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Cost shifting from Medicare at 60
Old 06-05-2020, 06:34 PM   #1
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Cost shifting from Medicare at 60

Analysis of the proposal to put people on Medicare at age 60.

Medicare payments would rise by about 100 Billion a year, but some offset by things like less insurance costs for employers (& thus for all employees of every age), and shifting people from Medicaid to Medicare which would relieve the states from some costs. It would induce more people to retire early, so raising SS payouts ...

The reaction by medical providers to reduced income is a wild card.

May 29, 2020
Potential Implications of Lowering the Medicare Eligibility Age to 60
Zirui Song, MD, PhD1,2
Author Affiliations Article Information
JAMA. Published online May 29, 2020. doi:10.1001/jama.2020.7245

A 2018 analysis by the Congressional Budget Office of a mirror-image proposal (ie, raising the Medicare eligibility age from 65 to 67 years) estimated that 60% of the federal savings to Medicare and Social Security attributable to removing this 2-year age band from Medicare would be offset by increased federal spending on subsidies in the ACA Marketplaces and on Medicaid.6

If a similar offset holds for lowering the age of eligibility, then the federal costs for lowering the eligibility age to 60 years could be as low as $40 billion a year for the 20 million new Medicare beneficiaries.

If the offset is smaller in reverse, in part because the share of people aged 60 to 64 years in Medicaid today (source of savings) is less than the share of Medicare beneficiaries aged 65-67 years predicted to go to Medicaid (source of costs) under the mirror image proposal, then the federal costs would be higher than $40 billion.

This does not account for the increased Social Security spending or additional federal tax revenues above, which are likely to be several billion dollars each.


Of note, however, more than one-third of Medicare beneficiaries now enroll in Medicare Advantage, in which private insurers can offer more tailored Medicare plans with a government subsidy. To the extent new 60- to 64-year-old Medicare beneficiaries enroll in Medicare Advantage plans, it would blunt the contraction in private insurer membership and revenue and soften the otherwise starker political contrast between government and private insurance.

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Old 06-06-2020, 08:15 AM   #2
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Thanks for this interesting analysis. If these estimates reflect the actual numbers, then they would pale in comparison to the amounts being given out through the various stimulus packages, and indirectly through the Fed. Considering that the virus affects the elderly more than younger folks, and costs for treatment can be high, this could be a good step to stabilize the situation for this group. In this context, also structural unemployment in this age bracket is much harder to remedy, and having health insurance covered by Medicare could blunt this effect as well.
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