Lowering The Medicare Age To : Cost And Coverage Outcomes
Christopher Holt, Stephen Parente
Executive Summary
- Lowering Medicare eligibility to age 60 would cost $380 billion over 10 yearseven after accounting for Affordable Care Act savings from lower spending on subsidies and assuming that employers continue to offer health insurance to those newly eligible for Medicare.
- If employers were to respond by dropping health coverage for employees age 60-64, the total cost of the policy would climb to as high as $1.8 trillion.
- Both scenarios would result in approximately 3.9 million additional insured individuals, at a cost of $9,756 to $57,912 per newly covered person.
Introduction
Last week congressional Democrats once again proposed lowering the Medicare eligibility age from 65 to 60, this time as part of the $3.5 trillion spending package theyre hoping to enact through the budget reconciliation process. The proposal was not ultimately included in legislative text released late last weekand even if had been included, past Senate precedent indicates it may not have complied with the rules of reconciliation.
Scenarios and Assumptions
H& E modeled two scenarios for lowering the Medicare eligibility age resulting in a lower and upper bound for cost to the federal government.
Scenario 1 assumes that all employers continue to offer employer-sponsored insurance to the newly Medicare-eligible population and that those age 60-64 are able to choose between ESI and Medicare, resulting on $380 billion in new federal spending.
Table 1.
Do I Have To Apply For Medicare Or Do I Get It Automatically
If you already collect some form of Social Security when you qualify for Medicare, you will be automatically enrolled in both Part A and Part B. Receive a social security disability for a period of 24 months
If you do not collect Social Security when you become eligible for Medicare, you must enroll through Social Security. You can do this online, over the phone, in person, or at your local Social Security office.
If you want to cover prescription medications from Part D of the Medicare program, you must actively enroll in them yourself. This is true whether you are automatically enrolled in Medicare or if you enroll yourself.
Keep in mind that people with Lou Gehrigs Disease or End-of-Stage Rental Disease do not have to collect Social Security for Disability Benefits for a period of 24 months to qualify for Medicare.
Arguments Against Medicare At 60
Arguments against the Medicare at 60 proposal include that it would strip away a sizeable revenue stream from the private insurance market. Private insurance could lose premium payments from up to 17 million people who make the switch to Medicare, thereby hampering the financial health of the market.
Adding nearly 23 million beneficiaries to Medicare rolls could also result in major costs being passed along to taxpayers.
Another opposing argument is that because working seniors who are nearing retirement are largely in their peak earning years, they dont need federally subsidized health insurance. Only a small fraction of this population currently lack insurance coverage.
1 Christ Sloan, et al. . Nearly 23M Individuals May Be Eligible for Medicare Coverage Under Biden Proposal. Avalere Health. Retrieved from https://avalere.com/press-releases/nearly-23m-individuals-may-be-eligible-for-medicare-coverage-under-biden-proposal.
About the author
Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareAdvantage.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelors degree in journalism. He currently lives in Raleigh, NC.
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What Would It Cost To Expand Medicare
Approximately 3.9 million people would gain health insurance through the expanded program at a cost of $9,756 to $57,912 per newly covered individual. This is one of the points that plays into the hands of opponents of Medicare expansion. It would simply cost too much for the actual benefit offered.
What Are The Various ‘parts’ Of Medicare
There are three major Parts of Medicare:
- Part A: which covers hospital stays, skilled nursing, and hospice services
- Part B: which covers outpatient services, most doctors visits, and most drugs that need to be administered by medical professionals and
- Part D: which covers most self-administered prescriptions.
Some seniors elect to add additional coverage for things like vision and dental through a Part C or Medicare Advantage plan.
Each year, Medicare members are able to purchase supplemental plans, Parts C and D, which enhance coverage.
Part C includes Medicare Advantage Plans which expand coverage by providing dental, vision, hearing, and other benefits, which are excluded from Parts A and B. Additionally, members looking to bring down the cost of prescription drugs are able to purchase Part D plans.
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Speeding Up An Ssdi Application
Your application for SSDI is likely to move more quickly if you select one doctor as the lead contact for your case. It’s best to go with one who:
- Has experience with disability cases
- Responds promptly to requests for information
- Is familiar with your overall health situation
It’s also a good idea to keep a detailed log of your everyday activities and experiences.
For example, document any difficulties you have with mobility or side-effects you are experiencing from medications. This will help when you have your interview with a Social Security representative. The interview may take place on the phone or in person at your local Social Security office.
The SSA website provides an easy-to-use Disability Starter Kit that includes FAQs, a checklist, and a worksheet to help you get ready for your interview. You can save time during your interview if you fill out the needed applications online before your appointment.
According to the SSA, most applications are processed within three to five months.
Requalifying For Medicare At 65
If you become eligible for Medicare before you turn 65 due to disability or one of the above diagnoses, youll requalify again when you reach age 65. When you do, youll have another Initial Enrollment Period and all the benefits of a newly eligible Medicare recipient, such as a Medicare Supplement Enrollment Period.
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How To Enroll For Medicare
If you meet the requirements for people age 65 or older, you can receive Medicare Part A without any premiums. However, if you or your spouse do not pay Medicare taxes, you may have to pay Part A. Medicare Part A covers hospital insurance. Medicare Part B covers things like outpatient care, preventive services, and medical equipment. It can also cover part-time home health services and naturopathy. If you decide you also want Medicare Part B, you must pay a monthly premium.
If you have received Social Security disability benefits for 24 months, you will automatically be enrolled in Medicare at the start of the 25th month. If you have Lou Gehrigs disease, you will be automatically registered the first month you start receiving benefits. In these cases, enrollment includes both Medicare Part A and Part B. However, if you have end-stage kidney disease, your Medicare benefits will be determined on a case-by-case basis. In this case, you will need to apply manually.
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How Much Does Medicare Cost At Age 62
Medicare was signed into law by President Lyndon B. Johnson in 1965. The program was designed to provide insurance coverage of hospital expenses through Part A, and of medical costs through Part B. Medicare covers senior citizens aged 65 and older and younger individuals with specific disabilities. Medicare is available for legal permanent residents that have met the qualifying number of years worked. Those eligibilities remain in effect today.
If someone retires at the age of 62, without any of the qualifying disabilities, they will not be eligible for Medicare until the age of 65. If someone retires without a continuing employer-provided health insurance plan, they will need to purchase an individual or family health plan that will meet their medical expectations until reaching the qualifying age of 65.
Medicare Coverage Due to Disease or DisabilityDisease EligibilityImmediate eligibility for Medicare insurance is available for people under the age of 65 with ALS, commonly referred to as Lou Gehrigs disease, and for those with end-stage renal disease, or kidney failure.
Paying for Medicare and Social SecuritySocial Security RecipientsRetired individuals aged 65 and older who are receiving Social Security income will see their Medicare premiums automatically deducted from their monthly statements.
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What If Im Not Automatically Enrolled At 65
If your Medicare enrollment at 65 is not automatic, but you want to enroll, here are some more magic numbers.
3 and 7.
To start taking advantage of Medicare at 65, you need to sign up during the three months before the birthday month you turn 65. Those are the first three months of your seven-month Initial Enrollment Period.
Unless your birthday is on the first day of the month, your Initial Enrollment Period includes the three full months before turning 65, the month you turn 65, and the three months after you turn 65. If you were born on the first day of the month, IEP is the four months before your birth month, along with your birthday month and the two months after.
If you sign up during one of the months before your 65th birthday, your coverage will begin on the first day of the month you turn 65 .
What Is The Medicare Eligibility Age
You may decide to retire at the age of 62 because you can start collecting Social Security at this age and feel ready to move to a new stage in life. According to the Social Security Administration, you may start receiving retirement benefits as early as age 62. An employers health benefits will likely expire upon retirement and you may be wondering about the age of your Medicare eligibility.
Medicare is the state health care program for people age 65 or older and people under the age of 65 who have certain disabilities whose eligible age for Medicare does not correlate with your retirement time and early retirement will not make you eligible for Medicare. In general, the only ways to be eligible for Medicare before age 65 are to:
- If You have kidney disease at the end of the stage
- Have ALS
- If You have a disability and are receiving disability benefits from Social Security for at least 24 months
If you retire at 62 and not have a disability, you generally will have to wait three years to get Medicare coverage. You can search on eHealth for an affordable individual or family health insurance plan while you wait to reach Medicare age.
There are certain benefits to waiting for retirement after age 62 besides reaching Medicare age. If you retire early, your benefits will be cut slightly for each month before full retirement age, according to the Social Security Administration. The amount to be reduced depends on your year of birth.
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Before You Make Your Decision
There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different. It is important to remember:
- If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
- That there are other things to consider when making the decision about when to begin receiving your retirement benefits.
Can You Be Eligible For Medicare Before Age 65
In some cases , you may be eligible for Medicare under age 65.
- You have been receiving Social Security disability benefits for at least 24 months
- You receive certain disability benefits from the Railroad Retirement Board and
- You have Lou Gehrigs disease
- You have permanent kidney failure requiring regular dialysis or a kidney transplant .
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If You Have Esrd Consider A Medicare Advantage Plan
Medicare Advantage plans are now accepting beneficiaries with ESRD, starting in 2021. This is a different type of insurance from Medicare Supplement, and the two types of plans dont work together. Learn more about Medicare Advantage .
Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. The product and service descriptions, if any, provided on these eHealth web pages are not intended to constitute offers to sell or solicitations in connection with any product or service. All products are not available in all areas and are subject to applicable laws, rules, and regulations.
Medicare information is everywhere. What is hard is knowing which information to trust. Because eHealths Medicare related content is compliant with CMS regulations, you can rest assured youre getting accurate information so you can make the right decisions for your coverage. Read more to learn about our Compliance Program.
Getting Medicare Under The Age Of 65
Many people think of Medicare as a government health-care program for Americans and legal permanent residents who are at least 65 years old. But some people qualify for Medicare before age 65.
Here are the most common ways you may be eligible for Medicare if youre under age 65:
- You receive disability benefits from the Social Security Administration or from the Railroad Retirement Board . Youre automatically enrolled in Original Medicare, Part A and Part B, after 24 continuous months of receiving disability benefits.
- You have Lou Gehrigs disease . Youre automatically enrolled in Medicare the same month that your disability benefits start.
- You have end-stage renal disease . In this case, you may qualify for Medicare, but youre not automatically enrolled. To enroll, contact Social Security .
If you have questions about your eligibility for Medicare if youre under 65, or to enroll, you can contact Social Security at 1-800-772-1213. TTY users can call 1-800-325-0778. Representatives are available Monday through Friday, from 7AM to 7PM. Or, you can contact Medicare, or a licensed insurance agent at eHealth .
New To Medicare?
Becoming eligible for Medicare can be daunting. But dont worry, were here to help you understand Medicare in 15 minutes or less.
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Will The Medicare Eligibility Age Lower
Now, with Democratic control of the Senate, its more likely that Medicare at 60 will be in effect. Additionally, a majority of individuals on both sides of the political aisle support a Medicare buy-in plan for adults over 50.
Yet, there is opposition particularly from hospitals because of lower reimbursement rates. Thus, there could be pushback in the process.
Regardless of the outcome, the eligibility age for Medicare wont change overnight. In the meantime, its crucial for beneficiaries to stay up-to-date with the latest information about the eligibility age lowering. We will be updating this content as more information is available.
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Who Would Be Eligible For Medicare At 60
When someone with U.S. citizenship of at least five years reaches age 65, they become eligible for Medicare. Currently, it seems as though the age would lower to 60 without any additional requirements. Therefore, millions more Americans would be able to obtain Medicare. Additionally, it isnt clear if the penalties that people must pay for delaying enrollment would become effective when they turn 60 rather than 65.
Now, those who lack creditable coverage and dont enroll when aging in at 65 pay late penalties through increased premiums. Its possible that the penalties could start at 60 or remain for those who wait until after 65 to enroll.
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Definition Of A Disability
The Social Security Administration has a very strict definition of disability. To be considered disabled:
- You must be unable to do any substantial work because of your medical condition
- AND your medical condition must have lasted or be expected to last at least one year, or be expected to result in your death
According to the law, your SSDI payments cannot start until you have been disabled for at least five full months, although a recent law change expedited this process for people with ALS. Your payment will usually start with your sixth month of disability.
How Many New People Would Become Eligible For Medicare Under Medicare At 60
If the Medicare eligibility is lowered from 65 to 60, estimates indicate 22.7 million additional people will be eligible for coverage.
Most 60-65 year-olds in the U.S. receive their current health insurance coverage through their employer. The composition of health insurance coverage for this population includes:
- 13.4 million people receive employer-sponsored health insurance
- 3.8 million people receive Medicaid
- 3.2 million are enrolled in an individual marketplace plan
- 600,000 receive health insurance through other government programs
- 1.7 million people are uninsured
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