CBO Predicts Medicare Public Buy-In Would Lead to Higher Insured Rates and Lower Costs

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Santa Monica, CA — A detailed report issued by the Congressional Budget Office comparing health care reform options found that a plan to allow Americans to buy into Medicare before turning 65 would lead to more people with health coverage and lower costs than private insurance coverage.

Download the CBO report here:

The CBO studied a limited Medicare buy-in option for those between 62 and 64 years old.  The CBO estimates that the annual premium for single coverage in 2011 would be about $7,600 including drug coverage.  In comparison, a private insurance policy premium for a 64-year-old can easily cost $12,000-$16,000 a year not including copays and deductibles and after excluding coverage for those with even minor health problems.  In 2006, Medicare spent about $10,200 on average per beneficiary, which currently includes an older and sicker population than that envisioned by the buy-in program.[1] 

"The report emphasizes an important point for policy makers to keep in mind as they grapple with fixing our nation’s health care: Medicare provides more affordable coverage because it eliminates the waste and profiteering of the private market," said Jerry Flanagan of Consumer Watchdog. "Polls show that seniors are also happier with their coverage than those of us with private insurance policies because they have better access to health care."

The CBO report did find that the Medicare buy-in program would lead to higher than expected Social Security payments because, due to the program, more Americans over 62 would retire earlier than without the program.  Consumer Watchdog said those expenditures, which the CBO found would be "minimal" over the long term, could be erased if the program were expanded to allow any American to buy-in to Medicare regardless of age.

Read Consumer Watchdog’s letter to President-elect Obama urging him to fulfill his campaign pledge to make health care affordable and available by allowing any American to join Medicare, regardless of age:

If Medicare also covered the young, the estimated cost per person would plummet. Children in federally subsidized plans cost about $2,300 a year (including dental), and younger adults fall in the middle.  

34.7% of Americans (89 million people) under the age of 65 did not have insurance for some part of the year during 2006. [2]   10-14 million people currently purchase individual insurance policies. These 100 million Americans would benefit from a low-cost, high quality public option to the private market, no matter what the level of subsidy.  Allowing employer groups to join the public purchasing pool over time would further maximize cost savings.


Consumer Watchdog is a nationally recognized public interest advocacy organization. 



[1]   Medicare Costs per Beneficiary, 1970-2017, Centers for Medicare & Medicaid Services, 2008.
[2]   Wrong Direction: One Out of Three Americans Are Uninsured, Families USA, Sept. 2007.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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