Raising The Medicare Age Has Insurance Companies Saying, “Whoa”

Filed in National by on December 6, 2012

Like we couldn’t see this coming.

The possibility that Democratic and Republican leaders will agree to slowly increase the Medicare eligibility age to 67 is creating strange bedfellows: liberals — both in and out of Congress — and the health insurance industry.

A well-placed industry source tells TPM insurers haven’t taken a public position but are skeptical of the idea, particularly those insurers that don’t cover elderly patients via Medicare Advantage, supplemental Medigap coverage or prescription drug coverage.

Skeptical?  Why would insurance companies be skeptical when this move would expand their customer pool?  (Yeah, I know the answer.)

The reason: hiking the Medicare eligibility age would throw seniors aged 65 and 66 off Medicare and into the private market, forcing insurers, who will soon be required to cover all consumers regardless of health status, to care for a sicker, more expensive crop of patients.

“The risk pool issue is important,” the insurance industry source said. “[I]f you add more older and sicker people to the pool, that’s definitely going to have any impact on premiums.”

This is why I become so frustrated with all the talk of age raising and vouchers.  It simply isn’t reality based, and the reality is that health insurers do not want people 65 and over.  If anything we should be lowering the age for Medicare – and should keep lowering it until we have Medicare for all.

Starting in 2014, the Affordable Care Act will forbid insurers from turning people away or charging them different prices on the basis of age or health status. So for the first time in about half a century, they’d be chiefly responsible for patients aged 65 and 66. The specter of rising costs worries insurers, who see the ongoing spiral as an existential threat to their industry.

An existential threat to their industry?  Their industry is about to go the way of the horse and buggy.  Oh, it’s going to be a long and painful process, but they’ll be gone at the end of it.  Their business model is terrible.  Any other company offering such a crappy product would have been forced out of the “free market” decades ago.  I can’t think of another business in which you give them your money only for them to deny you their product.  It would be like going into Macy’s, handing the cashier 50.00 and walking out with an empty bag.

In short, raising the Medicare eligibility age would save the government money by shifting costs to the less cost-effective private market — that is, businesses and consumers who buy coverage and the insurers who would have to provide it. And they won’t necessarily take that reform lying down.

Of course, they’ll fight this.  Actually insuring sick people isn’t part of their business model – it’s why we have Medicare.  Insurance Companies dumped old people long ago.  Seriously, how do you expect them to make a profit if they actually have to supply the product they’re selling?

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A stay-at-home mom with an obsession for National politics.

Comments (5)

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  1. socialistic ben says:

    It seems like going through with this would just speed up the move toward single payer.
    I’ll make myself look like an idiot again. If we say everyone currently under 30 has to wait until they are 67 instead of 65, (my youthful ignorance still doesn’t see that much of a difference between 35 and 37 years in the future) the health insurance cartel industry would be long gone by the time us folks would be effected and there wouldnt even be such a thing as “medicare”. Just “national health care for everyone”

  2. cassandra_m says:

    Raising the Medicare eligibility age just shifts costs, it doesn’t control costs. This is the lazy way of addressing the problem which is why you are seeing so much bipartisan stupidity on this. Because there is apparently no one in Congress who doesn’t think that we just won’t notice the cost shifting.

    One of the things that might help Medicare in the long term is to let people buy into it. This is a potential public option that would let younger people into the Medicare risk pool.

  3. puck says:

    “It seems like going through with this would just speed up the move toward single payer.”

    It occurs to me this is sort of like the liberal version of starve-the-beast: Deny so much health care that we just HAVE to rise up and implement single-payer.

  4. socialistic ben says:

    i feel like Grover Norquist’s approach to government should be taken against the health insurance system. keep doing things that weaken it and weaken it until it is so small and ineffective we can ….. you know.

  5. Joanne Christian says:

    I was just polled on this by AARP yesterday. It is an acknowledged cost shift, but the consumer is sure picking up more of the tab w/ co-pays and deductibles, if they can stay on employee/private insurance for those 2 years. Actuarially, Medicare will save a ton of front end dollars for end of life care expended in those 2 years. 65-67 is considered pretty young and viable in health care decisions, so choices are made affording every opportunity. The reality being how many people will avoid healthcare in that 2 year mark “because of the deductible etc.”. And then you have the limits, networks, etc., we all deal with private insurance. I don’t care if they up the eligibility age, but w/ only 60% of employers now providing health coverage–nothing can be done unless insurance and employers weigh in on extending contracts, or else we see a huge influx to Medicaid, awaiting Medicare eligibility. And that’s when it gets real expensive to government.