise would be, you get worried about the exchange being viable,” Park said. “Young people are already hard to get to participate, and with a change like this, they may be less willing.”