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Medicare Eligibility Age Increases Particularly Levies Pain on Seniors of Color

Raising the Medicare eligibility age has been taken down a notch, as well it should. Apart from everything else – privatizing a known commodity that reduces health care costs more than comparable private insurance, making health insurance costs go up across the board – it’s quite regressive and hurts at-risk populations the most:

Medicare eligibility is associated with a sharp increase in average coverage rates at age 65 and a narrowing in coverage disparities across different groups in the U.S. population.

In other words, coverage disparities between the rich and poor melt away at 65 right now, and particularly between whites and minorities. Delaying that two years just means two more years where poor people of color will defer medical care and live without health insurance. That’s particularly true in states that don’t adopt the Medicaid expansion, a key safety net in the Affordable Care Act. And we could go off on a tangent here about affordability in the ACA exchanges, but it’s not really worth it. The point is that raising the eligibility age hurts poor seniors of color very specifically. There’s an element of the middle-class squeeze to this as well, because middle-income seniors who don’t qualify for exchange subsidies would be in particular trouble. But poor seniors who can’t access Medicaid would be in more dire straits.

So when you say that the majority of “young seniors” affected by this policy change would still be covered, you have to also say that hundreds of thousands of these young seniors would end up without coverage, or with coverage that they effectively cannot use because of the high deductibles and out-of-pocket costs.

If you want to consider that an acceptable loss worth it for the political benefit, particularly to somehow by magic preserve the ACA, then I concur with Scott Lemieux that I don’t really understand your point.

First of all, particularly given that a significant number of states haven’t bought into the Medicaid expansion and aren’t in any hurry to establish functional exchanges, this will create a lot of suffering for people while we wait for 66- and 67- year olds to work their political magic and convince Republicans to strengthen the ACA. (We’re also assuming that seniors in deep-red states will blame Republicans rather than the ACA for losing their insurance, which seems…optimistic.) And second, as Dayen says in his follow-up response, the idea that “that the reliance of those aged 26-64 on insurance exchanges to deliver affordable health care is not enough of a constituency behind the program, but adding in those aged 65 and 66 will simply put it over the top” isn’t well-founded.

Ezra Klein, who has said plenty publicly about the dangers of raising the Medicare age, games this out, and it’s worth reading to get a sense of where the Administration is. For example:

The White House doesn’t like the idea, but administration officials see its incoherence as a virtue. The reason it doesn’t cut national health expenditures is that a lot of the pain is blunted by other players, like Medicaid and employers. The reason it doesn’t significantly pare back the safety net is that Obamacare is law, and by the time these age changes phase in, it will be deeply entrenched law. Better to give Republicans a bigger trophy than a deeper cut, or so goes the theory.

Any age changes that phase in reap nothing in terms of a dollar benefit. So these would have to be part of a large deal that cuts social insurance even more, in the immediate term. And at some level, that means an objectively worse health care system, particularly for specific populations, than we have today. That coincides directly with Affordable Care Act implementation. I’m fairly certain who the public will blame for all this.

See also Jon Cohn. I don’t support chained CPI either, by the way, and don’t think Republicans will if it means doing the same to tax brackets than it does to Social Security benefits.

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David Dayen

David Dayen

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