money Here's how Democrats want to expand Medicare
Baked into the Democrats' $3.5 trillion federal spending bill is an overhaul to the Medicare system that supports more than 62 million Americans and has largely remained unchanged for the last 50 years.
Chief among the proposed changes is filling in the major Medicare coverage gaps by including dental, vision, and hearing benefits, regardless of plan. Two other proposed changes: lowering the age of eligibility threshold from 65 and allowing Medicare to negotiate prescription drug prices.
“The proposed budget resolution sets the stage for Congress to advance the Biden Administration’s agenda on healthcare access, including expansions to Medicare, and drug pricing reforms,” Matt Kazan, principal at Avalere Health, a health care consultancy, told Yahoo Money.
Medicare consists of several coverage options — Parts A, B, C, and D — each coming with its own set of premiums. Due to the limited coverage of Parts A and B, Advantage Plans, or bundled coverage through a private insurer, have steadily gained in popularity since 2005 and about 40% of beneficiaries are enrolled in Advantage Plans.
With the proposed expansion to include these three additional benefits, Kazan said Medicare Advantage plans and “health plans that offer these types of services today” can be impacted when it comes to pricing and coverage offerings.
While the plan doesn't specify an age, lowering the Medicare eligibility age to 60 — as outlined by President Joe Biden in a campaign promise — would add up to 23 million people to Medicare, according to Avalere Health, a consulting firm. That would also provide more flexibility for older workers.
“Many of these individuals would no longer be constrained by their employer-provided coverage,” Cobi Blumenfeld-Gantz, CEO of Chapter, an online Medicare marketplace, previously told Yahoo Money. “In turn, this could facilitate earlier retirements as well as lower healthcare premiums for younger employees, if older employees opted to take Medicare instead of employer-sponsored coverage.”
The budget plan also allows Medicare to negotiate prescription drug prices — another Biden campaign proposal — in an effort to lower those out-of-pocket costs for seniors.
The mega bill was approved by the Senate last week and is now in committees. While Republicans have been vocal about their reluctance to vote in favor of such a massive spending spree, Democrats can pass the measure using reconciliation that requires just a simple majority of 51 votes — as long as all Senate Democrats vote in favor of the measure.
To get all Democrats on board, some details might change as part of negotiations.
How will this be funded?
Democrats say the investment will be paid through a combination of increased tax revenues on corporations and the wealthiest Americans, health care savings, and long-term economic growth. Funds will be raised through a proposed new fee on carbon pollution and IRS enforcement of new policies. The plan prohibits tax increases on protected classes like households making under $400,000 a year, small businesses, and family farms.
“This budget resolution is the first step toward reconciliation and presents an imperative for stakeholders to actively engage with Congress to shape what policies are included in the final package,” Kazan said.
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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