Open thread for night owls: Raising Medicare eligibility age would hurt minorities most

There has been heated talk among liberals and the left over the weekend since Jonathan Chait and Ezra Klein each wrote pieces about the possibility that President Obama might agree in negotiations over the fake fiscal cliff with House Speaker John Boehner to raise the age of Medicare eligibility from 65 to 67. Klein says this seems to be how the negotiations are shaking out. Chait said this wouldn't be the worst option. And that kindled the flames, including a sharp retort from David Dayen.

Others have weighed in as well. If eligibility were raised, it would mean around five million young seniors would be moved from the entitlement program into the private insurance market or, if they met the income requirements, Medicaid.

Paul Waldman writes What Raising the Medicare Eligibility Age Means:

In all this talk of the bloated entitlement system, you'd be forgiven for thinking Medicare was some kind of inefficient, overpriced big government program. But the opposite is true, and that's why raising the eligibility age is such a dreadful idea. Raising the eligibility age saves very little money, on the order of a few billion dollars a year. That's because the 65 and 66-year-olds will have to get insurance somewhere, and many of them are going to get it with the help of the federal government, either through Medicaid or through the insurance exchanges, where they'll be eligible for subsidies. However, since many Republican-run states are refusing to expand Medicaid in accordance with the Affordable Care Act, lots of seniors who live in those states will just end up uninsured, which will end up leading to plenty of financial misery and more than a few premature deaths. Put this all together, and the Center on Budget and Policy Priorities estimates that while the federal government would save $5.7 billion a year from raising the eligibility age, costs would increase by more than twice in other parts of the system'for the seniors themselves, employers, other enrollees in exchanges who would pay higher premiums, and state governments. What we'd be doing is taking people off Medicare, the most efficient and inexpensive option for them to have insurance, and putting them into the individual market, which works less well and costs more. When we start talking about this in more detail, that's what Republicans should really be forced to address.

Jonathan Kohn writes No, Don't Raise the Retirement Age:

Obama has been crystal clear about his demands in this debate. Tax rates on high incomes must go up. The debt ceiling drama has to end. He has made no similarly ironclad statements about the Medicare age. Obama would prefer to reduce Medicare spending by continuing to reform the way it pays for goods and services. He's even proposed a series of such reductions. But if it took more to get the concessions he wants from the Republicans? If it took something else to get what he thinks is a major deal on fiscal policy? Under those conditions, Obama would probably agree to a higher Medicare age'just like he did in 2011, when he was negotiating with House Speaker John Boehner over how to increase the debt ceiling. "The president put it on the table once before," says a senior Democratic aide on Capitol Hill. "I wouldn't be surprised if he did it again." The idea made me queasy back then. And it makes me queasy now. As both fiscal and health care policy, increasing the Medicare age from 65 to 67, even gradually, has very little to recommend it. The federal government would save money, yes, but only because state governments, employers and individual seniors would pay more. Overall, the nation would end up spending more on medical care, not less. That's the very opposite of what public policy, including Obamacare, is trying to achieve.

Sarah Kliff at the Washington Post has pointed to the work of David Card, Carlos Dobkin and Nicole Maestas at the National Bureau of Economic Research who found that those most hurt by a rise in the eligibility age would be minorities. Here's their graph comparing insurance coverage when less-educated minorities and more educated whites become eligible for Medicare.
^{Note the sharp jump in this graph of health insurance coverage for minorities when Medicare kicks in. (Chart does not start at zero in order to better show magnitude of change.) Click here for larger chart and scroll to appendix on page 42.}

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