Most Uninsured Near Elderly Would Have Severe Difficulty Affording Coverage Under President’s Medicare Buy-In Plan

News Releases
April 1, 1998

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ASHINGTON – The Center for Studying Health System Change, an independent non-partisan research group, released a study today, including a finding that most uninsured near elderly persons (ages 55-64) would have problems affording coverage under the President’s Medicare Buy-in plan, but that those in the poorest health would have the most difficulty of all. Specifically, the average uninsured near elderly person would have to spend 20 to 25 percent of his or her income on Medicare premiums, while their counterparts in poor or fair health would have to spend between one third to one half of their income to obtain coverage.   These findings come from a study that compares insurance coverage, access to care, and health status by age group. 

According to the Center’s findings, the uninsured near elderly are among the poorest and sickest of all uninsured persons – one fourth to one third of the near elderly characterize themselves in poor or fair health, as compared to 16 percent of all uninsured.  These sicker near elderly have average annual incomes of less than $10,000, while overall the near elderly have average incomes of about $46,000 a year. 

 “This study is an important contribution to the Medicare policy debate, in that it clearly demonstrates that a significant gap exists between the cost of coverage and the ability to pay of the uninsured near elderly,” said Robert Reischauer, Ph.D., Senior Fellow, Brookings Institution.  “The findings also suggest that 65 and 66 year olds would face even greater difficulty if the eligibility age for Medicare was raised.” 

The report from the Center is based on a telephone survey of 33,000 households across the country conducted between July 1996 and July 1997, and are part of a much larger effort by the Center for Studying Health System Change to track changes in health care over a multi-year period.  The Center has also conducted surveys of physicians (12,000) and employer establishments (23,000), and conducted intensive case study research in 12 U.S. communities.  See the Center’s web site for more information (www.hschange.com). 

Other key findings released by the Center today include a comparison of the near elderly population to other age groups, such as young adults (ages 19-24).  While the uninsured near elderly as a group may be the most difficult to extend coverage to because they are among the poorest and sickest, young adults actually have higher rates of uninsurance – 29 percent in comparison to 10 for the uninsured near elderly.  Young adults have high uninsurance rates for a variety of reasons, including losing eligibility under public programs and dependent coverage under their parent’s insurance, lower labor force participation, working at jobs where benefits are not offered, and the fact that they are less likely to accept coverage when it is offered to them. 

The Center for Studying Health System Change, an independent research organization funded entirely by the Robert Wood Johnson Foundation and based in Washington D.C., provides objective analyses about changes in the nation’s health care system and their impact on consumers to both policy makers and the public at large.