No, Kent Conrad. Raising Medicare Retirement Age Makes NO Fiscal Sense
Just stop, Senator Conrad. This is sheer insanity. Here's what he said:
Obama has already suggested raising the retirement age for Medicare. Should that be the starting point for thinking about entitlement savings?
I wouldn’t want that to be the starting point, but as part of an overall package, that’s balanced and fair. Given that we now have exchanges to purchase insurance because of the president’s health-care reform law, it makes it much more acceptable, much more reasonable, over a long period of time to gradually increase the age given that people are living so much longer.
Before the exchanges in the Affordable Care Act, it would really be unacceptable to raise the age. What would people do without insurance? Now that exchanges are going to be there, that’s going to be an alternative.
This way lies madness. Here's why:
- Medicare is far more efficient than private insurance companies; therefore, it stands to reason that it would be more, not less expensive for the government to subsidize insurance through the exchanges for people age 65-67
- Subsidies are inevitable for that age group, since most will not be working and will not have employer post-retirement health insurance benefits. With lower income and higher costs, the government will be providing hefty subsidies to older people
- Raising the retirement age will also raise the actuarial probability that those entering the system at age 67 will have more health problems and be more costly for Medicare to cover.
If insurance companies weren't run by right-wing money grabbers someone would actually speak up and tell this doofus that savings do not rest in raising the retirement age, but instead in lowering it. Adverse selection is costly, and it rises with older populations. Open the whole thing up to everyone and suddenly health care spreads across a spectrum of people who are also healthy.
What Conrad is proposing will actually drain Medicare of revenues instead of the other way around, and this is why a retirement age increase is such a monumentally bad idea.
To Conrad's credit, he did say that Social Security shouldn't be part of any budget discussion and also said capital gains taxes should rise to normal rates. I could not agree more on those points. But this business with Medicare is just wrong-way policy. Forget the politics, it's terrible policy.
Anyone who has ever worked in the insurance field understands that costs are reduced by three factors: benefit cost management, administrative cost management, and a very large pool of insureds spread across a risk spectrum. Why can't our Senators seem to understand this?
I actually see some benefit in striking a Grand Bargain, but not at the expense of the people least able to absorb the hit. If Republicans really are going to hold Medicare, Obamacare and Social Security hostage in exchange for tax reform, then put some ideas on the table that make more sense. Means-test Medicare if need be. I hate that idea, but it makes more sense than screwing people in the 65-67 age brackets.
Or maybe they just really don't need to go after Medicare at all. The Center for Economic and Policy Research has some interesting information about the "Fix the Deficit" Gang and their core beliefs, courtesy of Dean Baker (h/t digby):
They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.
It is especially important that they act now, because one of the pillars of their deficit horror story could be collapsing. Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high level policy positions.
See, Senator Conrad? Sometimes you shouldn't "fix" things that don't need fixing. And that goes for you, too, President Obama. No Grand Bargain should touch the retirement age for Medicare unless it lowers that age.
If you're as aggravated over Senator Conrad's proposal to push back the Medicare retirement age as I am, you can sign the petition at BoldProgressives.org. I urge you to sign and share it with as many as you can in order to speak loudly about what a terrible idea this is.