Medicare helps protect the elderly against catastrophic medical expenditure risk. Increasing the Eligibility age will expose many to higher costs and financial strain.

More than half of all lifetime medical expenses are incurred after 65; Medicaid protects seniors from the financial strain which would normally be associated with these costs. In new research, Silvia Helena Barcellos and Mireille Jacobson find that Medicare reduces the fraction of the elderly whose out-of-pocket medical costs exceed their income from 9 to 5 percent, and also reduces recipients’ medically related financial stress by as much as one third. In light of these findings, they argue that recent proposals to increase the Medicare Eligibility age will substantially increase the risk of catastrophic medical expenditures for those who would no longer be covered.