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Romney’s Medicare plan could create gap for seniors

DON EMMERT/AFP/Getty Images

Mitt Romney spoke with students Monday in Peoria, Ill., ahead of the state’s Republican presidential primary Tuesday.

WASHINGTON - Last week, Mitt Romney turned 65 and made the decision to forgo Medicare, the federal health insurance program for seniors. Romney made the move as he proposes delaying the age that Americans can receive Medicare to 67 as a way to rein in its skyrocketing costs.

Moreover, Romney’s plan to repeal President Obama’s health reform law would strip 65- and 66-year-olds of that law’s assurance that insurers would have to cover them even if they have preexisting conditions, as many elders do.

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The two policies - simultaneously raising the Medicare eligibility age while removing a new safety net for ailing individuals to obtain affordable health insurance - would result in many more uninsured seniors because they could not afford - or even obtain - coverage, according to many health care analysts and studies about the issue.

“It’s a double whammy,’’ said John McDonough, director of the Center for Public Health Leadership at the Harvard School of Public Health, who was a major architect of the 2006 Massachusetts health care law when he headed Health Care For All. “It’s one thing to raise the eligibility age if you have the Affordable Care Act as a new safety net. But to raise the age and to pull the safety net out is something that should make any ethical person blanch.’’

The Romney campaign points out that the increased eligibility age for Medicare will not affect anyone who is currently 55 or older. With people living and working longer, Romney aides say, costly retirement programs should begin later.

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A Romney campaign staffer said states could help seniors who are denied access to Medicare with new programs. “While Governor Romney has committed to repealing Obamacare, he is also strongly supportive of state-based solutions - like the one he pursued in Massachusetts - that would ensure robust health care options for all citizens until they reach the Medicare age,’’ the staffer said.

Under Romney’s plan, the eligibility age for Medicare would gradually rise to 67 - by one month each year - beginning in 2022 and be indexed to longevity. The plan would also allow seniors to choose traditional Medicare or federal vouchers to buy private insurance.

Although Romney has said he plans to repeal the Obama health plan, he has also said he would ensure that individuals with preexisting medical conditions are not denied coverage, provided they are continuously insured for a fixed period of time. He does not specify the amount of time a person would need to be insured to qualify.

A higher eligibility age for Medicare is a mainstay of many deficit-reduction plans - President Obama considered it last year as part of a failed bargain with Republicans that would have also included substantial new tax revenues. Under that proposal, however, 65- and 66-year olds would have had the protections and subsidies of Obama’s health care overhaul law to fall back on.

One health care analyst, Regina Herzlinger of Harvard Business School, weighs the higher Medicare age against the deficits that will only rise as more baby boomers qualify for the benefit. “It sounds terrible to raise the Medicare eligibility age but on the other hand, who’s going to pay the $90 trillion in unfunded liabilities?’’ she said. “We’re between a rock and a hard place. Something’s got to go.’’

Although the Romney plan would save the federal government money, it would raise costs in the private sector, as 65- and 66-year olds scramble for individual or group coverage, which will result in increased premiums with the influx of older and less-healthy subscribers. The Medicare premiums of beneficiaries 67 and older will also rise because their younger, healthier counterparts will be factored out of the pool, analysts said.

Seniors excluded from Medicare “could pay more and get less than they would if they were covered under traditional Medicare,’’ said Tricia Neuman, a senior vice president at the Henry J. Kaiser Family Foundation and director of the organization’s Medicare research.

Some people lament that Romney’s proposal would push many to work into their sunset years, if they are physically able, just to maintain health insurance.

Marcia Harrington, 61, who works 60 hours a week in the dry-cleaning business she owns with her 62-year-old husband in Manchester, N.H., said she is eagerly counting down the years until she is eligible for Medicare, because paying for health insurance has become more of a burden each year due to rising costs.

The couple, who earn less than $80,000 a year, pay $800 a month - the cheapest Harrington could find - for a plan that has a $5,000-per-person deductible each year.

“I never thought I would be looking forward to my 65th birthday,’’ Harrington said. “Our jobs are physical. I can’t even imagine having to do this until I was 67 years old just to be eligible for Medicare.’’

Each year, the couple switches insurers as costs rise, a process that subjects them to filling out pages of medical questions such as their blood pressure readings, the last time they were hospitalized, and the medications they take. For several years they were turned down for insurance in the individual market, she said, because her husband has a heart condition and had to have stents inserted.

Some skeptics of Romney’s plan say that requiring insurers to cover preexisting conditions without the individual mandate included in Obama’s plan would lead to an explosion of individual premiums because only the sickest would bother purchasing health insurance.

In 1996, Massachusetts prohibited insurers from discriminating against individuals with preexisting conditions but did not pass an individual mandate until then-Governor Romney’s plan in 2006. In those 10 years without the mandate, premiums shot up and many people dropped their coverage, McDonough said.

“Romney was smart enough to know that he couldn’t do it in Massachusetts without an individual mandate,’’ said Robert Restuccia, executive director of Community Catalyst and founder of Healthcare For All. “Insurance just doesn’t work that way.’’

According to an analysis by the Department of Health and Human Services, 48 to 86 percent of Americans between 55 and 64 have some type of preexisting condition.

Romney’s wife, Ann, a 62-year-old with multiple sclerosis who is also a breast cancer survivor, is an example of someone who would have difficulty finding affordable insurance in the private individual market in most states, if she were an average American.

“From the point of view of a 65- or 66-year-old consumer, Romney’s plan is a very expensive, lose-lose proposition,’’ said James Roosevelt Jr., chief executive of Tufts Health Plan.

Currently, a 63- or 64-year old buying individual insurance in an unregulated market will pay premiums that are about seven times as expensive as policies for people in their 20s in most states, McDonough said. The cost would rise even further for older seniors.

But starting in 2014, Obama’s health care law would limit the difference that insurers could charge for seniors compared to young people, a provision already in effect in Massachusetts.

“There are already many people out there who are hanging on by their fingernails for dear life until they get to 65, when they can enroll in Medicare, and to tell those people, ‘Sorry, pal, you’re going to have to wait two more years,’ it’s an appalling thing to do,’’ McDonough said.

Some health care economists, though, say Romney’s plan could work if it includes a few key provisions, such as allowing lower-income 65- and 66-year-olds to enroll early in Medicare or providing a path for retirees to hold onto their employer-based coverage until they reach 67.

“It’s clear even now that the gap is becoming an issue,’’ said Douglas Holtz-Eakin, president of American Action Forum and former director of the Congressional Budget Office, who was Senator John McCain’s economic adviser during the 2008 presidential campaign. “You’re going to have to produce a portable policy that gets you to Medicare. I just don’t see any way around that.’’

Herzlinger said Romney would have to “needs-test’’ Medicare to provide a safety net. “If you need it, you’d get it between 65 and 67,’’ she said.

Christina Weissbrod, 64, an administrative assistant at an Ashland, N.H., architecture firm who makes about $30,000 a year, said she cannot afford to buy full-coverage health insurance and is eager to become eligible for Medicare.

She is on temporary insurance that provides practically no coverage except in the event she were to be hospitalized. A breast cancer survivor, she paid $400 out of pocket recently for a mammogram.

“Under Romney’s plan, I’d be uninsured,’’ Weissbrod said. “This puts people in a situation where they’re not getting preventative care, so when they do end up going to the doctor, it’s pretty ugly.’’

Tracy Jan can be reached at tjan@globe.com.
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