Presidential candidate Joe Biden announced a proposal this week to allow Americans as young as age 60 an option to buy into Medicare. We have previously covered Senator Debbie Stabenow’s “Medicare at 50” bill here on our blog, and the Medicare at 60 proposal has some similarities but would not cost quite as much.
While Biden’s team is still hammering out the actual details for his full-fledged healthcare plan, we do know that he is not in favor of any plan that gets rid of Obamacare. Instead, his proposal would build upon the existing ACA program that was passed while he was Vice President.
Let’s look at some of the things we do know about Biden’s proposal:
Our Facebook audience is casting their votes on Medicare at 60
Targets Early Retirees: A Group that is Often Uninsured
Allowing Americans to buy into Medicare early is not a new idea. Health insurance under the ACA for people ages 60 – 64 can be quite expensive. So when someone loses their job or retires early and loses accesses to employer coverage, they sometimes go without health insurance at all because the premiums for individual health insurance policies through the healthcare exchange are too expensive if you don’t qualify for a subsidy due to low income.
Any proposal that lowers the possible entry age for Medicare would then help to get coverage to this relatively large group of uninsured older Americans. Offering Medicare to people at 60 would extend eligibility to approximately 18 million people in America.
Directly Responds to COVID-19 Fallout
There also could not be a better time as the Coronavirus has causes millions of job losses across America. While some of these workers will be rehired when businesses reopen, many of them will not be as the pandemic will surely cause many businesses to close for good.
In this respect, the proposal acknowledges the reality that many people will be facing early retirement after the current crisis ends because they will be unable to find and secure new employment.
Provides Cheaper Health Insurance Options
Currently Medicare Part B costs $144.60/month for most Medicare beneficiaries. They can add on supplemental or drug coverage at their own expense as well. Even so, their total monthly premiums for their entire Medicare coverage package would likely be substantially lower in price than buying an individual health insurance policy through the ACA.
ACA policies can cost upwards of $800/month for people in their sixties. Even when they opt for plans with very high deductibles like $6500/month, the monthly premiums far exceed what they would pay to buy into Medicare. In this respect, Biden’s Medicare at 60 public option would significantly reduce the cost of health insurance for many people in the 60 – 64 age bracket.
It’s Not like Bernie’s Medicare for All
Although Biden’s proposal would allow Americans to buy into Medicare at 60 instead of having to wait until 65, it would also leave Medicare intact as it is today. Beneficiaries pay for the current Medicare system through a combination of Medicare taxes during their working year plus monthly premiums when retired.
This is far cry from the more radical sweeping change that former candidate Bernie Sanders has promoted. That plan, although named Medicare for All, would completely replace the current Medicare system with universal, single payer option for all Americans, funded likely by tax increases on both businesses and individuals.
Biden’s plan, on the other hand, would be financed by general government revenues instead of the Medicare Trust Fund. It calls for large cuts to hospital revenues to keep it affordable. In this respect, it would not contribute to the current problem with the solvency of Medicare.
Keeps Insurance Companies in the Mix
One feature of Medicare is that beneficiaries can choose to get their Medicare benefits through a private local insurance carrier instead of from the federal government. These Medicare Advantage plans are run by private insurance companies today and would continue to be run by them under Biden’s plan. (Under Bernie’s plan, private health insurance companies would have been outlawed altogether).
Likewise, Biden’s plan would allow workers to stay on their private employer group health plans or enroll in health plans under the Affordable Care Act, both of which heavily involve health insurance companies.
While these early details about Biden’s proposal are a far cry from the more progressive single payer options supported by Bernie Sanders and some of the other Democratic presidential hopefuls, it does include a public option that many older Americans would welcome.
Biden also announced he would expand student loan forgiveness in another effort to get people back on their feet in a post-Coronavirus crisis world.
Will that be enough to secure the nation’s highest seat of power? That remains to be seen, but we’ll be here reporting the finer points to you as they emerge.