For Medicare, 67 Could Be the New 65

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A top item in the fiscal cliff budget negotiations, many aren't prepared to wait a proposed two extra years to be eligible for benefits.

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Sam Lewis, 65, had triple bypass surgery in late November. Just days before, when he first qualified for Medicare coverage, a checkup discovered three of his arteries were clogged with plaque. [Alison Yin/KHN]

Sam Lewis turned 65 just in time. For a year, he'd been broke. His Brentwood, California, general contracting business had gone bankrupt. He couldn't make payments on his home, and lost it. He couldn't make payments on his health insurance, so he let it lapse.

The day after his birthday in October, when he qualified for Medicare, Lewis got a checkup. Days later, he had open-heart surgery, a triple-bypass -- three arteries blocked with plaque, one of them, 99 percent. "If I'd had to wait until 67 for Medicare," Lewis said, "I'd be dead."

A proposal to raise the Medicare eligibility age from 65 to 67 to ratchet down spending is one of the more explosive ideas in the fiscal talks between House Speaker John Boehner and the White House. The negotiations are aimed at a deficit deal to avert automatic tax increases and spending cuts slated to take effect January 1. Liberal Democrats say they loathe the Medicare proposal, but the White House has not taken a public position on it.

President Barack Obama was open to a similar proposal last year during his failed effort to reach a "grand bargain" with Republicans. And many expect it to pop up again in next year's discussions about curbing entitlement costs if it is not included in this year's deal.

Whatever the politics, those approaching retirement are responding with anger and fear, while employers see themselves stuck holding the bag on long-ago social commitments made by the federal government.

"All they're doing is shoving the cost onto the backs of business," said Don Marks, president of Uesco Industries in Alsip, Illinois, a family-owned company that assembles overhead cranes and hoists used in manufacturing plants.

Uesco employs 45 people and pays some medical expenses of retirees that are not picked up by Medicare. With no set retirement age, the company would pay health insurance costs for older, likely sicker workers who might no longer retire at 65 because they would not be eligible for Medicare.

In his business, Marks sees little good coming from that. "We are a heavy metal manufacturer," he said. "It's big and heavy pieces of steel that we move around, that we grind, that we weld, that we cut with torches. It's heavy labor. The older (the workers) get, the more it costs for health insurance. And we have an aging workforce."

Kevin Kelly, CEO at Emerald Packaging in Union City, Calif., is also unhappy about the proposal. "I don't think the government or legislators are thinking about the impact this will have on business," he said.

Emerald employs 225 workers to manufacture plastic bags for produce sold at grocery stores -- five of them between the ages of 63 and 65.

Kelly figures it would cost him an extra $120,000 annually to pay for health insurance for those five workers for another two years. "It comes right out of profit," he said. "It's not like I can raise prices because the government decided not to cover people between 65 and 67. If I try to pass the cost to the retailers, it just gives them one more reason to look to China."

Proponents of the idea such as Gail Wilensky, who oversaw Medicare and Medicaid for the first President George Bush, say people are living longer than when the program was enacted in 1965 and it's important to raise the eligibility age gradually to change younger Americans' perceptions about what they can expect from entitlement programs.

Sam_Lewis_061inset.jpg"If I'd had to wait until 67 for Medicare, I'd be dead," Lewis, 65, said. [Alison Yin/KHN]

"What we need is to try to find ways to try to encourage people to participate in the labor force longer, and not only for our sake but for their sake as well," Wilensky said at a forum this week, noting the number of beneficiaries is expected to double over the next two decades as Baby Boomers retire.

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Russ Mitchell is a writer for Kaiser Health News.

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