Raising US Medicare's eligibility age to 67 would achieve significant savings, but shift costs

Raising Medicare's eligibility age from 65 to 67 in 2014 would generate an estimated $7.6 billion in net savings to the USA’s federal government, but also result in an estimated net increase of $5.6 billion in out-of-pocket costs for 65- and 66-year-olds, and $4.5 billion in employer retiree health care costs, according to a new Kaiser Family Foundation projection of the potential change suggested by several deficit-reduction plans.

The study also estimates that the change in Medicare eligibility would raise premiums by 3% for those who remain on Medicare and for those who obtain coverage through health reform's new insurance exchanges. The study assumes both full implementation of the health reform law and the higher eligibility age in 2014 in order to estimate the full effect of both the law and the policy proposal.

Among the estimated 5 million affected 65- and 66-year-olds, about three in four would pay an average of $2,400 more for their health care in 2014 than they would have paid if covered under Medicare, the study estimates. Nearly one in four, however, are expected to have lower out-of-pocket spending, mainly due to the health reform law's coverage expansions through Medicaid and the premium tax credits available to low- and moderate-income Americans.