Obama signs Affordable Care Act

President Obama signs the Health Care and Education Reconciliation Act of 2010.

When it comes to properly judging a major piece of legislation such as the Affordable Care Act, it is important not just to examine what the law does, but also what else the law allows Congress and the President to do as a result. In this case, the passage of the ACA has made President Obama open to the idea of raising the Medicare eligibility age as part of a deficit deal. If Obama agrees to this it will very likely mean that the net effect of the passage of Obamacare will make you and most Americans personally worse off.

Raising the Medicare age from 65 to 67 was previously an unthinkable policy, but the administration now believes it is more acceptable since most of those seniors could still technically get access to some form of insurance under the ACA. This logic depends on the ACA actually working as intended and all states expanding Medicaid, both of which are very big ifs as this point.

Even if the ACA works as planned, the issue is that increasing the Medicare age is still a truly horrible policy. Medicare is significantly more cost effective than private insurance. Being forced to remain on private insurance for an extra two years would make most people pay more for health care in those two years of their life.

That is only the beginning of the problems. Old people tend to have higher medical costs. Forcing them to remain in the private insurance world would increase costs for the entire risk pool. That means if you are one of the tens of millions of adults who get insurance from work or through a union your premiums may increase thanks to older co-workers remaining on these plans. It would force some of these seniors into Medicaid at some additional expense to the state. States would likely need to increase taxes or divert funds away from other programs.

The ACA is at least meant to make a share of lower income Americans better off, but if Obamacare gives Obama an excuse to increase the Medicare age, that needed to be weighed against the damage its passage will end up doing to the vast majority of Americans. Obama’s signature law has struggled to gain popular support, this possible move definitely won’t help.

Official White House photo by Pete Souza.