As Democrats and Republicans jockey for political position on the so-called fiscal cliff negotiations, I can’t help but wonder how many of our elected representatives truly care about moving the American economy and the federal budget forward in a sensible manner, and how many others are just measuring the political outcome of whatever deal is made vs. falling off the figurative fiscal cliff. From my vantage point, most members of Congress are simply calculating political outcomes rather than examining what is truly best for the vast majority of Americans going forward.
One example of how politics seems to override common sense is the debate over whether the age for Medicare eligibility should be raised. One thing I have learned in conducting effective systems change advocacy for over 27 years is that partisan rancor rarely gets resolved by creating sound policy. Building consensus amongst those who differ has a much better chance of creating sound fiscal and social policy. Indeed, I started my career doing elder advocacy, including writing a popular handbook, Your REAL Medicare Handbook.
As of the moment, some Republicans have suggested that one way to secure Medicare’s viability in the future is to raise the eligibility age to 67. Most Democrats have viewed such suggestions as an attack on the social contract of Medicare.
As a strict non-partisan working on effective Systems Change, I invite readers to look at the facts:
- When Medicare was established by the Social Security Amendments of 1965, men’s life expectancy was approximately 67 years and women’s life expectancy was approximately 73 years.
- Current estimated life expectancy for men is about 76 years for men, and 81 years for women.
- In 2011, the oldest baby boomers—Americans born between 1946 and 1964 started turn 65. Today, over 40 million people in the United States are ages 65 and older, but this number is projected to more than double to 89 million by 2050. Although the “oldest old”—those ages 85 and older—represent somewhat over 15 percent of the population ages 65 and older today, their numbers are projected to rise rapidly over the next 40 years. By 2050, the oldest old will number 19 million, over one-fifth of the total population ages 65 and older.
- By 2025, the U.S. Census Bureau and the Bureau of Labor Statistics (BLS) projects that there will be almost 50 million persons over 65 and not in the labor force—about twice the number in 1995.
- The US Labor Force grew rapidly from the 1950s through the 1970s and has steadily declined since then. The Bureau of Labor Statistics does not anticipate a rise in the US Labor force until the 2030s and then only returning to the levels of 2010.
So, even without discussing the problem of controlling health care inflation, it is clear that a shrinking workforce cannot continue to support the booming Medicare population through Medicare payroll taxes. It is worth noting that Congress resolved this problem for Social Security by slowly raising the retirement age. There simply is no sound reason not to duplicate this gradual rise in the Social Security retirement age, in the Medicare eligibility age. This will avoid any retirees suddenly having retirement and anticipated Medicare coverage change without reasonable time to plan. I suggest raising the age to 67 over 4 years (i.e., 6 months/year). Other time tables could certainly be adopted.
While this may appear to be a Republican idea, Democrats can brag that raising the Medicare eligibility age is made possible by Obamacare as those caught in the rising age group will have health insurance available to them under the Affordable Care Act. Moreover, it is worth noting that way back in 1999, the National Bipartisan Commission on the Future of Medicare concurred with this recommendation, calling for linking the Social Security retirement age with the Medicare eligibility age. Sadly, politics has gotten in the way of sound policy ever since. It is time for brave politicians to figure out how to declare a win-win for the American people and stop playing win-lose politics with our future.
For more information e-mail Jeff Spitzer-Resnick or visit Systems Change Consulting.
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Unfortunately, political reality prevents a mix of a wide range of reasonable solutions such as a very tiny increase in the Medicare payroll tax.
Two reasonable but probably politically impossible ways to help deal with Medicare costs are:
1. Nursing homes: The current funding for nursing is barely adequate. No room exists in nursing home reimbursements to pay six and seven figure salaries of corporate bean counting suits nor to pay dividends to stock holders. The only way that can be done is by shortchanging the residents with inadequate, underpaid, poorly trained and supervised staff, neglect of facility maintenance, and actual fraud of billing for care not provided.
Nursing homes should either be non-profit or highly regulated public utilities with severe limits on shareholder dividends and corporate executives’ salaries.
2. More use of hospice and palliative care for the elderly at the end of life. A major portion of Medicare is spent in the last 12 to 18 months of life. Significant amounts are being spent for extremely expensive life extending treatments and care.
Last time I checked, we’re all mortal and we’ll all die. Too much healthcare is driven by our denial of our mortality.
Unfortunately, when this was proposed during the Obamacare debate the ultra-right conservative extremists started screaming about death panels to euthanize the elderly. These are the same people who demand every bit of medical care possible until their last breath while refusing to agree to tax increases to pay for it.
Thank you for initiating this much needed discussion. I have three points to make in response to your thought-provoking analysis, which you might not have considered in your analysis.
First, I don’t think there’s a valid analogy between raising the age for social security and the age of Medicare eligibility. Just because people are living longer, that doesn’t mean their usefulness in terms of cognitive and physical abilities have been extended. A 65 year old is still a 65 year old. Regardless how long you live, people in general don’t have the same physical and mental capabilities at age 68 that they had at age 65. People should not be forced to work past the age that they are capability of doing so effectively just to keep healthcare benefits. In my 40s and 50s, I used to believe that I would work until age 70, without realizing that there were likely to be significant differences in my energy level, cognitive abilities, and physcial health. That’s a myth only the young might seriously believe in. We are not all Ruth Ginsburgs.
Second, the recent Great Recession has shown how difficult it is to keep or get a job past the age of 60 (or past the age of 50). In our country, no job often means lack of access to affordable health insurance.
Third, there often is a signficant difference in useful work life depending on the nature of one’s employment. Do you really want 67 year olds roofing your house? No matter how long you might live, your knees, back, and joins give out long before age 65 if your career involves manual labor. Similarly, some precision-sensitive jobs require a dexerity that declines at a certain age regardless of longevity. Also, higher salaried employees have access to a lifestyle that might help them to age later (e.g., gym memberships, massage therapies, and other stress relievers require money to access). We have to be careful about not making broad generalizations about the useful work life of the population at large based on personal experiences that might reflect cultural privileges more than common experience.
What does the medical and related research offer with regard to these issues?
Thanks for your thoughtful comments, Judie. Your argument is really against the raising of the retirement age. While your points may well be valid, for the very real population dynamics I explained in my original blog post, there are really only 2 other alternatives: 1) drastically reduce Medicare benefits; or 2) increase the financial burden on the shrinking working age population. I think my proposal to simply align Social Security retirement age with Medicare eligibility is far less painful, especially in light of the availability of health insurance coverage under Obamacare.
There are other fiscal alternatives in addition to those noted in your blog, Jeff. Persons aged 65 – 69 in general are much healtier, and their Medicaid usage is minimal compared to older beneficiaries. Part B is not free, and I suspect the data show that younger beneficiaries subsidize the older ones. You don’t get real savings by raising the age, and in fact you might make things worse by removing the healtiest beneficiaries. So, for example, why not raise the Part B monthly fee for the wealthiest benficiaries (taking into account wealth other than earned income)? Part A currently is free for all beneficiaries. Why not charge a monthly fee for the wealthiest beneficiaries? Also, I’ve heard estimates that the amount of unnecessary tests and procedures ordered for Medicare beneficiaries as in excess of 50%. That has been my own experience as a Medicare recipient for two years. I’m knowledgeable enough to say no to recommended diagnostic tests and treatments that don’t make sense, and this is a constant issue in the care that I receive. Almost 98% of doctors in Kansas accept Medicare patients, and my sense is that they offset low reimbursement rates by ordered a large number of tests and treatments. I admit to not being a Medicare funding expert, but I suspect there are a number of cost-savings options that make sense but are blocked by lobbiest (the uproar over changing the frequency of pap smears or mammeograms, for example; or over addressing the high costs of unnecssary end of life care).
As our economy inches its way towards recovery, the demand for labor will exceed the supply available in our current population.
That could add another reasonable but almost politically impossible way to deal with both Medicare and Social Security funding concerns. We could increase the working age population paying into the both programs through immigration reform.
Judie: I agree that there are multiple ways to reduce Medicare expenditures. I still believe that one reasonable way is raise the eligibility age. The largest portion of Medicare is not paid by premiums. It is paid by workers’ FICA taxes. Increasing the number of workers paying those taxes and reducing the covered beneficiaries is one step to bring Medicare into balance, but certainly not the only one. I wrote this blog because most Democrats oppose the idea purely for partisan reasons and not for sound policy reasons.