How would Medicare buy-in programs affect coverage, premiums, spending? 5 insights

Some policymakers have floated the idea of allowing people younger than 65 to buy in to the federal Medicare program. But how would a Medicare buy-in program affect health insurance coverage, premiums on the individual market and federal spending? 

Researchers from the nonprofit think tank RAND Corp. sought to answer these questions in a new report. For their analysis, the study authors considered a base scenario where Americans age 50-64 can buy in to the Medicare program. The base scenario also considers advance premium tax credits and cost-sharing reductions as part of the buy-in, as well as no out-of-pocket maximum, similar to traditional Medicare.

Here are five notes from the study, which considers eight different scenarios in addition to the base:

1. Six million people would enroll in the buy-in program under the base scenario. Between 2.8 million and 7 million people would buy in to Medicare across all scenarios.

2. For most enrollees, Medicare buy-in would be less expensive than a traditional individual marketplace plan.

3. Across all scenarios, lower buy-in premiums would lead to reduced spending, on average. Researchers estimate total out-of-pocket spending would decline by 16-35 percent on average for Americans who switched from the ACA individual marketplace to the buy-in program.

4. Premiums on the individual marketplace would increase if 50-64 year olds shifted to the buy-in program. Insurers on the individual marketplace would face a smaller pool of younger, less healthy and relatively expensive adults to cover, ultimately raising premiums.

5. Total health insurance enrollment would not really be affected by a Medicare buy-in program, the authors found.

Read more here.

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