Analyzing the actuarial implications of a Medicare Advantage buy-in option for older adults

Currently, there are two Medicare buy-in policies proposed by Congress. Both policies would allow individuals aged 50 through 64 to enroll in a public option Medicare buy-in plan or a private Medicare Advantage and Part D (MA-PD) buy-in plan.

These buy-in plans would be structured in ways similar to Medicare, but the economics around the funding of the plans would be very different. In particular, the benefits and administrative expenses for such a plan would be entirely funded through member premiums. By contrast, the vast majority of funding for traditional Medicare and MA-PD comes from the federal government.

Milliman’s Lindsy Kotecki and Stan Westrom have performed a case study on the actuarial implications of one potential MA-PD buy-in option. The scenario considered would permit individuals aged 50 through 64, who are not otherwise eligible for Medicare, Medicaid, or employer group coverage, to purchase a plan that looks like a typical MA-PD plan. The purpose of the study was to explore the concept of an MA-PD buy-in option by analyzing potential outcomes under one set of policy and program characteristics.

To read their entire study, click here.