As new COVID-19 cases begin to slow and most Americans feel the pressures of a global pandemic lifted, changes could be coming to healthcare. These changes possibly include Medicare at 60. Below, we provide some insight into what lowering the Medicare eligibility age could entail.
The Presidents Proposal for Medicare at 60
Besides a proposal to offer a public health insurance option similar to Medicare, President Biden has mentioned the importance of lowering the Medicare eligibility age to 60. This was part of his health care reform platform during the presidential race.
Currently, the age at which one becomes Medicare-eligible is 65. Individuals under 65 can obtain Medicare if they collect SSDI for 24 months or are diagnosed with ALS or ESRD.
Lowering the eligibility age by five years aims to provide healthcare to those who retire early, are unemployed, or lack health benefits through their employer. Additionally, qualifying U.S. citizens over 60 would have an extra health care option. As the market is more difficult for older job seekers, the President says providing this safety net is necessary.
Who Would Be Eligible for Medicare at 60?
When someone with U.S. citizenship of at least five years reaches age 65, they become eligible for Medicare. Currently, it seems as though the age would be lowered to 60 without any additional requirements.
Therefore, millions more Americans could obtain Medicare coverage. Additionally, it is unclear if the penalties people must pay for delaying enrollment would become effective when they turn 60 rather than 65.
Now, those who lack creditable coverage and do not enroll when they age in at 65 pay late penalties through increased premiums. With this potential change, the penalties may start at 60 or remain for those who wait until after 65 to enroll.
The Cost of Medicare at 60
If Medicare at 60 becomes a reality, there are financial concerns that the country must address. Those who age in are eligible for Medicare Part A premium-free if they paid in while working for at least 40 quarters (ten years).
The tax money goes to the Hospital Insurance (HI) Trust Fund. This fund pays for Medicare Part A, which is premium-free for most.
A significant concern is that the HI Trust Fund is at risk of insolvency. There might not be sufficient revenue to cover Part A premiums in just a few years. The original prediction for when this would happen was 2026, but the pandemic is an additional strain on the fund and is speeding up the timeline.
The HI Trust Fund will need to be well-funded if Medicare at 60 becomes law. This is because millions of new citizens would become eligible for Medicare. Thus, the need to fund the healthcare program would increase.
Medigap at 60
Medicare Supplement plans cover the 20% of costs that Original Medicare does not. Presently, participants can use the Open Enrollment Period to choose a Medigap plan to begin at the same time as their Medicare Part B coverage. Their health does not impact whether a carrier accepts them into a plan in this time window.
Currently, there is no public plan from the President outlining how Medigap would work when people age in at 60. Currently, state laws dictate whether a basic Medigap plan must be available for those under 65. It is not clear whether everyone would be eligible for their choice of Medigap plan at age 60 or if the states would determine whether an option would be available to them before 65.
Also, it is unclear whether guaranteed issue rights will apply to those between the ages of 60 and 65. These rights apply to circumstances when Medicare Supplement carriers cannot deny someone’s application due to health conditions. Thus, those with guaranteed issue rights do not have to answer medical underwriting questions.
When Will the Medicare Eligibility Age Lower?
With Democratic control of the Senate, it is more likely that Medicare at 60 will go into effect in the coming years. Additionally, most individuals on both sides of the political aisle support a Medicare buy-in plan for adults over 50.
Yet, there is opposition – particularly from hospitals because of lower reimbursement rates. Thus, there could be pushback in the process.
Regardless of the outcome, the eligibility age for Medicare will not change overnight. Lowering the eligibility age is no longer part of the U.S. Government’s budget for Fiscal Year 2022. So, the Medicare eligibility age will not see a reduction anytime in the next year.
In the meantime, you should stay up-to-date with the latest information about potential changes to Medicare, including a reduced eligibility age. We will be updating this content as more information is available.