Earlier this week, Mitt Romney pledged torestore Obamacare’s savings in the Medicare program — a move that would move up the insolvency date of the program’s trust fund from 2024 to 2016.
On Fox News Sunday, Chris Wallace asked Romney senior adviser Ed Gillespie how the campaign would extend the life of the program if the Romney-Ryan reforms won’t kick in until 2023, long after Medicare reached insolvency. Gillespie replied by insisting that a Romney administration would raise the age eligibility to 67:
WALLACE: But the problem is, those reforms don’t kick in until 2023. It doesn’t affect any seniors or anybody close to being a senior. But that doesn’t solve the Medicare part A problem which kicks in in 2016. What are you going to do to keep solvent between 2016, after you have repealed Obamacare, and 2023?
GILLESPIE: Governor Romney supports increasing over time bringing Medicare eligibility in line with the Social Security retirement age … The Congressional Budget Office says assumptions about the Medicare trust fund being solvent through 2024 under the Obamacare proposal is unrealistic.
Numerous studies have shown that booting 65- and 66-year-olds from Medicare would in facthave only modest savings, while raising health care costs across the board for seniors. Though Medicare spending itself would be reduced by 5 percent, the seniors taken out of the system would then have to turn to employers, other government programs and the states, increasing costs. As a result many of the people who would otherwise have enrolled in Medicare would face higher premiums for health insurance, higher out-of-pocket costs for health care, or both.
The Center on Budget and Policy Priorities (CBPP) estimates costs could “total $11.4 billion — twice the net savings to the federal government” in 2014 alone. Medicare’s market power would inevitably suffer as well:
Raising the Medicare age would shift costs to most of the 65- and 66-year olds who would lose Medicare coverage, to remaining Medicare beneficiaries, to employers that provide coverage for their retirees, and to states. These cost increases would, in total, more than offset the savings to the federal government. Moreover, by further shrinking Medicare’s share of the health insurance market, raising Medicare’s eligibility age would reduce its market power and weaken its ability to serve as a leader in controlling health care costs in the future.
Beginning in 2023, Ryan’s FY 2013 budget would “raise the eligibility age for Medicare — now 65 — by two months per year until it reaches age 67 in 2034.” But if Romney hopes to extend the life of the trust fund by booting younger seniors off of the program, he would have to institute the policy sooner and faster than Ryan has proposed.