A tentative deal on Senate health reform legislation reportedly includes a provision that would allow individuals age 55 to 64 who are uninsured or cannot afford private health insurance to buy into the Medicare program. The Medicare buy-in provision would replace a proposal for a government-run insurance plan, or "public option," which has met with opposition from some Democratic senators.
The idea of a Medicare buy-in has attracted the interest of senators who had opposed the public option, and even some proponents of the public option are applauding.
"Expanding Medicare is an unvarnished, complete victory for people like me," said Rep. Anthony Weiner (D-NY). "It's the mother of all public options. We've taken something people know and expanded it."
But hospitals and doctors have launched a full-court press against the proposal. Both the American Hospital Association and the the Federation of American Hospitals are urging their members to speak out against the plan, arguing it would hurt their members because Medicare pays providers at a lower rate than private insurers.
(UPDATE: One senator whose vote is critical to health reform's passage, Sen. Joseph Lieberman (I-CT), has signaled that he may join Republicans in opposing any bill if it permits uninsured individuals as young to 55 to purchase Medicare coverage.)
Polls Show Widespread Support
Nevertheless, the idea of a Medicare buy-in is highly popular among American voters, according to an updated Issue Brief on the Medicare buy-in released by the Kaiser Family Foundation. Based on polls conducted in 2000, 2004 and 2009, about three-quarters of adults in the U.S. have said they support the idea.
The Kaiser brief also offers a detailed profile of the population of older adults likely to take advantage of the program. The Foundation reports that while most adults ages 55 to 64 have health coverage through their work, about 13 percent -- more than four million -- are uninsured. More than one-quarter of these uninsured older adults are in fair or poor health and consequently face both higher premiums and higher denial rates in the individual market than younger uninsured adults.
At the same time, many of these four million older adults have low incomes and would likely require subsidies to afford Medicare, depending on the cost. The median family income for this group was $22,510 in 2008, says Kaiser. More than half of those in fair or poor health did not get needed care in the past year due to cost. A report last year by AARP based on data from the Congressional Budget Office estimated that an earlier proposal to expand Medicare to people aged 62 to 64 would cost participants $634 a month, or $7,600 a year.
Nevertheless, the Kaiser brief concludes that "[i]n the context of the current debate, a Medicare buy-in could provide coverage in a relatively short period of time, as early as 2011, and target help to those who are most likely to have difficulty purchasing coverage on their own in the individual market."
A Jobs Program in Disguise?
Some commentators have suggested that a Medicare expansion could have beneficial effects beyond assisting the uninsured near-elderly. For example, many of the uninsured, who are currently financial burdens to hospitals, would switch to Medicare and start helping hospitals' bottom lines. Others have suggested that the Medicare buy-in could be viewed as an economic stimulus program. A certain number of individuals aged 55 to 64 would be persuaded to retire hearly knowing they would be guaranteed health coverage, opening up jobs for younger workers.
Senate Democrats did not release details of how the Medicare buy-in would work, including whether subsidies would be provided to those who sign up and how extensive those subsidies would be. The Democratic leadership has sent its proposed deal to the Congressional Budget Office for a cost analysis, which could heavily influence the level of congressional support it eventually attracts.
For a discussion of "What Medicare would mean for 55-64 year olds" on the retirementrevised Web site, click here.
For a National Public Radio interview with Marilyn Moon, director of health programs at the American Institutes for Research, on the buy-in, click here.
For a Los Angeles Times article on the Medicare expansion idea, click here.
For more on Medicare, click here.
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