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Biden’s ‘Medicare At 60’ Gains Momentum In Coronavirus Era
The former vice president in April announced his proposal to allow Americans between the ages of 60 and 64 the option of buying into Medicare, the federal health insurance program for the elderly. The proposal would be less costly than earlier versions proposed by Democrats in the U.S. Senate to lower Medicare eligibility to as young as 55 or even 50 as some new analyses are beginning to show. And Medicare would be particularly attractive to Americans with employer-sponsored coverage who are looking to retire early or have recently lost their jobs as companies close their doors and lay off workers during the spread Covid-19. “As the economy works to recover on the heels of the Covid-19 pandemic, guaranteeing coverage for the country’s oldest workers at a somewhat modest cost may have wide appeal,” Dr. Zirui Song, of the department of health care policy at Harvard Medical School in Boston wrote in Friday’s JAMA (companion article) about the potential implications of lowering the age for Medicare eligibility. “Lowering the Medicare eligibility age to 60 years would achieve meaningful coverage gains while disrupting commercial insurance less than would a broader public option or Medicare-for-All program.” Biden’s Medicare proposal is part of his campaign’s pledge to build on the Affordable Care Act. Biden’s Republican opponent, Donald Trump, however, has been working to uproot the ACA as well as its subsidized individual coverage known as Obamacare and also opposes expanded Medicaid. And the Justice Department under Trump appointees have been working with Republican attorneys general to repeal the ACA. The latest analysis of Biden’s proposal indicates it would be cost effective and less disruptive to the commercial insurance market than a single payer version of “Medicare for All” that would uproot the private health insurance industry and essentially bring an end to the role of private insurers. “Evidence on the effect of entering Medicare from employer-sponsored coverage shows that, at age 65 years, Medicare enrollment leads to decreased health care spending by about 30% without changes in utilization; virtually all of this reduction is related to lower prices for services—that is, Medicare reimburses physicians and hospitals less than private insurance,” Song wrote in JAMA. “Therefore, the policy would increase public spending by replacing some of today’s private spending with federal dollars, although notably at lower prices.” Details of Biden’s proposal have yet to emerge other than the brief description that emerged less than two months ago. Biden said the idea was to allow Americans to have more choices than they do now and allow them to keep their employer coverage if they so desired. Biden’s proposal to introduce a public option and expand existing Medicare is in line with public sentiment heading into the heat of the summer and fall Presidential election campaign. The latest data from the Kaiser Family Foundation’s health tracking poll show nearly 70% of Americans favor a public option, which is a percentage that has largely held steady since January and “before coronavirus became a major concern in the U.S.” The Kaiser poll also showed more than half, or 51% of the American public “now holds favorable views toward” the ACA while 41% hold “unfavorable views.” The poll was conducted May 13-18, Kaiser said, from a sample of nearly 1,200 adults.
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Seniors Will Pay Less For 2020 Medicare Premiums, Study Finds
Seniors will need less money to cover their health-care costs this year than they did last year. But retired couples will need a combined total of $386,000 in healthcare savings to afford them over their lifetimes, according to a report by the Employee Benefit Research Institute (EBRI).
The report, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decreases in 2020,” examines the savings needed to pay for premiums for Medicare Parts B and D and Medigap Plan G, as well as out-of-pocket spending for outpatient prescription drugs.
Medicare generally covers only about two-thirds of the cost of health care services for beneficiaries age 65 and older.
This year, Medicare Trustees reduced projected costs for Medicare Part D premiums and out-of-pocket expenses by 10% - the lowest EBRI said it has recorded since 2013, when needed savings declined between 6% and 11%. EBRI said in a press release that the primary reason for the decrease was related to an annual adjustment associated with prescription drug use.
While every little bit helps, this year’s 10% decrease will not significantly reduce the amount of healthcare savings needed to cover most seniors’ annual medical expenses, EBRI said. A male and female couple will need $386,000 this year to afford their combined annual medical expenses in full, even with a 10% reduction in cost over last year.
“Americans should consider that even with this decline, the amount needed to supplement Medicare is still significant, and that they will likely need more savings than cited in this report,” Paul Fronstin, Ph.D., director of the Health Research and Education Program at EBRI and co-author of the study, said in the news release.
According to Fronstin, so will retirees who incur long-term care and other health expenses not covered by Medicare. So will individuals who retire before the age of 65.
While Medicare Trustees make small changes to Medicare program costs, EBRI said that policymakers are poised to make sweeping financial changes to the program as a whole through solutions that will shift still more responsibility for healthcare costs to beneficiaries, many of whom already are struggling to afford them.
A copy of the issue brief, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decreases in 2020,” can be found at www.ebri.org.
Founded in 1978, the Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement, and financial security issues.
More than 50% of Baby Boomers believe health care costs will consume 20% of their income, or less.
