I figure increasing the Medicare eligibility age to 67 would cost someone in their 50's at least $10,000 in today's dollars (1). It may not be theft in a legal sense, but if 'Taxation is theft!' according to standard Republican dogma, how is pulling the rug out from under those who have paid into the system for thirty years any less of a crime? Perhaps there is, after all, one Tea Party slogan that inadvertently makes sense:
Keep your Government hands off my Medicare!
When the Social Security full retirement age was increased by the 1983 Social Security Reforms, the full effect of that increase was only to be felt by those who were 23 years old and under. Only if you were born in 1960 or later would your full retirement age be 67 instead of 65, while those aged 40 or less would see their retirement age raised to 66.
In other words, the people who had paid into the system already for twenty or thirty years would not be affected. Those who had yet to contribute anything would be affected maximally, while those who had been contributing for some years would see a more modest rise in retirement age. Plus none of these changes were to take effect for another twenty years after the bill became law. The bill was enacted in 1983, and only those born in 1938, retiring in 2003, twenty years after the law went into effect, would see any increase in retirement age at all, and that by two months.
Nothing to be proud of, to be sure. But at least you pretty much knew what you were getting into and had plenty of warning.
Not so with President Obama's reported proposed increase in the Medicare eligibility age.
According to five separate sources with knowledge of negotiations -- including both Republicans and Democrats -- the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.
The proposal, as discussed, would not go into effect immediately, but rather would be implemented down the road (likely in 2013). The age at which people would be eligible for Medicare benefits would be raised incrementally, not in one fell swoop.
We don't have the exact details, but in order to have any significant effect on Medicare expenses over the next ten years (which is the span the budget agreement was supposed to cover) the eligibility changes have to take effect during that time period.
If we assume the first round kicks in in 2013, and completes in 2023, that would mean that people who are already sixty-three years old and likely counting the days until they can access Medicare will have to wait another two or three months. And people who are now fifty-three, who have been paying into Medicare for thirty years, will bear the full brunt of this.
Here's a tabular view of the difference between the 1983 Social Security changes and the proposed increase in Medicare eligibility age.
Effects of Proposed Medicare Eligibility Changes
Description |
Years Until Effect Kicks In |
Age of People Now Who Will Feel The Effect |
Increased Eligibility Begins |
2 |
63 |
Increased Eligibility Age Reaches 66 |
7 |
58 |
Increased Eligibility Age Reaches 67 |
12 |
53 |
Effects of 1983 Social Security Eligibility Changes
Description |
Years Until Effect Kicked In |
Age of People In 1983 Who Would Feel The Effect |
Increased Eligibility Begins |
20 |
45 |
Increased Eligibility Age Reaches 66 |
25 |
40 |
Increased Eligibility Age Reaches 67 |
42 |
23 |
In addition, Social Security still allows you to partake of partial Social Security anytime before the full retirement age beginning at age 62. No one has proposed a Medicare buyin at reduced cost, or even at cost, for those below age 67.
As you can see from the table, the people who designed the changes in Social Security at least had some sense -- they knew the full effect of their changes back in 1983 wouldn't kick in until 2025, forty-two years hence. Whomever is designing Medicare changes that start taking effect almost immediately and penalize people who have already paid into the system for thirty years -- well, I'd say they would be batshit insane, except that it's Democrats who seem to be doing the designing.
What is the difference between the government raising your taxes by $5000 a year when you reached age 65 -- a proposal which Republicans no doubt would commit hari-kari before voting for -- and forcing you to pay $5000 more per year than you otherwise would?
There's only one difference -- that $5000 will now go to health insurance companies, who will use it to pay for vast amounts of administration to insure that they deny every claim they possibly can, and to support their executives' seven-figure salaries and their profit margins.
It's time everyone took up this mantra (sparing us, please, the badly drawn hammer and sickle):
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(1) Where does the $10,000 cost to an individual of raising the Medicare eligibility age come from?
Right now, insurance for an individual who is over sixty years old is something like $600 a month (2) -- if that individual can get it at all. That's $7200 a year just in premiums, not counting deducibles and co-pays. Standard Medicare coverage costs about $2400/year (Part A and Part B), and has small deductibles. (You do pay 20% of costs, and there's the doughnut hole for drug coverage). But to a first approximation the government is proposing to take something like $5,000 a year or $10,000 for two years from people in their fifties insofar as they will be forced to pay for private health insurance for two additional years.
(2) Premiums for those age 60-64 in the California PCIP program vary from $570-$650/month. These premiums are, by law, supposed to be approximately the same as paid by Californians of that age in the private market who do not have pre-existing conditions.
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If you want to tell your US Senators that this is theft, you can find their contact information here
For more action items see joanneleon's rec-listed diary