home icon

Will You Have to Wait Past Age 65 to Get Medicare?

Major politicians want to raise the eligibility age to 67, but some people would be exempt

By Bob Rosenblatt | May 17, 2012
Contributor Photo

Bob Rosenblatt is a writer and editor specializing in aging issues. His blog, Helpwithaging.com, focuses on the finances of aging.

The drumbeats are getting louder to raise the eligibility age for Medicare, the federal health insurance program currently available to Americans 65 and older. Recently, Mitt Romney entered the discussion, saying he wants to increase that age, which has remained the same since Medicare began in 1966. Which prompts the question: If such a proposal is enacted, will you need to wait past 65 to start getting Medicare benefits?
 
That depends on how old you are now.
 
Even if the Medicare age goes up, most baby boomers probably wouldn’t need to wait past the age of 65 to collect their benefits. But a large number probably would.
 
That’s because the presidential candidates and Congressional leaders who are talking about raising the Medicare age haven't called for an unqualified change. They typically say they wouldn’t want the shift to affect anyone who is now 55 or older.
 
Romney’s Medicare Eligibility Proposal
 
Romney has unveiled a plan to gradually raise the Medicare age by one month a year, starting in 2022, when today’s 55-year-olds would turn 65. That’s the same year proposed by Rep. Paul Ryan (R-Wis.), the leading Republican budget policy guru, and Sen. Ron Wyden (D-Ore.), a key Congressional player on health issues.
 
The Republican candidate would also index the eligibility age for Medicare — and for Social Security — to Americans’ longevity, which means the qualifying age would rise in tandem with life expectancy.
 
If the Romney or Ryan-Wyden plan became law, about 28 million of the total 78 million boomers — those who are now between the ages of 48 and 54 — would have to wait longer than their parents did to enroll in Medicare.
 
Obama and Other Republican Candidates
 
President Barack Obama, a Democrat, hasn’t outlined a plan to raise the Medicare eligibility age, though he reportedly offered to increase it to 67 during last year’s budget discussions with Republicans. But Obama too would likely give a pass to people within a decade of retirement. Republican candidates Rick Santorum, Newt Gingrich and Ron Paul haven’t stated their positions.
 
The Public’s View of Raising the Medicare Age
 
Americans are split on this issue, but their views depend to some extent on age. In a new poll by the Kaiser Health Foundation, 63 percent of people over 65 favored raising the eligibility age to 67, but 57 percent of those younger than 50 were against it.
 
 
How Raising the Medicare Age Could Pinch
 
A delay in Medicare eligibility could cause financial difficulty, according to the independent Congressional Budget Office. In a recent report that looks at the impact of raising the eligibility age to 67, the agency said: “Many of the people who lose access to Medicare would pay higher premiums for health insurance, pay more out of pocket for health care, or both.”
 
How the Change Would Affect the Deficit
 
Raising the Medicare eligibility age would cut the deficit by reducing federal spending on Medicare by about 5 percent, according to the Congressional Budget Office.
 
But the fiscal challenge from all federal health care expenditures — including Medicare and health costs for people under 65 — would still be significant. Today about 17 percent of the Gross Domestic Product goes to health care, and that’s scheduled to rise to 19 percent by 2019. 
 
Why Medicare Is a Great Deal Today
 
Under current law, Medicare is a great financial deal for Americans covered by the program, providing them with far more in benefits than they paid in Medicare taxes.

Consider the following, from a study by The Urban Institute think tank:

A man who turned 65 last year and earned the average wage during his working lifetime — $43,500 a year – would have paid a total of $58,000 in Medicare taxes. His expected lifetime Medicare benefits, however, would be $167,000.
 
Today's 47-year-old man will have paid an estimated $87,000 in Medicare taxes, on average, by the time he turns 65. His expected lifetime Medicare benefits would be $251,000. And a 47-year-old woman would collect $275,000 in benefits, on average, because women live longer than men.

The Urban Institute hasn't run the numbers for those 47-year-olds if the Medicare eligibility age goes up, but it's likely that those people would still receive more in Medicare benefits than they'll pay in Medicare taxes.