Raising the Enrollment Medicare Age

[GailL1]

If we raised the enrollment age of Medicare to correspond to the Full Retirement Age of Medicare - (almost 67) - then it would be so much easier for people to understand the process and timely complete their enrollment.

It was like this before - I think it should go back to that way again.

There would be far fewer late enrollment penalties assessed for Part B particularly.

There are other + reasons too like saving cost to the (Part A) program while adding contributions.

Your opinion?

[Tonster521]

@GailL1 I thought you would receive a number of opinions that are against raising the Medicare Enrollment Age. So far, only one. I will be number two. As you know, age 65 is acceptable for the vast majority of folks. IMO,many would be acceptable to reducing the enrollment age to somewhere between ages 62 to 65. In other words, folks become eligible for Medicare when they elect to begin SS Benefits. I believe a lower enrollment age would allow folks to retire earlier because health insurance (Medicare) is available. I found an article that addresses pitfalls with Part B enrollment. It is usually due to the person not knowing the Medicare provisions. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.medicarerights.org/pdf/PartB-Enrollment-Pitfalls-Problems-and-Penalites.pdf  Another concept is to require folks who work beyond age 65 to enroll in Part B at age 65. I do not know why the Medicare provisions allow those folks to delay Part B enrollment which is creating adverse risk. Some may argue that those folks are covered by perhaps an employer's Plan. So, Medicare is avoiding Part B claims. However, if they are working, they are generally in good health and not filing claims. The Medicare Part B premium that they will pay may offset current Part B expenses for the Medicare eligible as a whole. 

[LG322302]

TEFRA, enacted in 1982, allows employees who are still working at 65 to continue with their employers health insurance provided that they work for an employer who has 20 or more employees. If the employee does choose to also sign up for Medicare,  Medicare pays second after the employer insurance pays its part, so Medicare would pay little to nothing. This came about because even at that point in time (the early 80's), the government was realizing Medicare is not a sustainable program. LOWERING the enrollment age would make this problem even worse.

We chose to stay with employer insurance because, frankly,  Medicare sucks and would be far more expensive than our employer insurance given that Medicare pays for nothing without a medigap plan, its deductibles are higher and it doesn't cover vision, dental or prescriptions.  Yeah, no thanks. 

[Tonster521]

@LG322302 I will try again to copy and paste the U.S. News article https://money.usnews.com/money/retirement/aging/articles/what-is-the-average-retirement-age#:~:text=....

[Tonster521]

@LG322302 Electing to separate from service (i.e.,retire, etc.) will vary from person to person and depends on facts and circumstances. I am providing a link to an article from U.S. News (updated in March 2024) which informs us of an average retirement age. You may be surprised that it is approximately 63. So, those folks are not eligible for Medicare unless they are disabled for two years. They may find health insurance coverage through an employer's retiree coverage, a spouse's coverage, COBRA, buy it through the marketplace, VA, etc. or just go without coverage. I worked for a manufacturer wherein approximately 2/3 pf the employees (100,000 plus) were exposed to weather. That means cold winters and hot summers. Although many can perform the job requirements, the changing weather conditions, especially cold winters, were brutal. So, many retired in January and February. For the employees in production (mostly outside work), they retired on average by age 59. For employees in administrative and management (mostly in heated and air conditioned offices), they retired on average by age 63. Because there was retiree insurance coverage, early retirement (before age 65 for Medicare) was doable even if some paid anywhere from 20% to 50% if the retiree insurance cost. This has to be a greater cost for the folks whose employers do not provide retiree insurance coverage which is the case for many folks. 

Managed Care with cleverly worded Coordination of Benefit and Non-Duplication of Benefit provisions were implemented in the 1980s and 1990s with just about every employer. Cost shifting was the strategy. Let some other organization pay the bill. Medicare benefit provisions followed along trying to be the secondary payer. In fact, Medicare allowed folks who continued to work for an organization with employer sponsored insurance coverage to delay Part B enrollment and not contribute (pay) toward the cost of Part B. I believe this waiver of paying the Part B premium and not requiring Part B enrollment was implemented because Medicare simply eliminated all potential Part B claims rather than accept Part B claims and deal with cleverly worded COB and Non-Duplication  provisions. So, for a handful of folks that work beyond age 65, Medicare allows delayed enrollment in Part B which is, in effect, adverse risk. As you know, other folks who elect to delay Part B enrollment for a period of time because they are healthy and will not need or file claims with Part B are assessed an increased Part B premium.due to adverse risk. In effect, they have not made the contributions that others have made who enrolled in Medicare Part B when  eligible at age 65. Lastly, Medicare Part B will be part of your health insurance program after you stop working unless you elect to self insure yourself. As an alternative to traditional Medicare Parts A and B, you may elect Medicare Advantage which will be similar to coverage offered by most employers (i.e., medical, dental, vision, prescriptions). In fact,your primary physician may already participate in Medicare Advantage. 

[LG322302]

When other people choose to retire and what they do about paying for health insurance/care isn't my concern or my problem.  We chose to stay with employer health insurance coverage because it is less expensive and offers more value than medicare. Congress chose to add the medicare as second payor rules because they were aware, even as far back as the 1980's, that medicare wasn't a sustainable program without changes.  (It was also in the 1980's that federal employees had to start paying into medicare for the first time.) Medicare is a terrible program. They have already spent decades taking money out of my paycheck for this mess. I don't intend on paying an additional penny into it before necessary, if even then.

[Tonster521]

@LG322302 It appears you missed the point I was providing. In the past, most folks left their jobs or separated from service before attaining Full Retirement Age (i.e.,ages 66 through 67). It could be for various reasons such as eligibility for Medicare, physical demands, brutal weather,etc. Although today we may see more folks working past age 65 because they do not have a monthly pension, do not elect to convert their 401 K or IRAs to monthly income, or simply need the money, etc. However, they are still an exception and a small group of folks estimated to be approximately  2.5 million out of approximately 66.7 million or about 3 to 4% of Medicare Eligible. In the 1970s, most employers shifted healthcare costs to other employers as well as Medicare using cleverly worded COB and Non-Duplication provisions. In 1980, Congress enacted Medicare Secondary Payer provisions to stop the cost shifting.to Medicare. https://www.cms.gov/medicare/coordination-benefits-recovery/overview/secondary-payer You may click on the various topics in the Overview section to read about MSP and COB provisions. This is when the rules for delaying Part B - Medical Insurance were implemented. It should be noted that one must have Creditable Coverage in order to use the Special Enrollment Period (SEP) for electing Part B at a later date and avoid an increased Part B premium. FYI, paying an increased Part B premium essentially means one is receiving a lessor Medicare Part B premium subsidy. Currently, the Federal Government pays approximately 75% of the Part B premium and the Medicare Eligible pay 25% or for 2024 about $174/month. Some low income folks pay less or nothing. Based on the 75%/25% split, Medicare Part B for 2024 cost approximately $696/month (rounded). The cost for Part A is not publicized, but Medicare charges folks who have less than 30 quarters of earning/taxes paid about $506/month for 2024. Adding Parts A and B totals $1,202 for 2024 or $14,424/year. If one worked more than 40 quarters, there isn't any monthly premium for Part A because you paid for this coverage when you were working. So, using $174 for Part B and $0 for Part A and $1,202 for their actual cost, most Medicare Eligible pay about 14.5% for 2024 which is very reasonable for the over age 65 age group. I am not sure if your employer's health insurance cost is less than $1,202/month or $14,424/year. I read that Ford and Stellanis (old Chrysler/Dodge/Jeep) annual costs are in the $17,000 range and that is with a younger workforce. So, if you comparing the contribution you pay your employer with the cost of your Plan, it is "apples and oranges". Your employer may be subsidizing employees at 90% to 95%. And, that cost is an expense deducted from your employer's income and not taxable. In effect, the taxpayers are subsidizing your cost. In summary, to address Gail's initial post wherein she asked for any opinions, my suggestion/opinion is that everyone must contribute to Part B when eligible or pay an increased amount later regardless if working after age 65 or not. It should be noted that the 2024 Part B deductible is $240 whereas many employer plans have deductibles of $1,000 or more. Another concern is that there are no networks with traditional Medicare Parts A and B. Individuals with employer managed care plans may not have access to the comprehensive coverage and other services that they need if they are experiencing a healthcare challenge. You are never out of network with traditional Medicare. That may be very valuable.

Here is an article that addresses some history of how Medicare was enacted in 1965 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4195078/#fn7-hcfr-85-supp-003 You will see that Medicare as well as Medicaid have roots that go back to the 1940s and earlier. President Truman tried to establish national or universal health coverage in the 1940s. The AMA lobbied against the proposed concept with the most expensive campaign in the history of proposed legislation.I believe they feared price controls. At any rate, when you separate from service, retire, etc. remember to enroll with Medicare even if you do not like the program. It will pay for certain hospital and medical expenses which beats paying out of pocket.

[LG322302]

I am aready aware of everything you have stated here.

You're forgetting that medicare part a also has a deductible whether or not you have a premium ($1632 for 2024). So the total amount you pay for deductibles this year is not $240 but $1872. And that's for one person. For a couple you can double that amount. Medicare also only pays 80% of costs, doesn't cover dental, vision or prescriptions (those are additional expenses either through paying out of pocket or finding additional coverage) and medicare has no annual out of pocket limits. You are also forgetting that many people feel compelled to buy medigap insurance through commercial insurance companies to cover the 20% that medicare doesn't pay and this can be hundreds of dollars a month for that premium.

Our employers insurance is $63 less a month than the medicare part b premium with dental and vision coverage, has a smaller deductible, and an annual out of pocket limit. The insurance is with the state's largest insurer so nearly every provider is accessible including one of the best hospital systems in the country.

And as for taxpayers subsidizing health insurance premiums through employer tax deductions, remember since medicare is a pay-it-foward system, myself and my kids are currently paying medicare taxes into the trust fund to subsidize your part a premiums. Whether medicare still exists by the time my children are eligible to qualify for it remains to be seen. 

[Tonster521]

@LG322302 As I understand the Medicare enrollment process, most folks at age 65 are automatically enrolled in Medicare Parts A and B. Part A does not require a monthly premium. So, Part A is accepted by most unless they are working and funding a Health Savings Account (requires a high deductible plan). However, Part B requires a monthly premium ($174 in 2024) which is deducted from a SS Benefit payment or paid separately. Some folks delay SS Benefit payments. So, they need to pay that Part B premium separately or opt out of Part B coverage. If employed and eligible for Employer sponsored health insurance coverage (i.e., Creditable Coverage), many opt out of Part B because they will be eligible for a Special Enrollment Period  (SEP) after they separate from service/retire. 

If you are a reader of the Forums at AARP, you will read about folks being charged greater amounts for Part B premiums due to errors incurred during Medicare enrollment including the SEP. Gail has addressed those question/postings time and time again. Gail has the "patience of a saint". I agree with Gail's SS Benefit and Medicare replies 99%. However, I believe raising the Medicare enrollment age from age 65 to the new Full Retirement Age(s) would defeat the purpose of why Medicare was enacted in 1965 and implemented in 1966. I believe it will shift more costs to the folks who have stopped working and are over age 65.Those costs will be incurred as they use the marketplace (ACA), buy bear bones temporary coverage, or self fund. I believe Medicare enrollment should remain age 65 and allow for earlier ages such as ages 62 through 65 if one begins receiving SS Benefits. Medicare allows enrollment after two years of disability at any age. Why not enroll healthier folks at age 62? The Medicare program can use the income especially from folks who may not incur any major health care expenses.Moreover, all folks must pay Part B premiums from age 65 even if working. MSP and COB should remain the same. This eliminates adverse risk and will lower the monthly Part B premium.

Currently, many folks over age 65 who work have Part A because there is no additional premium. However, they are still paying the 1.45% payroll tax based on earnings even though Part A may not provide any benefits.due to a lower deductible employer plan and MSP/COB/Non-Dup language. So, employees over age 65 with Part A do not incur the Medicare Part A deductible. However, Part B types of medical expenses may not be the same because the Part B deductible ($240 in 2024) may be lower than the employer plan deductible. This where the MSP/COB/NON-Dup language is important.

So, for the folks over age 65 who are still working with employer sponsored Creditable Coverage are still paying their fair share for Part A, but receive a huge subsidy for Part B by not being charged a Part B premium. As I pointed out earlier, the Part B premium is only about 25% of the actual premium.That is a windfall if one works from age 65 to age 70. With regard to your opinion about you and your children paying Medicare payroll taxes and subsidizing current Part A benefit, I suggest you carefully review the SS Trustee reprt which was just released as well as SS Funding at the SSA website. I use the word, "carefully"  because it is long, complex, and may be cumbersome for some folks. Essentially, Part A is projected to be adequately funded until 2036 which means there is a surplus. That may change in the future depending on job growth, earnings and if Congress changes the Medicare program. The Special Issue Treasuries that provide the Part A benefits have already been bought and issued. So, for folks already Medicare Part A Eligible, the money is there. You have it backwards. Your Medicare taxes and mine (work as well) are being used to fund younger folks including your children's Part A benefits after 2036 based on current actuarial assumptions. The cost for employer sponsored health insurance still remains tax free. Employees and retirees that receive such benefits should be taxed similar to an imputed tax on group life insurance over $50,000. Moreover, it should be included in FICA and Medicare payroll taxes just like 401 K contributions. Otherwise, our government is looking to the taxpayers to make up the shortfall.

[SherryBabyy]

Yeah no. Stop taking stuff away!