The High Cost to Massachusetts of Raising the Medicare Age
Raising the Medicare eligibility age to 67 would cost Massachusetts $298 million in the first full year of implementation, including $160 million to individuals, $114 million to Massachusetts businesses, and $24 million to the Massachusetts State Government. Such a change would increase premiums in the healthcare exchanges for those under 65, increase the average out-of- pocket costs for those 65-66 and increase Medicare premiums for those 67 and above. Overall, it could cost a Massachusetts resident nearly $7,578 over their lifetime.
Many of the initial savings to the federal government are mitigated by a loss of Medicare premiums and increased Medicaid and healthcare exchange subsidy payments. While increasing the Medicare eligibility age will save the federal government $5.7 billion a year, it will raise overall health care expenses by $11.4 billion and shift this additional burden to individuals, employers, and state governments.
In contrast, the federal government could save at least $20 billion a year – more than 3 times the amount from raising the Medicare age – by allowing Medicare to offer a prescription drug benefit with negotiated prices. This proposal would also offer additional savings to seniors through lower co-payments and would simplify the complicated and confusing enrollment process for Part D.