Evidently Ezra Klein and Jonathan Chait have been dispatched to sell us on why it might be a great idea to go ahead and trade a higher Medicare eligibility age for some kind of tax rate deal. In Ezra's case, it's less about selling the idea
December 8, 2012

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Evidently Ezra Klein and Jonathan Chait have been dispatched to sell us on why it might be a great idea to go ahead and trade a higher Medicare eligibility age for some kind of tax rate deal.

In Ezra's case, it's less about selling the idea and more about assuring us a deal will be cut with a framework that includes it. Chait, on the other hand, argues that Obamacare fixes things so it's no big deal.

Yes, it's a very, very big deal. I don't know how old Jonathan Chait is, but I'm already screwed on my Social Security eligibility date and don't much care for the notion of being screwed on my Medicare eligibility date, which is eleven years yonder right now.

Raising the Medicare eligibility age is terrible, awful, horrible policy that plays right into the Republicans' goal of killing Medicare altogether. Obamacare does not change that fact in substantive ways. Here's why, in bullets:

  • Adverse selection - Obamacare or no Obamacare, raising the eligibility age means people enter the Medicare system with a higher likelihood of health problems. Even if they have health insurance before they're eligible for Medicare, facts are facts: The older one gets, the more likely health problems become.
  • Administrative costs - Medicare's administrative costs consistently come out to about 7 percent. Obamacare allows for administrative costs of 15 percent. Extending coverage via Obamacare means higher, not lower, costs to the government and the middle class. Subsidies will cost more for that older group as well as for the younger group, since insurers will set a higher baseline on young people in order to pad reserves for older people because of the 3:1 ratio requirement on rates between youngest and oldest.
  • Workforce phase-outs of older employees - This is the dirty little elephant in the middle of the room that no one talks about. Because of the high demand for jobs right now, older employees are being shoved phased out earlier. Beginning at around age 50 to 55, jobs become scarce for older workers, leaving them with a 10-15 year gap before they become eligible for Social Security and Medicare. That means they're living on their savings, home equity, or odd jobs just to scratch their way to the social safety net. Moving that football means leaving them on the hook for 2 extra years, not only for living expenses, but also covering their health insurance, whether or not subsidized.

I haven't even addressed the political downside of doing something like this because it seems obvious to me. Nearly two-thirds of Americans support leaving the Medicare eligibility age right where it is. There is no excuse for a benefit cut that leaves people hanging out in the wind for two extra years. Furthermore, framing the debate in these terms sets up an intergenerational battle that is needless and plays right to Republicans' goals. Of course, Republicans won't vote FOR this deal. Rand Paul is already selling them on the notion of voting "Present" so they can hang tax increases around Democrats' necks. With a deal that raises the Medicare age, they'll do far more damage.

I can hear the campaign mantra in 2014 now: "Democrats cut your Medicare. Again."

For these reasons and more, just stop. Stop floating the balloon, pop it, stomp on it, and burn it. Take Medicare off the table altogether right now and force Republicans to deal with the mess they made.

If, on the other hand, you buy into Chait's argument that handing the Medicare eligibility age to Republicans is a largely symbolic victory, you're missing the bigger picture altogether. Republicans don't want to voucherize Medicare. They want to kill universal healthcare altogether. If they cannot kill it with a bullet they're happy to kill it with poison. One step in their direction is administration of that poison. There's nothing symbolic about it. They will use even the smallest concession to wedge their way into killing Medicare while they work hard at killing Obamacare in the courts and via refusal to implement it.

I've been told by some pragmatic liberals who I usually agree with that I'm being unreasonable on this point. I beg to differ. It is not reasonable for Peter Orszag to say we've gotten a concession from Republicans because privatizing Social Security is off the table entirely. That's a little like saying we're really lucky that they're holding the gun to our hearts instead of our heads. The impact of conceding any ground on Medicare eligibility is immeasurably negative for Democrats.

Do. Not. Go. There.

I cannot stress this enough: We have the aces. Do not show your hand so early in the game.

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