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Romney Advisor Says Medicare Eligibility Age Would Increase

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Considering what we learned this morning, between Paul Ryan defending a third stimulus to extend unemployment and COBRA benefits and deliver cash payments in February 2002, when unemployment was at the astronomical 5.6%, and Ryan arguing for a bailout of the auto industry to save his hometown GM plant in Janesville, Wisconsin, perhaps we should not hype all these dire warnings about what a Mitt Romney Administration would do in office. Both parts of the ticket seem ideologically malleable enough to say one thing when the economy is in the hands of Democrats and do another when the responsibility falls to them. Still, we should probably take this statement from senior Romney advisor Ed Gillespie at face value:

On Fox News Sunday, Chris Wallace asked Romney senior adviser Ed Gillespie how the campaign would extend the life of the program if the Romney-Ryan reforms won’t kick in until 2023, long after Medicare reached insolvency. Gillespie replied by insisting that a Romney administration would raise the age eligibility to 67:

WALLACE: But the problem is, those reforms don’t kick in until 2023. It doesn’t affect any seniors or anybody close to being a senior. But that doesn’t solve the Medicare part A problem which kicks in in 2016. What are you going to do to keep solvent between 2016, after you have repealed Obamacare, and 2023?

GILLESPIE: Governor Romney supports increasing over time bringing Medicare eligibility in line with the Social Security retirement age … The Congressional Budget Office says assumptions about the Medicare trust fund being solvent through 2024 under the Obamacare proposal is unrealistic.

This is the action that gets the Romney campaign out of the box where it has confined themselves. They have said that they would entertain no Medicare changes for current or near-retirees. But with no changes, and indeed with the repeal of the Affordable Care Act, the Medicare trust fund runs out of money in 2016, at which point you have to make a number of drastic changes because otherwise your spending authority runs out. So in exchange for giving more subsidies to Medicare Advantage, and more payments to hospitals and health care providers who already voluntary gave them back in the ACA deal for more covered customers, Romney would have to do something like increase the eligibility age, and do it sometime in the first term.

The Obama Administration is not just an imperfect but an impossible messenger for the proposition that this is a horrible idea, since during the debt limit negotiations, the President proposed it. But let’s briefly recap why this would be terrible. You would actually raise costs in all insurance risk pools by increasing the eligibility age. Moving 65 and 66 year-olds off Medicare would mean that the younger senior citizens would phase out of the Medicare risk pool, making that a sicker population, and that those 65 and 66 year-olds would phase into the individual and group market pools, making THAT a sicker population, too. As a result, health care costs would rise across the board, far more than the savings to the federal government. Individuals would pay for those savings, and the health care system as a whole would end up more expensive. In addition, this would of course be a nightmare for 65 and 66 year-olds, many of whom would find themselves unable to access coverage in those years. They would probably delay necessary medical treatments until they reach Medicare-eligible age, making those treatments more costly to the government. And because of the trust fund issue, this would simply have to happen right away.

I’m perfectly willing to believe that Romney and Ryan are frauds on fiscal policy, and would put in some kind of tax-cut stimulus immediately to boost demand. But if they hold to giving back the Medicare savings, which they’ve now signaled very loudly they would, they would have to come up with some alternative method to extend the life of the trust fund. And increasing the eligibility age is the only policy they’ve proposed.

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David Dayen

David Dayen