A major topic of discussion among the political candidates is lowering Medicare eligibility to age 60. The idea behind this proposal is that it would save taxpayers money by reducing the amount that needs to be spent on healthcare for those over age 65.
However, there are several concerns about lowering Medicare eligibility from 65 to 60, including how much people will have saved in retirement and whether or not they can afford health insurance coverage.
In this article, we discuss some of these potential implications and provide information on what you can do now if you're worried about your future healthcare costs due to lower Medicare eligibility.
Research on Lowering Medicare Eligibility
Research has shown that if Medicare eligibility is lowered to age 60, around three-quarters of people will not have enough saved in retirement funds by the time they reach their new lower eligible limit.
If you're one of these individuals who does not save enough for retirement or doesn't work well enough into your later years, then there are a few options available to help you prepare.
One option may be continuing with life insurance coverage through an employer. Another might be using tax-deferred savings plans like IRAs and 401Ks so that any money deposited now can grow over a long period until it becomes substantial (around $250k).
Possible Challenges to This Idea
One suggestion is to lower the eligibility age for Medicare, but some challenges may come with this idea.
The first challenge would be a decrease in revenue since it's estimated that lowering the eligibility age of Medicare will cost an extra $68 billion over ten years.
Lowering Medicaid eligibility could also cause potential problems. People who need health insurance coverage now won't have access if they don't qualify when their income exceeds poverty levels from ages 60-64 and lose all other forms of coverage or programs like long-term care insurance.
This option might not work out well for everyone, and we should consider how older generations can best prepare themselves financially during retirement. Hence, they thrive instead of struggling just to get by.
A downside of lowering the eligibility age is that people who are currently healthy and could work would be ineligible for Medicare, creating a sense of hopelessness because they will need to keep working to afford medical care until they reach 65.
Another problem with lowering the age limit on Medicare is that it forces those aged 59 or younger into an unsustainable system with no other forms of coverage. They may not receive necessary treatments or medications if their income falls below poverty levels from ages 60-64 and lose all other forms of coverage.
Lowering the age limit will also increase health risk among Americans who are insured between 55-59 years old since their rates go up.
Another problem is how this will affect employers responsible for providing health insurance coverage for mid-level managers, supervisors, and executives when they turn 65 (the typical retirement age).
These types of jobs don't typically come with benefits that extend into retirement like pensions or 401ks. With such a dramatic change in workforce demographics, these employers would be burdened with managing employees' health needs during an extended period of time.
Employees are also left more vulnerable because those working past 60 years old make less money on average than younger workers. This means that many won't qualify for subsidized healthcare plans through Medicaid or Medicare even if they meet income qualifications at other ages.
Advantages of Lowering Medicare Eligibility
One of the advantages of lowering the Medicare eligibility age is to help lower the cost of healthcare. It also allows Medicare to be used as a backup in case other insurance coverage is lost.
Experts also note that lowering the age of Medicare recipients would help reduce premiums and expenses for employer-sponsored health insurance.
Because insurance premiums for healthcare are determined by spending, lowering the minimum age of Medicare eligibility could translate to more health spending for people who keep their employer insurance coverage.
This could help to improve the economy with higher wages and lower health insurance premiums.
Reduced tax subsidies for employers that offer health insurance to their employees is another positive advantage of lowering the minimum age requirements for Medicare.
While this is a priority for the current administration, it has not been popular with Republicans in Congress. Democrats want to keep the policy alive with a group of senators introducing legislation that would help people buy into the Medicare program at the age of 50.
Lowering the minimum age requirements could help with insurance premiums and tax subsidies, but will a large group of people who are currently uninsured be able to afford health insurance?
One thing is certain: Medicare coverage would need reform if the minimum age requirement were lowered from 65 years old. This proposal may also impact Medicaid as more retirees enroll in that entitlement program when they lose their employer benefits due to retirement or disability.
