Healthcare Business News
Neil McLaughlin, managing editor
Neil McLaughlin, managing editor

Every industry for itself

Groups fighting to stave off cuts going after Medicare eligibility age

Posted: October 10, 2011 - 12:01 am ET

In addition to Steve Jobs, the new iPhone and Amanda Knox, the cultural events of last week included the public TV airing of the new Ken Burns documentary “Prohibition.”

As many observers on the program noted, the 18th Amendment was one of the worst ideas in American history. It took an enormous toll on society and its institutions. Unfortunately, we still are playing with dangerous propositions—not so grandly deleterious, but still bad news.

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A current example is the notion of raising the Medicare eligibility age. Previously, this idea was endorsed by political philosophers such as Rep. Paul Ryan (R-Ayn Rand) and Sen. Joseph Lieberman (I-Cranky). Even President Barack Obama briefly toyed with the idea while ineptly seeking a nonexistent middle ground with Congress over deficit reduction. The Medicare age hike was at least temporarily set aside, in part because many politicians realized their constituents would embrace it with the enthusiasm they show for root canals and home foreclosures.

So it's a little disquieting to see healthcare executives take up a cause that even the most unpopular Congress in recent history finds unpalatable. For example, the American Hospital Association inserted the idea in talking points the group's members could waft pass lawmakers during its advocacy meetings last week. The Healthcare Leadership Council also floated it in that organization's legislative agenda. The AHA and the HLC want members of Congress to avoid cuts to the industry as legislators, especially the so-called supercommittee, debate deficit reduction. And the American Medical Association and 42 other medical groups offered it as an option. The AMA coalition wants Medicare to scrap the sustainable growth rate formula—but to do so without cutting other physician payments.

The industry is saying cut anybody but us. The AHA maintains it merely wants officials to “consider” raising the Medicare eligibility age, but is not necessarily endorsing the idea. That's akin to counseling a financially strapped family to consider consigning granny to an ice floe—not that anyone is endorsing that, of course.

Studies by the Kaiser Family Foundation and others have concluded that while raising the eligibility age might save the federal government money, it would actually increase state and private sector costs. Kaiser estimated the price tag would reach $11.4 billion, more than offsetting federal savings of $5.7 billion. Seniors would have to find coverage through insurance exchanges or employers, incurring billions more in out-of-pocket costs.

More importantly, the move would counter a century of efforts to expand health coverage in this country, a goal that many people in the industry claimed they supported. Insurers have never stampeded to write policies for older Americans (that's why we have Medicare). Even if the Supreme Court upholds the tepid reform law—don't bet on it—seniors would have a hard time obtaining affordable coverage. All this would occur during the worst economic downturn since the Great Depression, with companies relentlessly cutting jobs.

To suggest that vulnerable people should be put at risk so the world's most expensive healthcare system with the highest prices and inferior public health (Sept. 26, p. 17) should go untouched is hardly flattering to the industry. Ron Pollack, executive director of the advocacy group Families USA, said the AHA “is trying to shift the focus on program beneficiaries rather than hospital operations.”

We are now in an economic crisis with a politically/ideologically driven budget-cutting frenzy that is pitting interest groups against one another and the common good. It's a miserable time, but in a few decades it may at least make for a great documentary.

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