Friday, July 8, 2011

Raising Medicare Enrollment Age is a Very Bad Idea

In brief...

...this will kill both Social Security and Medicare. Who can afford to retire on Social Security without Medicare? Not a soul (all your Social Security would go to pay for private insurance). So raising the Medicare age to 67 will make people work longer. Older workers on private health insurance plans will increase the insurance rates for those plans. A dollar "saved" by the government will be a dollar plus spent by private and public employers with their insurers. This will rock public employers that depend on retirees going on medicare to save money.

The Medicare costs per enrollee will rise as you will have removed the lowest cost enrollees in Medicare. So while overall costs will go down it will make Medicare look less efficient than in the past. Fewer people on Social Security, fewer on Medicare means less political support for these critical programs. Means testing just leads to everyone wanting to kill the programs. (By the way, Medicare is already means tested as the more you earn the more you pay in tax).

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