How would lowering the Medicare eligibility age to 60 help?

Vice-President Joe Biden recently advocated for lowering the Medicare eligibility age to 60 in order to help older workers. In a JAMA opinion piece, Zirui Song, MD, looks at how lowering the Medicare eligibility age to 60 could benefit individuals, employers, states and the federal government. Among other things, he fails to consider that, unlike Medicare for All, it would leave people under 60 with high cost, unreliable health care coverage.

Of note, the majority of the public supports lowering the age of Medicare eligibility. In fact, more than three in four people support lowering the Medicare eligibility age to 50. It’s not clear that they appreciate that lowering the Medicare eligibility age could drive up health care costs for everyone who is not eligible, among other concerns.

If not done right, lowering the Medicare eligibility age could further endanger traditional Medicare. It would be particularly problematic if Congress lowered the Medicare eligibility age and did not also put an out-of-pocket cap in traditional Medicare so that it protects people from financial risk and is on a more level playing field with Medicare Advantage plans. As it is, Medicare Advantage plans attract the healthiest people with Medicare, and traditional Medicare attracts a disproportionately high proportion of people in poor health. Without an out-of-pocket cap, traditional Medicare is too costly for many people.

Not only would it give people 60-64 a choice of good health care coverage, it would bring down Medicare’s per capita costs and lower premiums for people 65 and older.

Dr. Song explains that because Medicare pays lower rates to doctors and hospitals than commercial health insurers, lowering the Medicare eligibility age would reduce health care spending by about 30 percent. It would also lower health insurance costs for employers and reduce premiums and average spending for working people under 60 years old. It would remove the highest-spending group of people with employer coverage from the employer pool. Older people use more health care services than younger people.

Dr. Song does not consider that lowering the Medicare age without the federal government negotiating fair health care prices for everyone could drive up health care costs for people under 60. He focuses instead on the fact that the per capita costs of Medicare would fall as a younger cohort of people, likely with fewer health care costs, would be joining. More younger and healthier people would be contributing to Medicare premiums, which do not vary with age. People with Medicare over 65 should benefit as premiums would decline.

Dr. Song opines that lowering the Medicare eligibility age would also save the federal government money on subsidies for people in the state health insurance exchange plans. Fewer people would be in these plans. And, the remaining group would be younger, reducing costs. These savings could help offset the costs of opening Medicare to 60-64 year olds.

Lowering the age of Medicare eligibility would also save both the federal and state governments money on Medicaid for people 60 to 64. In addition, the federal government would be giving fewer tax breaks for employer health care coverage because many people would give up this coverage for Medicare. As a result, the federal government would garner billions more in tax revenues.

Would Medicare end up with a pool of members in poorer health? Dr. Song does not conclude that people in poorer health would disproportionately enroll in Medicare over other options, although that is quite likely if Medicare offers them coverage at lower cost than commercial insurance. Dr. Song does suggest that lower income populations should benefit from lowering the Medicare eligibility age because they will have a lower-cost health insurance option through Medicare.

Dr. Song believes that people in small employer plans would be more likely to opt for Medicare at age 60 than people in large employer plans because Medicare has more generous benefits than most small employer plans. He believes that people in large employer plans would likely stick with those plans because he think they tend to have better benefits than Medicare.

Of course, Medicare for All would do far more to ensure a lower cost better quality health care system than lowering the Medicare eligibility age by five years. And, more than half the public (56 percent) supports making Medicare available to all. Lowering the Medicare eligibility age by five years keeps high administrative costs and high health care prices in place. It does not do anywhere near enough to ensure all Americans have access to the health care they need.

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