New legislation in Congress would lower the age of Medicare eligibility to 55, from the current 65.
The Medicare at 55 Act is sponsored by eight Democratic senators and the trade press has reported that similar legislation is in the works in the House of Representatives.
This move really cuts at the crux of the GOP’s efforts to repeal and replace the Affordable Care Act, in part by significantly raising rates on older individuals who account for a disproportionate amount of the insureds in government-operated health insurance exchanges. And interestingly, some Republicans seem open to the idea as a way to fix ACA problems.
Before the ACA became law in 2010, about 4 million people aged between 55 and 64 were uninsured, according to a 2009 study by the Kaiser Family Foundation. Additionally, nearly 25% of those uninsured individuals were in fair to poor health, compared to 16% of 35- to 54-year-olds.
Also, 20% of individuals who were aged 55-59 were denied coverage prior to the creation of the ACA individual market, as were 29% of 60- to 64-year-olds.
If it were implemented, the Medicare at 55 Act would pull many people with pre-existing conditions out of the individual market, which would reduce the overall “riskiness” of the pool and in turn lower premiums for those that remain in the pool.
One of the reasons for the ACA’s problems is that many young people feel the premiums are too high and so they opt to pay a penalty for not buying coverage, which also drives up premiums since they are not evening out the risk pool.
Additionally, the bill would also address one of the other big anchors in the ACA: people in the 50-64 age bracket are often burdened with extremely high premiums and many people in this category have been priced out of the market.
In other words, it would open up a reliable market for people 55 and over who are having trouble paying the steep premium tabs from exchange-purchased plans.
“People between the ages of 55 and 64 often have more health problems and face higher health care costs, but aren’t yet eligible for Medicare,” said Sen. Debbie Stabenow, D-MI, when introducing the legislation in early August. “If you live in Michigan, are 58 years old, and are having a hard time finding coverage that works for you, this bill will let you buy into Medicare before you turn 65.”
In turn, there could be a third benefit in that overall Medicare premiums could also be reduced as the overall risk pool would improve with the addition of the relatively younger new enrollees.
Meanwhile, Democrats in the House of Representatives have said they plan to introduce similar legislation in September: the Medicare Buy-In and Health Care Stabilization Act.
The measure would allow Americans 50 or older to buy in to Medicare for $8,212 a year.