Wednesday, December 12, 2012

This is simply remarkable

Aaron Carroll:
Lots of those 65 and 66-year-olds will need Medicaid. That will cost the federal government about $8.9 billion. Lots of those seniors will go to the exchanges for insurance. That will cost the federal government about $9.4 billion in subsidies. Oh, that Medicaid will cost states too, about $700 million. The 65 and 66 year olds getting  insurance from their employers will cost them about $4.5 billion (they’re expensive). As I’ve reported before, Medicare premiums will go up ($1.8 billion), and exchange premiums will go up ($700 million). And, there will be increased out-of-pocket spending by the 65 and 66-year-olds themselves for premiums, deductibles, co-pays, etc. Add it all up. To save the federal government $24.1 billion, we need to spend $29.8 billion.
 Even if some of these assumptions are naive, it doesn't look like this change is about saving money at all.  Instead, I am beginning to accept Peter Sunderman's claim that it is all about the long game of decreasing the consituency for the program.  But as a practical matter, it seems like this is a fairly stiff price to pay for a symbolic gesture that will make things more dificult for people to get medical care.  I am not even convinced that it does much to increase the work incentive -- moving social security to age 67 likely did most of the heavy lifting on this front already. 

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