President Obama and House Speaker Boehner may have failed to strike a “grand bargain” on the nation’s deficit, but they have accomplished one thing in our world: they have forever changed the terms of the Medicare debate. There is an air of inevitability about some of the proposals they have put forth brewing here in DC.
Obama says he could accept “means testing” the program, which would require affluent seniors to pay more for services. Obama used himself as an example of someone who would pay a higher rate. Obama has also been open to other proposals, including charging co-pays for home health services and for lab work.
Obama also floated on several occasions a provision that would raise Medicare’s eligibility age from 65 to 67 — one that Boehner agrees with him on. In doing so, they gave a controversial idea legitimacy and high political cover. The concept is now likely going to be a fixture in the Medicare debate.
The idea has drawn some support from the GOP in the past. Senators Tom Coburn (R-OK) and Joe Lieberman (I-CT) introduced a bill last month moving the eligibility age up by two years, and Democrats ran from it like scalded dogs. Senate GOP Leader Mitch McConnell didn’t endorse the proposal but applauded the effort. Grover Norquist — the guy behind the GOP’s stalwart refusal to move one inch on taxes in this debate — backed it too.
Under the ACA, in 2014 insurers are banned from turning down any patient — and that could make increasing the eligibility age an easier pill to swallow because 65-66 year-olds would ostensibly have access to coverage in the exchanges. It also means that any increase in eligibility age is unlikely to pass until the exchanges and subsidies are in place in 2014.
The “agreement” between Obama and Boehner – before talks collapsed last week – bumped up the eligibility age from 65 to 67 over about two decades. One approach called for increasing the age by one month per year beginning in 2017 until it reached 66 in 2029. In 2030, it would increase two months each year until it hit 67.
The Congressional Budget Office said raising the eligibility age to 67 would save $125 billion over 10 years, adding that the savings would be somewhat reduced by new spending on Medicaid and insurance subsidies to cover the uninsured 65- and 66-year-olds. It’s still too big a number to ignore when the bills come due next month.
Expect to see a lot more discussion about these ideas in the coming weeks as we hopefully find our way out of this looming mess. I’m turning 43 next week — and my retirement plan assumes no Medicare or Social Security for me or my wife by the time we’re ready for it. Our generation should be prepared for a very different look to Medicare now that the once unthinkable has become a fixture of the debate.