No Medicare until 67?

Some have proposed delaying eligibility for Medicare for two years as a way to shore up its finances. Would that really help?

By MSN Money Partner Jun 16, 2011 6:25PM

This postcomes fromGlenn Ruffenachat partner site SmartMoney.


Is raising the age of eligibility for Medicare to 67 from 65 an effective way to help improve the program's finances? And would you be able to wait two additional years for coverage?


That's just one of the many proposals being discussed in Washington as part of the debate about the future of the health insurance program. There's certainly precedent for changing the rules: The age when individuals qualify for full retirement benefits from Social Security is climbing gradually to 67 after decades of standing at 65.


On its face, changing Medicare eligibility to age 67 would likely reduce growth in the program's spending and, ideally, yield significant savings in Washington. At the same time, the change could encourage some employees to delay retirement and work beyond age 65. That, in turn, would increase payroll taxes and general revenues and bolster the Medicare and Social Security trust funds.


But a recent study (.pdf file) from the Kaiser Family Foundation, a nonprofit group in Menlo Park, Calif., indicates that the savings could be much smaller than anticipated -- and that the change could shift significant costs onto the shoulders of adults ages 65 and 66 as well as other government programs. Post continues after video.

No easy choices

Indeed, the findings illustrate the "tough policy choices that lie ahead when Washington gets serious about reducing the federal deficit," says Tricia Neuman, vice president at Kaiser who heads the organization's research into proposed changes to Medicare.


The Kaiser study begins by assuming both full implementation of the 2010 health reform law and the higher eligibility age in 2014. As such, gross federal savings in 2014 would total about $31.1 billion. Net savings, though, would total only about one-quarter of that figure, or about $7.6 billion. That's because Uncle Sam would end up spending more money on people covered by Medicaid ($8.9 billion) and on federal premium and cost-sharing subsidies ($7.5 billion) that are part of health care reform.


At the same time, the federal government would end up forgoing $7 billion in Medicare premiums from individuals ages 65 and 66 who wouldn't be enrolled in the program.

The study also found that health care costs for employers would jump about $4.5 billion, if corporate medical plans -- rather than Medicare -- became the primary insurance coverage for 65- and 66-year-olds.


Workers, of course, also would feel the pinch. Kaiser estimates that -- among the 5 million people ages 65 and 66 who would initially be affected by the change -- about 75% would end up spending an average of $2,400 more for health care in 2014 than they would with coverage under Medicare.


In all, increasing the eligibility age to 67, Kaiser estimates, would result in a net increase of $5.6 billion in out-of-pocket costs for individuals who otherwise would have been covered by Medicare.


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Jun 17, 2011 7:31AM
I paid for these benefits for almost 40 years. How about just not giving them to those that did not pay for them.. Starting with all the Illegal's...
Jun 17, 2011 8:58AM

Since when do you pay into something over 40 years of your working life and it becomes an

"entitlement" that they can change "because they want to" and borrow from it over the years and then say its the publics fault?????? HEllo america - wake up - entitlements???? thats what the expense accounts , salaries of the reps and congressman - their exclusive gyms, their "benefit" that we pay for are - if we are going to be cut, what about them?   Term limits, lesser salaries - required number of hours to work - no more hiring government employees that get COL increases, but No raises when private employees of companies get nothing but increases in the COL and no breaks or raises - WAKE UP AMERICA - CLEAN OUT CONGRESS AND THE HOUSE.

Jun 17, 2011 8:31AM

Social Security is a retirement program which was paid into for the years I worked just like a 401K or and IRA, I am entitled to collect upon retirement, which was set up when I started working nearly 40 years ago to be age 65.  It is not fair to me or anyone else that the government changes the date because it couldn't handle it's finances properly.  Not my fault.  I did not fault on my payments into the program so why should I have to pay for it.  For the same reasons I am entitled to draw on Medicare which I also contributed to.  This a travesty.

Jun 17, 2011 8:29AM
The big problem with Medicare and SS is that for decades the government has been borrowing from it instead of treating it like the separate enity it was meant to be.

If you look at your pay check, you will see that taxes for both Medicare and SS are separate from Fed taxes. There is a reason for this but Washington keeps dipping into that fund. Thats why it going insolvent.

Best thing to do is pass a law to stop taking money out of it, keep it separate from any debt or government deficit and if needed, raise taxes on a TEMP basis to refund it.

If your company stated dipping into your retirement funds and then tried to change it rules because they took too much, they would be in jail.

Jun 17, 2011 7:29AM
Replacement of those who vote for this bill,will shortly follow. How about no benefits for our Politicians, Like better than average Health Care and Pensions after serving one term. And being able to give yourselves raises..
Jun 17, 2011 8:23AM
Maybe those who are dipping into Social Security and Medicare should have to live off of it as well.  But they don't.  They give themselves raises and leave those of us paying our taxes hung out to dry.  They should have to live off of Medicare instead.  Then it would be a much better program.  I agree with whoever said we need to quit sending money overseas and start helping our own.  It is sad when those who pay taxes can't get the help they need, yet those who have never worked a day in their lives can get total help.  All I can say is at least I can be proud top have done it on my own.  Because wondering about my retirement THAT I HAVE PAID INTO doesn't make me proud.  We won't even get any of our hard earned dollars paid into Social Security at this rate.  We have no choice in how it is spent.  They should start spending their own money, but that will never happen.  So sad, the state of it all. 
Jun 17, 2011 7:55AM
It doesn't mater If they raise it to a hundred as long as the government have there sticky hands in it, it will always be mismanaged, they have no integrity what so ever taking money from their elders and off the backs of hard working Americans VOTE THEM OUTSmile
Jun 17, 2011 7:56AM
How about our politicians quit sending Billions over to foreign countries and take care of this problem without stealing it from the people here.The cost of all these wars is crazy. I've worked and paid in for over 40 years now. From the looks  of it, our government wants you to pay in, but hurry up and die before you can draw any of it.
Jun 17, 2011 8:52AM
   I am going to turn 70 at this years end.   My father and my brother  collected 2 years on their social security before dying.   Most of the people my age are gone or dying.   There is something wrong in the way this accounting is done.   I firmly believe that figures don't lie, but liars can figure.  I suspect that every time one of these articles appear and the phrase "entitlements" is in the opening statement this occurs.  Think about it folks.   The neo cons gave the wealthiest Americans the largest tax breaks and the rest got pacified with a 500 dollar check from the Bush administration.   Billions from Iraq in cash Daryl Issa cryling, no Bonner tearing up....they ignore this and chomp down on our Medicare and Social Security.....Who cried when Wall Street raped our retirement account funds....Did they even agree to regulate the gamblers...Hell No......Repeat "Hell NO"....lets hear from you Bonner.....say it.... 
Jun 17, 2011 12:03PM

Congressmen and congressional staff should not be guarenteed gold-plated health benefits while the rest of us are having our medicare delayed until 67 or privatized.  We need SHARED sacrifice.  Congress should be exclusively dependant upon the same retirement and health benefits the rest of us recieve, so that when they propose cuts, they are impacted by the cuts they propose.  We must END congressional participation in the FEHBP, so that congressmen & women depend on Medicare just like the rest of us.

Jun 17, 2011 12:47PM

Congress and Senators should pay for own Medical benefits, instead of having life coverage at Public Expense they make enough money, take those perks away and give it to the needy. Stop the Junk mail being sent out by elected officials and let  them use electronic media, just a few ways that would save money, so the government does not have to borrow money from social security and cut the medicaid for the seniors and make them suffer more that they have to choose between Food and Medicine. Companies cutting benefits and dont  want to hire older people how do you expect these people to afford any thing.

Jun 17, 2011 11:48AM
How about not spending any more of my money in a foreign country????
Jun 17, 2011 7:47AM

This is shameful, the government forces people to pay into this, then says "Oops, not enough money for you!" Sure you can fund your own retirement plan, but who knows if the finds will still be there after all these corporate rip offs?

Not to mention all the bums on disability! No, not all people are on disability are bums. However people who have never paid into this program, should NOT be drawing funds from it. Do you know that almost anyone with who has a doctor and lawyer, can get disability, whether they are disabled or not?

I know a family of bums that live off social security, they receive as much as if they worked for minimum wage, plus free healthcare. (Free to them, paid for by taxpayers.) So no, they are not wealthy, but they are satisfied because they don't have to work. (yet, many do part-time or occasionally... for "under the table" wages.)

If the social security organization had people checking up on these "bums" and booting them off the program it would more than pay for their salaries.

Jun 17, 2011 10:48AM

The U.S. will give an estimated $26 billion in foreign aid in 2008—70% more than when President George W. Bush took office (the figure doesn’t include funds related to the wars in Iraq and Afghanistan). More than 150 countries get financial assistance from the U.S. How about we assist  our own people first and  you put back the money that  has been stolen from social security and medicare  and we could retire at 55 !!!!!!!!!!!!!!!!!!!!!!!!!!!



Jun 17, 2011 9:53AM
Why doesn't the federal government pay back all that was borrowed from S/S and then there would be plenty instead of sending more money to Moslem countries that will be wasted and put this country right where you see it BROKE.
Jun 17, 2011 8:37AM
you really dont think that a bunch of grey hairs give a rats asses about anyone how about cutting there pay (congressman senators)did you know that they got there 5% pay raise yet ss did not get there pay raise and they play it as it is LAW they had to get there raise the ss raise is ALSO LAW but you did not get it thieves will be thieves and now that thing are getting bad there are setting up there retirement so they can life there thieving lives on YOUR monoy i say fire the whole lot and start over it cant get any worse
Jun 17, 2011 10:39AM
I am waiting to retire (having worked since age 14) until 65 because I will have NO insurance otherwise.  I CANNOT even fathom the thought of having to work 2 more years!!!  How about doing something about the leeches that are on disability benefits instead - you know, the people who want their kids identified with a disability like an attention disorder (which many people have) in order to collect benefits... or the kid with asthma who gets SSI (well, duh, I have asthma too - amongst other illnesses and STILL have worked FULL TIME).  How about the illegals or those who cannot speak English that get social security benefits....????  It is about time the govt. stops trying to squeeze us little folks who have actually WORKED for a living in order to  be able to retire (with very little, BTW, in terms of cost of living today).  ENOUGH ALREADY!!!
Jun 17, 2011 10:24AM

I worked in social services for over thirty years, and I've seen firsthand where major cuts and savings could be made.  The general public has no idea how much is being given out as benefits to people who are physically and mentally able to be employed. It's just an incredible drain.  Anyone who can't take care of themselves deserves to be helped, but no one else.  Why take benefits from someone who has gotten up and gone to work every day for decades to offset the waste? Politically, it's easier and more popular to take from the working class and leave the others alone. We have a system where fairness and common sense are a thing of the past.




Jun 17, 2011 1:15PM

Cut the military budget.  Stop fighting in countries that don't want us (remember Viet Nam).  Bring our troops home and have them protect "our home".  They can even spend money on us, like they do in Afghanistan, so that we will like the U.S.


Have the politicians pay for their health plans, their gym memberships and their vacations.  They say that these are all earned because they are working for you the voting public.  They are just humble public servants.  Since when do servants get these type of benefits?  Also, from the looks of our country they have not been serving the voting public to the best of their ability.  Maybe it is their leader?


Cut foreign aid to most foreign countries instead of cutting Social Security and Medicaid.  It is time for our country to take care of it's own.


Also, establish term limits for congress.  The "good ole boy/girl clubs" need to be slowed down.  In 2008, Obama was preaching "Yes we Can!" and now he has proven that "No we can't"  We are so worried about our overseas friends that we don't even look at the terrible shape we are putting our own country in.  Shame on our elected officials, get them out of power and put a new bunch in.  Then keep doing that until they get the message and we finally get the right bunch in.

Jun 17, 2011 12:19PM
Just like the government. Balance the budget on the back of the people that have paid taxes all of their working life. Only to be penalized for refusing to die before we can collect what is rightfully ours from Social Security and Medicare.
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