Last night, President Obama delivered the State of the Union Address to Americans. I would like to call out the talking points related to Medicare reform. In his address, the President stated:
“On Medicare, I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission. Already, the Affordable Care Act is helping to slow the growth of health care costs. The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. We’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital – they should be based on the quality of care that our seniors receive. And I am open to additional reforms from both parties, so long as they don’t violate the guarantee of a secure retirement. Our government shouldn’t make promises we cannot keep – but we must keep the promises we’ve already made.”
Prior to the State of the Union Address, the Washington Post reported on Medicare eligibility age in the article below.
In 2011 and 2012, the White House was open to raising the Medicare eligibility age from 65 to 67. They were open to this for two main reasons.
Second, Washington in general, and Republicans in particular, get weirdly excited about changing retirement ages, and so changing the eligibility age gave you more political bang for your deficit-reduction buck than any similarly sized policy move.
On Monday, however, White House Press Secretary Jay Carney declared that raising the Medicare age was off the table.
Q: Jay, yes, can you just clarify for me very clearly — is the president open to raising the eligibility age for Medicare?
Q: Absolutely not?
CARNEY: The president has made clear that we don’t believe that that’s the right policy to take. The president has made clear in the proposals he put forward to John Boehner, that John Boehner walked away from late last year, that he’s willing to make tough choices with regards to entitlement reform.
Q: But not that choice?
CARNEY: That’s correct.
So, what happened?
First, the cutoff for Medicare eligibility age has been under consideration repeatedly, giving health-care experts more time to run the numbers and parse their results. Their conclusion, essentially, was that raising the Medicare eligibility age is counterproductive: It cuts the deficit but raises national health spending as it moves seniors to more expensive insurance options. Some in the White House are simply more skeptical of the policy than they were two years ago.
Second, the potential big deals that led the White House to mull raising the Medicare eligibility age are no longer available. The eligibility age, at least in 2012, was meant to be the sweetener that closed The Big Deal — the one with well over a trillion dollars in revenue. The one where the White House could walk out and say they solved the deficit problem, done, finished, time to move on — oh, and here’s some new stimulus, too. But they could never quite get House Speaker John Boehner to take that deal. And during the fiscal cliff negotiations, they got more than $600 billion in tax revenue without giving up any more spending cuts.
The White House wants more revenues, and they want to get them through tax reform. But they’re not going to get $1 trillion in newer revenues. They’re hoping, at best, for another $600 billion or so. But that’s not enough for the administration to take the hit on the Medicare eligibility age. So they’re making their base happy and taking it off the table.
Does that mean it’s really off the table? Well, if Boehner went to the White House tomorrow and offered $1 trillion in new revenues, half of which would come via a carbon tax, in return for Medicare eligibility, I’m pretty certain the White House would hear him out. But the White House is pretty sure Boehner’s not going to offer that deal.
From the Washington Post article Posted by Ezra Klein on February 11, 2013