The Senate Democrats initial reconciliation intention is to move standard Medicare eligibility to age 60 instead of age 65. This would move a huge tranche of the sickest people on the employer sponsored insurance market into the healthiest cohort of folks in the Medicare market. That would have significant premium impacts on the commercial group market. The Petersen Center for Healthcare estimates that this would lead to a 15% reduction in employer side health spending.
Lowering Medicare’s age of eligibility to 60 would reduce employers’ healthcare costs by an estimated 15% if people age 60-64 switched to Medicare.
— Peterson Center on Healthcare (@PetersonCHealth) June 23, 2021
I am curious if there are any dynamic modeling going on regarding network breadth and scope as well. Some of the work that we discussed earlier this week found that employer groups overvalued broad (and expensive) networks relative to the average employee. The employers were responding to the preferences of high power/high prestige individuals in the firm. If we think that a decent number of the director, VP, C-level folks are in their early 60s and some would be moved to Medicare with a full company paid supplement, perhaps the dissonance between the HR valuation and prioritization of scream minimization and average enrollee valuation of networks could potentially be reduced. And if employers are more willing to credibly threaten narrow(er) networks, better pricing per unit for fewer units could be achieved.