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Exclusive: Medicare buy-in attracting interest in the public option negotiations

Sources who have been briefed on the negotiations say that Medicare buy-in is attracting the most interest. Expanding Medicaid is running into more problems, though there's some appeal because, unlike increasing subsidies, expanding Medicaid actually saves you money. There's also ongoing discussion about tightening regulations on insurers, but I don't know the precise menu of options being considered.

The negotiations are fluid right now, and there's nothing close to agreement. But there is interest, and everyone remains at the table. The broader point is that the public option compromise is increasingly becoming a health-care reform compromise, and the focus is returning, usefully, to the goals of the bill. That's good for both moderates and liberals, as everyone who votes for this bill has a stake in seeing it work, and the intense attention to the increasingly weakened public option had begun to distract from the need to improve other elements of the legislation.

By Ezra Klein  |  December 7, 2009; 12:22 PM ET
Categories:  Health Reform  
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Well now, I'm all confused, which is my usual state anyways. But I just read a story from Politico that said the hot topic now is National Health Insurance Plan like the one Congress has is gaining ground.

Posted by: arnold104 | December 7, 2009 12:26 PM | Report abuse

At least we are back to looking at things that actually stand up on their merits. If the democrats are going to do this on their own they need to get back to convincing the american people about a plan that they are willing to stand behind- not a lousy mess of a bill where even the supporters know it sucks but feel bound to support anyway.

Posted by: spotatl | December 7, 2009 12:48 PM | Report abuse

A lousy mess could be one way of describing a vibrant democracy. When things get tidy is when I worry.

Posted by: arnold104 | December 7, 2009 12:51 PM | Report abuse

No surprise. Liberals like me love expanding Medicare. The dealbreaker is going to be what the buy-in entails.

Normally early buy-in means you agree to pay all your contributions plus interest plus actuarial adjustment. It could end up being another of Obama's trickle down programs that only the well-to-do can take advantage of. That would not be good.

Posted by: bmull | December 7, 2009 1:09 PM | Report abuse

Hi Ezra,

Can you explain how the Medicare buy-in might work? What scenarios could be possible?

Thanks and love your blog.

Posted by: MisterSunshine | December 7, 2009 1:20 PM | Report abuse

A working public option for old people only is better than a broken version for 2% of people of all ages.

Posted by: adamiani | December 7, 2009 1:32 PM | Report abuse

Ezra - Medicare buy-in will be very tough to get done in my view. Has anyone called the AMA or AHA to see if they're on board? I can't imagine Docs and Hosps will be happy to take a 30% reimbursement cut on everyone who goes from private sector insurance coverage to Medicare.

Details and implementation of buy-in are very challenging. If it increases the long-term gov't liability it can't get done. If it depletes the Medicare trust fund at all it can't get done -- because seniors won't allow it. If it reduces benefits given to current seniors it can't get done.

Posted by: MBP2 | December 7, 2009 1:34 PM | Report abuse

I so hope that you are right on this one Ezra!

Posted by: supag32 | December 7, 2009 1:46 PM | Report abuse

Given that the current bill includes a provision to help companies who do not currently cover early retirees provide insurance for that group, a complementary program to let people in the same age range who are not receiving other company benefits *temporarily* buy into Medicare would be a reasonable plan.

I'm not really interested in a longterm extension of Medicare though; it's already facing significant problems as these very folks age into the standard program. I would see this not as an end, but as a bridge to getting actual universal health care reform.

This proposal has the advantage of delivering "something" fairly quickly. Without something to actually help the millions of middleclass taxpayers who are being crushed by medical expenses today, the viability of the current reform bill seems questionable to me. I don't think most voters will be willing to wait for 5 years for this stuff to get off the gound. If most people don't see some sort of concrete benefits for people they know within the next 12-18 months, I wouldn't be surprised to see the whole thing repealed.

Posted by: Athena_news | December 7, 2009 1:52 PM | Report abuse

If done in a reasonable way this could be the way to break the logjam. It seems to me it would work like the exchanges, in that anyone who buys in would get the same Medicare options available to Medicare recipients in the area. Whatever subsidies or adjustments apply in rural areas would apply here too. No one can say it is a scary program--it's just Medicare! The hitch is in the amount of the buy-in. It should be somewhere between employer-based and individual health care for people of that age group. Yes, the gov't would lose Medicare contributions from that group, but the administrative and set-up costs are scalable and so likely to be very low.

I think it sounds good.

Posted by: Mimikatz | December 7, 2009 2:23 PM | Report abuse

We're going to end up raising the eligibility age of social security and Medicare anyway, since we have to deal with the baby boomer time bomb. If any young person in their twenties on the website believes he or she will get the same level of benefits at age 65 as someone who is currently enrolled, explain yourself.

Posted by: RandomWalk1 | December 7, 2009 2:33 PM | Report abuse

I think it sounds good.

I think it would be cool to watch wingers twist themselves out of the PRO Medicare knot they've recently tied themselves up in with their phony "Let's Save Medicare" strategy.

A big time chess move it would be, but above my pay grade for understanding everything involved in making it work.

Posted by: arnold104 | December 7, 2009 3:40 PM | Report abuse

How in the world does expanding Medicaid save you money? It is amazing that those who are pushing this bill actually think people are going to believe that more people receiving entitlement money from the government=saved money. Heck, why don't we spend away the deficit?

Posted by: Bob65 | December 7, 2009 3:42 PM | Report abuse

It would have to be available to anyone in order to create downward competitive cost controls in a meaningful way, just the same as a PO would, but doesn't as currently composed. This is the night terror for big insurance and likely for HC providers, who would likely fight it tooth and nail.

The advantage of going this way politically is obvious, you could call it by the name of a popular government program that most understand, and have it be truly the same. And would turn the GOP's current message of attack back on them as the faux saviours of Medicare.

Posted by: arnold104 | December 7, 2009 3:51 PM | Report abuse

"I think it would be cool to watch wingers twist themselves out of the PRO Medicare knot they've recently tied themselves up in with their phony "Let's Save Medicare" strategy.:

Honestly, is it impossible for some people to go five minutes without insulting those with whom they disagree? Lowering the age for Medicare eligibility and allowing those under 65 to buy in will do absolutely nothing to save Medicare, unless you can think of some magical way whereby increased Medicare liabilities won't hasten Medicare's insolvency.

Posted by: Bob65 | December 7, 2009 4:02 PM | Report abuse

Honestly, is it impossible for some people to go five minutes without insulting those with whom they disagree?

Guilty as charged your honor. I plead snark.

Posted by: arnold104 | December 7, 2009 4:07 PM | Report abuse

Hello all,

I work for a small Silicon Valley start-up of under 50 people and we pay - are you ready for this? - $ 1947 per employee per month for health insurance. Yes per month. And the rates are going up 10% in January - so we will be paying $ 2142 per employee per month. This is a huge cost to a small start-up company, not to mention that any one who gets to go on COBRA can look forward to paying over $ 25,000 per year in health insurance costs - just when they are least able to afford the cost.

Hence my interest in how this buy-into-Medicare idea might work.

Posted by: MisterSunshine | December 7, 2009 4:07 PM | Report abuse

Unless your startup is unique in that it has a large number of employees older than 55, I don't think it would have much effect on your expenses.

Posted by: TXAndy | December 7, 2009 4:22 PM | Report abuse

Bob, I think Ezra's point is that it will be cheaper to subsidize people into Medicare than to give subsidies to buy private insurance.

Posted by: truth5 | December 7, 2009 5:23 PM | Report abuse

Medicaid up, Medicare down. Has a nice ring to it.

Posted by: ched | December 7, 2009 5:31 PM | Report abuse

TX Andy,

You're right about the age distro in our company. Me personally am in my early fifties, so the concept is of personal interest (esp. given how frequently start-ups fail).


Here is a link to a AARP paper on Medicare buy-in. Some one posted earlier asking what AARP might have to say ...
It says Sen. Baucus proposed something like this last year as well ...

Posted by: MisterSunshine | December 7, 2009 5:38 PM | Report abuse

Can't we just drop the public option for now with an agreement to take it up as a free standing bill early next year, and pass a strong public option through reconciliation.

Posted by: dn_21 | December 7, 2009 7:26 PM | Report abuse

After reading the AARP report, I can see why this idea hasn't gone anywhere: it would require another set of subsidies to make it affordable for most people to cover both standard Medicare and supplementary policies.

That would be especially true for "pre-seniors" who are unable to get insurance anywhere else -- and large scale enrollment of that population would change the underlying risk assumptions of Medicare.

Bottom line: this is something that sounds good but would be unlikely to help enough people to make much of a difference.

Posted by: Athena_news | December 8, 2009 9:59 AM | Report abuse

I was postponing retirement because of the insurance gap and the high expenses of a cobra extension..buying into medicare for at least 3 years gives me another option and allows someone who is trying to find a job an opportunity

Posted by: notmd | December 8, 2009 11:43 AM | Report abuse

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