Let's LOWER, NOT RAISE Medicare Age
Last edited Fri Nov 30, 2012, 01:07 AM - Edit history (1)
Even though raising the Medicare retirement age is both deeply unpopular with voters and a terrible policy that saves the federal government only a modest amount of money, it is still treated by the Washington media as an idea to be seriously considered. During what little TV news I’ve watched in the past week, I have seen multiple elected Democrats asked about it. If we are going to be discussing changing Medicare eligibility age to reduce the deficit what we should be talking about is lowering it.
The CBO has previously stated that offering a public option partially based on Medicare rate to everyone in the new Affordable Care Act exchanges would save roughly $15 billion a year. This means if we were to only allow adults between, say, the ages 50-65 on the exchange to effectively “buy into Medicare early,” it should produce smaller but still real savings for the federal government.
http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/116xx/doc11689/stark_letter-hr_5808-07-22.pdf
What makes an early Medicare buy-in a good deficit reduction idea is that it is also just good policy. Unlike raising the Medicare retirement age, which would force millions of regular Americans to pay more for health care, creating an early Medicare buy-in would save both the government and regular people money. Politically, an early Medicare buy-in is also radically more popular with voters.
Of course, it is only the unpopular ideas that make regular people worse off that are considered serious in this current debate. The “deficit debate” really isn’t about reducing government spending or making it more efficient.
It is sacrifice in the most traditional sense of the word. There seems to be a belief among our leaders and top media organizations that if we do the fiscal equivalent of throwing enough old people into a volcano, the market gods will finally show us favor with a bountiful harvest.
http://fdlaction.firedoglake.com/2012/11/29/how-about-lowering-medicares-retirement-age/
BusinessInsider:
GALBRAITH: Here's Why We Should LOWER The Retirement Age
Last night, Goldman Sachs CEO Lloyd Blankfein came out of the CEO meeting with President Obama and said that the President's plan to avert the fiscal cliff was "very credible." It's still not clear what mix of spending cuts and tax hikes Obama is focusing on, but we do know that Blankfein, like many other CEOs, thinks that an increase in the retirement age is something that we should be shooting for as a way to alleviate the perceived entitlement crisis.
This is actually common conventional wisdom (we're living longer, we have a debt problem, so let's modestly increase the retirement age), but there are some holdouts who disagree. Economist James K. Galbraith of the University of Texas made the argument in early 2011 that if anything, we should be talking about lowering the retirement age. We talked to Galbraith on the phone today to discuss this idea, as well as his assessment of the Fiscal Cliff talks and entitlement (a word he hates) situation in general. He still likes this idea. With unemployment near 8%, he still thinks that it makes sense, at least temporarily, to reduce the retirement age, to let people get benefits earlier, and to clear up the job market.
He explains:
My argument is that you have a phenomenon which is very well known called the Baby Boom which is out there and the Baby Boom is a portion of older workers who are approaching, but in many cases are not at, the retirement age. They are, particularly those who have been working in real jobs, I'm not talking about professors or journalists, but people who actually - you know, move boxes, inventory, or stand at checkout counters for a living. When unemployed, they have a very difficult time getting a new job and early retirement is intrinsically attractive.
Why aren't they taking it? Possibly because it's not attractive enough, possibly because they're a little too young. So the solution is to make the early retirement available for a limited period, let's say three years...and let the people who take it at 62 get a better deal than they get now so that a higher fraction of the working population will take it at 62.
But what about the general entitlement problem, and all the debt we're drowning in?
Galbraith calls this "propaganda" that's been pushed for decades by the same people, who have made predictions that have never come true. He specifically called out old writings (from the '80s and '90s) of anti-debt activist Pete Peterson.
The whole notion that there's this great deficit crisis which can only be dealt with by cutting SS, Medicare, and Medicaid, that's just - it's a relative recent front in a very old propaganda war. People who have been, for decades, blathering on about the disaster in SS, Medicare, and Medicaid. I highly recommend the back issues of the New York Review Of Books, which lists Peter G. Peterson, who prowled on about this.
If there is a problem, he says, it's not the government's expenses per se, but that costs for covering the elderly's healthcare are expensive regardless of who's paying for them:
If you're asking whether there are problems with Medicare and Medicaid, the standard answer on that is health care costs are the problem, and that is not dependent upon whether or not you are on a private or public insurance scheme. In fact, Medicare pays less to providers than private insurance does. The reason doctors accept Medicare patients is that unlike private insurers, Medicare actually writes the checks and pays people, which doctors like. I suppose you've encountered doctors who have had problems getting cash out of insurance companies, if you haven't, I'll say you haven't encountered a doctor.
The key point which he emphasized over and over again is that changing who pays for people doesn't change the burden. And if anything, if you're worried about generational dependency, you should be in favor of the current structure of Social Security, which makes workers set aside money for their retirement, so that they're not dependent on their children.
cont'
http://www.businessinsider.com/interview-with-james-galbraith-on-lowering-the-retirement-age-and-the-fiscal-cliff-2012-11
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