There Are a Number of Ways to “Expand” Medicare
Dating all the way back to the 2020 Presidential election, we have heard a lot of talk about “expanding” Medicare. But, what do policymakers mean when they say they want to “expand” Medicare? That is a reasonable question because there are a number of ways Medicare can be “expanded.”
For example, a Medicare-for-All Program could be put into place where every American regardless of age, income, or job-status would be enrolled in Medicare. Under this type of Program, the Federal government would prescribe the benefits that would be covered, and the government would administer the health coverage. The government would also establish the prices that Medicare would pay for the covered benefits.
Alternatively, policymakers could allow individuals to “buy into” Medicare through a Medicare-Buy-In Program. This Medicare-Buy-In Program might only be available to individuals of a certain age (e.g., 55 or 60 years old). Here, the Federal government would prescribe the benefits that would be covered and also establish set-prices for the covered benefits. The government might administer the health coverage – or – the government could choose to outsource the administration of the Program to private insurance companies (somewhat similar to how Medicare Advantage works today).
Another way to “expand” Medicare is by simply lowering Medicare’s eligibility age to, for example, age 55 or 60. Here, any individual turning 55 or 60 would be eligible to be covered under Medicare. This Medicare Program would work just like the traditional Medicare Program works today for individuals 65 and older.
Most recently, there has been a robust discussion over adding auxiliary benefits such as vision, dental, and hearing benefits to traditional Medicare. This is yet another way to “expand” Medicare because currently, the only way Medicare beneficiaries can get coverage for dental, vision, and hearing benefits is through supplemental coverage such as Medicare Advantage plans.
We Will See Efforts to “Expand” Medicare Later This Year
Congressional Democrats and the Biden Administration have just told us how they propose to “expand” Medicare. In particular, Congressional Democrats and the Biden Administration will seek to enact legislation later this Fall/Winter that will include proposals to:
- Adding auxiliary benefits like vision, dental, and hearing benefits to traditional Medicare; and
- Lower Medicare’s eligibility age.
These proposals are scheduled to be included in legislation that will be processed through Congress’s “reconciliation” (a process that only requires a majority vote in the Senate and the House to pass the legislation). It is important to emphasize that proposals that are included in “reconciliation” legislation must meet specific criteria, and there is no guarantee that these two proposals to “expand” Medicare will end up in a final “reconciliation” bill passed by both the House and Senate.
In addition, these two proposals require a significant amount of government spending, and the cost to the government may require Congressional Democrats and the Biden Administration to pare back these proposals or to even drop one or both proposals from the underlying “reconciliation” legislation.
That is all a long way of saying this: While Congressional Democrats and the Biden Administration want to “expand” Medicare in the above stated ways, there is no guarantee that these “expansion” proposals will become law. However, at this point, it appears that the White House and Democratic Congressional Leadership are going to everything they can (1) to find ways to pay for the spending under each proposal and (2) to get the necessary votes to make these “expansion” proposals a reality.
What is the impact of these proposals on individual coverage and the business of State-Based Marketplaces?
Should the Medicare “expansion” occur through lowering Medicare eligibility age to 60 or even 55, a significant decrease in a number of enrollees in State-Based Marketplaces will likely follow. In 2021, 3.4 million people between the ages of 55 and 64 enrolled in marketplace coverage. Those are people that could potentially leave the public markets and enroll in Medicare, should the eligibility age be lowered. We have been advocating for State-Based Marketplaces and State policy makers to prepare for such eventuality and should the age of Medicare eligibility change, be proactive in providing current enrollees choices, allow them to compare plans and programs based on their circumstances, and should individual enrollees age in into Medicare, streamline the process so that enrollment into Medicare program is seamless.