Raise the Medicare Eligibility Age Right Now

Here is something Congress could do today, tomorrow or certainly as fast as they spent $1 trillion on various bailouts and stimulus packages over the past 6 months.

And it would save billions, if not trillions, of taxpayer dollars your children and grandchildren will not have to send to Washington over the next 50 years:

Equalize the eligibility age for Medicare with Social Security immediately at age 66 and then gradually raise the eligibility age by 2 months per year until it reaches age 70 by the year 2033.

The age increase might have to be more rapid, like 1 month per year, depending on the severity of this current economic crisis. The damage it has done might significantly impair our ability to reach balanced budgets and surpluses anytime soon in the near future to start to pay down the national debt again (as we did from 1998-2001). Every year we wait to do this is just another year that compounds the problem for our children and grandchildren.

The only people immediately affected by this change are the aging Baby Boomers who have not started retiring in massive numbers yet. Consider this one of our enduring ‘sacrifices’ for the good of the nation.

If you have been following this blog since inception, you would have already learned that the eligibility age to receive full Social Security benefits is now 66, not 65 as is commonly assumed. You also know that you can take early Social Security benefits at age 62, at a far lower rate, of course, but which is an age that needs to be escalated as well.

But Medicare has withstood any tinkering with its age eligibility and stayed at age 65, mostly due to the overpowering influence of the AARP and its mighty grip on the hearts and minds of over 39 million seniors who vote in every single election, primary and general, presidential and off-year congressional, it seems.

So you got to hand it to the AARP and the senior citizen coalition; they have played by the rules and won…and won big in terms of getting what they want out of Congress year after year.

But they have won by such huge margins that there will be literally nothing left in the current tax revenue cupboard to pay for the other programs we all want and need in about 15 years. Like National Defense.

Homeland Security. Environmental Protection. Space Travel. If the AARP has its way, every single dollar we need for those ‘discretionary’ programs will have to be borrowed from our children after 2024 or thereabouts. [1]

If you don’t think voting in every election makes a huge difference, look no further than the fact that close to 50% of the federal budget is soon going to be dedicated to two programs: Social Security and Medicare.

You won’t ever see 50% of the budget being dedicated to children’s issues, high school, education for college students or even assistance for young adults with families. Why? Because in the first case, children are not eligible to vote and in the last 3 cases, they are too lazy, misinformed or “too busy” to vote…working on Facebook, presumably or playing video games, I guess.

The federal budget is almost a perfect reflection of ‘who votes and who don’t’, or won’t, vote on a regular basis. And if you are not registered to vote and don’t vote in every election, you shouldn’t even be reading blogs like Telemachus because, quite frankly, in the eyes of your congressional representative and 2 U.S. Senators, you ‘just don’t count’.

I can’t tell you how many times someone called our congressional or senate office totally irate about some issue and when I asked them: “Are you registered to vote?”, they answered no. All I could tell them was: “Call us back when you are registered and then we’ll listen” and then hang up on them, politely, of course.

The magnitude of the savings that would accrue from raising the eligibility age for Medicare are simply enormous, because the rate of growth in spending for Medicare is about 5 times the annual growth rate in Social Security due to spiraling health care costs. There are no current budget estimates for immediately raising the Medicare age to 70 but consider this: by the year 2050, if the Medicare age has been raised to age 70 somewhere along the way, the savings to the federal budget would be 0.9% of GDP. That doesn’t sound like a lot until you consider that the GDP in 2050 might be between $35-$40 trillion; the national GDP is around $14 trillion today, even with this enormous recession.

That translates into close to a $400 BILLION savings in one year alone for the U.S. federal budget. For one single federal entitlement program for senior citizens. Not counting any other programs such as Social Security.

Multiply graduated savings like that per year from 2009 until then and you have a mess of savings on your hands. All money that will not have to be paid by your over-worked and over-taxed children and grandchildren for year after year after year.

And since you have probably already decided to work a couple of extra years any way due to the current economic crisis and the dent (fracture?) it has put in your retirement portfolio, you might as well stay on a company or individual plan for as long as you can afford it and go on Medicare a couple of years later than originally planned. We can not go on the current path that was laid down in 1965 with the passage of Medicare and never change the program’s structure.


[1] The AARP has succeeded in even insulating their programs from the routine annual review process by Congress by calling their programs “mandatory entitlement programs” as if they can never be changed by Congress. Every program in the federal budget should be included in the ‘on-budget’ budget and open to annual review by every successive Congress, as the Founders intended. Congress supposedly can not be ‘bound by the decisions of previous Congresses’ and removing the mandatory moniker from entitlement programs would be a step in the right direction.