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The CBO Just Shredded The Idea Of Raising The Medicare Eligibility Age

Oct 25, 2013, 20:02 IST

The Congressional Budget Office dramatically reduced its projection of the deficit savings that would come from raising the Medicare eligibility age to 67, perhaps providing even less of an incentive for lawmakers to consider what was already a politically risky option.

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The nonpartisan CBO now estimates that raising the eligibility age would reduce the federal budget deficit by just $19 billion over 10 years. That's down from $113 billion it projected in savings last year.

During 2011 deficit-reduction talks between President Barack Obama and House Speaker John Boehner, Obama reportedly agreed to gradually increase the eligibility age to 67 over a two-decade period. That was before talks between the two parties broke down.

The CBO report also comes as ahead of a House-Senate budget conference that is scheduled to begin next Wednesday.

The reasoning for the CBO's massive shift is pretty simple. Most 65- and 66-year-olds who enroll in Medicare are healthier than those already enrolled at 65 because of disability. It also projects that these 65- and 66-year-olds will have greater access to employer coverage. Both of these factors mean that the beneficiaries will cost the federal government substantially less money.

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"For most of those workers, employment-based health insurance is the primary source of coverage, and Medicare is a secondary payer - meaning that Medicare's payments are limited to the cost-sharing obligations that beneficiaries face under their employment-based health insurance policies," the CBO wrote in its analysis.

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