Retirees and Seniors

Skyrocketing prescription drug costs, which are not covered under Medicare, are devastating to seniors living on a fixed income. In addition, while people over age 65 are covered through Medicare, many older Americans age 55-64 face difficulties accessing affordable insurance, especially when a spouse dies, retires or becomes eligible for Medicare.

Fact:  13 percent of people aged 50-64 or 5.2 million people, were uninsured in 2000.¹

Fact:  In 2003, only 38 percent of firms offered retiree coverage, down from 66% of firms in 1988.²

Fact:  One in ten married women aged 50 to 64 becomes uninsured when their husbands turn 65 and retire.³

Fact:  Nearly half of Medicare beneficiaries lack drug coverage at some point during the year.⁴

What can we do about it?

Extend COBRA coverage until the retiree turns 65

Right now, COBRA can last up to 18 months. However many of the difficulties faced by retirees could be dealt with by allowing 60 to 64 year olds and their dependents to purchase COBRA continuation coverage until they turn 65 and enroll in Medicare. (COBRA premiums may need to be set at a higher cost to compensate for the higher premiums). In order to make these premiums more affordable, an income-based tax credit could be used.

Medicare Buy-in Programs

Again, income-based tax credits could help make these premiums affordable.