What the Biden Plan to Lower Medicare Eligibility Age Could Mean for Medicare

Among several other plans for expanding insurance coverage among Americans, President-elect Biden has proposed that Medicare be expanded to people from the ages of 60-64. This proposal could expand Medicare’s coverage by as many as 23 million people — compared to the current 60 million enrolled.

Whether or not this proposal will be a priority for Biden’s early presidency remains to be seen, as other healthcare concerns, including the ongoing COVID-19 pandemic, are likely to take center stage.

However, this simple proposition is popular among the voting public, and Biden has emphasized that COVID-19 only highlights why this change remains necessary, writing in April that “Even after the current crisis ends, older Americans are likely to find it difficult to secure jobs.”

Here are some of the ways this change could affect Medicare and Medicare plans in the future.

The pros of a lower Medicare eligibility age

This proposal is designed, first and foremost, to ensure that older adults who find themselves unemployed don’t have to go without insurance past the age of 60. However, employed Americans would also be able to choose Medicare, and it may encourage others to retire early without fear of losing their insurance coverage.

If employees switch from private, employer-subsidized insurance to Medicare, that would be expected to benefit employers as well as, potentially, private insurers. Employers won’t have to subsidize the insurance coverage of those employees and private insurers may find fewer members of a more medically risky age group in their pool.

Medicare Advantage Plans, private alternatives to Medicare, may also be available to everyone from the age of 60 under this plan. That would also mean room for growth for Medicare Advantage insurers.

It would also be possible for people on Medicaid, which provides insurance coverage for low-income people, to switch to Medicare — which would save money for states, which pays part of Medicaid expenses alongside the federal government.

The potential cons of lowering the age of Medicare eligibility

The two main losers of this proposal? Hospitals and the federal budget.

Hospitals and other medical providers are pushing back against lowering the Medicare age as Medicare plans pay less for services than private insurances. This could mean a loss of revenue for many hospitals nationwide.

Additionally, the Medicare coverage replacing private insurance, or even the state’s portion of Medicaid coverage, would now be the federal government.

The Medicare Hospital Insurance Trust Fund, which pays hospitals and nursing homes for the care they give to Medicare beneficiaries, may become insolvent by 2024, and adding tens of millions of new potential beneficiaries is sure to raise issues with lawmakers concerned about the federal budget deficit.

This early on, it remains to be seen how much political capital the Biden administration will put behind this idea, or how it will tackle issues such as the Medicare Hospital Insurance Trust Fund. Nonetheless, if it were to go through, it could be one of the biggest changes to Medicare since its establishment in 1965.

Source: iQuanti, Inc.

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Categories: Healthcare Insurance

Tags: Biden, Healthcare, Insurance, Medicare