By Mark Miller
CHICAGO (Reuters) – In what now seems like a galaxy far, far away, Republican lawmakers routinely talked up the idea of raising the Medicare eligibility age from 65 to 67. In fact, we were in that galaxy just three years ago.
A higher Medicare age was an awful policy idea when the Republican-controlled House of Representatives pitched it in 2017 (https://reut.rs/3cjvT01). It was just as bad in various proposals from Paul Ryan to reform federal spending when he ran the House Budget Committee and served as speaker of the House. And just imagine what it could have meant during today’s coronavirus outbreak, which disproportionately affects older adults who rely on Medicare.
The pandemic has made the yawning gaps and inequities in our health insurance system painfully obvious. And until now, the dream of universal health insurance coverage has seemed very distant.
But last week, presumptive Democratic presidential nominee Joe Biden became the first major-party candidate to call to expand access to Medicare by reducing the eligibility age to 60. This is a remarkable turning point – the standard bearer of a major party actually is calling for significant expansion of a government program. “Suddenly, the government doesn’t seem to be such a bad actor anymore,” said Marilyn Moon, one of the nation’s top experts on Medicare.
Moon is an economist and former public trustee of both Medicare and Social Security. She co-chaired a recent study on ways to expand Medicare eligibility by the National Academy of Social Insurance (NASI).
Biden’s proposal was a concession to the progressive wing of his party aimed at unity for the fall election, and it was a step in the right direction. But the NASI report shows that dropping the Medicare age to 60 would be no more than a very incremental step. A new battle over health reform surely will emerge in the wake of the pandemic, and the outcome we need is universal, affordable health coverage for all that improves the quality of care.
THREE APPROACHES TO REFORM
The NASI study https://bit.ly/2K4Aya7 offers a fascinating in-depth look at three approaches to expanding Medicare eligibility: lowering the eligibility age, establishing Medicare for All, and creating a Medicare buy-in. The report was created by a study panel made up of 27 experts from a broad range of perspectives, such as economics, health policy, political science, sociology, medicine and law.
The report draws some surprising conclusions about the practicality of actually executing these approaches. Yes, Medicare for All might be the toughest putt from a political standpoint – but the optional buy-in – which sounded great rolling off the tongues of moderate candidates like Pete Buttigieg – actually is the most difficult to execute.
“A lot of people think that Medicare for All sounds nice, but that it is aspirational and very difficult, if not impossible to do in practice,” said Moon. “And the buy-in just sounds like it’s not a big change. But we quickly realized that the buy-in was very complicated, because you take a complicated program like Medicare, which has a lot of moving parts, and then the even more complex Affordable Care Act structure and you try to marry the two in some way. It’s very difficult to do.”
Medicare for All could achieve nearly universal coverage, and yield sizable administrative savings. But there are plenty of questions about how exactly it would be executed. These include the continued role – if any – of private insurance like Medicare Advantage, Medigap and prescription drug plans; benefits and cost sharing and financing mechanisms, to name just a few. From a political standpoint, a push for Medicare for All would provoke a donnybrook with the powerful health insurance lobby if it includes an end of commercial health insurance as we know it.
A SWEET SPOT?
Reducing the Medicare age might just be the sweet spot, because it is fairly straightforward to implement and might not provoke the same intensity of political opposition.
But if we want to make a meaningful difference in healthcare coverage in this country, the age would need to move much lower than 60. The NASI study found that an entry point of age 62 would add 10.1 million to the Medicare rolls, but only 670,000 who had been uninsured because this older age group already has a comparatively low uninsured rate. Of course, that figure could be much higher now due to COVID-19-induced job losses.
Dropping the eligibility age to 50 would add 57.3 million new enrollees, 4.6 million of whom would have been uninsured. But that would come with its own set of questions. “You begin to change the nature of the people that are being covered, including many more families with children – but Medicare is an individually based insurance program,” said Moon. “You also have to figure out whether or not the payment rates that Medicare uses that help make it inexpensive would be adequate for healthcare providers who suddenly would be covering many more of their patients under Medicare.”
A lower Medicare age would come with a few other complications, starting with how to finance the expansion. Medicare Part B (outpatient services) and Part D (prescription drugs) are paid for with a combination of enrollee premiums and government general revenue. But Part A (hospitalization) is financed through a payroll tax paid in advance by workers. The fund’s actuarial assumptions are premised on serving only the 65-and-older population, and it already is on thin ice, facing an exhaustion date of 2026. (https://reut.rs/2RBxUwP) That date will likely move even closer due to the unanticipated cost of
caring for coronavirus patients.
Biden has proposed to protect the Part A trust fund by financing the expense of serving new, younger enrollees from general revenue, rather than the payroll tax.
It is far too early in the pandemic crisis to know where this debate will go, and much will depend on the political makeup of Washington next year. But as the saying goes, a crisis is a terrible thing to waste https://nyti.ms/2ykhKkl.
For more on Medicare expansion, check out my podcast interview this week with Marilyn Moon https://bit.ly/3adkttp.
(The opinions expressed here are those of the author, a columnist for Reuters.)
(Reporting by Mark Miller in Chicago; Editing by Matthew Lewis)