With a new President in the White House, many changes are coming to health care. These changes possibly include Medicare at 60. Below, we’ll provide some insight into what lowering the Medicare eligibility age could entail.
The Proposal for Medicare at 60
Besides a proposal to offer a public health insurance option similar to Medicare, President Biden hopes to lower the Medicare eligibility age to 60. During the presidential race, this was part of his health care platform. 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 five years aims to provide health care to those who retired 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 it’s necessary to provide this safety net.
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 lower to 60 without any additional requirements. Therefore, millions more Americans would be able to obtain Medicare. Additionally, it isn’t clear if the penalties that people must pay for delaying enrollment would become effective when they turn 60 rather than 65. Now, those who lack creditable coverage and don’t enroll when aging in at 65 pay late penalties through increased premiums. It’s possible that the penalties could 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 reality, there are financial concerns that the country must address. Those who age in are eligible for Part A premium-free if they’ve 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 Part A, which is why it is premium-free for most.
A major concern is that the HI Trust Fund is at risk of insolvency. Meaning, 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 would need to be well-funded if Medicare at 60 becomes law. Millions of more people would need to start receiving the coverage that they’ve already paid into.
Medigap at 60
Medigap plans cover the 20% of costs that Original Medicare doesn’t. Presently, participants can use the Open Enrollment Period to choose a Medigap plan to begin at the same time as their Part B coverage. In this time window, their health doesn’t impact whether they’re accepted into a plan.
The President doesn’t have a publically outlined plan for 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. At present, it isn’t 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 and Advantage carriers cannot deny someone’s application due to health conditions. Thus, those with guaranteed issue rights do not have to answer medical underwriting questions.
Will the Medicare Eligibility Age Lower
Now, with Democratic control of the Senate, it’s more likely that Medicare at 60 will be in effect. Additionally, a majority of 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 won’t change overnight. In the meantime, it’s crucial for beneficiaries to stay up-to-date with the latest information about the eligibility age lowering. We will be updating this content as more information is available.