CEOs Support Raising Medicare Eligibility Age

By David Pittman, Washington Correspondent, MedPage Today

Published: January 18, 2013

WASHINGTON -- Raising the Medicare eligibility age and turning the program into a premium-support system would help lower the nation's rising deficit, according to a group of executives from major U.S. companies.

The Business Roundtable laid out its proposals Wednesday for cutting the deficit through reforms to entitlement programs Medicare and Social Security. According to conservative estimates, Medicare would save about $300 billion in the first decade if the proposals were implemented, the group said at a press conference to release its report.

"We are calling on President Obama and Congress to look at our plan and enact a package of gradual changes that will provide economic and personal security for generations to come," said Gary Loveman, PhD, former professor of economics at Harvard Business School and current CEO of Caesars Entertainment.

The reforms, most of which have been suggested before, include:

• ·         Raising Medicare's eligibility age to 70 gradually, in a way that would not affect those 55 or older today
• ·         Offering seniors the choice among competing and comprehensive private plans and traditional Medicare while subsidizing part of the cost -- a model known as premium support
• ·         Introducing means testing for Medicare Parts B and D
• ·         Protecting existing financial support received by low-income beneficiaries today
• Business Roundtable members said they were meeting with congressional leaders and members of the White House to pitch their plan.

When asked why their proposals would gain traction now when they had already been suggested by others to no avail, the CEOs said Washington power brokers need to have this discussion now whether they agree politically with their proposals or not.

A premium-support model has been advocated by former Republican vice presidential nominee Paul Ryan (Wis.) but was declared dead after running mate Mitt Romney lost November's presidential election. Critics of the premium support model argue that the subsidies that beneficiaries would receive from the government would not be able to keep up with the rising cost of healthcare.

Meanwhile, calls for upping the eligibility age to 67 have been roundly rejected by Democratic lawmakers and senior advocacy groups in the current deficit talks.

Backers of those plans are still pushing forward, preaching patience.

"It is a discussion that's very important to have because ... it wasn't that many years ago that choice in education was considered unthinkable," Business Roundtable President John Engler told reporters Wednesday. "We went to the public school where you grew up. Today you might go there, you might go to a charter public school in some cases."

While the Roundtable's plan calls for raising the eligibility age to 70, it wouldn't occur until 10 years from now, allowing those nearing retirement not to have the age upped just before they reach it.

"It would give people plenty of time to plan around it and would significantly go a long way towards addressing the fiscal situation in this country," said Randall Stephenson, CEO of AT&T and vice chair of the Roundtable's Health and Retirement Committee.

A premium-support model would lower Medicare spending through increased competition, according to the group. "The benefit of private competition for large numbers of seniors who would make a selection, we believe, would lead to a more [efficient] allocation of medical resources, better outcomes, and a lower trend rate of growth in medical cost," Loveman said.

The Business Roundtable pointed to the dire situation Medicare is facing as one reason to act quickly. For example, Medicare's Part A trust fund will deplete in 2024, while spending will double to more than $1 trillion by 2022. The number of beneficiaries has doubled in the past 35 years and will double again in the next 25.

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David Pittman is MedPage Today’s Washington Correspondent, following the intersection of policy and healthcare. He covers Congress, FDA, and other health agencies in Washington, as well as major healthcare events. David holds bachelors’ degrees in journalism and chemistry from the University of Georgia and previously worked at the Amarillo Globe-News in Texas, Chemical & Engineering News and most recently FDAnews.