A Medicare Buy-in Program In Brief

• To subsidize or not: the trade-offs between affordability and program costs. People with more health problems may be most attracted to the program. This makes the premium higher and discourages healthier people from enrolling. One way to avoid this is to subsidize the premium so it is low enough to attract a better mix of risks. At the same time, subsidies are costly.
• Eligibility. Limiting eligibility to those who are older and who don't have access to employer or other public coverage focuses on a population with trouble getting private insurance, and limits erosion of employer coverage. It is unclear how much it would effect decisions to retire, which can hinge on having both adequate income to retire and access to coverage.
• Financing Subsidies. To make coverage affordable to a many people, subsidies are needed. Financing for broader health reform might be used to support people choosing the Buy-In program.

The goal of health care reform is to make coverage options available that are both affordable and provide adequate benefits.

The adequacy of benefits, eligibility, the mix of age and health risks enrolling, the availability of subsidies and financing to make premiums older adults face affordable are all central. Together they will determine how well a Buy-in program (or any other coverage option opened up by reform) improves on the options available to older adults today.

Written by Gerry Smolka and Sarah Thomas, AARP Public Policy Institute
June 2009
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