Democratic legislators are seeking to make Medicare available to more people, potentially lowering the cost of health insurance. Although Bernie Sanders’ “Medicare for All” proposal has gotten the most attention, there is another plan that would extend Medicare benefits to the people who pay the most for individual health insurance—those nearing retirement age.
The legislation, introduced by Sen. Debbie Stabenow (D-MI), would allow people aged 50-64 to buy into a private Medicare plan. Currently, you must be age 65 or older or disabled to qualify for Medicare.
Insurance is Unaffordable for Many Older Adults
While some people over 50 have good employer or union health insurance, others do not. That means they must buy insurance on the individual marketplace, where plans get more expensive the closer you are to age 65. Self-employed people, early retirees, and people who are unemployed or can�t get insurance through their jobs often end up in plans with high premiums and high deductibles, if they can afford insurance at all.
Medicare at 50: The Specifics
Unlike “Medicare for All,” which would completely overhaul our health insurance system, Medicare at 50 focuses on giving people in their 50s and 60s additional options that will make healthcare more affordable. The bill allows people to keep their employer coverage, buy a plan on the Affordable Care Act exchange, or buy a Medicare plan.
The Medicare plans available to people aged 50-64 would be private insurance plans, so they would cost more than traditional Medicare coverage for people 65 and up. But because Medicare’s reimbursement rates to doctors are lower than the rates paid by private insurance companies, the Medicare option is expected to be cheaper than the individual insurance plans now available to people 50 and up.
In addition, people who qualify for subsidies under the Affordable Care Act would be able to keep those subsidies and apply them to the cost of a Medicare plan.
Pros and Cons of Medicare Expansion
MMedicare at 50 has the potential to make health insurance more affordable for people aged 50-64. That could increase the number of people who have insurance and make it easier for older adults to take care of their health. Another potential advantage of Medicare at 50 is that it is not such a radical change to our healthcare system as Medicare for All. This could make it less controversial and easier to implement. But that doesn’t mean the proposal is without opposition.
Health insurers and pharmaceutical companies have come out against any plan to expand Medicare. Hospital groups say that because of Medicare’s low reimbursement rates, they may have trouble staying in business if more people are on Medicare. Industry experts worry that any Medicare expansion could reduce the number of people buying insurance on the ACA’s health insurance exchanges, leading insurance companies to pull out of the exchanges altogether. And there are concerns that if older people leave the exchanges, younger ones will pay higher premiums for coverage.
Medicare at 50 is a long way from becoming law—there are several similar proposals, and all of them must work their way through the legislative process. If you currently buy your insurance on the individual marketplace, or you’re considering retiring before age 65, you’ll want to keep an eye on Medicare expansion—it could save you money someday.
David Haass is the COO of Elite Insurance Partners & MedicareFAQ. A visionary with experience propelling innovation in the Insurance field, he is highly regarded for driving industry standards in client experience and cutting-edge technologies. Mr. Haass is an active contributor on the Forbes Financial Council, recognized for building brand trust and establishing strong customer relations, motivated by a genuine desire to demystify health insurance options.
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