Rhetoric Vs. Reality: “Medicare At 60” Would Come With Unaffordable Costs & Consequences

WASHINGTON – As some lawmakers discuss proposals to open up the Medicare program to younger Americans, such as “Medicare at 60,” it’s important to note that doing so could come with unaffordable costs and negative consequences.

RHETORIC: Proponents of “Medicare at 60” claim it would help lower health care costs.

REALITY:  “Medicare at 60” could bankrupt the Medicare program and/or push increased Medicare expenditures onto taxpayers.

• Lowering the Medicare eligibility age from 65 to 60 “would shift costs to taxpayers and increase Medicare program expenditures overall.” (Kaiser Family Foundation, 4/27/21)

• While “Medicare at 60” could absorb a majority of newly eligible Americans aged 60 to 64 years old, most of those Americans would otherwise be covered by private plans, such as employer-provided coverage, and shifting their coverage could lead to significantly higher Medicare expenditures. (Lanhee J. Chen, Ph.D., Tom Church and Daniel L. Heil, 4/27/21)

RHETORIC: Proponents of “Medicare at 60” claim it would improve Americans’ ability to access quality health care.

REALITY:“Medicare at 60” could threaten the high-quality health care Americans rely on, including seniors and residents of rural and underserved communities.

• Opening Medicare up to younger Americans “would likely lead to lower revenues for hospitals, physicians, and providers who deliver care to older adults who choose Medicare over employer coverage.”(Kaiser Family Foundation, 4/27/21)

• Unsustainable reimbursement cuts could cause hospital closures and jeopardize the care patients depend on – especially in rural and underserved communities, where providers often operate on tight margins and where many hospitals already face the threat of closure. A “lower eligibility age would also create new challenges for doctors and hospitals. Medicare underpays providers significantly, reimbursing hospitals just 87 cents for every dollar of care they deliver. These paltry reimbursement rates stress the finances of providers” and lowering Medicare’s eligibility age could “force some providers to close up shop.”(“Sanders Proposal Brings Medicare Closer To The Brink Of Collapse,” Sally Pipes, Forbes, 4/12/21)

RHETORIC: Proponents of “Medicare at 60” claim it would not put seniors’ Medicare at risk.

REALITY:The Medicare program is already at risk, and “Medicare at 60” could bankrupt the trust fund much sooner, while causing other unknown and unintended consequences.

• With Medicare’s trustees already warning the program is at risk for today’s seniors and its Hospital Insurance (HI) Trust Fund projected to be depleted by 2026 under current law, implementing “Medicare at 60”in 2022 would “hasten the depletion of the trust fund” and could cause its bankruptcy by 2024, two years sooner than currently projected. (Lanhee J. Chen, Ph.D., Tom Church and Daniel L. Heil, 4/27/21)

FOOD FOR THOUGHT:

There are other complications that may arise from opening up Medicare to younger Americans.

• Lowering the Medicare eligibility age to 60 may also encourage many Americans to retire earlier, which “would affect the federal budget, reducing income and payroll tax revenue,” and additional analysis is needed to determine the more extensive effects this would have on the budget, cuts to health care providers, and disruption to current health care law and programs – among other considerations. More research is expected to follow on these important topics. (Lanhee J. Chen, Ph.D., Tom Church and Daniel L. Heil, 4/27/21)

The current health care system, along with recent expansions and subsidies, is working to assist the same people who would be eligible for Medicare at 60, without the potential costs and consequences.

• Meanwhile, our nation’s health care system is working together to expand access to coverage and care, and “the number of people eligible for a subsidy to purchase Marketplace coverage has increased 20 percent” under the American Rescue Plan Act (ARPA), while “the majority of uninsured people (63 percent) are now eligible for financial assistance through the Marketplaces, Medicaid, or Basic Health Plans. In fact, more than four out of 10 uninsured people are eligible for a free or nearly free health plan through one of these programs.” (Kaiser Family Foundation, 3/25/21)

• ARPA represents “the biggest expansion of federal help for health insurance since the Obama-era Affordable Care Act,” and separate steps are already underway to extend open enrollment in the federal health care marketplace, eliminate ineffective red tape that can prevent Americans from accessing coverage options and urge the Supreme Court to uphold the Affordable Care Act.
   
• Recently, the 94-member New Democrat Coalition sent a letter urging President Biden to work with Congress to “permanently expand new subsidies passed as part of the most recent Covid aid package,” POLITICO Pulse reported, while in a separate letter, “30 Democrats — most of whom were elected during the party’s 2018 wave — are pressing Biden to make expanded Obamacare subsidies permanent as part of his infrastructure plan,” POLITICO Pulse also reported.

With our health care system already working together to help Americans get healthy and stay healthy, this is not the time for one-size-fits-all proposals such as “Medicare at 60,” Medicare buy-in or the public option, which could ultimately lead to many of the same consequences as Medicare for All. Instead, our leaders should build on and improve what’s working, where private coverage, Medicare and Medicaid work together to expand access to coverage and care in order to lower costs, protect patient choice, expand access, improve quality and foster innovation.