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Medicare Must Grow Older To Survive

Matt Pressberg |
November 28, 2012 | 10:31 p.m. PST

Editor-at-Large

Democrats have dug in to defend Medicare at all costs. (SenRockefeller/Flickr)
Democrats have dug in to defend Medicare at all costs. (SenRockefeller/Flickr)
The big takeaway for Republicans from the election was that America is changing, and a winning electoral strategy for the future has to be based on the demographics of the future. Democrats should realize that building sustainable government programs for the future also depends on the same demographic realities.

In 1965, when Medicare was established, giving health coverage to Americans over 65 years of age, life expectancy in the United States was 70.21 years. Now it’s 78.49. Not only are Americans living longer under Medicare coverage, there are more of them on it as a proportion of the population.  As of the 1970 census, 10 percent of Americans were older than 65. Today, that group is at 13 percent and projected to hit 20 by 2040.

Medicare has become a future budget bomb, but it’s not because it’s outlived its usefulness as a program or as an idea. It’s simply because we’re outliving Medicare.

The solution is not to dismantle the program a la Paul Ryan’s voucher system. A single-payer system is critical for providing the comprehensive care required by many seniors, and aside from that, it’s something I believe in on principle and would like to see extended to more people. The fact that health care is tied to one’s employer is creepy at best, especially for anyone working for the Trump Organization.

To save Medicare, Democrats have to understand that this particular single-payer program, built to provide for the health needs of the oldest slice of Americans, cannot survive and provide significantly the same level of care if that slice is allowed to expand uncontrollably. Medicare is doing a great job of keeping seniors alive longer, which is in turn killing Medicare.

Social Security (which is solvent and should remain untouched in budget talks) kicked in at 65 for everyone born before 1937, but it’s been adjusted to where the normal retirement age is now 67 for those with post-1960 birthdates. This seems like a fair benchmark for Medicare. If 40 is the new 30 and 78.49 is the new 70.21, we can make 67 the new 65. As vibrant and active 66-year-old Bill Clinton would say, that’s just arithmetic.

Raising the qualifying age of Medicare is one of the rare issues that’s unpopular across the board and for obvious reasons. It's also the right thing to do. People want stuff, and they hate when the goalposts are moved. However, they are going to hate it more when the system gets overburdened and the quality of coverage declines. People don’t like to have to wait to get into a club, but overcrowding just makes it a bad experience for everyone there. It only makes sense to let new people in when enough people leave.

Medicare is a health care program for senior citizens. The definition of a senior citizen in America has materially changed from what it was in 1965 as the average life cycle has been extended. Those who think holding the eligibility age at 65 forever and ever makes sense given the shifting demographics are living in fantasyland. This is math they do as Democrats to make themselves feel better.

We can make politically courageous, prudent and overdue adjustments to the qualifying age and use those savings to not only bolster Medicare, but improve health care for people yet to qualify.

One major reason Medicare is so expensive is the fact that many Americans hit 65 with numerous lingering maladies that have gone undertreated for years (often due to the prohibitive cost of insurance for many working adults) and now they are getting the full repair work done. If the president and Democrats use both actual cost savings and political capital to push for more resources to help Americans take care of health problems at an earlier stage, many of the 67-year-olds qualifying for Improved Medicare might be better off than the 65-year-olds getting Current Medicare, providing some unexpected bonus savings.

Physical therapy for an active trucker or laborer now might prevent debilitating and costly back surgeries later. Using government resources to strongly encourage (including the use of financial incentives) young people to eat better and exercise now will prevent us from paying for many obesity-related procedures down the road.

If we start the clock later, we can preserve and enhance Medicare benefits while saving money (more with an overdue push for negotiated prescription drug prices) and most importantly, the service model. It’s not about reducing the scope of Medicare—it’s just about aligning its timeline with that of Americans.

This is almost the progressive version of a Grover Norquist situation. Republicans fight tooth and nail against raising taxes on the rich in spite of financial data which makes an extremely strong argument in favor of doing just that. Democrats won’t increase the qualifying age for Medicare in spite of demographic data which does the same.

Barack Obama was a big winner on November 6. Math was a bigger one. The fiscal cliff only requires a quick fix for now, but the president and his team should approach long-term budget talks with this lesson in mind.

They should defer to math and concede the sensibility of raising the qualifying age for Medicare, and defer to the same math to argue for things like means testing for the Naples, Fla. crowd and more aggressive negotiation of the price of prescription drugs. They should also point to the simple math of record corporate profits and hedge fund guys occupying all the rich lists to make the case for bumping capital gains and ending the carried interest tax break, which will finally get the Wall Street crowd closer to paying civilized world tax rates and paying their fair share. If President Obama will stand up to MSNBC on entitlements, Republicans should be forced to betray the Wall Street Journal and yacht brokers on investment income.

Progressive folk hero Alan Grayson, who was just elected to the second term of a Grover Cleveland sandwich, once stood on the House floor and described the Republican health care plan as “die quickly.” Let’s not have this be the Democratic plan to control entitlement spending. Raising the qualifying age of Medicare is not austerity. It’s arithmetic.

Read more of Neon Tommy's coverage of the fiscal cliff here.

Reach Editor-at-Large Matt Pressberg here.



 

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