In a policy paper for the Robert Woods Johnson Foundation, Robert Berenson, John Holahan and Stephen Zuckerman propose a package of changes that would save more than $700 billion over 10 years. One of the changes they propose is raising the age of eligibility from 65 to 67. But in order to blunt the impact of that change, they propose letting people between ages 65 and 67 buy into Medicare on their own — that way, they can take advantage of Medicare's lower prices, even if they're paying for them out-of-pocket. "Buying into Medicare gives them as good a deal as they're going to get," Berenson said.
If it's such a good deal for the 65-to-67 crowd, then why not let 55-year-olds buy into Medicare, or even let everybody buy into Medicare? "I've always assumed it was just political opposition from Republicans," Berenson replied. I asked him to put aside the politics and just assess whether it would work. "Conceptually, I don't see a problem," he said.
It has become common in Washington for wonks and politicians alike to lament the public's resistance to cutting Medicare and Social Security. But that resistance is there for a reason: These programs work extraordinarily well.
Social Security has been wildly successful at raising living standards for the elderly, even as other forms of retirement savings have grown shakier. Medicare is cheaper than private health insurance and has seen its costs grow more slowly, to boot. We've gotten so used to thinking of our entitlement programs as problems to be solved, we're missing all the problems they can solve.