Whether it’s Medicare for All or lowering the age you qualify for Medicare, there have been many proposals to make Medicare available to more people.
This article will discuss how President Biden’s proposal for Medicare at 60 would work and how that could be both good and bad.
The Medicare Population
Medicare has provided health insurance for people 65 years and older since 1965. In its first year alone, it covered 19 million people. That was quite a feat when nearly half of older adults had no health insurance before then.
After the baby boom (the increased rate in birth between 1946 and 1964), the number of people on Medicare continued to rise. Medicare also expanded coverage to people with end-stage renal disease and certain disabilities in 1972.
By 2020, Medicare covered 62.8 million people, approximately 19% of the U.S. population. The Centers for Medicare & Medicaid Services expects that number to increase to 81 million people by 2030.
Decreasing the Medicare eligibility age to 60 would potentially add coverage for more than 24.5 million people. These older adults would have the option to sign up for Medicare early, stay on their employer-sponsored plan (if they have one), or enroll in Medicaid if they qualify.
When Medicare was signed into law, the retirement age was 65 years. Someone could get their full Social Security benefits and get started on Medicare at the same time. That’s no longer the case.
In 1983, Social Security extended the retirement age to 67 years. Depending on the year you were born, your retirement age will vary. It starts at 65 for anyone born before 1938 and goes up to 67 years for anyone born after 1960.
With Medicare and Social Security out of sync, early retirees could be priced out of affordable health insurance. Although the Affordable Care Act does not allow a health plan to look at pre-existing conditions, plans can charge older adults as much as three times more than younger adults. Medicare at 60 would provide a reasonable option in this case.
Social Security Benefits
If you retire before the designated retirement age, you will not receive full Social Security benefits. The earliest age you could receive Social Security is 62 years old, but your benefit decreases based on how early you retired. You have to decide if early retirement is worth the loss in future income.
Employer-Sponsored Health Plans
Many people may choose to keep working to retirement age to maximize their Social Security benefits. As many as 61% of people between 60 and 64 years old have health insurance through their employer. Essentially, their employer pays a percentage of the monthly premiums while they pay the rest.
This could be beneficial for several reasons. First, their employer-sponsored insurance could cover more services than traditional Medicare.
Second, they may have a family member on their insurance plan, e.g., a spouse or dependent, who does not qualify for other types of health insurance. Medicare covers only one person and cannot be applied to families.
However, employer health plans can sometimes get expensive. Premiums increased by 4% from 2019 to 2020. Altogether, premiums increased by 22% over the past decade.
Medicare, on the other hand, tends to see more modest rises in premium rates over time. Most people get Part A premiums for free, while Part B premiums vary based on your income level.
In 2021, people in the lowest income bracket only saw a $4 rise in monthly premiums. Also, when there is no rise in Social Security payments in a given year, there is no rise in Medicare premiums.
In these ways, Medicare at 60 could potentially save money. It could also benefit employers. If all people between 60 and 64 left their employer health plan for Medicare, employers could spend 15% less on health insurance.
Medicaid, the Underinsured, the Uninsured
Having health insurance does not always mean you can afford to use it. There may be expensive deductibles to pay out of pocket before your insurance coverage kicks in. When insurance does pay for services, you could still be left to pay copays (a fixed dollar amount for a service) or coinsurance (a percentage of the cost for a service).
Not everyone is fortunate enough to afford health insurance. As many as 17% of adults between 60 and 64 are on Medicaid, and 8% are uninsured. States where Medicaid expansion did not occur tend to have higher rates of uninsured people.
Unfortunately, many people delay care due to concerns over cost. In 2019, 9.1% of people delayed getting the care they needed, and 8.3% chose not to get care at all. When it came to people who did not have insurance, those rates increased to 32.2% and 30.4%, respectively.
A study in the journal Cancer looked at a national database of cancer diagnoses from 2014 to 2016. The researchers focused on uninsured adults between 61 and 64 years old and compared them to insured adults on Medicare from 65 to 69 years old.
Interestingly, there was a significant rise in cancer diagnoses at 65 years old, especially for colon cancer and lung cancer. The implication is that people delayed care until they qualified for Medicare.
Medicare at 60 could be an option for Americans who do not qualify for Medicaid or who cannot otherwise access affordable health care.
A Cost Analysis
Medicare at 60 sounds promising, but there is also the Marketplace to consider. People with low or modest incomes can qualify for subsidies to decrease those costs. This could make those plans more affordable for them than Medicare.
The marketing and consulting firm Avalere compared costs between three insurance options:
- Marketplace plan
- Traditional Medicare with enrollment in a Medicare supplement plan, also known as Medigap
- Medicare Advantage plan
In terms of coverage, option 2 was the most comprehensive since Medicare is accepted nationwide. The other options may be limited geographically or by a plan’s network.
Overall, people who had incomes less than 250% of the federal poverty level (FPL), approximately $32,000 per year, saved more with a silver Marketplace plan. For those earning more than 400% FPL, about $52,000 per year, Medicare was the better deal.
Don’t forget that Medicare has subsidy programs too. Medicare Savings Programs can pay down not only Medicare premiums, but deductibles, copays, and coinsurance. Anyone who qualifies for one of the four savings programs also qualifies for Extra Help, a subsidy program to help pay for prescription drugs.
There are pros and cons to Medicare at 60 that will depend on your income. If the proposal comes to pass, you will have an important choice to make.
Marketplace (Obamacare) Plans
President Biden has not yet provided the details for Medicare at 60. Understanding how the plan would work with Marketplace (Obamacare) plans will affect how many people could benefit and their choices.
Currently, the law does not allow you to sign up for a Marketplace plan if you are on Medicare, even if it’s just Part A or Part B.
There are exceptions. If you pay premiums for Part A (that is, you do not get it for free because you paid less than 40 quarters of Medicare taxes) and cancel your coverage, you could enroll. Otherwise, you could enroll if you were eligible for Medicare but never signed up.
If Medicare at 60 follows the current rules, most people at 60 would not be eligible for Marketplace plans. Alternatively, if it offers Medicare as an option but does not exclude Marketplace plans for adults 60 to 64 years old, you could have more choices.
Not signing up for Medicare when you are eligible could hit your wallet in the long run. You could face late penalties when you do decide to sign up. Those penalties could last as long as you have Medicare.
Lowering the age of qualification for Medicare to 60 would have several implications. It would make more than 24.5 million people newly eligible. It could be an alternative to employer-sponsored health plans or Marketplace health plans. The uninsured and underinsured may have better access to affordable care.
A Word From Verywell
Health care in the United States can be expensive. Older adults, in particular, may find it hard to get insurance if they retire early, if they are self-employed, or if they have limited income.
Medicare has traditionally been an affordable healthcare option, and proposals are underway to decrease the Medicare age so that more people can get the care they need. Keep an eye out for Medicare at 60. It could offer considerable savings depending on how it moves forward.