The United States hit its debt ceiling of $31.4 trillion Thursday. As a result,
Republicans
and
Democrats
are jousting over how to raise the federal government’s borrowing limit.
Democrats have insisted on raising the debt ceiling without any conditions. Republicans, meanwhile, are looking to cut federal spending in exchange for any increase in the debt limit.
Some have suggested
raising Medicare’s eligibility age as a potential reform.
That’s reasonable.
The country’s demographics have changed drastically since President Lyndon B. Johnson signed Medicare into law in 1965. In 1965, U.S. life expectancy at birth was just
70 years
. In 2019 — before COVID-19 took life expectancy to its
lowest level
in nearly three decades — the average person could expect to live until age 79. People who make it to age 65 can expect to live even longer. According to
data
from the Organization for Economic Co-operation and Development, life expectancy at 65 is an additional 17 years for men and 19.8 years for women.
There are also many more seniors today due to the aging of the baby boomer generation. In 1965, individuals over age 65 accounted for
10% of the total
population. Now, they account for
17% of U.S. citizens
. That share is growing. Medicare, which kicks in at age 65, is now covering many more seniors for much longer periods of time.
Unsurprisingly, costs have skyrocketed. In 1970, Medicare spending made up just
3.5% of federal outlays
. Today,
one in every 10 dollars
the government spends goes toward the program. At the same time, there are relatively fewer working people paying Medicare taxes — a crucial source of funding for the entitlement. While there were 4.6 working people for each Medicare beneficiary in 1966, that number
fell to just 3.2 in 2017
.
Because of these demographic shifts, Medicare’s Part A hospital insurance trust fund is expected to become
insolvent by 2028
. Raising the program’s eligibility age would relieve these financial pressures and preserve the program for seniors for years to come. The Congressional Budget Office estimates that raising the eligibility age by just two years to 67 would slash federal deficits by
up to $22 billion
.
People are living longer than they did nearly 60 years ago when Medicare was created. Medicare’s eligibility age should reflect that shift, especially as the nation slides deeper into debt.
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Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is
False Premise, False Promise: The Disastrous Reality of Medicare for All
(Encounter 2020). Follow her on Twitter @sallypipes.
