Republicans look to raising Medicare age

WASHINGTON - Americans are living longer, and Republicans want to raise the Medicare eligibility age as part of any deal to reduce the government's deficits.

But what sounds like a prudent sacrifice for an aging society that must watch its budget could have some surprising consequences, including higher premiums for people on Medicare.

Unlike tax hikes, which spawn partisan divisions, increasing the Medicare age could help ease a budget compromise because President Obama has previously been willing to consider it. AARP, the seniors' lobby, is already running ads knocking down the idea as a quick fix that would cause long-term problems. House Speaker Nancy Pelosi (D., Calif.) doesn't like it either.

But for Republicans seeking more than just tweaks to benefit programs, raising the current eligibility age of 65 has become a top priority, a symbol of their drive to rein in government. If Obama and the GOP can't agree soon on a budget outline, it may trigger tax increases and spending cuts that would threaten a fragile economic recovery.

Increasing the eligibility age to 67 would reduce Medicare spending by about 5 percent annually, compounding into hundreds of billions of dollars over time. But things aren't that simple.

"This is a policy change that seems straightforward, but has surprising ripple effects," said Tricia Neuman, a leading Medicare expert with the nonpartisan Kaiser Family Foundation. Among the cost shifts identified in a Kaiser study:

Higher monthly premiums for seniors on Medicare. Keeping younger, healthier 65- and 66-year-olds out of Medicare's insurance pool would raise costs for the rest. The increase would be about 3 percent when the higher eligibility age is fully phased in.

Higher premiums for private coverage under Obama's health overhaul. Older adults would stick with private insurance for two extra years before moving into Medicare, and they are more expensive to insure than younger adults.

An increase in employer costs because older workers would try to stay on company insurance plans.

Higher out-of-pocket health-care costs for two out of three older adults whose entry into Medicare would be delayed.

Polls show that many Americans are willing to consider raising the age at which people become eligible for Medicare benefits.

U.S. life expectancy has risen about eight years since Medicare was created in 1965. In the 1980s, President Ronald Reagan and congressional leaders agreed to gradually raise the age for getting full Social Security benefits from 65 to 67, but they didn't touch Medicare eligibility.