Major changes in Medicare eligibility proposed; biggest in 50 years

The Improving Medicare Coverage Act of 2021, introduced in the House of Representatives in early September, would, if enacted, lower the age of eligibility for Medicare to 60. According to the cosponsors of the bill, this would expand Medicare coverage to some 23 million people, nearly 25% of whom have no health insurance coverage.(1) “On the face of it,” says Dave Rich, CEO of Ensurem, a Florida-based insurance technology and product distribution firm, “this is a great idea. However, many unanswered questions remain. Medicare is already underfunded, and it is not yet clear where the money would come from to cover these additional enrollees.”

Medicare, notes Rich, has a long and complicated history. The first president to call for a national health insurance program for Americans was Theodore Roosevelt, who made it a part of his platform in 1912. Harry Truman called for such a plan in 1945, and Medicare became a reality in 1965, when Lyndon Johnson signed it into law. As of January 2021, there were 63.1 million people enrolled in Medicare.(2)

Along with lowering the eligibility age, the Biden administration’s current proposed budget for Medicare would expand its coverage to include dental care, vision, and hearing.(3) Sponsors of the legislation note that:

  •  Nearly two-thirds of Medicare beneficiaries have no dental coverage, and half of all beneficiaries report that they have not seen a dentist in the past year;
  •  About one-third of all those between the ages of 65 and 74 have some degree of hearing loss, as do nearly half of those older than 75. On average, hearing aids cost between $1,000 and $5,000.(4)

Desirable as they might be, these coverage expansions, says Rich, are unlikely to take place. In order to avoid the need for a supermajority vote in the Senate, the proposed budget plan will go through a complex process known as budget reconciliation, in the course of which the administration’s party will almost certainly have to remove some of its core policy elements. The bill will also, after debate closes but before final passage, face a theoretically unlimited number of proposed Senate amendments in the course of what is known as a “vote-a-rama.”(5)

Regardless of the outcome of these negotiations, says Rich, it seems likely that there will be changes in Medicare coverage for 2022, as there is virtually every year. To one degree or another, these changes will be reflected in the available array of Medicare Advantage plans, now used by over 40% of all Medicare beneficiaries.

Making the best choice among these possibilities, Rich notes, is already quite complex, and–given the growing number of plans offered each year–likely to become more so. “Whether or not proposed legislative and budgetary changes to Medicare are enacted,” says Rich, “it will be more necessary than ever for beneficiaries to seek advice before enrolling in or changing plans.”

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