Study: Lowering Medicare Eligibility Age Will Save Baby Boomers Money, Increase Costs For Millennials

WASHINGTON — The idea of lowering the eligibility age for Medicare to 50 has been picking up steam in recent years as a way to provide health care support for the millions of Americans unable to afford proper medical treatment. A “Medicare at 50” act was even introduced in February of this year by Democratic senator Debbie Stabenow from Michigan.

While the idea still faces a great deal of resistance, a new study investigated the impact such a change would have on Americans’ insurance costs. The researchers concluded that Americans aged 50-64 would enjoy lower health care premiums, but younger people buying health insurance on exchanges created under the federal Affordable Care Act would see their costs increase.

According to the research, conducted by the RAND Corporation, in all likelihood the cost of buying into Medicare by 2022 will be $10,000 annually. For many, that will be an affordable price in comparison to the ACA-compliant individual insurance market. For reference, in this market, older Americans are charged up to three times more than younger adults.

Even though older adults in these exchanges are paying higher premiums, researchers say that their actual care is far less expensive than younger people. This is because younger people enrolled in ACA exchanges are usually dealing with serious health problems requiring care that is more expensive than the premiums they pay.

Consequently, the study’s analysis finds that lowering the age of Medicare eligibility would raise prices for people still in the individual health insurance market by anywhere from 3% and 9%.

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“Our findings suggest that Medicare buy-in could offer significantly more-affordable health care coverage to older adults, while potentially leading to higher premiums for the pool of people remaining on the individual market,” says study author Christine Eibner, the Paul O’Neill Alcoa Chair in Policy Analysis at RAND, in a release.

Per the study’s projections, a typical 50-year-old would pay $2,500 less to buy into Medicare as opposed to a gold-level plan on the insurance exchanges. For the average 60-year old, the savings would be even better; buying into Medicare would cost $8,000 less per year in comparison to a gold-level plan on the insurance exchanges.

Interestingly, researchers also concluded that lowering the age for Medicare would not significantly change the number of Americans without healthcare. While it would probably mean that more older Americans get access to health care, that change would be offset by the lower number of younger Americans able to afford coverage.

It was also noted that under all the possible scenarios researchers considered, changing the age for medicare eligibility didn’t effect the medicare trust fund or current medicare beneficiaries’ outcomes.

The research team utilized a microsimulation model to come to their conclusions, and worked under the assumption that eligible individuals would be able to apply their marketplace advanced premium tax credits towards their buy-in plan.

This study is especially interesting because its findings contradict the prevailing belief that older people drive up the cost of health care and individual market premiums due to their tendency to have more medical issues.

The full study can be found here.

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