Kaiser Health News/Philadelphia Inquirer examines proposal that would allow people ages 55 to 64 to buy into Medicare

Kaiser Health News/Philadelphia Inquirer on Monday examined a plan being touted by Senate Finance Committee Chair Max Baucus (D-Mont.) that would allow people ages 55 to 64 to buy into Medicare. The plan would target people who purchase insurance on the individual market or have no insurance because of unemployment.

About four million people between ages 55 and 64 are uninsured, according to the U.S. Census Bureau. While people in that age group are less likely to be uninsured than others, they are more likely to have serious medical problems and difficulty finding affordable coverage, according to Kaiser Health News/Inquirer.

Most states allow insurers to reject applicants who have pre-existing medical conditions. A 2006-2007 survey by America's Health Insurance Plans showed that individual insurance plans rejected 17% to 29% of all applicants ages 50 to 64, compared with 10% of those ages 30 to 34. In addition, people in their 60s often pay as much as three to six times more for coverage than people in their 20s, according to Georgetown University Health Policy Institute research professor Karen Pollitz.

The Baucus plan would allow people to buy into the program until comprehensive health reform legislation is approved. Complicating the debate is the "tricky question" of whether federal subsidies would be provided for people enrolling in Medicare early, according to Kaiser Health News/Inquirer. Baucus' current plan would not provide subsidies for younger beneficiaries. His proposal does not include cost estimates, but a similar plan analyzed by the Congressional Budget Office found that premiums would cost $7,600 per year for those ages 62 to 64.

Republicans who oppose the early buy-in plan say that rather than expanding Medicare -- which the federal government estimates will run out of reserve funds by 2019 -- the government should promote private sector ideas. AHIP spokesperson Robert Zirkelbach said the insurance industry opposes expanding Medicare because it "underpays providers," who then charge private insurers more to make up the difference. He cited an industry pledge to accept all applicants if all people are required to obtain coverage.

Baucus also has proposed allowing adults with incomes of up to 100% of the federal poverty level to enroll in Medicaid and eliminating the requirement that disabled people younger than age 65 wait two years before enrolling in Medicare (Appleby, Kaiser Health News/Philadelphia Inquirer, 5/4).