Rationalizing a Medicare buy-in policy for adults ages 50 to 64 that builds on the ACA

Rationalizing a Medicare buy-in policy for adults ages 50 to 64 that builds on the ACA

Collection:
Health Policy and Services Research
Author(s):
Garrett, Bowen, author
Contributor(s):
Urban Institute, issuing body.
Publication:
Washington, DC : Urban Institute, February 2021
Language(s):
English
Format:
Text
Subject(s):
Medicare -- economics
National Health Insurance, United States -- statistics & numerical data
United States
United States.
Genre(s):
Technical Report
Abstract:
Medicare buy-in policies gained prominence as potential incremental health reforms in the mid-1990s, after the Clinton administration's more ambitious health reform plan failed (Johnson, Moon, and Davidoff 2002). Such proposals from that era would have created a guaranteed source of health insurance adults ages 55 to 64 could buy, before becoming eligible for Medicare at age 65. 1 At a time when individually purchased coverage was not always available (insurers could deny coverage based on preexisting conditions) and premiums were generally linked to health status, the ability to buy into Medicare would have produced a reliable new source of health coverage for older adults. With the implementation of the Affordable Care Act (ACA), coverage options for older adults changed significantly. Medicaid coverage is now generally available for all individuals with incomes below 138 percent of the federal poverty level (FPL) in states that adopted the ACA's Medicaid expansions. Many older adults who do not have access to affordable employer-based coverage may purchase coverage in the ACA's Marketplaces, regardless of health status. Government subsidies, in the form of income-based tax credits, are now available that partially or fully offset the costs of health insurance premiums. By making coverage more broadly available—without regard for health status and possibly with a subsidy—the ACA has substantially obviated some key rationales of earlier Medicare buy-in proposals. Even with the ACA, some coverage gaps remain. In the 12 states that have not expanded Medicaid, subsidized coverage is unavailable to those with incomes below the FPL. And ACA subsidies are not available for people with incomes over 400 percent of FPL, who may face very high health insurance premiums, even with age-rating rules that limit premiums for older enrollees to no more than three times what enrollees in their early 20s are charged. Two recent Medicare buy-in proposals, the Medicare at 50 Act (S. 470), sponsored by Senator Deborah Stabenow, and the Medicare Buy-in and Health Care Stabilization Act of 2019 (H.R. 1346), sponsored by Representative Brian Higgins, are designed to build on the ACA. These proposals aim to produce a competing Medicare-like insurance product for the population ages 50 to 64 (called "older adults" hereafter). By taking advantage of Medicare payment rates for providers, potentially offering broader provider networks, and lowering cost sharing, these proposals intend to benefit older adults. In this brief, we discuss the potential merits of a Medicare buy-in policy that coexists with the ACA. We first show how older adults are at substantial risk of high health care spending, making health insurance coverage critical to their financial security. We then show how uninsurance rates have varied with age before and after ACA implementation. We also highlight some main findings from a recent report that estimated the health insurance coverage and spending effects of Medicare buy-in policies (Garrett et al. 2020) and discuss what buy-in policies could achieve if they were implemented alongside the ACA.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-DC license. (More information)
Extent:
1 online resource (1 PDF file (9 pages))
Illustrations:
Illustrations
NLM Unique ID:
9918316882906676 (See catalog record)
Permanent Link:
http://resource.nlm.nih.gov/9918316882906676