Two new KFF analyses find that lowering the age of Medicare eligibility from 65 to 60 could significantly reduce health spending for employers, who could potentially pass savings to employees in the form of lower premiums or higher wages.

Additionally, per person health spending for older adults who move from employer coverage on to Medicare would likely be lower, though such moves would shift costs to taxpayers and increase Medicare program expenditures overall.

President Biden proposed lowering the age of Medicare eligibility to 60 during the presidential campaign, with the goal of broadening coverage and making health coverage affordable for older adults.

To illustrate the potential for employer savings, one analysis shows that lowering the age of Medicare eligibility to 60 could reduce costs for employer health plans by as much as 15 percent if all eligible employees shifted from employer plans to Medicare. Similarly, costs for employer plans could drop by as much as 30 percent if all people age 55 and over were no longer in employer-sponsored insurance, the analysis finds, and by up to 43 percent if everyone 50 and older chose to enroll in Medicare. The actual impact on health spending for employers would depend on how many older workers shifted from employer coverage to Medicare.

The savings in employer plans would come from employers covering fewer older adults, who tend to have higher health care spending than younger enrollees.

A second analysis by KFF experts shows how 60- to 64-year-olds who move from employer plans to Medicare could be covered more cheaply because Medicare payments to hospitals, physicians and other health care providers are generally lower than what private insurance pays.

Average monthly health care spending (per person) for enrollees ages 60-64 in large employer plans is 38 percent higher than average monthly spending for traditional Medicare beneficiaries ages 65-69 ($1,061 vs. $770), despite the fact that health needs and service use tend to increase with age.

Lowering the age of Medicare eligibility could lower overall health care costs, but would also shift costs from employer plans to the Medicare program. Such a shift also would likely lead to lower revenues for hospitals, physicians, and providers who deliver care to older adults who choose Medicare over employer coverage.

The full analyses are available here:

• How Lowering the Medicare Eligibility Age Might Affect Employer Sponsored Insurance Costs
• Health Spending for 60-64 Year Olds Would Be Lower Under Medicare Than Under Large Employer Plans

The first analysis is only available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.For more data and analyses related to health reform, employer-sponsored insurance and Medicare, visit kff.org.

Medicare currently offers health insurance coverage to more than 60 million Americans ages 65 and older and younger adults with long-term disabilities. During the presidential campaign, President Biden proposed to lower Medicare’s eligibility age from 65 to 60, along with other policies to address health insurance coverage and affordability. Then-candidate Biden stated that the proposal would not affect Medicare’s Hospital Insurance trust fund or premiums for currently eligible Medicare beneficiaries, but other important policy design features have yet to be specified, including how it would be financed or administered. While many details are unknown, the proposal would potentially allow millions of adults to switch from non-group or employer plans to Medicare.

Lowering the age of Medicare eligibility from 65 to 60 would likely lead to lower revenues for hospitals, physicians, and providers who deliver care to 60-64 year olds. Provider payment rates from private plans tend to be considerably higher than those paid by Medicare; for example, large employer plans pay between 1.6 to 2.5 times more than Medicare for the same type of inpatient admission. Over time, the payment rate differential has been increasing. If private plans paid the same rates as Medicare, their spending would decrease by 41%, or over $350 billion in 2021.

The flipside of lowering provider reimbursement to Medicare payment rates for the 60-64 age cohort is the potential to reduce health care spending for people who shift from large employer plans to Medicare, potentially saving money for people, employers, and the federal government in the form of reduced tax subsidies for employer coverage. In this analysis, we use claims data for covered medical services from both large employer plans and traditional Medicare to illustrate the potential spending effects of using Medicare payment rates in lieu of higher rates paid by employer plans. There may be some differences in plan design and structure between Medicare and private insurance plans, though covered benefits are likely similar. (See Data and Methods for details.)

While health care spending increases with age within a given payer type, our analysis shows substantially higher per person spending among 60-64 year olds in large employer plans than among 65-69 year olds in Medicare, primarily reflecting the differences in payment rates noted above.

• Average health care spending per person per month for enrollees ages 60-64 in large employer plans ($1,061) is 38% higher than average monthly spending for traditional Medicare beneficiaries ages 65-69 ($770) (Figure 1). This comparison understates the savings that could be realized by shifting 60-64 year olds to Medicare, since one would expect 65-69 year olds to have roughly 20-25% higher spending, because health needs rise with age.
• Average monthly health care spending for large employer plan enrollees ages 60-64 is similar to that of traditional Medicare beneficiaries in their early 70s, who tend to use more health care services than people in the younger age cohort.

Our previous analysis of the difference between provider payment rates from private plans and Medicare suggests that the adoption of Medicare payment rates could reduce per enrollee health spending for those aged 55-64 by almost $4,000 dollars per year. This analysis suggests that lowering Medicare’s eligibility age would lower total and per capita health care spending for people who shift from large employer plans to Medicare, thereby generating savings for employers and potentially increasing the affordability of health care for these individuals, while also shifting costs to the federal government associated with coverage for 60-64 year olds. The exact savings possible and the trade-offs involved would on depend many policy details that have yet to be specified.

President Biden proposed lowering the age of Medicare eligibility to 60 during the presidential campaign, with the goal of broadening coverage and making health coverage affordable for older adults.

This analysis illustrates the potential for employer savings and finds that lowering the age of Medicare eligibility to 60 could reduce costs for employer health plans by as much as 15 percent if all eligible employees shifted from employer plans to Medicare. Similarly, costs for employer plans could drop by as much as 30 percent if all people age 55 and over were no longer in employer-sponsored insurance, the analysis finds, and by up to 43 percent if everyone 50 and older chose to enroll in Medicare. The actual impact on health spending for employers would depend on how many older workers shifted from employer coverage to Medicare.

The brief is available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

In the course of the pandemic, health officers have become the face of local government authority. And, in turn, many have become targets for the rage and resentment of some of the same loose-knit militia and white nationalist groups that stormed the U.S. Capitol in January, smashing windows, bloodying officers and savagely chanting “Hang Mike Pence.”

Kaiser Health News joined forces with the iconic public radio team at This American Life to chronicle this disturbing trend through the lens of California’s Santa Cruz County. The county, though widely viewed as liberal and progressive, saw an escalating succession of threats, capped by the cold-blooded killing of a sheriff’s deputy, that have upended the lives of health leaders trying to navigate the covid response.

KHN senior correspondent Anna Maria Barry-Jester tells the story of Dr. Gail Newel, Santa Cruz County’s health officer, and her boss, Mimi Hall, the county’s health services director, who have soldiered on as legitimate debate over their covid-related public health orders has devolved into vitriol and sinister intimidation. Their daily routines now incorporate security patrols, surveillance cameras and, in some cases, personal firearms.

They are public servants who no longer feel safe in public.

This is KHN’s first collaboration with This American Life. It follows similar partnerships with the investigative public radio team at Reveal and St. Louis Public Radio.

Listen to the This American Life audio story, entitled “The Herd,” here. And read KHN’s companion digitalstory here.

About KFF and KHN

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

About This American Life

This American Life is an award-winning weekly public radio program and podcast hosted by Ira Glass. It is heard by 2 million listeners each week on over 500 public radio stations in the U.S., with another 2.8 million people downloading each episode as a podcast. The show is produced in collaboration with WBEZ Chicago and delivered to stations by PRX, Public Radio Exchange.

There has been little research on how essential workers not employed in the health care sector have been impacted by the pandemic and their views on and experiences with COVID-19 vaccines. The latest KFF COVID-19 Vaccine Monitor report finds that this group of workers – roughly 3 in 10 of all adults who have been required to work outside their homes during the pandemic – are less enthusiastic about getting vaccinated than other adults.

As of mid-March, nearly half (48%) of non-health care essential workers said they had received at least one dose of the COVID-19 vaccine or will get a vaccine as soon as they can – fewer than the share among those who work from home (69%) and among adults who aren’t working (67%). Non-health care essential workers are also more likely than those who work from home to say they will get the vaccine “only if required” (11% vs. 3%) or that they will “definitely not” get vaccinated (21% vs. 7%).

These differences in enthusiasm in part reflect the underlying demographics of the two groups.

Compared to employed adults working from their homes, those identifying as essential workers are less likely to have a college degree (26% vs. 59%) and are more likely to identify as Republican or Republican-leaning independents (39% vs. 26%). People without a college degree and those who are or lean Republican in general are more likely to be resistant to getting a vaccine than their counterparts, though even after accounting for these and other demographic factors, essential workers are more likely than other adults to say they won’t get vaccinated.

Among essential workers who are not already vaccinated or planning to do so as soon as possible, two thirds (66%) say they worry about experiencing serious side effects, and about half (53%) are concerned they may have to miss work if they experience side effects from the vaccine.

The analysis finds employers could encourage some of these workers to get a vaccine through incentives. About 1 in 5 say they would be more likely to get vaccinated if their employer arranged for a health care provider to administer the vaccine at work (23%), or if their employer offered to pay them an extra $50 (19%) or $200 (22%) to get vaccinated.

Overall, most non-health care essential workers (57%) say that employers should not be allowed to require their workers to get vaccinated, compared to 42% of workers employed in other types of non-healthcare jobs.

The issue divides along partisan lines. Among non-health essential workers, those who identify as Republican or lean that way overwhelmingly say employers should not be allowed to mandate their workers get vaccinated (79%), while two thirds (65%) of Democrats and Democratic leaners say they should be able to do so.

Designed and analyzed by public opinion researchers at KFF, the KFF Vaccine Monitor survey was conducted from March 15-22 among a nationally representative random digit dial telephone sample of 1,862 adults, including oversamples of adults who are Black (490) or Hispanic (476). Interviews were conducted in English and Spanish by landline (356) and cell phone (1,506). The margin of sampling error is plus or minus 6 percentage points for results based on the sample of 477 essential workers. For results based on subgroups, the margin of sampling error may be higher.

The KFF COVID-19 Vaccine Monitor is an ongoing research project tracking the public’s attitudes and experiences with COVID-19 vaccinations. Using a combination of surveys and qualitative research, this project tracks the dynamic nature of public opinion as vaccine development and distribution unfold, including vaccine confidence and acceptance, information needs, trusted messengers and messages, as well as the public’s experiences with vaccination.

COVID-19 deaths and cases among residents and staff of long-term care facilities have fallen dramatically since vaccinations began in December, with deaths declining by nearly 89 percent and cases declining by nearly 92 percent as of April 2021, according to a new KFF analysis.

COVID-19 deaths in long-term care settings fell from 1.7 deaths per 100,000 state residents in December to just 0.2 deaths per 100,000 state residents in April, an all-time low, the analysis finds.

By mid-April, about a third (34%) of all COVID-19 deaths were in long-term care facilities, down from a peak of nearly half (49%) in June 2020 and 42 percent around the time that long-term care residents and staff began receiving vaccines in late December.

Similarly, average new weekly cases in long-term care facilities were just 1.6 per 100,000 state residents in April, also an all-time low, compared to a peak of 20.3 in December 2020 across the 39 states (38 states plus DC) for which trend data is available.

Not all the news is good. Eight states experienced a rise in COVID-19 cases in long-term care facilities between March and April 2021. The increases ranged from a 6 percent uptick in New Hampshire to a more than 150 percent jump in Connecticut and Michigan. Such increases may be reflective of increased COVID-19 cases and community spread in such states overall, often attributed to rising infections among younger people due to “pandemic fatigue.”

No states reported increases in both cases and deaths in long-term care settings between March and April, so it remains to be seen whether recent increases in cases in a few states will lead to increases in deaths.

For more data and analyses about COVID-19 and long-term care settings, visit kff.org.

A new KFF issue brief explores several potential policy options that would help close the Affordable Care Act’s “coverage gap,” including providing further new incentives for states to expand Medicaid, creating a new “public option” or extending ACA Marketplace premium subsidies to low-income people who don’t currently qualify for federal help.

At stake is affordable health coverage for 2.2 million uninsured people with incomes below the federal poverty level ($12,880 annually for an individual in 2021), who currently do not qualify for either their state’s Medicaid program or federal premium subsidies in the ACA marketplace. As of April 2021, 12 states have not adopted the ACA’s Medicaid expansion to provide coverage to adults with incomes through 138% of poverty.

President Biden proposed the public option approach during the 2020 campaign and is expected to soon release his American Families Plan proposal that could include a provision to address the coverage gap.

The KFF brief also explores the challenges and budgetary cost considerations of the potential options to expand coverage, all of which are likely to increase federal spending and could require offsets through other proposals that produce savings.

A previously released analysis of the coverage gap is also available.

As of April 2021, 12 states have not adopted the Affordable Care Act (ACA) provision to expand Medicaid to adults with incomes through 138% of poverty. In these states, 2.2 million uninsured people with incomes under poverty fall in the “coverage gap” and do not qualify for either Medicaid or premium subsidies in the ACA marketplace (See Appendix Table).  An additional 1.8 million uninsured adults in these states are currently eligible for marketplace coverage (because their incomes are between 100% and 138% of poverty level) but would be eligible for Medicaid if their state expanded.

The federal government covers 90% of the cost of Medicaid coverage for adults covered through the ACA expansion, a higher share than it does for other Medicaid enrollees. The American Rescue Plan Act (ARPA) enacted in March 2021 includes an additional temporary fiscal incentive for states to newly implement the ACA Medicaid expansion, and KFF analysis shows that all non-expansion states would actually save money for two years by newly expanding.  The incentive would be available for two years following expansion, but there is no time limit for states to take up the option.  It is unclear which states, if any, may take advantage of the new option, which has prompted discussion about whether further steps could be taken to guarantee coverage to people in the gap in President Biden’s forthcoming American Families Plan.

President Biden proposed during the campaign that a public option insurance plan would be broadly available and automatically enroll people in the coverage gap, but such a plan would be difficult to pass in a closely divided Congress. This issue brief examines some of the other options policymakers may consider to extend coverage to people in the gap, including  increased fiscal incentives for states, a narrower public option, and making people with incomes below the poverty level eligible for enhanced ACA premium subsidies.

What are leading options to provide coverage for people in the coverage gap?

Add More Financial Incentives for Medicaid Expansion

Additional incentives for non-expansion states generally include increases to the expansion match rate or other broader fiscal incentives for expansion states.  In addition to the APRA, which included a two-year, 5-percentage point increase in the federal matching rate for traditional (non-ACA) enrollees, policies could increase the expansion match rate.  For example, the policy could allow new expansion states to receive the three years of 100% federal matching dollars, as was available to states that had implemented in 2014, or could increase the current expansion match rate (e.g., to 95%) more broadly to all expansion states (new and current expansion states).  Alternatively, policies could provide additional financial incentives for all expansion states that increase the opportunity cost of not expanding (e.g., an increase in the traditional match rate) or could create financial disincentives to not expanding (e.g., a decrease in the traditional match rate or limits on disproportionate share hospital payments (DSH) or uncompensated pool funds).

Policies to encourage non-expansion states to cover people in the coverage gap build on the existing Medicaid infrastructure in those states.  As with other states that have adopted the expansion, expansion builds on existing Medicaid provider networks, health plans, and eligibility systems, as well as existing mechanisms to draw down federal funds for coverage. Coverage offered through Medicaid is designed to be affordable for people with low incomes. Medicaid generally prohibits premiums and deductibles and limits cost-sharing to nominal amounts, which differs from coverage provided in the Marketplace or other coverage.  In addition, there is no open enrollment period for Medicaid, so individuals can enroll at any time, and eligibility is based on monthly income (not projected annual income). Individuals are eligible for Medicaid even if they have an offer of employer coverage, and unlike marketplace coverage, there is no reconciliation at the end of the year to align benefits with actual income.

These options still rely on state action to adopt the expansion.  There are already substantial financial incentives for states to expand Medicaid under the ACA; some states have not acted on them largely due to politics or ideology, so it is unclear if additional incentives will impel them to act. Providing additional funding that would benefit only non-expansion states could also create equity issues in federal funds flowing to states that already expanded. For some policies, the legal limits of the federal government’s ability to leverage Medicaid funds to states as an incentive to adopt the ACA expansion is unclear.

Create a Broad or Narrow Public Option

Instead of relying on Medicaid, federal policy makers could create a new public option that would be available broadly or more narrowly targeted for the people in the coverage gap.  President Biden campaigned on a “public option,” a new federal public health insurance option, that would be available to all people eligible for marketplace coverage, people with employer coverage, and people who would otherwise be eligible for Medicaid in non-expansion states. For the last group (the coverage gap population), enrollment would be automatic, fully funded by the federal government, premium-free and provide the full scope of Medicaid benefits. Under the Biden campaign proposal, states that have expanded could move Medicaid expansion enrollees into the public option, with a maintenance-of-effort payment from the states.  Instead of a broad public option, a narrower option to provide coverage specifically for people in the coverage gap could be developed.

A public option would not depend on states to expand coverage and could be tailored to people with low incomes, but creating a new federal coverage option presents some political, administrative and implementation challenges.  Creating a broad or narrow public option would require an infrastructure to set up and administer a new federal health insurance program.  For example, it requires resources to set up the plan, set rates, administer or contract with plans to administer benefits, and establish and conduct eligibility and enrollment processes.  Even if the new public option plan were administered in conjunction with an existing federal health program (such as Medicare or the Federal Employees Health Benefits Program), there would be a number of design choices, such as whether and how the public option would conform with state insurance regulations; set payment rates for providers and prices for prescription drugs; and enroll providers or contract with health plans.  Different choices would have implications for costs, access, and affordability.  A broad public option has the potential to deliver coverage at a lower cost than in private insurance by restraining health care prices, but that would also be strongly opposed by the health care industry.

Setting up a narrow public option plan targeted to cover 2.2 million nationwide would still require many policy design choices and could be administratively complex, especially for a relatively small population nationwide. The guarantee of coverage for people with incomes below poverty at full federal cost would almost certainly mean that none of the current non-expansion states would choose to expand in the future. While a maintenance of effort requirement on current expansion states could theoretically prevent current expansion states from dropping the Medicaid expansion and shifting costs to the federal government, such a requirement could be difficult to sustain politically and could face legal challenges. This inequity across states could potentially be addressed through fiscal carrots provided to expansion states, but that would also increase federal costs. Given the limited scope of coverage, a narrow public option would likely be less disruptive to the health care industry than a broad public option.

Expand Eligibility for Marketplace Premium Subsidies

Policy makers could consider an option to extend financial assistance for coverage by extending Marketplace premium subsidies to people in the coverage gap.  Under current law, individuals below poverty are generally not eligible for premium subsidies to purchase coverage in the ACA marketplace, with the only exception being authorized immigrants who are ineligible for Medicaid because they have been in the U.S. fewer than five years.  One approach to covering people in the coverage gap would be to make them eligible for marketplace premium subsidies. Under the American Rescue Plan – which enhanced ACA premium subsidies for two years – people with incomes below 150% of the poverty level are eligible for a 100% premium subsidy for the second lowest cost silver plan. They are also eligible for cost-sharing reductions that provide them with coverage that has an actuarial value of 94%. This means that, on average, they are responsible for deductibles and copays equal to 6% of their health spending. The average deductible in these reduced cost-sharing plans in 2021 is $149, with an average out-of-pocket limit of $1,189. A policy to cover people in the coverage gap could reduce cost-sharing further for people with income below poverty, comparable to the nominal cost-sharing in Medicaid.  It also would be theoretically possible to provide wrap-around benefits for services like nonemergency medical transportation (NEMT) that are covered by Medicaid but not covered in the Marketplace, but there is currently no mechanism for doing so.

Similar to other options, expansion of marketplace subsidies does not depend on state action, but there a number of design challenges for policy makers to consider.  A policy to extend marketplace subsidies would expand coverage by building on the existing marketplace structure, which would reduce administrative complexity and could be accomplished relatively quickly and easily. However, there could be some challenges to this structure for people below poverty, depending on how the policy is designed, which would take time to implement.

Unless further cost-sharing reductions and benefit enhancements were included, marketplace plans would have significantly higher cost-sharing and less comprehensive benefits than Medicaid.  While provider networks in Medicaid may be more limited than typical employer insurance plans, in some parts of the country the networks in marketplace plans can be even more restrictive. As an entitlement program, Medicaid provides beneficiaries with broader legal protections for accessing care than enrollees in private insurance plans. Unlike Medicaid, eligibility for marketplace premium subsidies is reconciled for the year after the fact based on actual income. Such a reconciliation could be waived for people with incomes below poverty – including the need to file a tax return — but eligibility still requires estimating annual income rather than current income as in Medicaid.

There is some precedent for providing coverage to Medicaid enrollees through the marketplace.  For example, in Arkansas, the state buys marketplace coverage for Medicaid expansion enrollees; the state also pays the premium and other cost sharing amounts and provides wrap around coverage.  Extending marketplace subsidies to people in the coverage gap raises all of the same potential inequities across states as a public option.

What are the cost considerations for these options?

All options to expand coverage are likely to increase federal spending and could require offsets through other proposals that produce savings. In addition to the specific structure of the policy, cost considerations include:

Distribution of state and federal costs: Cost for Medicaid are shared by states and the federal government, while costs for marketplace subsidies and a public option would be borne entirely by the federal government (and the individual covered, for any premiums or out of pocket costs).  Thus, policies that rely on Medicaid may cost less to the federal government, depending on how much of a fiscal incentive might be provided to non-expansion states to encourage them to expand, as well as to current expansion states.

Relative costs of Medicaid versus private coverage: In addition, Medicaid costs per person may be lower than private insurance primarily due to provider payment rates.  Coverage costs (for both Medicaid and marketplace coverage) may also vary by state as health care costs and markets vary. For example, premiums in marketplace plans tend to be higher in rural areas with little competition among hospital and plans.  The federal government may also face costs if a new option creates an incentive for a current expansion state to drop coverage, leading the federal government to lose the state share of financing. For coverage options that use a new public option, the difference between Medicare rates and private coverage or Medicaid coverage is also a factor.

Enrollment: Lastly, government costs depend in large part on take-up and enrollment in the new option. If there are no adjustments for higher out of pocket costs, enrollment in coverage options through the marketplace could be relatively lower than other approaches.  Additionally, enrollment likely depends on outreach, if open enrollment periods apply to the group that could be eligible for Medicaid, and how incomes is counted (monthly or over the course of the year).

What to watch?

Existing and new research continue to show that expanding eligibility for health coverage to people with low incomes reduces the uninsured rate, improves access to and utilization of care, reduces uncompensated care costs, improves affordability of care, and reduces racial and ethnic disparities in coverage.  The pandemic has highlighted the importance of access to coverage and challenges with accessing care for uninsured people.  President Biden is expected to release the American Families Plan in the near future, which may include proposals to address coverage for people in the coverage gap.  Congress may also consider proposals as part of a budget reconciliation bill.  In the meantime, some states may move forward with expansion efforts and take advantage of existing incentives under the ARPA, and there are efforts to get expansion on the ballot in Mississippi and South Dakota and other states considering expansion in their legislative sessions. Understanding the tradeoffs that different approaches have for government cost, administrative feasibility, and affordability for low-income people will be helpful in assessing policies as details of specific proposals are released. While alternative approaches to Medicaid expansion could be more expensive for the federal government and offer fewer protections for beneficiaries, they could also guarantee coverage for low-income people now in states that may not choose to expand for many years or at all.

Appendix Table