Joe Lieberman’s proposal to raise Medicare eligibility to age 67 is proof that we’ve really “gone off the rails,” writes Paul Krugman in the New York Times. Really, we should be doing the opposite: extending Medicare, because it “actually saves money—a lot of money—compared with relying on private insurance companies.” Sure, Medicare spending per beneficiary, adjusted for inflation, has shot up more than 400% since 1969—but private health insurance premiums, also adjusted for inflation, have soared 700% in the same span.
“So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse,” Krugman notes. Other downsides to Lieberman’s plan: Many 65- and 66-year-olds would find themselves unable to get private coverage ... and those uninsured seniors would likely wait to address health issues until Medicare kicked in, making them more costly recipients at age 67—which means Medicare spending might actually increase under Lieberman's plan. "If we really want to hold down costs," concludes Krugman, "we should be seeking to offer Medicare-type programs to as many Americans as possible."