A plan to allow Americans to buy into Medicare before turning 65 would do a better job of lowering costs and expanding health coverage than private insurance, according to a new report by the Congressional Budget Office.

The CBO studied a limited Medicare buy-in option for people ages 62 through 64 and estimated that the annual premium for single coverage in 2011 would be about $7,600, including prescription drug coverage.

In comparison, a private insurance policy for a 64-year-old can easily cost $12,000 to $16,000 a year, excluding co-payments and deductibles, according to Consumer Watchdog, a public interest group in Santa Monica.

In 2006, Medicare spent an average of $10,200 per beneficiary for an older, sicker population than envisioned by the buy-in.

"The report emphasizes an important point for policy-makers to keep in mind as they grapple with fixing our nation’s health care: Medicare provides more affordable coverage because it eliminates the water and profiteering of the private market," Consumer Watchdog spokesman Jerry Flanagan said in a news release.

The report found that the Medicare buy-in would lead to higher-than-expected Social Security payments because more Americans would retire before 65.