Rough Passage: Affordable Health Coverage for Near-Elderly Americans

Rough Passage: Affordable Health Coverage for Near-Elderly Americans

HSC Research Brief | By the Center for Studying Health System Change

Americans between the ages of 55 and 64 faced a particularly precarious position in the U.S. health insurance landscape. Too young for Medicare but increasingly likely to develop chronic health conditions, this near-elderly population confronted a shrinking set of options for obtaining affordable, comprehensive health coverage. HSC's research documented the specific pathways through which these individuals lost coverage and the consequences for their health care access.

Declining Employer Coverage for Older Workers

Employer-sponsored retiree health benefits had been declining steadily for years, with companies cutting back or eliminating coverage for workers who retired before age 65. At the same time, job losses during economic downturns disproportionately affected older workers, who often had more difficulty finding new employment with comparable benefits. Workers who were laid off or took early retirement frequently lost not only their income but also their primary source of health insurance at a time in life when they were most likely to need it.

Individual Market Barriers

For near-elderly individuals who lost employer coverage, the individual insurance market posed formidable obstacles. Medical underwriting in most states meant that older applicants with even modest health histories faced significantly higher premiums, coverage exclusions for pre-existing conditions, or outright denial. The combination of age-based pricing and health-status underwriting made individual policies prohibitively expensive for many people in this age group, particularly those living on fixed or reduced incomes.

COBRA as a Temporary Bridge

Federal COBRA law allowed workers who lost employer coverage to continue their group plan for up to 18 months by paying the full premium themselves. While this provided temporary relief, the cost was often steep -- former employees paid the entire premium plus an administrative fee without the employer contribution they had previously received. For near-elderly workers approaching but not yet eligible for Medicare, the gap between COBRA expiration and Medicare enrollment could leave them without any coverage option except the individual market.

Health Consequences of Coverage Gaps

Near-elderly individuals who went without coverage reported delaying needed care, skipping prescribed medications and avoiding preventive screenings. These behaviors carried real health consequences, as untreated chronic conditions worsened during the coverage gap and resulted in more expensive care once the individual enrolled in Medicare at age 65. The research suggested that coverage gaps during the near-elderly years could increase long-term Medicare costs by allowing preventable health deterioration.

Sources and Further Reading

This analysis was published by the Center for Studying Health System Change, a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.