CONGRESSMAN PETE STARK 239 CANNON HOB, WASHINGTON, DC 20515 (202) 225-5065 http://www.house.gov/stark

THE MEDICARE EARLY ACCESS ACT 0F 2005

REPRESENTATIVES PETE STARK (D-CA) AND SHERROD BROWN (D-OH)

Introduced May 4th, 2005

- BILL SUMMARY -

The Medicare Early Access Act gives early retirees and others between ages 55 and 65 the option of purchasing Medicare coverage. Millions of near elderly who are uninsured can benefit from a Medicare buy-in. This bill provides affordable health insurance to a vulnerable population, while protecting the solvency of the Medicare Trust Fund.

ELIGIBILITY
Starting January 2006, individuals age 55-65 who do not have access to coverage under another public or group health plan are eligible to purchase Medicare. Enrollees will receive the full range of Medicare benefits. Participants are not required to exhaust employer-based COBRA coverage before choosing the Medicare buy-in option. At age 65, buy-in participants move into regular Medicare.

In addition, because employers are dropping retiree health benefits at an alarming rate, early retirees who have access to retiree health coverage may also participate, and their employers can wrap around the Medicare benefit.

PREMIUMS
Enrollees must pay a premium to receive Medicare coverage. The premium will be set by the Centers for Medicare and Medicaid Services at the actuarial level necessary to cover the full cost of services provided to the buy-in population. The premium will be adjusted annually to ensure its accuracy. Premiums will also differ slightly by region to reflect geographic differences in healthcare costs.

TAX CREDIT
Program enrollees receive a 75 percent refundable, advanceable tax credit to offset premium costs. Thus, participants in the Medicare buy-in are only personally responsible for 25 percent of their monthly premiums. The tax credit is modeled on the payment mechanism created by the Trade Adjustment Assistance (TAA) health care tax credit for displaced workers, which was enacted in 2002.

FINANCING
Premiums are deposited in a new Medicare Early Access Trust Fund. Participant premiums and tax credits are transferred to the Early Access Trust Fund to pay for Medicare services, ensuring this new program does not financially affect Medicare.