The deficit reduction plan authorized this summer would automatically cut billions of dollars from Medicare payments to hospitals and other health providers unless Congress agrees to alternate budget reductions. Medicare typically pays hospitals and health providers lower rates than other health insurers pay. Thus, the hospital industry is lobbying Congress to raise the Medicare eligibility age from 65 to 67 by 2014 instead of cutting their Medicaid payments. Such an increase could have a dramatic effect on people close to age 65 who are counting on Medicare to provide health insurance in the next few years.

Hospitals are pushing Medicare eligibility deferral as an alternative to billions of dollars of cuts in their future Medicare payments. While the American Hospital Association claims the delay in Medicare eligibility could be ameliorated by other provisions in 2010′s Affordable Care Act, others respond that those provisions will provide little benefit to most retirees and raising the eligibility age would cost individuals, employers, and states far more than the federal government would save. In addition, various pending lawsuits may preclude Affordable Care Act provisions from even taking effect.

In short, soon to retire baby boomers no longer can assume that Medicare will kick in at age 65 and should consider alternatives in case Medicare eligibility is deferred.

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