Medicare Expansion: A (Not So) New Idea in Healthcare Reform - December 11, 2009
In an effort to get a bill passed before Christmas, a group of ten Democratic Senators offered to take a “public option” off the table in exchange for a substantial expansion of Medicare. It is a plan that would open up the Medicare system to Americans age 55-64, a demographic that makes up the majority of this nation’s healthcare expenditures and currently has 4.5 million uninsured.
People in this age bracket would be offered the chance to buy-into the Medicare system with premium payments. Early estimates for premiums top $600 a month. The details are unclear as to whether or not subsidies would be made available to those who need them. In keeping with the spirit of current healthcare reform proposals being considered, offering participation in Medicare to this age group would be another option that would compete with private insurers, arguably keeping costs down.
According to Patricia Neuman, Medicare policy expert at the Kaiser Foundation, “The idea of a Medicare buy-in floated around for years, even before the Clinton health reform proposals. The idea has appeal because it’s relatively easy to implement and it targets those who have had the greatest difficulty finding affordable coverage.”
Industry experts argue that this could be the most important provision to come out of healthcare reform. Americans in the age bracket of 55-65 often cite healthcare as the number one reason they are unable to retire early. An option like this could change the retirement landscape of America. Further, this would bode well with employers as employees in this age bracket generally incur the highest healthcare expenses. Taking this risk group off the books might lower health insurance premiums for everyone else.
Critics of the idea worry that the demographic that would benefit is too narrow. Healthcare reform efforts are needed for all Americans, regardless of age. Also, there are many Senators, namely Joe Liberman (I-CT), voicing concerns about burdening the existing Medicare system which is already “in a perilous financial condition”. Further, Senator Conrad (D-ND) expressed concern about the rural states and how Medicare’s complex payment formulas tend to shortchange healthcare providers in those areas. Doctor and hospital groups that have been key proponents of healthcare reform up until now have serious concerns about the reimbursement levels and how they will operate if the number of Medicare beneficiaries increases significantly. The effects are far-reaching. If the Medicare system already underpays medical providers, expanding its reach will only have a further deteriorating effect on the healthcare industry and costs will inevitably shift to the private sector.
It's an interesting theory and one worth investigating. The fact that it would use the existing infrastructure of Medicare to insure more people seems more efficient than creating another huge, government agency to administer health insurance. Howard Dean, a long-time proponent of a single-payer system, said, “….it does something that should have been done the whole way along: instead of creating a new bureaucracy it just uses the one we already have.” But just because it can be done, should it be done? Medicare is hugely popular and successful, to an extent, for good reason: it provides quality coverage to a sector of the American public that could otherwise not find coverage. It may not be the answer, however, for a younger group of people who still might find more comprehensive coverage on one of the government-regulated exchanges described in other health care reform proposals. It seems like an easy solution, but the ramifications of expanding Medicare must be considered carefully before moving forward.
If you have any questions about national healthcare reform efforts being considered today, please contact your Client Executive at William Gallagher Associates.