In slightly more than 7 years from the posting of this blog entry, the Hospital Insurance Fund (Part A) for Medicare will go bankrupt, according to the federal Centers for Medicare and Medicaid Services (CMS). Why, then, are the Democrats in the U.S. Senate proposing to expand the program by lowering the age of eligibility from 65 to 55 years as part of a compromise to secure passage of its health care reform bill?

As the program stands today, the number of Medicare eligibles age 65 and older is projected to increase from 46 million in 2010 to 78 million in 2030. Correspondingly, the number of workers taxed to support each beneficiary whose medical care is underwritten by the hospital fund will decline from 3.7 to 2.4 during that same period.

Even if the proposed expansion is budget-neutral (i.e., fully funded), why invite Americans aged 55 – 64 to buy into a government insurance program that is sinking fast with no bail-out in sight?

Rather than expand Medicare by lowering the age of eligibility, Congress should consider raising the age to 68 or even higher.  This makes sense for a lot of reasons, not the least of which is the increase in human lifespan.  At 78 years, life expectancy is a lot higher than it was when the program was enacted in 1965.

Congress should also consider installing a means test that would grant eligibility to only those seniors who cannot afford to pay for private insurance. Let’s take “entitlement” out of this government program, or, at the very least, let’s have those seniors with upper class incomes or assets pay more to qualify for Medicare.

Lastly, a do over is needed on the benefit package. Coverage should be eliminated or reduced for many program benefits.

I suspect none of this is palatable to the AARP crowd, but neither is program insolvency.

For added perspective and to understand the impact potential of a Medicare buy-in program on California, go to the Insure the Uninsured Project web site or click-on ITUP.  

Your thoughts?