BOSTON (CN) — Former Vice President Joe Biden on Thursday proposed lowering the Medicare age to 60 and forgiving student loan debt for low- and middle-income borrowers who attended public colleges and universities.
The move comes one day after Senator Bernie Sanders dropped out of the presidential race but urged supporters to continue voting for him anyway to gain leverage over the Democratic convention platform. Biden made clear that his new proposals are an attempt to reach out to supporters of the Vermont senator, who made health care and student loan debt the centerpieces of his campaign.
“Senator Sanders and his supporters can take pride in their work in laying the groundwork for these ideas, and I’m proud to adopt them,” he said. He called them part of his “progressive vision for the country.”
Expanding Medicare to age 60 would make 20 million more Americans eligible for the program. Doing so “reflects the reality that, even after the current crisis ends, older Americans are likely to find it harder to secure jobs,” Biden noted.
Medicare participation would be voluntary and older workers could choose to stay on an employer plan if they prefer. Employers “would be prohibited from excluding older workers from coverage or [trying] to push them out of their plans,” Biden said. Workers could also choose to stay on a subsidized plan offered through the Affordable Care Act.
It’s not clear how many older workers would actually opt for Medicare rather than an employer plan since many larger employers’ plans are relatively generous, according to Thomas Greaney, who teaches health care law at the University of California Hastings Law School.
“Traditional Medicare has a lot of holes in it. There are very high co-pays and no out-of-pocket limits. I’m not so sure how attractive it will be,” he said.
But he added that Medicare Advantage plans, if they end up being included in Biden’s proposal, might be more attractive.
Seniors might prefer Medicare to many smaller employers’ plans, he noted, and this could be a benefit to those employers because “it could take away some of their most costly employees and ease their cost burdens.”
Biden said expanding Medicare would not affect his earlier proposal for a public option for younger workers that he called “Medicare-like.” He gave no estimate of the cost and said it “would be financed out of general revenues.”
As for student loans, Biden’s positions have “evolved a lot” over the course of the campaign and this is the latest of a series of iterations, noted Robert Kelchen, a Seton Hall University professor who has written a book about college debt.
“I propose to forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities for debt-holders earning up to $125,000, with appropriate phase-outs," Biden said. The plan would also apply to private historically black colleges and universities and other minority-serving institutions.
The proposal would affect some 20 million Americans and result in an average debt forgiveness of about $10,000 per person, so it would cost about $200 billion, Kelchen estimated.
The plan applies only to “tuition-related” debt and thus presumably wouldn’t go to debt from room, board, books and other expenses, he noted.
The proposal would be in addition to Biden’s other current student debt plans, which include immediately canceling a minimum of $10,000 of student debt per person; no monthly payments and no interest accrual for borrowers making less than $25,000 per year; a limit on payments of 5% of discretionary income; forgiveness of all loans after 20 years; and an additional $10,000 per year of forgiveness for up to five years for borrowers who participate in public service.
Biden said he would fund the plan by repealing the high-income “excess business losses” tax cut in the recent $2.1 trillion coronavirus relief package.
Politically, Kelchen thinks the proposal “will help on the margins” in attracting Sanders and Warren supporters. However, “It’s still not free college and it’s still not debt cancellation, so Biden could still be seen as too moderate,” he said.
In his announcement Biden also made suggestions for a second coronavirus relief package, another proposal that has been championed recently by Sanders.
“Congress has moved to help with the CARES Act, but they must do more,” he said.
“The next recovery package will need to provide significant funds to states, to make sure that educators and health care workers and first responders can keep getting paid. It will have to provide hazard pay to frontline workers putting themselves at risk.
“It will have to provide health care coverage for millions who lose their insurance, by allowing them to stay on their health care plans and covering the cost, as well as reopening enrollment for Obamacare and creating the public option I've been calling for. It will have to extend unemployment benefits, and provide further direct cash relief,” Biden said.
Finally, he added, “we must – must – make sure not only that every American can be tested for coronavirus free of cost, but also make sure every American can be treated for coronavirus free of cost. Period.”
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