One of the common ideas that float around “fixing” Medicare is raising the eligibility age from 65 to 67. While some government professionals think that this could have a significant positive impact on Medicare and it’s ability to survive in the future, this might not be true. We aren’t saying that this proposal to raise the age to 67 is close to being approved, or is even a realistic idea, but it’s tossed around often, so we would like to explore the possibility of it happening. If you are concerned that some information you have heard is not true, you should read about Medicare myths.
Why would they want to raise the age two years for Americans enroll in the Medicare program? Having two fewer years in the program would drastically shift the hospital costs from Medicare to individuals and employers that are still covering employees. Raising the age would shift an estimated $8 billion from Medicare to other payers. It’s estimated that it could save the Medicare program $113 by the year 2023. But compared to the $16 trillion U.S. economy, some believe that’s not even a statistically significant amount.
Changing the eligibility age for Medicare is one of the most common proposals, but it doesn’t just automatically jump up to 67 (based on most proposals). If the government ever approved the change, it would happen gradually, raising the age a couple of months every year until it’s at 67.
How does this impact the average American? For those that are getting close to the Medicare age (or will be in the future), it could have a huge impact on your health care coverage and finances. IF (big IF) this were ever to happen, you would need to budget another two years of covering your health care costs or to pay the out-of-pocket expenses of your employer’s health care plan. Another two years of paying for hospital bills and doctor’s fees can add up to thousands of dollars that you wouldn’t have spent otherwise.
The biggest problem with the idea of changing the idea is that there are only marginal benefits for the government, but a lot of burdens placed on everyone else. While the billions of dollars that are saved might seem like a ton of money, in the grand scheme of the Medicare budget, it isn’t. Especially since the signing of Obamacare into law, changing the age to 67 would only move a lot of the expenses from one government program to a different one.
Not only will the change impact individuals it will also impact businesses. Instead of having their employees enrolling into Medicare at 65, if they don’t retire, these firms are then burdened with paying for health insurance for an extra two years. That could have a problematic effect on a company’s bottom line. Speaking of businesses, the change would also hurt private Medigap companies that would have two fewer years that they could sell their products to retirees.
Like we said, don’t think that the age will be changed any time soon. While it’s often suggested as an “easy” way to fix some of the Medicare problems, we doubt that it will happen anytime soon, or ever. This is only of the many suggestions that have been submitted to fix the growing problems in Medicare. While we don’t know what will fix it, we do know that if nothing is done, we could see a severe health care problem in the future. With the rising costs of Medicare spending, it’s believed that eventually the program will not be able to sustain its spending trajectory and be forced to reduce benefits significantly. So, the idea of changing the age to 67 may eventually be one of several adjustments that need to be considered.
MedicareWallet.com is an unbiased, online resource for individuals turning 65 or already on Medicare. Our utmost goal is to provide information in a way that is user-focused, informative and ethical. With a combined 40 years of experience in the Medicare market, we can answer any questions about Medicare and Medigap insurance. Feel free to reach out to us at 800.376.0824 or by email at [email protected].