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Struggling Seniors Set to Win One, Lose One

FILE: Seniors, Senior Citizens, Elderly
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WASHINGTON – First the good news: the Obama Administration has indicated through the White House Press Secretary that it will not agree to increase the eligibility age for Medicare as part of the upcoming sequester negotiations.

Why is that good news? Raising the age requirement for Medicare won’t save the program much money, but it would cost the rest of us significantly more. Compared to the rest of the Medicare enrollees, those who would no longer qualify, namely seniors from ages 65 to 67, are relatively healthy, and hence cost less per year to cover. However, compared to the non-Medicare population, namely people under age 65, they are relatively infirm, meaning that if they are forced onto the private market, they will end up raising the rates for the rest of us.

Most importantly, for those in the affected bracket who are ill, and hence most need Medicare coverage, their bills are likely to be too expensive for them to handle. Those with low enough incomes would qualify for other assistance under Obamacare, but last year’s Supreme Court decision opened the door for state Governors to resist Medicaid expansion. This effectively creates a donut hole through which many of the neediest would likely fall. Allowing any number of the infirmed elderly to have to fend for themselves in their hour of need would be reprehensible.

Avoiding the aforementioned consequences would be commendable. Obama’s unwillingness to negotiate the Medicare eligibility is a welcome change, given that it was purportedly on the table as part of the “fiscal cliff” wrangling at the end of last year.

Now the bad news: in the same press conference the White House suggested it was open to reducing benefits for Social Security recipients by changing the way cost of living adjustments are calculated.

Why is that bad news? The same people who have been pushing to end Social Security as we know it through privatization, have also long been jockeying for reducing benefits by cutting the amount of yearly inflation adjustment. What is being sold as a simple accounting change will result in about a percentage point less per year in cost of living increase.

If you think one percent less per year doesn’t sound like such a burden, try squeezing that out of the budget of the 9% of seniors on Social Security who already live below the poverty line, or the 5.7% that live at less than 125% of it. Simply stated, these people can’t afford to have less buying power each month.

Social Security is currently solvent until 2042, and by simply removing the cap on contributions for those who make over $110,000, it would be in the black until at least 2075. The issue here should be finding a way to means test benefits in order to direct it more to those in need so that no senior citizen has to spend their golden years in poverty. Obama’s willingness to give in on Social Security is particularly disheartening, given that the program runs a surplus, and hence does not add a dime to the deficit.

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