The Kaiser Family Foundation has found that lifting the eligibility age from 65 to 67 would reduce federal spending by about $5.7 billion in its first year of full implementation. But that would be offset by $11.4 billion in spending by other parties. That includes $3.7 billion in higher costs for 65- and 66 year-olds, $4.5 billion from employers through company-sponsored insurance, $0.7 billion from state governments, and $2.5 billion in higher average prices for third parties once younger seniors are shifted out of the Medicare risk-pool and into the general population  [i.e., everyone's group policy premiums go up].

That’s an absurd means of saving the fderal government money—akin to raising $12 billion in taxes and then setting half the money on fire. The only people who actually benefit from this shift are health care providers who get to charge higher prices to 65- and 66-year-olds."

"There are two separate fiscal issues around the government and health care spending. One is the scope of the government’s responsibility for footing the bill for health care financing. The other is the price the government has to pay for the health care services it’s responsible for financing. Conservatives often imply that government health care spending is expensive because the government is somehow purchasing inefficiently or offering bloated benefits. This fits well with stereotypes about public sector waste and thus plays to popular prejudice. But it ignores the big reality about government health care purchases, which is their enormous scale. Medicare, in particular, is the biggest bulk buyer of health care services in the country, and so the fees it offers health care providers are much lower than what normal insurance companies pay.