Is the Aging Medicare Program Too Old to Keep Up?
There’s a joke going around about Medicare not living long enough to qualify for Medicare.
“According to the CMS trustees forecast,” says Alan Weinstock, an insurance broker at MedicareSupplementPlans.com, “the Medicare program will run out of money in 2029. That’s one year shy of its 65th birthday.” But warnings of this kind have been going on for years.
Dire Predictions Haunt Medicare
The Center for Medicare and Medicaid Services (CMS) trustees have warned about Medicare’s impending insolvency since 1972. That was just seven years after the initial program launch. Since then they have offered 25 additional projections.
Because of the predictions, Congress regularly enacts legislative changes in an effort to adjust the program’s spending and to slow costs. In fact, in 2010 the health reform law helped to extend the Medicare program’s solvency for an additional 12 years. That’s the biggest one-year jump on record.
However, there is an additional untested suggestion that many feel would help the Medicare program extend its life: increase the eligibility threshold.
Changes in Life Expectancy
The Medicare program was enacted at a time when the average 65-year-old American was expected to live until about 80 years of age. Now that number has increased to about 84. And there are many more people who live well into their nineties.
This places an extra burden on the Medicare program and has many policy analysts calling for a readjustment to Medicare eligibility so that it aligns better with these changes in life expectancy and productivity. In fact, Social Security has slowly been increasing the retirement age from 65 to 67.
“Things have changed over the last few decades,” suggests Weinstock. “Not only have there been advances in health care, but there have been vast changes in how most people live their life. They eat better, get more exercise and stay on the job longer than ever before.”
Now the hope by many in Congress is to boost the Medicare eligibility age to 67. But that idea isn’t a new one. Increasing the minimum age has been contemplated as far back as 1984. And Senate Republicans tried to pass a budget proposal that hiked the Medicare eligibility age to 67 back in 1997.
Would Raising Eligibility Threshold Cost Too Much?
A new report found that raising Medicare’s eligibility age from 65 to 67 would save the federal government $7.6 billion in 2014 – but it also would increase costs for elderly U.S. residents and employers.
According to the report, most 65- and 66-year-olds would pay an average of $2,400 more for health care in 2014 than they would as Medicare beneficiaries. Employer costs would rise by an estimated $4.5 billion in 2014 because employer plans would become the primary provider of health benefits for the “young elderly.” Meanwhile, those still eligible for Medicare would see premium increases of about 3% because of a higher concentration of older and sicker beneficiaries.
The best Medicare Supplemental Insurance is one that provides full security to the people and hence is called Medigap, Medicare supplemental plans should be beneficial for the people.
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