What You Need to Know
- The net cost would be about $43,056 per year per enrollee who would otherwise be uninsured.
- Employers could cover 3.2 million fewer older workers.
- Use of Medicaid and individually purchased coverage could fall by 3.8 million.
Offering ordinary Medicare coverage to all U.S. residents starting at age 60 could add about $155 billion to federal budget deficits from 2026 through 2031.
Analysts at the Congressional Budget Office and the Joint Committee on Taxation have given that estimate in a new review of the possible budget impact of lowering the standard Medicare eligibility age by five years.
The CBO has predicted in a separate budget and economic outlook report, for the period running from 2021 through 2031, that the federal government will generate about $33 trillion in revenue, and spend about $41 trillion, from 2026 through 2031.
The federal debt impact of lowering the Medicare eligibility age would amount to about 0.5% of baseline federal revenue over that six-year period and about 0.4% of baseline federal spending.
Expanding access to Medicare could decrease the number of uninsured people by 600,000, at a cost of about $43,056 in additional federal debt per year per additional Medicare enrollee who would otherwise be uninsured, according to the analysts’ forecasts.
Expansion could add $3,539 in debt per year for every newly eligible American who used Medicare as a primary source of coverage.
What It Means
Many members of Congress and other policymakers have suggested that expanding access to ordinary Medicare coverage could be a simple, relatively affordable way to get more people covered and reduce U.S. spending on health care.
The new analysis suggests that expanding access to the current Medicare program could reduce spending by employers, individuals and state Medicaid programs, and could improve the well-being for people in their 60s who otherwise would be uninsured, but could be expensive for the federal government.
Older people tend to have higher average health care costs than younger people.
Employers pay more to cover older workers, whether through insured group health plans or through their own self-insured health plans.
The federal Affordable Care Act lets health insurers charge the oldest adult users of individual and family major medical coverage up to three times more than they charge the youngest adult insureds.
Consumers ages 60 through 64 tend to have higher take-up rates for health coverage than younger people, in spite of the higher costs, but the result is that many consumers in their 60s who have no access to Medicare or to employer-sponsored coverage view individual and family coverage as unaffordable, even when they can use ACA premium tax credit subsidies to pay part of the bill.
Some consumers under age 65 already qualify for early access to Medicare coverage due to serious disability or severe kidney disease, but the rules for qualifying for Medicare on this basis are strict.
Some other consumers ages 60 through 64 qualify for Medicaid — a program that uses a combination of state and federal money to provide health coverage for low-income people, and for some others who meet state eligibility criteria.
The Medicare at 60 Coverage Impact
The CBO and JCT budget analysts say the United States could have about 20 million residents ages 60 through 64 in 2031.