Ezra Klein reported a few days ago that the Medicare eligibility age is part of the fiscal cliff negotiations. He follows up today.
Progressives have reacted to the prospect of an increase in the Medicare eligibility age with fury. If that policy is included in the final agreement, then the White House is going to have to be able to persuade its base that the trophy of an increased Medicare eligibility age really did forestall much worse cuts in programs, and really did unlock more revenues and more stimulus than would’ve been available otherwise. The politics of that explanation are difficult, though, as it’s tough to sell a deal in terms of what wasn’t in it.
If we are going to raise the age, Ezra suggests "graduated eligibility," which would grant poorer Americans Medicare access at 65 but not give Medicare to richer Americans until later ages. Waldman's objection to raising the age for anyone:
Medicare is the least expensive way to insure these people. Or anybody, for that matter. 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.
Chait is taking flak from the left for being open to raising the eligibility age. His argument:
Many of my liberal wonk friends have been making the case against raising the Medicare retirement age — see Sarah Kliff, Matthew Yglesias, and Jonathan Cohn. Their basic case is that raising the Medicare retirement age is a really stupid way to save money because it just forces people to stop buying health care through Medicare, which is relatively cheap, and start buying it through private insurance, which costs way more. They’re all totally right about this. Still, when the question comes to what concessions the Democrats are going to have to accept, rather than what policy makes the most sense, raising the Medicare age seems like a sensible bone to throw the right. For one thing, it has weirdly disproportionate symbolic power, both among Republicans in Congress and establishmentarian fiscal scolds.
Michael D. Tanner, who supports cuts to Medicare, notes that raising the Medicare age won't fix our fiscal problems by itself:
Proposals such as raising the eligibility age to 67 reduce spending by less than most people realize in the short term (approximately $150 billion over ten years, in this case), but do lock in substantial savings over the longer term. Still, Republican plans fall far short of the restructuring envisioned under, say, the Ryan budget. That may simply be facing up to political reality, but it won't come close to making the program solvent.
Suderman is on the same page:
Raising the retirement age is a good idea, but it wouldn't save that much money. The Congressional Budget Office says it would save about $125 billion over the next decade. That's something, but in the context of $1 trillion deficits and $16 trillion and debt, it's hardly a debt-reduction game changer. Medicare itself is on track to spend roughly $1 trillion a year by the next decade. Yes, there would be bigger savings down the road, but even then the impact of raising Medicare eligibility age is fairly limited because the highest cost beneficiaries are the oldest. Raising the retirement sounds drastic and therefore serious to some because it affects a lot of people over the long term. But fiscally, removing the youngest and healthiest age cohort from the system is small potatoes, and probably shouldn't qualify as a "truly real entitlement reform."
And Jonathan Cohn suggests an alternative:
Obama might want to offer a different concession: an adjustment to the formula for Social Security benefits. Although Obama has not officially put forward this possibility during this round of negotiations, he has previously indicated a willingness to support it. And, unlike an increase in the Medicare age, it actually has policy merit.
The Dish 