As President Obama and Congress seek to grapple with the looming fiscal cliff, the notion of changing the age for eligibility of Medicare to age 67 appears to be back on the table.
According to an article in the Wall Street Journal, the implementation of Obamacare just might make this option possible and timely. President Obama has indicated in previous negotiations that he might be open to the notion, and several Democrat as well as Republican congress members are in support of the idea.
Proponents argue that come 2014 and in line with requirements of Obamacare, seniors would still be able to obtain health care coverage due to the fact that insurance companies can no longer deny coverage for pre-existing conditions. Those against changing the eligibility age argue that it would increase costs for younger people who buy private insurance alongside seniors in the marketplace, and also that it would shift costs to large employers who would be required to cover seniors in company plans.
According to an article on The Hill, the CBO has concluded that healthcare programs are eating up an ever-increasing share of the economy, while tax revenues and other domestic spending are holding relatively steady. The CBO additionally noted that raising the retirement age for Medicare would save the federal government about $30 billion dollars in 2020.
While it is uncertain whether changing the age for eligibility of Medicare will be implemented, the fiscal cliff and the CBO findings are telling. According to an article in the Huffington Post, President Obama plans to make a case for increasing taxes on the wealthy while extending tax cuts for families earning $250,000 or less. The fiscal cliff seems to be driving one of two options to take place: 1) increase taxes on the wealthy, or 2) come up with cuts to entitlement programs such as Medicare or Social Security.
What would the latter option mean for employers, workers’ compensation carriers, and seniors? Healthcare costs are rising and will need to be absorbed somewhere. If the age eligibility for Medicare changes, employers that offer insurance to their employees would likely face higher costs because of the additional older people they were covering. This could come in at $4.5 billion for 2014 if the policy were fully implemented, according to a study by the Kaiser Family Foundation.
There would be a positive effect on workers’ compensation carriers if the eligibility age for Medicare benefits increased as it would decrease the pool of Medicare beneficiaries, thereby reducing the amount of cases that would need to comply with the Medicare Secondary Payer Act (fewer payouts of MSAs, claims to report through MMSEA Section 111 and conditional payment reimbursement).
For seniors and all other taxpayers, changing the eligibility age to 67 for Medicare would increase costs, but nonetheless with Obamacare more Americans would have healthcare coverage.
Where will our nation’s increasing healthcare costs go? We’ll just have to wait and see.