According to five separate sources with knowledge of negotiations — including both Republicans and Democrats — the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.
This would be an extremely horrible move from a policy perspective that would hurt tens of millions of Americans. It would not only increase the medical cost of for those individuals between 65-67 year of age and their employers. Such a move would also increase the Part B premiums for millions of people over 67 who are on Medicare and the increase the premiums for the millions of people under 65 who will be getting insurance on the new exchanges created by Obamacare. From the Kaiser Family Foundation (PDF):
Premiums in the Exchange would rise for adults under age 65 by three percent (an additional $141 per enrollee in 2014), on average, due to the shift of older adults from Medicare into the pool of lives covered by the Exchange.
Medicare Part B premiums would increase by three percent in 2014, as the deferred enrollment of relatively healthy, lower-cost beneficiaries would raise the average cost across remaining beneficiaries.
In addition, costs to employers are projected to increase by $4.5 billion in 2014 and costs to states are expected to increase by $0.7 billion. In the aggregate, raising the age of eligibility to 67 in 2014 is projected to result in an estimated net increase of $5.6 billion in out-of-pocket costs for people who would otherwise have been covered by Medicare.
In addition to being a horrible policy that would hurt tens of millions, while producing relatively little savings, agreeing to this bad idea would destroy Democrats current 2012 political advantage which was caused by Republicans embracing Paul Ryan’s plan to eliminate Medicare.
Approving this retirement increase just as Democrats were starting to repair the damage done with seniors as a result of voting for Obamacare would be political devastating to the party.