One of the most contentious components of the fiscal cliff discussions is the debate about the Medicare eligibility age.  Prominent conservatives argue that raising the Medicare eligibility age to 67 would adjust the most expensive government health program to modern times, while liberals believe it would take away benefits from hardworking seniors, and hurt the market in the long run. Despite all the controversy, it is true, according to the CBO, that raising the age would save the government $133 billion from 2012-2021. Since the rest of the health insurance market follows Medicare’s lead, the real question is how it would affect everyone else. According to a recent Kaiser study, the effects would be fairly negative. Kaiser estimates that raising the age would cause higher monthly premiums for seniors in Medicare and private insurance. It would also increase employers cost for insurance, by having to cover the delayed seniors, and the seniors who would have to wait would have higher out of pocket costs. Yet these setbacks only exist if raising the eligibility age is all we do. No one is claiming that Medicare is an easy fix, and we need to make several changes to see real results.

According to a Kaiser survey of health policy experts, there are many more solutions we can apply to Medicare that will additionally solve our spending problems. Scholars from American Enterprise Institute and the Heritage Foundation argue that we could revolutionize our system simply by abandoning fee for service payments for better incentives and develop Medicare into a defined contribution plan. The competition and innovation that would ensue could help lower premiums and decrease costs. Medicare was created in 1965 to help seniors handle healthcare costs, but the program needs to adjust to a completely different healthcare environment. From 1980 to 2010, health expenditures increased from $256 billion to $2.6 trillion and are expected to continue grow. Coupled with a life expectancy of 78.2 years, the federal government can simply not afford to continue to cover costs at the same rate. Medicare is a program that needs serious restructuring, and the eligibility age is one of the many measures that should be updated to reflect current times.