How Many People Will Die if We Raise the Medicare Age to 67?

By Matt Stoller, a fellow at the Roosevelt Institute. You can follow him at http://www.twitter.com/matthewstoller.

In September, 2009, Rep. Alan Grayson got on the floor of the House of Representatives and said that the Republican health care plan – leaving 44 million uninsured – was killing people. It was a famous speech, in which he said that the Republican health care plan consists of two steps. One, don’t get sick. Two, if you do get sick, die quickly. This speech threw the political world into a temporary tizzy, because Grayson actually made the point that health care is about living and dying, not making charts look nicer. The speech, while rhetorically zesty, was data-driven. It relied on this study from Harvard Medical School researchers showing that the death rate for those who are uninsured is 40% higher than those who have insurance (controlling for socioeconomic factors).

So with that in mind, it’s worth asking the question – how many people will die if the Medicare age is increased to 67? To answer this question, we have to make assumptions about other parts of the health care system going forward. Will Obamacare be implemented fully? Will all states accept expanded Medicaid? Will income inequality to continue to increase and make it harder to pay for out of pocket expenses? Will there be tweaks to Medicare or Medicaid in the fiscal cliff or future fiscal cliff-like scenarios?

Even so, we can and should start to understand what the human death toll might be if we increase the retirement age to 67. If the age goes up, there will be 5 million 65 and 66 year olds who can’t get Medicare for at least a year (7 million for at least a month), and will have to rely on some other system for health care payments. Kaiser has a study out on what would happen to Medicare if the eligibility age goes to 67, but with the assumption that Obamacare kicks in and covers all 66 and 67 year olds with a mixture of employer/retiree insurance, Medicaid, or insurance through exchanges. We can assume, however, that some of these seniors will be uninsured. The Congressional Budget Office says that this number, by 2020, will be 5% (see page 6). The Center for Budget and Policy Priorities, and fairly centrist think tank which supports cutting Social Security, provides the rationale.

In reality, however, many of these 65- and 66-year-olds are likely to end up uninsured. Some of those eligible for premium credits in the exchanges would not enroll because they would regard the required premium contribution as too high; people with incomes between 300 and 400 percent of the poverty level (about $34,500 to $46,000 for an individual in 2014) will have to pay 9.5 percent of their income — $3,300 to $4,400 — for exchange coverage. Even some of those eligible for more generous premium credits or for Medicaid would likely fail to obtain coverage; participation in means-tested programs like Medicaid falls far short of that in social insurance programs like Medicare, in part because of the difficulties navigating the application process.