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Threat of Medicare Eligibility Age Increase Recedes – For Now

Amid all the fiscal slope machinations comes one bit of good news, at least in the near term. House Speaker John Boehner has pulled back on raising the Medicare eligibility age in this deal, although he holds it out as a possibility for the conclusion of the deal next year. This suggests that the White House came around to seeing it as a non-starter in the current political environment. But this is very careful language being used by the Speaker:

Congress doesn’t need to raise the Medicare eligibility age this year, House Speaker John Boehner (R-Ohio) said Tuesday.

Raising the eligibility age from 65 to 67 was on the table in earlier debt talks, and has been floated again as Boehner and President Obama look for a way to avoid the looming fiscal cliff […]

“There are a lot of issues on the table. That issue has been on the table, off the table, back on the table,” Boehner said. “It’s an issue for discussion, but I don’t believe it’s an issue that has to be dealt with between now and the end of the year. It is an issue, I think, if Congress were to do entitlement reform next year and tax reform, as we envision if there’s an agreement, that issue will certainly be open to debate in that context.”

This is worth paying attention to. In the President’s most recent offer, in addition to the shift to chained CPI to calculate cost of living adjustments in Social Security and other programs, he included $400 billion (over 10 years) in “health program savings” that were not made explicit at all. The idea is that there would be a separate process next year to identify those $400 billion in savings, along with other cuts totaling an additional $400 billion, to defense, discretionary spending and mandatory spending. What Boehner is saying here is that raising the eligibility age could come up as part of that process next year. Presumably there would be some kind of trigger, similar to the sequester, to try and force an agreement on these issues. Incidentally, the level of 10-year spending cuts called for in the Obama offer, $922 billion, is virtually identical to the level of cuts in the sequester, $984 billion.

In other words, it’s completely plausible that the deal will conclude with chained CPI AND raising the Medicare age, in addition to hundreds of billions in other spending cuts heaped onto a spending cap baseline that already mandates the lowest level of public investment since the Eisenhower Administration. This isn’t really being discussed in the context of the deal, but it’s a very real possibility.

That said, I would imagine we would have the Medicare age increase inside this current deal, effective immediately, were it not for the strong pushback on the idea. I tend to subscribe to the idea that the Medicare age was a shiny object that a lot of people chased while things like chained CPI slipped into the conversation. But that doesn’t mean that the particular cruelty of the Medicare age increase didn’t require a forceful response. This is a temporary victory, but it is a victory, led from the outside.

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David Dayen

David Dayen