Medicare at 50
Most of us have heard about Bernie Sanders’ proposed Medicare for All legislation. This would create a single-payer universal healthcare system here in America where everyone would have access to free Medicare with no cost-sharing or premiums. Sanders’ bill would be a sweeping change to America’s healthcare system and there are concerns about the tax increases that might be required to make this bill a reality.
But did you know that there’s another proposed bill that would keep Medicare like it is now but allow American to buy into it as early as age 50? This bill, proposed by Senator Debbie Stabenow (D-MI) and several Democratic co-sponsors, would enable individuals aged 50 – 64 to purchase a private Medicare insurance plan, thereby offering an alternative to the often-costly Affordable Care Act plans.
People opting into Medicare early under this new legislation would gain access to more affordable healthcare at a time when many people most need it. This bill is sure to gain more visibility as we head into the 2020 election cycle, so let’s review some of the key takeaways.
Would Cover a Key Segment of Older Americans
Under the current ACA legislation, people aged 50+ pay some of the highest premiums in the individual health insurance marketplace. When an older American loses his or her job or can only find work that doesn’t offer health benefits, an expensive ACA health insurance plan is difficult to pay for.
As a result, they often choose plans with very high deductibles just so that they can afford the insurance, or they do without coverage altogether, which means we still have the ongoing problem of a large group of Americans being uninsured.
By offering these individuals an opportunity to buy into Medicare early, legislators hope to help early retirees gain more affordable healthcare coverage. After all, Medicare pays medical providers lower fees than private health insurance carriers, so it stands to reason that buying into Medicare early would result in significant premiums savings for older Americans.
There is also potential that this legislation could lower the average price of ACA plans altogether as older individuals would essentially leave the risk pool. This could then make healthcare premiums for younger people more affordable too.
Continues the ACA Subsidies
The Medicare at 50 legislation would also continue to allow individuals to benefit from the ACA tax credits and cost-sharing subsidies. Under Obamacare, individuals with incomes below a certain level currently qualify for premium tax credits.
These credits can be applied directly against the cost of their health insurance premiums, thus reducing what they pay on a monthly basis. Under Medicare at 50, these same people could apply their tax credits to their chosen Medicare plan, making premiums which are already expected to be lower even more affordable.
Could Gain Higher Public Support
Another key factor in the potential success of this legislation is that it may gain higher support from the general public. After all, Medicare is a very popular program and this bill would give more Americans access to it.
It’s a less-sweeping change than Medicare for All and polling indicates that Americans support the idea of a public insurance option that would compete with private plans over the idea of a single-payer system.
It’s also possible that Democratic legislators will be able to gain some Republican support for this bill when the country is faced with the alternative of Medicare for All. It’s a more modest change than Sander’s call for ending private insurance as we know it and it would be mostly financed by people paying premiums to buy into Medicare rather than drastically raising taxes to pay for a national healthcare system.
To be sure, not everyone supports the idea of Medicare at 50. Opponents are concerned that hospitals especially would suffer from the lower reimbursements for the patients that they treat. With already slim profit margins for Medicare patients, there is worry that the quality of acute care offered by these hospitals would suffer.
Insurers are another group that may be unlikely to support the legislation. Many insurers fear that Medicare at 50 would be just the first step in a slippery slope that ultimately leads to universal healthcare run by the federal government. With no place at the table in such a scenario, we can expect many insurance companies to lobby against the legislation.
On the flip side, some Democrats feel that Medicare at 50 just wouldn’t go far enough to save healthcare in America. They feel it is too like the Medicare at 55 bill that was offered in the past and didn’t gain traction. These opponents want to push for universal payer at an expense.
What ultimately will happen with this legislation remains to be seen but you can expect Medicare and healthcare reform to be a hot topic with presidential candidates in the 2020 elections, so stay tuned.
Danielle K Roberts is a Medicare insurance expert and co-founder at Boomer Benefits, where she and her team help baby boomers and seniors navigate their Medicare choices. She is a member of the Forbes Finance Council where she frequently writes about the costs of healthcare in retirement.
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