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By taking advantage of lower provider payment rates, Medicare buy-in can increase the value of coverage and reduce out-of-pocket spending for beneficiaries, particularly individuals who do not qualify for premium tax credits. With modest additional federal spending, buy-in policies also can save on national health spending.

That’s the conclusion of the Urban Institute, a Washington, D.C.-based think tank that released a brief on Feb. 2 detailing what Medicare buy-in policies potentially can accomplish when implemented alongside the Affordable Care Act.

Related: Medicare buy-in: The right move for employers?

“The ACA greatly expanded health insurance coverage among older adults through Medicaid expansion and guaranteed availability of marketplace plans, which may be subsidized for those with lower incomes,” Bowen Garrett, a senior fellow at the Urban Institute and the brief’s lead researcher, wrote in the nine-page brief titled “Rationalizing a Medicare Buy-In Policy for Adults Ages 50 to 64 That Builds on the ACA.” “With the ACA in place, fewer older adults remain uninsured, and analyses find buy-in policies have limited potential to expand coverage further. What Medicare buy-in policies can mainly do, by building on the ACA, is take advantage of lower provider payment rates.”

He notes that two recent Medicare buy-in legislative proposals — the Medicare at 50 Act (S. 470) and the Medicare Buy-in and Health Care Stabilization Act of 2019 (H.R. 1346) — are designed to build on the ACA by creating a competing Medicare-like insurance product for individuals between the ages of 50 and 64.

Garrett contends that older adults in the 50 to 64 age group are at substantial risk of high health care spending, making health insurance coverage critical to their financial security. He also cites the ACA for “greatly” increasing insurance coverage rates for individuals under 65 and predicts that Medicare buy-in policies likely would increase premiums “somewhat” for people under age 50 in ACA marketplace plans.

In December, Garrett and other Urban Institute researchers released a report that stated a Medicare-buy-in option would have a modest effect on health coverage and spending, given the subsidies already provided under the ACA.

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