Older adults without employer coverage often have trouble getting access to good, affordable health insurance. A program allowing people to pay a premium to buy into Medicare could be a solution to this problem. But, design of a Medicare Buy-In would have to address the need for subsidies to make premiums affordable and key other issues.
Central to the current health care reform debate is consideration of a variety of approaches to expanding access to health coverage for those who are currently uninsured or underinsured. One approach would allow older adults to pay a premium to join Medicare. In general, such proposals for a Medicare Buy-In have targeted adults in their 50s and early 60s.
A key question is whether buying into the program will be an attractive, affordable option for people in this age group.
Why a Medicare Buy-in Program?
Medicare is by many measures a tremendous success story, providing health care coverage for the elderly and disabled. Before the program started in the 1960s, the elderly had great difficulty purchasing health care coverage and faced challenges accessing health care.
Medicare has largely addressed the fundamental problem of access to coverage for the age 65+ population, while keeping administrative costs down. So, expanding this program to other groups of people facing challenges accessing insurance coverage and health care is a logical idea.
Advantages of a Medicare Buy-In
- Guaranteed access and continuity of coverage. Being allowed to purchase Medicare coverage would provide long-term access to health insurance, continuity of plan and providers, and stability for many older adults.
- Better health and lower future Medicare costs. A buy-in program may actually reduce Medicare spending if it means that people have access to preventive and other services that can improve their health as they become eligible for Medicare under the traditional rules.
- Efficiency and speed of building on existing infrastructure. Medicare buy-in would build on an existing program rather than creating a new one, allowing it to be implemented more quickly than a new mechanism, such as an Exchange.
Concerns about a Medicare Buy-In
- If financed through the existing trust funds, would hasten insolvency. Sustainability of the existing Medicare program is a policy concern. Expanding Medicare to more people would aggravate this problem unless there are no premium subsidies or subsidies are not funded from the existing Medicare trust funds.
- Further erosion of employer-sponsored retiree health benefits. Employers might avoid offering coverage to early retirees if other options are available at a reasonable price.
- Adverse selection could limit its appeal. Since a buy-in for older adults will reflect the average cost of that population, the premium may be too high to attract those who don't use much health care and to be affordable for those with modest incomes.
Key Design Questions
The design of a Buy-in involves many important choices. Some of the most critical are the following.