I've long held this theory that to stimulate the economy, the government should lower the age of Medicare eligibility to 62.
The idea is that millions of Americans have enough money and assets to retire before age 65, but they continue to work because they don't want to buy – or cannot afford to buy – health insurance. So, instead they choose to work until 65, when Medicare kicks in.
If Medicare eligibility were lowered to age 62, many Americans might make the leap to retirement at that age, knowing that they have health insurance. That, in turn, would open up jobs for millions of other Americans looking for work, lowering the unemployment rate and pumping more money into the economy.
Will it happen? Not likely, considering Medicare is going to have enough trouble paying its bills as more and more Baby Boomers hit 65.
But there may be another option for folks to retire early and buy health insurance, and it's the private health care exchanges now ramping up as the Patient Protection and Affordable Care Act kicks into high gear.
Obviously, anyone already can buy individual health insurance, but likely it is going to be very expensive for someone in his or her 60s. Plus, there was no guarantee that the insurance company would accept that person as an insured. With Obamacare, the insurance is guaranteed, although the price that one will pay still could be a major factor.
The individual exchanges "can be very helpful for people who are just hanging on until Medicare because they cannot get guaranteed issue insurance on their own before Medicare kicks in," said Tony DaRe, agency principal of BSI Corporate Benefits of Bethlehem. "The exchanges in health care reform now all have guaranteed issue. …
"So you have an opportunity if you're at 62 and the only reason that you're working is to bridge that gap between 62 and 65, the exchanges are going to potentially be very valuable, when they work, to be able to facilitate insurance for that population."
Of course, it's not necessarily quite that simple, according to DaRe, who had more than 17 years of health insurance experience prior to founding BSI.
"That has its pros and cons. That is a higher risk pool of people, and for the exchanges to be affordable long-term, you have to bring people in on the other end in order to balance out those costs," he said. "So there will definitely be an uptick in the next year … in people who have decided to retire early because the only reason they continue to work is to bridge that gap between retiring, COBRA, Medicare."
COBRA, of course, is the often very expensive insurance that people can continue to buy after leaving a company. I have used COBRA, and it is so expensive that I do not see it as an option should I decide to jump into retirement before 65.
Ideally, I'd love to see the Medicare eligibility age drop to 62 or 63. But if that doesn't happen, the individual exchanges are an option.
Then again, for me that is years away – and who knows what the health care insurance landscape will look like by then.
Obamacare – meet Rubiocare. Or is that Christiecare?