If you don’t have employer-sponsored health insurance, health care for the years leading up to retirement can be wildly expensive—even if your health is good.
People in their 50s and early 60s who are self-employed, cannot get health insurance through their jobs, or have retired early can buy individual health insurance. But premiums for older Americans are high. And they get higher the closer you are to age 65, the age when you become eligible for Medicare.
Because of this, many people sign up for high deductible plans with high out-of-pocket costs, or they go without health insurance and hope nothing happens.
Legislation introduced by Sen. Debbie Stabenow (D-Mich) aims to provide relief by allowing people aged 50-64 to buy Medicare coverage. This legislation has the potential to make health insurance less expensive for everyone.
How Medicare at 50 Might Save You Money
The Medicare at 50 legislation would give people the option of buying into Medicare’s Part A, B and D coverage starting at age 50, with the same benefits that people aged 65 and older receive now. There would also be an option to buy a Medigap plan to cover out of pocket costs, with guaranteed acceptance into a plan. For people whose income makes them eligible for subsidies under the Affordable Care Act, those subsidies would also apply to Medicare buy-in coverage.
Sponsors of the bill say the program will pay for itself through monthly premiums. Though it’s unclear at this point what those premiums would be, they are expected to be significantly lower than the premiums older people pay for Affordable Care Act plans.
Younger people buying into Medicare would probably pay more for coverage than people over 65 pay. Most people 65 and older pay no premium for Medicare Part A (hospitalization) and just $135.50 a month for Part B (medical). A 2008 estimate from the Congressional Budget Office said the government would have to charge a premium of $7600 a year (about $633 a month) for a Medicare buy-in to work.
That’s still far less than many people are paying now. A 62-year-old who earns $50,000 a year pays an average of $12,904 a year (or $1075 a month) for an individual Silver plan. If a significant number of older people choose Medicare instead of an ACA plan, the ACA plans will have a younger risk pool and potentially become more affordable for younger people.
The Bill Faces Opposition
Medicare at 50 may be less controversial than Bernie Sanders’ (D-VT) Medicare for All legislation. Polling by the Kaiser Family Foundation indicates that 77 percent of Americans support a Medicare buy-in for people aged 50-64.
But the legislation still faces strong opposition, particularly from hospital groups who say they can’t afford an expanded Medicare system because Medicare’s reimbursement rates are so much lower than what private insurance companies pay.
Medicare at 50 May Help More People Get Health Care
In our business, we talk to people every day who are enrolling in Medicare for the first time. While some have had good employer-sponsored coverage in the past, others are thrilled that they will finally have insurance for the first time in years. We hear stories from people who have delayed taking care of medical conditions because they couldn’t afford the insurance premiums or the out-of-pocket costs to satisfy their deductibles.
It remains to be seen whether any of the current Medicare expansion bills will be financially or politically feasible. But we are excited to see dialogue and proposals that may provide healthcare coverage to more people and make it possible for them to take care of their own health and the health needs of their families.