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Biden’s Incremental Medicare Play For Bernie’s Backers

In one of his first proposals since becoming the presumptive Democratic presidential nominee, Joe Biden is wading back into the roiling waters of health policy.

In a nod to the effects of COVID-19 on the economy, and what is clearly an overture to supporters of the “Medicare for All” plan pushed by Vermont Sen. Bernie Sanders, who suspended his presidential campaign Wednesday, Biden wants to lower the age of eligibility for Medicare from 65 to 60.

“It reflects the reality that, even after the current crisis ends, older Americans are likely to find it difficult to secure jobs,” the former vice president wrote in a post on the website Medium. Details on the plan are few, but Biden made clear that those ages 60 to 64 who have employer health coverage could keep it if they wanted to, or could join Medicare earlier.

In addition, he said, “the Biden Medicare-like public option — as well as other subsidized private plans available to individuals through the Affordable Care Act — would remain available.”

Some people think Biden’s new proposal doesn’t go far enough. Tweeted RoseAnn DeMoro, former head of the National Nurses United union and a longtime Medicare for All supporter: “Now if he will only erase the 60 we have #Medicareforall.” Agreed the Physicians for a National Health Program, which also favors a Medicare for All plan: “Why the unnecessary 6?” implying that Biden should lower the eligibility age to 0.

But just as Biden’s earlier health proposal from last summer seemed incremental compared with more liberal candidates’ plans to uproot the nation’s health care system in its entirety, this proposal is also more significant than it seems.

Since it was a thousand news cycles ago, let’s review what Biden proposed in July. That blueprint would uncap federal subsidies for plans purchased through the Affordable Care Act’s marketplaces, so that no one would be required to pay more than 8.5% of their income toward health insurance premiums. It would also create a comprehensive new “public option” health insurance program that anyone could purchase, including those who don’t like or can’t afford what their employer offers.

At first glance, Biden’s latest plan (which was coupled with a student loan forgiveness plan aimed at younger voters) seems much like many other proposals that surfaced during the Democratic presidential campaign to let people younger than 65 “buy in” to the popular Medicare program or a similar program.

But this is not at all the same thing. Even though it is optional, “it literally means you’re in Medicare at 60,” said Rodney Whitlock, a health care consultant and former GOP congressional aide.

Such a plan would also be far simpler to implement than a buy-in program. Most of those proposals call for people not to enroll in Medicare itself, but a parallel, Medicare-like plan run by the federal government.

“The proposals in Congress are totally different,” said Tricia Neuman, who heads the Medicare policy program for the Kaiser Family Foundation. “This is so much easier,” Neuman said. (Kaiser Health News is an editorially independent program of KFF.)

Easier to implement, maybe, but Biden’s latest proposal is likely to be more controversial, too. While the few available details of Biden’s proposal pledge that federal funding would come from regular tax revenues rather than the dwindling Medicare trust fund (projected to reach insolvency in 2026), Republicans are still likely to oppose such a plan ― strenuously.

“Republicans are all about long-term [Medicare] solvency,” Whitlock said. In fact, in recent years, Republicans have pushed to raise the eligibility age to 67, to match the new Social Security threshold being phased in.

When analysts first started looking at the impact of changing Medicare’s eligibility age, they thought that lowering it would help both the Medicare and private insurance risk pools. That’s because the 60- to 64-year-olds would become the youngest, and likely healthiest, members of the Medicare pool. Conversely, they are currently the oldest, and presumably sickest, members of the pool for individual market insurance.

But that view has changed over the past few years. A 2019 study by the Rand Corp. evaluated the consequences of allowing even younger Americans to buy into Medicare. The Rand study found that while those 50-64 would themselves likely pay less under a buy-in program, that doesn’t necessarily translate to savings for the pool of people who buy their own coverage on the individual market.

“When older adults leave the market, insurers are left with a smaller pool of younger, less healthy, and relatively expensive people given their age, leading to higher premiums,” the study found.

Still, said Whitlock, Biden’s latest proposal could disrupt GOP efforts to oppose Medicare for All. Right now, he said, the crux of their argument is that expanding Medicare to everyone would threaten the viability of the popular program for those on it now. But “only doing it for a targeted group will complicate Republicans’ message,” he said.

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