Raising the eligibility age for Medicare may seem like a great way to save money, but one study says it may not save the government much money.
That is because the federal government and states will be forced to pay more for dual eligibles, people who are on both Medicare and Medicaid, according to a new study from the left-leaning think tank Urban Institute.
Social Security’s retirement age is going to be 67 years old by 2027, and some have proposed to do the same for Medicare, the healthcare program for seniors. For instance, New Jersey Gov. Chris Christie suggested raising the Medicare age earlier this year.
But the population of dual-eligibility beneficiaries would be reduced, Urban said.
If the Medicare age is raised to 70 years old, then a 69-year-old on both Medicare and Medicaid would no longer get Medicare. That senior still will qualify for Medicaid coverage for low-income residents, so he will still get access to medical care.
But the cost for providing that care only shifts from one government program to another, Urban said.
Some 277,000 non-disabled dual eligible people would be affected if the eligibility age rises to 67 and 915,000 if it increases to 70, the study noted.
A higher eligibility age to 67 also would increase federal Medicaid liability costs by $766 million and nearly $4 billion if it goes to 70, the study said.
“We estimate that nearly all the costs saved by Medicare for this population would be shifted to other government payers,” Urban wrote.
States would see their share of Medicaid funding increase by $369 million if the eligibility goes up to 67 and $1.9 billion if it rises to age 70.
But the study does not go into the cost savings for the general Medicare population.
More than 66 million people are eligible for Medicaid and nearly 1.5 million people are between the ages of 65 and 69.
Overall, Medicaid bears a sizable responsibility for seniors, mainly through long-term care such as reimbursement for nursing homes.
Beneficiaries between 65 and 66 years old represent 63 percent of Medicaid’s total spending, the study said. For the larger group between 67 and 69 years old the expenditures increase significantly, the study added.
