Opening Medicare to Americans Aged 50 to 64 Would Cut Their Insurance Costs, but Drive Up Insurance Prices for Younger People
Nov 18, 2019
In this report, the authors analyze how allowing adults ages 50 and older to buy into the Medicare program could affect health insurance coverage, individual market premiums, and federal health care spending. Their findings suggest that a Medicare buy-in could offer significantly more-affordable coverage to older adults while potentially leading to higher premiums for the pool of people remaining on the individual market.
Assessing the Effects of Allowing Older Adults to Buy Into the Medicare Program
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Policymakers have long discussed allowing people under the age of 65 to buy into the Medicare program. Unlike health care proposals that seek to provide tax-financed health coverage to the entire population (often labeled "Medicare for All"), Medicare buy-in proposals would create a voluntary new option for eligible people to enroll in Medicare.
In this report, the authors analyze how allowing adults ages 50 and older to buy into the Medicare program could affect health insurance coverage, individual market premiums, and federal health care spending. They consider a base buy-in scenario that assumes 50-to-64-year-olds are eligible for the buy-in, advance premium tax credits and cost-sharing reductions (which are Affordable Care Act subsidies to help pay for cost-sharing at the point of service) are available on the buy-in, and — like traditional Medicare — the buy-in has no out-of-pocket maximum. They then estimate eight alternative scenarios that vary based on assumptions about the design of the buy-in and consumers' response to the program.
The findings presented in this report suggest that a Medicare buy-in could offer significantly more-affordable coverage to older adults while potentially leading to higher premiums for the pool of people remaining on the individual market.
Limitations and Uncertainty
Discussion and Conclusion
Results with Cost-Sharing Reductions Funded
Individual Market Premiums
Merged Risk Pool
This report was funded by AARP and conducted by the Payment, Cost, and Coverage Program within RAND Health Care.
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