Raising Medicare age would save $7.6 billion in 2014, study finds

NEWS IN BRIEF — Posted April 11, 2011

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Health care costs would shift away from the federal government if the Medicare eligibility age were raised from 65 to 67, a Kaiser Family Foundation study concludes.

The foundation released the March analysis as lawmakers and health care policy officials debate the projected effects of raising the retirement age in an effort to cut costs. Federal spending would be reduced by $7.6 billion in 2014 if such a policy were adopted, according to the study.

The analysis assumes the health system reform law would continue to be implemented and that the roughly 5 million people affected by the eligibility change would look for coverage elsewhere that year. An estimated 42% would receive employer-sponsored health coverage, 38% would enroll in an individual plan from a health insurance exchange, and 20% would be covered by a Medicaid plan.

This would cause average premiums for other Americans to rise, the study said. People using the exchanges would see a 3% increase to account for the addition of more older Americans in risk pools. At the same time, Medicare Part B premiums would rise 3% because fewer healthier, lower-cost patients would be paying into the program.

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