NCPA - National Center for Policy Analysis


January 19, 2009

Medicare kicks in at 65 for most Americans.  But an early buy-in would allow someone as young as 55 to enroll in the program and pay a higher monthly premium than seniors do.  Depending on how lawmakers design the program, the premiums would cost several hundred dollars a month.  The services would be the same as those for current Medicare beneficiaries, says the Dallas Morning News.

Advocates of an early Medicare buy-in say it would complement other entitlement reforms because it would keep older workers healthy and productive longer and help rein in government spending over the long haul.

Opening Medicare to Americans in their late 50s or early 60s could plug a gaping hole in the nation's health care safety net, say experts:

  • Currently there are 5.1 million uninsured Americans between 55 and 64 who would benefit.
  • However, between 2000 and 2010, as the oldest baby boomers approach or reach retirement, the number of Americans 55 to 64 will increase 50 percent, from 24.4 million to 36.2 million.

Despite advocates' claims that premiums alone would cover the cost of a Medicare buy-in program, others believe taxpayer subsidies would be needed to make the option affordable for most people.  According to James Capretta, a fellow at the Ethics and Public Policy Center, the proposal poses a dilemma for policymakers:

  • If lawmakers don't subsidize an early buy-in, the substantial premium would appeal only to people who can't buy insurance in the private market because of health problems; thus, it would end up helping only a limited number of Americans.
  • But if lawmakers subsidize the program enough to drive down premium costs, they might cause a stampede of people leaving private insurance and encourage more Americans to retire early.

"That would be counterproductive," Capretta said.  "Our government's already overburdened with Social Security and Medicare obligations and ought to be persuading people to delay retirement."

A taxpayer subsidy would only exacerbate Medicare's financing problems, said John Goodman, president and chief executive of the Dallas-based National Center for Policy Analysis.

"Instead of expanding another government entitlement, we should be giving employers more ways to help retirees obtain and afford individually owned insurance," he said.

Source: Bob Moos, "Would early opt-ins to Medicare be a boost or a burden?" Dallas Morning News, January 18, 2009.


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