More than three million Americans become eligible for Medicare every year. If presidential candidate Joe Biden’s proposal to lower the Medicare eligibility age from 65 to 60 becomes law, close to 23 million people could become newly eligible for Medicare in 2021. The estimate of newly eligible Medicare beneficiaries comes from recent analysis from Avelere Health.1
While several candidates for the Democratic nomination pushed a Medicare For All proposal in 2019 and early 2020, Biden distanced himself from that idea and has instead lobbied for a “Medicare For More” plan, or “Medicare at 60.”
Biden has also campaigned on promising a public health insurance option available to Americans of all ages. Workers between the ages of 60 and 64 would have three primary health insurance coverage options: Medicare, their employer-provided insurance or the public option.
Those under the age of 60 would primarily be able to choose from employer insurance or the public option.
If the Medicare eligibility is lowered from 65 to 60, estimates indicate 22.7 million additional people will be eligible for coverage.
Most 60-65 year-olds in the U.S. receive their current health insurance coverage through their employer. The composition of health insurance coverage for this population includes:
Biden plans finance “Medicare at 60” through general government revenues instead of the Medicare Trust Fund, which currently is in danger of future insolvency. Biden proposes keeping Medicare affordable for beneficiaries by cutting hospital revenues.
Private Medicare insurance such as Medicare Advantage, Medicare Part D and Medicare Supplement Insurance would remain intact, and people would become eligible to apply for these options at age 60, if they are eligible for Medicare.
Shifting the population of people ages 60 to 64 from private insurance to Medicare could benefit both types of insurance.
This demographic represents the oldest and unhealthiest group of people in the private insurance market. By removing them from the pool, the overall health of the private insurance pool theoretically improves, while the average age decreases. Lower risk can result in lower costs for plan beneficiaries.
By moving people age 60-64 to Medicare, they would become the youngest and healthiest demographic in the Medicare pool. The Medicare pool then becomes slightly healthier and younger overall. Again, lowered risk can translate to lower costs to the overall Medicare risk pool.
The other argument in favor of Medicare at 60 is that it provides an affordable option for early retirees who might pay high premiums on the individual market or risk going without insurance until they turn 65.
Arguments against the “Medicare at 60 “proposal include that it would strip away a sizeable revenue stream from the private insurance market. Private insurance could lose premium payments from up to 17 million people who make the switch to Medicare, thereby hampering the financial health of the market.
Adding nearly 23 million beneficiaries to Medicare rolls could also result in major costs being passed along to taxpayers.
Another opposing argument is that because working seniors who are nearing retirement are largely in their peak earning years, they don’t need federally subsidized health insurance. Only a small fraction of this population (7% according to Avalere) currently lack insurance coverage.
1 Christ Sloan, et al. (Apr. 21, 2020). Nearly 23M Individuals May Be Eligible for Medicare Coverage Under Biden Proposal. Avalere Health. Retrieved from https://avalere.com/press-releases/nearly-23m-individuals-may-be-eligible-for-medicare-coverage-under-biden-proposal.