A new Washington Post/ABC News poll released today shows that Americans strongly favor tax increases on the richest Americans as a way to avoid the fiscal cliff. At the same time the poll shows Americans strongly oppose raising the Medicare age as part of any compromise. The polling numbers lend support to the position of President Obama and congressional Democrats who favor tax increases over entitlement cuts as part of any deal to avoid the January 1, 2013 deadline for the fiscal cliff.
According to the survey, 60 percent of Americans favor raising taxes on those making over $250,000, compared to just 37 percent who were opposed. However, 67 percent of Americans opposed one idea to raise the minimum Medicare eligibility age from 65 to 67.
The tax rate hike on the rich is currently the leading proposal being advocated by Democrats. Today President Obama will renew his push to extend tax rate cuts for the middle class and poor, while excluding any extension of tax rate hikes for those making over $250,000. Senate Majority Leader Harry Reid (D-NV) and House Minority Leader Nanacy Pelosi (D-CA) have both said any deal on the fiscal cliff must include tax rate increases on the rich.
Republicans, on the other hand, have been opposed to any tax rate hikes, and instead advocated for a number of entitlement reforms. The biggest entitlement programs are Social Security, Medicare, and Medicaid. Social Security largely pays for itself, making it an unpopular target for Democrats. Medicare payments to providers have already been cut over the last four years, and Obamacare already eliminated much of the waste from the program. That means the only real way to really save money from the Medicare is to start raising the age at which people become eligible. The 2012 budget plan of Rep. Paul Ryan (R-WI) included a proposal to raise the Medicare eligibility age from 65 to 67 just as the poll described.
The problem with raising the Medicare age is that it will leave many 65 and 66 year-olds struggling to find insurance in the private market. Insurance companies charge much higher premiums because as people older they also tend to get sicker, which increases the liability risk for the insurer. The rationale behind Medicare was to provide affordable care to older adults who were being priced out of the private market, and for the most part it has worked to achieve that goal. Many poor and middle class Americans would be forced to keep working just to qualify for a group insurance plan through an employer, which is probably why an overwhelming majority of them now stand opposed to any proposal that would delay their eligibility for Medicare.