Raising Medicare Eligibility to 67 Would Leave Nearly 2 Million Uninsured
If the ACA is also repealed, nearly 4 million seniors will lose their health insurance, says PERI’s Peter Arno
KIM BROWN: Welcome to The Real News Network in Baltimore. I’m Kim Brown.
Even before the passage of the Affordable Care Act in 2010, Republicans have been publicly floating ways to chop social health care programs, such as Medicare and Social Security, under the guise that these programs account for much of the nation’s debt, and even claim that these programs will go bankrupt in the coming decades.
Here’s then candidate, Donald Trump, speaking on this issue at the New Hampshire Republican Leadership Summit back in April of 2015.
DONALD TRUMP: Every Republican wants to do a big number on Social Security. They want to do it on Medicare.They want to do it on Medicaid. And we can’t do that. And it’s not fair to the people that have been paying in for years and now all of a sudden they want to cut.
KIIM BROWN: A lot of this falls under the seeming obsession by congressional Republicans, and now new President Donald Trump, to repeal and replace Obamacare, otherwise known as the “Affordable Care Act”. Here is candidate Trump again at the third Presidential Debate when asked how he will manage so called entitlement programs.
MODERATOR: Would President Trump make a deal to save Medicare and Social Security that included both tax increases and benefit cuts in effect a grand bargain on entitlements?
DONALD TRUMP: I’m cutting taxes. We’re going to grow the economy. It’s going to grow at a record rate.
MODERATOR: That’s not going to help on entitlements.
DONALD TRUMP: No. It’s going to totally help you. And one thing we have to do. Repeal and replace the disaster known as Obamacare. It’s destroying our country, it’s destroying our businesses. Our small business and our big business. We have to repeal and replace Obamacare.
KIM BROWN: Part of the piecemeal plan involved raising the eligibility age of Medicare, currently at age 65, but proposed to be raised up to age 67.
So, this is the focus of a recently released report by the National Committee to Preserve Social Security and Medicare. The study is titled, analyzing the impact of raising Medicare’s eligibility age, with and without the Affordable Care Act, and the result is a huge increase in the number of uninsured persons.
Today, we’re joined by one of the study’s authors, Dr. Peter Arno. He is an economist and a Senior Fellow and Director of Health Policy Research at the Political Economy Research Institute at the University of Massachusetts at Amherst. He’s also a Senior Fellow at the National Academy of Social Insurance. Dr. Arno, we appreciate you joining us. Thank you.
DR. PETER ARNO: Glad to be here. Thank you.
KIM BROWN: We’ve seen this from congressional Republicans for some time now, especially I would imagine most recently the middle of 2016 when House Speaker Paul Ryan proposed his budget, his healthcare plan, as it were, not really a healthcare plan, but in the Republican budget about what to do about so-called entitlement programs, and one of those solutions, as it were, is to raise the age for people to be eligible for Medicare. Tell us about what your study found.
DR. PETER ARNO: Well, what we tried to look at was, if you raise the age from the current 65 two years to the age of 67, what would be the impact on men, on women and race and ethnic minorities, and particularly in regard to their insurance status – whether they would have health insurance at all. As you mentioned, the impact is quite dramatic in terms of increasing the rate of uninsured. At the present time, Medicare does such a good job that about 1% of people over the age of 65 today are uninsured. But what we found is that if you raise the age by two years that that 1% that’s uninsured today would become closer to 19% if the Affordable Care Act remained in place. And if the Affordable Care Act is repealed, as the Republicans promise, the uninsured rate would rise dramatically to about 37%, or more than one out of three older Americans aged 65 and 66 would become uninsured.
KIM BROWN: And this could be particularly devastating. After all, the elderly population is among our more vulnerable populations, those more prone to require health care of some sort, especially even the possibility of long-term care, and more expensive healthcare at that. So what would be the financial impact on this group of seniors if this age of eligibility were to be raised?
DR. PETER ARNO: Well, obviously it would impact older Americans directly because the out-of-pocket costs would go up. If you don’t have insurance coverage and have to pay for medical care yourself, then clearly your out-of-pocket expenditures would go up.
Now, many people would just forego care because they couldn’t afford it, which would end up with them going to use emergency services and hospital emergency rooms and so on, which would cost even more money, and those costs would be shifted — if you end up in the hospital, for example — many of those costs would be cost-shifted to the providers, to the hospitals and the physicians, and they would end up providing care and not being reimbursed.
So it’s a huge burden on the providers and it’s a more serious burden on the seniors themselves. And to the extent that they forego care and get sicker, then their health is obviously jeopardized, as well.
KIM BROWN: And let’s talk about the difference, as you mentioned, with these costs — with the Affordable Care Act in place and without the Affordable Care Act in place. Because there’s a big gap here, looking at the numbers. People with the Affordable Care Act, if it were to remain in place — let’s say for example about 19% of men would be uninsured — but without the Affordable Care Act we’re looking at maybe upwards of 34% of men who would not have coverage in this case. This is not a small difference here between with and without the ACA.
DR. PETER ARNO: Right. I mean, it almost doubles, and the reason it goes up so dramatically without the Affordable Care Act is that one of the key things that the ACA has done is by expanding Medicaid to many, many people who formerly had no insurance, they would be picked up by the Medicaid program and for those on the individual market, they’re picked up with subsidies in the private exchanges. So without those two things, that’s why the numbers for the uninsured would go up so dramatically without the ACA in place.
But I think it’s worth pointing out that even with the ACA in place, the numbers… the increase goes up 17-fold with the ACA in place between what we have today and what would happen if their age is raised.
So it’s a terrible, terrible policy prescription for the future of the American people and for one of its most cherished institutions, being Medicare.
KIM BROWN: Peter, hypothetically speaking, what would these figures look like if the United States Congress and the President, although highly unlikely, but were it possibly were to happen, if a Medicare for All program was implemented? What would these numbers look like then?
DR. PETER ARNO: Well, I think the easiest way to answer that is just to look at what Medicare does right now for people over the age of 65, and the number of uninsured Americans, as I said, for those over the age of 65, those today who are accessing Medicare, is about 1%. So clearly, Medicare for All is the only rational, sane public policy solution to the future of health care in America. That’s my own personal opinion, and I think that anything that we can do to head in that direction would be excellent steps to make.
KIM BROWN: If the Republican plan were to be enacted — the repeal and replace of Obamacare obviously seems to be priority number one for the Republican Congress and now this new President — but also if we were to take a look at how they want to implement this in terms of block grants for states for seniors to access Medicare, how does that look under this scenario?
DR. PETER ARNO: Well, this is where things get quite confusing. We have to separate out Medicare and Medicaid. Medicare is essentially for people over the age of 65 or those persons with severe disabilities of any age. Medicaid is a federal/state partnership program mainly for the poor, and of course, it turns out it’s the main source of coverage for people needing long-term care or nursing home care in the United States. And the block grant proposal that you mentioned, which would be a fixed per-capita amount of money going to the states, that is being talked about in terms of the Medicaid program. In Medicare, okay, so that’s… Medicaid is where the block grants are coming in, and the Republicans, in my view, are moving actually ahead now with this block granting imperative, and they’ve been wanting to do this for decades, and they’ve never been able to do it — that’s where Medicaid is going.
But Medicare, the Ryan plan, the Tom Price plan, those folks that are leading the Republican establishment in terms of health policy, they’re talking about voucherizing Medicare — giving everybody a fixed amount of money to then purchase health insurance on the private market. That’s a little bit different from the block granting, and the problem with that, with this voucherizing or “coupon care”, as it’s called, is that the rate of inflation of health care expenditures is expected to rise much faster than whatever per-capita voucher-coupon amount is set and, therefore, over a few years, individuals, seniors and others, would face the increasing costs of that care, the increasing burden of that care.
So it’s a little complicated, but I think it’s useful to sort out. We do have an assault on all these programs, Medicare, Medicaid and, I believe soon, Social Security, as well. So it’s useful to sort them out a little bit.
The study that we did was focused specifically on raising the age in Medicare per se, but I’m happy to answer your questions about the other programs, as well.
KIM BROWN: Well, as you mentioned, Mr. Price, who was just recently confirmed as Health and Human Services Secretary, is in favor of privatization of these social programs, and Peter, I mean, I really have to ask in terms of the cost, the current cost of Medicare and Medicaid and Social Security as they are, I mean, the Republicans repeatedly make this claim that these programs are taking up a large chunk of our national debt, so-called entitlement programs, and also that they will go bankrupt in the coming decades. Has your organization found this to be accurate?
DR. PETER ARNO: No. Absolutely not. None of these programs are going bankrupt at all. It’s a misnomer. In fact, you know, I think it’s worthwhile putting out this… a statement that Jared Bernstein made, I think either late yesterday or this morning, he put out a call to reporters to call policymakers to task for using these euphemistic terms over and over again, like “going bankrupt” or “cutting Social Security” or “cutting Medicare”, and they used the terms like “we’re going to fix it” instead of really what they mean is “cutting”. So it’s a way of disguising in almost Orwellian terms what they really plan on doing.
Now, the true answer on the healthcare side in terms of the fiscal viability in the long term has to do with how much money we spend on health care and what’s driving those costs up. And I think what one of the failures, if you will, of the Affordable Care Act, or at least in its earliest stages, is that it has not fully addressed this issue. And this issue is about prices — how much we are charged for doctor fees, hospitals, pharmaceuticals and medical equipment. That’s what’s the main driving force, and until we address the causes of those rises in prices and address those prices, the health care will remain a growing fiscal threat.
But it’s not going bankrupt. I mean, Medicare’s trust fund, yes, it’s going to get wound down because of these rising expenditures — and not just rising expenditures, but we have 10,000 Baby Boomers turning 65 every day for the next several years. So it’s more and more people aging into the system that’s helping to also drive the expenditures. So, to solve that problem, we need to address prices. High drug prices — we pay more than double for drug prices than any other developed country, more than double for physician prices than any other developed country.
So those are the issues that need to be addressed, and the sources of revenue are many. And those also need to be expanded, so that people… higher income individuals — and this was partially addressed under the Affordable Care Act where higher income and higher wealth individuals paid a little bit of a higher share towards supporting Medicare. I can go on, so you might want to ask a question.
KIM BROWN: Well, I think that’s a good start, Peter. We’re going to have to have you back on to get into this some more, because obviously this is all super-complicated, and maybe not as complicated as it’s made out to be, but this is something that is going to be on the table. This is a priority of this President and of this Congress, and they are not dragging their feet on this, although they are seemingly not as quick on the draw when it comes to their replacement solutions. But we will certainly be addressing this topic more going forward.
And for our listeners and our viewers, if you’re interested, we will have a link to the study on our site, right here below this interview. It’s from the National Committee to Preserve Social Security and Medicare. And the study, it analyzes the impact of raising Medicare’s eligibility age with and without the Affordable Care Act and the result is a huge increase in the number of uninsured.
We’ve been speaking with Dr. Peter Arno. He’s an economist and Senior Fellow and Director of Health Policy Research at the Political Economy Research Institute at the University of Massachusetts at Amherst. Dr. Arno, thanks a lot for your time and for your analysis today.
DR. PETER ARNO: Appreciate it. Thank you.
KIM BROWN: Oh, thank you. And thanks for checking out and watching The Real News Network.