Working Baby Boomers May Not Need Medicare Health InsuranceBy Kelly Johnston on January 3, 2011, 12:56 pm
Not all of these baby boomers will need to enroll in Medicare because many will continue working and will be covered by their employer’s health insurance. A person who works for a large employer with good health insurance (that probably includes coverage for a younger spouse, and even dental and vision insurance) should keep that coverage and does not need to enroll in Medicare. When that person retires, he/she will face no penalty for late-enrollment in Part B of Medicare.
Medicare Can Not Cover Its Own Costs
Moreover, the Medicare program is simply not taking in enough dollars to cover its costs. Current workers’ payroll taxes are earmarked for Medicare’s trust fund that pays for inpatient care. Outpatient doctor visits and prescription drugs are paid for by health insurance premiums collected by current beneficiaries and some of the trust fund. Contributions by both groups are insufficient to cover the entire cost of the Medicare trust fund, outpatient care and the prescription drug plan. In fact, today’s seniors only pay for one-fourth of the outpatient and prescription drug costs through their current premiums.
Voucher Program And Medicare Eligibility Age
New proposal centers on a voucher program that beginning in 2021 would give every Medicare-eligible American a payment that they would use to purchase private insurance. The amount of that voucher would be based on average annual per-person Medicare spending in 2021, and annual increases would be limited to no more than the rate of GDP growth plus one percentage point. That’s a lot less than the current annual growth rate in health insurance costs. Moreover, high-income seniors would only be eligible for a smaller annual increase. The upshot of this proposal is that if your voucher amount doesn’t buy you the level of insurance coverage you want, well, the rest would need to come out of your own pocket. Rivlin-Ryan would also raise the Medicare-eligibility age from 65 to 67.