Although extending Medicare eligibility to a broader slice of the US population might seem to be a relatively uncomplicated way to expand health care coverage, make coverage and care more affordable, and contain costs, achieving these 3 key policy goals presents policy makers with “a significant set of technical and program design considerations,” according to a report released last week.
“Delivering on these policy goals simultaneously is not necessarily possible and may entail tradeoffs,” the report says.
The report, Examining Approaches to Expand Medicare Eligibility: Key Design Options and Implications, was released by the National Academy of Social Insurance (NASI), a nonprofit, nonpartisan organization of experts on US social insurance programs, namely, Social Security, Medicare, unemployment insurance, and workers’ compensation.
About 1 in 10 of the US nonelderly population was uninsured in 2018, according to a December 2019 issue brief on the uninsured population from the Kaiser Family Foundation.
“Policymakers need to acknowledge that Medicare is a complicated program, one that some believe is also in need of reform; that the health care sector is a large, profitable share of the US economy; and that any significant change in Medicare eligibility is likely to help individuals who qualify for coverage while potentially disadvantaging other stakeholders,” the NASI report notes.
The academy’s study panel on Medicare eligibility assessed how variants of 3 strategies for changing Medicare eligibility could be designed to achieve the key policy objectives of coverage expansion, affordability, and cost containment. These strategies included lowering the eligibility age (to age 62, 55, or 50), extending Medicare coverage to all, and creating a Medicare “buy-in” that would make some or all of the population or employers eligible to purchase Medicare or Medicare-like coverage.
As part of this assessment, the panel examined issues such as eligibility criteria, payment rates for those providing health care services, financing mechanisms, rules governing the transition to a new or modified program, and other considerations.
The most ambitious approach, a Medicare-for-all program aiming for near-universal coverage, would likely have the greatest effect of the 3 approaches on access and affordability for the entire US population. “How well a Medicare-for-all system would achieve its goals depends on decisions about—and preferences regarding—the role of private insurance, benefit comprehensiveness, cost controls, and financing,” the report says.
A Medicare-for-all program’s effect on systemwide cost containment would depend on payment rates to clinicians, health care facilities, and other entities; prescription drug pricing; and the degree of administrative cost savings. “It would also require the greatest amount of additional federal revenue and resources while potentially lowering net costs for some individuals or other payers,” the report notes.
Approaches that lower the age of Medicare eligibility or feature a Medicare buy-in program would target only specific portions of the population, thus having a more limited effect on achieving policy goals. Lowering the age of Medicare eligibility would decrease the size of the uninsured and underinsured populations, to a greater or lesser extent depending on the new threshold for eligibility. This approach could significantly reduce costs for a cohort of older adults not currently eligible for Medicare and would be likely to improve their access to and choice of clinicians, hospitals, and plans. However, it could shrink revenues for hospitals and physicians.
This strategy also would shift the costs of coverage for the expanded beneficiary population away from private insurance and Medicaid to the Medicare program. “Such a shift would reduce long-term solvency of the Medicare trust funds and increase pressures on the federal budget unless provisions to raise additional revenues accompanied the extension of the program,” the report notes.
The effect of a Medicare buy-in strategy is the most difficult to determine because it “would be highly dependent on underlying design decisions and the complicated relationships that would be created with existing coverage options,” the report says. The approach would improve affordability and access to care for participating individuals, but it might have a limited effect on increasing overall coverage rates and controlling systemwide health care costs.
“Although often suggested as a simple add-on to improve the [Patient Protection and Affordable Care Act], in practice a Medicare buy-in would greatly increase the complexity of the current health care system,” the report says.
Polls showing that health care is a top issue for voters with respect to the 2020 presidential election indicate that there is a widespread public perception that coverage and access problems are significant—which, the report suggests, opens “a window for reform.”
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Stephenson J. Report Describes Policy Challenges of Using Medicare as a Platform for Expanding Health Care Coverage. JAMA Health Forum. 2020;1(3):e200300. doi:10.1001/jamahealthforum.2020.0300