Let’s Not Be So Quick to Lower Medicare Eligibility Age


new report from the Congressional Budget Office takes a close look at one of the most wasteful and unnecessary healthcare proposals on the Democratic agenda — reducing Medicare’s eligibility age to 60.

Joe Biden endorsed the idea as a candidate for president. But it’s never made much sense. Medicare’s Part A hospital insurance trust fund is already on the cusp of insolvency. Expanding it would saddle taxpayers with immense new costs.

And those taxpayer dollars would go toward a segment of the population that is relatively well-off and generally has private insurance coverage.

Only Democrats could look at Medicare, the federal health insurance program for seniors, and conclude that its biggest problem is too few enrollees. The entitlement already accounts for one of every five dollars the nation spends on health care. Total expenditures reached $926 billion in 2020.

According to the latest report from the program’s trustees, Medicare’s hospital insurance trust fund will run out of cash in 2026. The trustees also note that Medicare expenditures “will increase in future years at a faster pace than either aggregate workers’ earnings or the economy overall.”

Last month, the CBO estimated that the hospital insurance trust fund will be exhausted come 2030.

Regardless of who is correct, Medicare is headed for fiscal ruin. So imagine what might happen if the Democrats open up the program to people starting at age 60.

The new CBO report projects that lowering Medicare’s eligibility age would increase the federal deficit by $155 billion over six years. At a moment in which unprecedented federal deficits have helped fuel record-high inflation, that’s not something most Americans would welcome.

Medicare at 60 makes even less sense given that its chief beneficiaries — Americans 60 to 64 — are among the wealthiest age groups in the country.

Further, lowering Medicare’s eligibility age won’t do much to boost the number of people who have insurance. Of the roughly 29 million Americans who lack health insurance, just 400,000 will gain coverage through an expanded version of the program.

Instead, most of Medicare’s new enrollees would be people who previously had private insurance. Of the 7.3 million newly eligible people the CBO expects would sign up, about 5.2 million are currently covered by either an employer-based plan or some form of non-group coverage.

Why spend tens of billions of dollars offering government-sponsored coverage to patients who, by and large, don’t need it?

It’s possible that Democrats see lowering Medicare’s eligibility age, not as an end in itself, but as a step on the path to single-payer — which they’ve tellingly renamed “Medicare for All.”

Combined with the kind of public health insurance option President Biden has proposed and Obamacare’s Medicaid expansion, a bigger Medicare program would help marginalize private coverage. The result would be a situation in which most of the country relied on government health insurance of one form or another.

This piecemeal approach to a government takeover of the health insurance market could be far more menacing than the kind of comprehensive Medicare for All plan recently reintroduced by Sen. Bernie Sanders, I-Vt. Remaking the entire health sector in one fell swoop has thus far proven politically impossible.

Gradually loosening the requirements for existing public insurance schemes until all Americans are covered by the government may lead to the same place — without the political upheaval.

In this light, lowering Medicare’s eligibility age isn’t just wasteful, as the CBO analysis makes clear. It’s genuinely dangerous to the future of American health care.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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