Lowering Medicare Eligibility Age to 60 May Have Mixed Impact

by Jane Anderson

 

Lowering the Medicare eligibility age to 60 could add as many as 24.5 million individuals to the program, an analysis from Avalere finds. However, shifting people ages 60 to 64 to Medicare actually could have a mixed effect on coverage overall, a separate analysis from the Kaiser Family Foundation (KFF) reports.

 

Approximately 61% of the 24.5 million Americans ages 60 to 64 currently are covered by employer-sponsored insurance, while 17% have Medicaid, 11% are in the individual market, 8% are uninsured, and 3% have other government insurance, according to the Avalere analysis.

KFF's report found similar numbers, and noted that among uninsured adults ages 60 to 64, two-thirds are eligible for financial assistance to buy coverage through the Affordable Care Act marketplaces or Medicaid, while about 15% of the uninsured are estimated to have access to private coverage offered by an employer, which they may view as unaffordable.

Lowering the age of Medicare eligibility could potentially shift 11.7 million people with employer coverage and 2.4 million with non-group coverage into Medicare, the KFF report said, while about 1.6 million people ages 60 to 64 who are uninsured could gain Medicare coverage this way. In addition, reducing the eligibility age to 60 could reduce costs for employer health plans by as much as 15%, KFF said.

"I think at the end of the day, employers are going to find it very attractive on the face of it to have a Medicare expansion or a public option covering some of their employees," explains Massey Whorley, associate principal at Avalere and one of the report's co-authors. "However, employers have to weigh that against the lost benefit that they would have of providing employer-sponsored insurance."

In addition, simply expanding Medicare eligibility does not guarantee premium affordability, the Avalere analysis points out, since the current design of the Medicare program could lead to some low-income beneficiaries spending more on premiums in Medicare than they currently spend. For lower-income individuals — those at 138% of (FPL) — current exchange subsidies are consistently more generous than the subsidies available to Medicare beneficiaries, the analysis says.

For higher-income individuals above 400% of the FPL, Medicare can offer significant savings relative to exchange subsidies, says Whorley. In addition, the generosity of those subsidies will depend on whether Congress votes to make permanent the temporary expanded marketplace subsidies provided in the American Rescue Plan, he says.

 

From Health Plan Weekly