Joe, You Forgot About Lowering the Medicare Age

The president’s big speech featured a progressive wish list, but it was missing a proposal that makes for excellent policy and politics.

Since his layoff shortly before the pandemic, software engineer Mike Kifle has struggled to find full-time work—though gigs and contracts have been plentiful. A veteran of General Electric, the Silicon Valley-based Kifle has extensive experience building and maintaining the digital networks companies now deem essential.

A full-time job has been elusive, Kifle believes, because potential employers consider him too pricey. “When you’re an older employee, you pretty much screw up the curve,” said Kifle, who is in his 50s. “You’re going to be part of the higher expense the company pays for, and I don’t think they like that.”

No, companies don’t like that, and that’s why workers like Kifle are the reason President Joe Biden has endorsed lowering Medicare eligibility from age 65 to 60. It’s an idea that Sen. Bernie Sanders has advocated and a growing number of Congressional Democrats support. “[E]ven after the current crisis ends, older Americans are likely to find it difficult to secure jobs,” Biden said in an early April post on Medium.

Yet disappointingly, when Biden offered an historic progressive agenda to Congress and the nation Wednesday night, he failed to mention early Medicare. And the White House didn’t tout it in any of the background briefings it held for reporters. About the closest Biden came was proposing the permanent extension of expanded premium subsidies included in the recently-passed American Rescue Plan. Sure, that’s an important move to bolster the Affordable Care Act (ACA), but older workers need more. For them, early access to Medicare is a far better option Biden should trumpet, even amidst an already very ambitious agenda. Already, a broad group of Democrats, led by Sanders and Sen. Richard Durbin, is urging this commonsense reform.

For middle-income older Americans who have lost their jobs and no longer get health insurance through work, buying coverage through Obamacare is unaffordable. Fifty-somethings who aren’t senior citizens but old enough for AARP often have health problems that make for stunning insurance costs. In 2019, according to the Kaiser Family Foundation, a 60-year-old making $50,000 would have had to pay 23 percent of their income to buy a mid-level silver plan and 17 percent of income for a bare-bones bronze. In contrast, monthly premiums in 2021 for Medicare Part B (which covers doctor visits and outpatient care) are $148.50.  No wonder so many persons in their 50s count the days until Medicare kicks in—which unfortunately isn’t until age 65. (Social Security retirement benefits, on the other hand, are available at age 62.)

Even with relief from the American Rescue Plan—which limits premiums to 8.5 percent of income for the next two years—insurance costs will eat up a sizable chunk of workers’ resources. Older workers, moreover, get less for their money. Although the ACA limits what insurers can charge older enrollees, premiums can still cost three times what a younger person pays for the same plan. One of the great benefits of Obamacare—that you can’t be denied coverage because of preexisting conditions—is of little help if premiums are still out of reach.

Older workers need early Medicare because too many of them are uninsured, despite the ACA’s general success. In 2019, nearly one in 10 (9.4 percent) adults ages 50 to 64 was uninsured in 2019, according to the AARP. Though this is lower than the rate among young people, the consequences of being older and uninsured are far more dire, for obvious reasons. Compared to younger Americans, older adults are more than four times more likely to suffer from two or more chronic conditions such as asthma, diabetes, and heart disease. Delaying care can be catastrophic, but many older workers are doing exactly that —which means higher costs for the rest of us at some point. In fact, eight percent of Americans told pollsters in 2018 that “they were waiting to get medical procedures until they had Medicare.”

Older workers also need early Medicare because of diminishing access to employer-sponsored benefits. This is especially true among the middle class. The pandemic has precipitated a crisis among jobless older workers for whom the road to re-employment is longer than expected—if it’s there at all. While blue-collar workers in their 50s have long been vulnerable to displacement—from disability and the decline of manufacturing—white-collar workers are increasingly joining the ranks of workers sidelined in today’s economy.

Many of today’s older unemployed are casualties of corporate downsizing, workers who’ve been funneled into gig economy jobs, or starting their own businesses in an attempt to recoup some of their lost wages. “We see a substantial number of older job seekers who have a college degree and are still struggling,” says Maria Heidkamp, founder of the New Start Career Network, a re-employment program for workers age 45 and over based out of Rutgers University in New Jersey. “We have a lot of MBAs in our pool, and you wouldn’t think that with an MBA, somebody would struggle to get reemployed.”

Older workers now make up about a significant share of the “long-term unemployed”—Americans who’ve been out of work for six months or more. Of the roughly 4.2 million Americans in this chronic category as of March 2021—a figure that’s worsened over the last several months—nearly 1.4 million were between the ages of 45 and 64. Many older workers have also dropped out of the workforce entirely, discouraged by their prospects; the labor force participation rate among workers 55 and over in March was 38.2 percent—the lowest it’s been since the early 1990s.

The data paints a bleak picture for these economic refugees. One longitudinal study of more than 4,000 older workers by the Center for Retirement Research found that just 26 percent of workers held a “traditional job” with benefits through the entirety of their pre-retirement years from 50 to 62. Many workers endured spells of unemployment, and many made ends meet by cobbling together a patchwork of opportunities. In 2017, according to an estimate by the Bureau of Labor Statistics (BLS), nearly 12 percent of the nation’s roughly 6 million contingent workers were between ages 55 and 64. Only about one-fourth of contingent workers have access to employer-provided health insurance, according to BLS.

Medicare at 60 would solve many of the health care problems facing this suffering cohort. It would make about 23 million Americans newly eligible for the program, including about 2 million who are currently uninsured. Even better would be Medicare at 55, which would expand availability to 42 million. For these Americans, the prospect of automatic, universal coverage would ease a major source of anxiety. (Less than one percent of Americans over age 65 are uninsured, thanks to Medicare.) And administratively, it would be simple.

Expanding Medicare could create other wide-ranging benefits as well. An April 2020 analysis by the Kaiser Family Foundation concludes that lowering eligibility to age 60 may significantly lower total health care spending on Americans ages 60 to 64 if large employers opt to shift their older employees to Medicare. These savings would largely result from lower payments to hospitals and providers (which is why hospitals, a health lobby that gets far less attention than the insurance industry, oppose the idea), but the end result could be lower costs for “people, employers, and the federal government in the form of reduced tax subsidies for employer coverage.” Adding younger and relatively healthier beneficiaries to the Medicare pool could even reduce premiums and per capita costs for current beneficiaries, according to an analysis by the National Academy of Social Insurance.

The expansion of Medicare may even lead to a spike in hiring of older workers by taking the insurance burden away from employers. “Making Medicare the primary payer would relieve employers of this added cost, improving older workers’ chances in the labor market,” the Congressional Joint Economic Committee declared in an August 2020 report.

Despite Biden’s hopeful rhetoric this week, the future doesn’t look so promising for millions of Americans caught in a netherworld between their career and retirement. After promoting the idea of early Medicare and now going silent, Biden has raised and perhaps dashed the hopes of a group that has been swinging back to the Democrats. Reneging on his earlier endorsement could prove politically perilous. And if he doesn’t pitch it now, there may not be another time, when Democratic control of both chambers is already teetering.

In the meantime, Mike Kifle is hoping that his latest contract will lead to a permanent position. “Initially, it was three months and now has been extended to six months, so I’m pretty pleased,” he said. “If everything works out, I definitely look forward to that.” That’s great for Kifle. But Biden should do more now to ease the burden for him and all of America’s older workers.

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Anne Kim

Anne Kim is a Washington Monthly contributing editor and the author of Abandoned: America’s Lost Youth and the Crisis of Disconnection. This story was produced with support from the Education Writers Association Reporting Fellowship program.