One idea that the deficit hawks like is raising the eligibility age for Medicare. During the 4 month farce to raise the debt ceiling Obama himself had at one point suggested he might be open to discussing this-though some like Lawrence O'Donnell believed it was a negotiating tactic as well.
In any case the benefits from doing so may not be quite what we have been led to believe they would be. Republican Thomas Coburn relishes the idea and lectures that older Americans need to learn to sacrifice and settle for less:
"Sen. Tom Coburn (R-Okla.), who supports the age increase, acknowledges it may require “some sacrifices of older Americans.” But he said tough choices “are necessary for our country to survive.”
“The average couple pays in [to Medicare] about $110,000 and takes out $350,000,” Coburn said. “Everyone can see that doesn’t work.”
To be sure, the Congressional Budget Office estimates that the cost savings in such a move would be 124.8 billion between 2014 and 2021. However a study by the Kaiser Foundation shows that much of the savings of the plan would be eaten up by its consequences.
"Kaiser found that with the new health care law in place, gross savings would be $31.1 billion — but net savings would be one-sixth of that, about $5.7 billion in 2014. That reflects the higher costs of subsidizing some of the recipients in the exchanges or covering them under Medicaid, as well as other cost shifts. Seven million people would be affected, and costs would shift to them and their employers, and to state governments through Medicaid."
Read more:
http://www.politico.com/news/stories/1111/68339_Page2.html#ixzz1dmzc9WA4 "And the 67-and-older Medicare recipients could see their costs increase, because the somewhat younger and healthier 65- and 66-year-olds would not be spreading the risk within Medicare."
"“If you remove the healthiest, youngest and lowest-cost seniors [from Medicare], the remaining group is a little bit older on average, a little bit sicker on average, so premiums would rise,” Neuman said. “Likewise, the study finds that young people with coverage would also see premiums rise, a result of bringing older people into that risk pool.”
So while that figure we talked about above of 124.8 billion might sound impressive that is the gross savings not the net savings which are what matters. Net savings will be less than 21 billion over 8 years. Then you have to-or should-factor in the human costs of many seniors seeing their costs increase and their quality of care worsen as it inevitably will being forced onto the state plans, etc. After all it makes no economic sense to have a program like Medicare and then not fund it properly in order save money. If it's not doing its stated purpose properly even what is being spent is wasted.
The question should be is whether 20 billion over eight years-that is to say 2.5 billion per year is worth essentially worsening the health care of many millions of Americans.
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