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Howard Dean: This is 'real reform'

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In an interview with Greg Sargent, Howard Dean seems pleased with last night's compromise. His big concern is that subsidies won't be available to people buying into Medicare. I haven't heard that, but if it proves true, it would be a huge problem, and a weird decision.

As Medicare is expected to be cheaper than private insurance, it will be cheaper for the government to subsidize the folks eligible for Medicare who qualify for subsidies than to not subsidize them. Without subsidies, even Medicare will be unaffordable for low-income folks between 55 and 64, and so those people will instead use subsidies for more expensive private insurance, costing the government more than it would otherwise have had to pay. Subsidizing part of something more expensive is costlier than subsidizing the same percentage of something else that's less expensive. But for now, I haven't heard this, so I'm hoping the good doctor has it wrong.

Photo credit: By Phil McCarten/Reuters

By Ezra Klein  |  December 9, 2009; 11:43 AM ET
 
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Comments

I'm sure someone will explain how this helps people under 55 right?

Posted by: JayGR | December 9, 2009 11:53 AM | Report abuse

People under 55 tend to hope they will be over 55 some day.

There are many other provisions of the bill beyond the possible Medicare buy-in.

Posted by: fuse | December 9, 2009 12:02 PM | Report abuse

I read on TPM that the subsidies don't apply for the initial period of buy-in,beginning 2011, until the exchange and subsidy program is implemented. In my view this is huge because it legimiitize Medicare for the larger population and is a path to a real public option eventually available to everyone.

Posted by: cmpnwtr | December 9, 2009 12:18 PM | Report abuse

"As Medicare is expected to be cheaper than private insurance"

Slow down, Ezra. CBO will project cost of single coverage from Medicare to be around $6500-7000 per year. We need to see the reforms take place, i.e. what a nongroup plan in the exchange would cost, with the rating reforms that will be in place. Given that Medicare has no utilization controls in place, coupled with the other reforms, I think what will be cheaper in 2014 remains to be seen.

Posted by: wisewon | December 9, 2009 12:27 PM | Report abuse

I think that cmpnwtr is right on this. So Dean seems to be confused or at least unclear.

Posted by: michiganmaine | December 9, 2009 12:27 PM | Report abuse

Dean is confused. The buy-in begins in 2011 with beneficiaries paying all the cost. In 2014 when everything else kicks in, buy-in beneficiaries get the subsidy along with everyone else. At least that is what TPM is reporting.

Posted by: scott1959 | December 9, 2009 12:39 PM | Report abuse

You're hoping it has subsidies? But you don't know, right? That's because it is a secret deal. Way to go, communists, let's do this all in secret. And stop using the word "folks". It is absurd in this context, or indeed, in any context north of the mason dixon. From now on refer to the "people." Every secret deal and bribe and threat is done for "the people."

Posted by: truck1 | December 9, 2009 12:59 PM | Report abuse

"As Medicare is expected to be cheaper than private insurance..."

The only people for whom Medicare would be cheaper are those who are currently shut out of the private market completely due to pre-existing conditions or who have exclusionary riders for those conditions.

Also, Ezra tends to conflate the cost of administering the program with the cost of operation. CMS pays Medicare Advantage programs over $800/month in my area. Even if that were cut by 14% (the supposed excess over standard Medicare), that means that the operating costs are more than what the "cadillac" plans charge. Given the fact that those who are most likely to apply are those with outstanding issues, their costs would probably be higher than averag. To be viable, the premium for the buy-ins has to cover the actual cost of care for the new population or it will end up being yet another drain on an already over-committed program.

I would advise Senators and/or their staffers, as well as the punditry, to read the AARP report on the topic before making any pronouncements. This is not something to be included as a last minute deal maker.

http://www.aarp.org/research/ppi/health-care/medicare/articles/i29_buyin.html

Posted by: Athena_news | December 9, 2009 1:05 PM | Report abuse

bending the cost curve down on medicare helps those under 55

bending the cost curve down on insurance premiums helps those under 55

bending the cost curve down for anyone buy their own health care helps those under 55

getting the nation on the road to health care reform helps those under 55

health care reform will help the nation regardless of age group...you remember that is what the political process is supposed to achieve, right?


Posted by: teoc2 | December 9, 2009 1:54 PM | Report abuse

I stole this from americablog.
Howard Dean gives contradictory answer as to whether Health Care bill is sufficient

by John Aravosis (DC) on 12/09/2009 11:04:00 AM
He tells Greg Sargeant that the compromise contains "real reform" and progressives should support it. Then he says that the compromise doesn't contain "enough" reform. He goes on to say that the Medicare deal, letting those aged 55 and up buy into Medicare, could be a "deal-breaker" if people aged 55-64 don't find their premiums subsidized. He adds that it's not even clear who will be able to buy into Medicare at 55 - those without insurance or just those at "high risk." (No mention of the self-employed.) If it's just those at high risk, then that could "fall short of real reform."

It sounds to me like someone put Dean up to this. They cajoled him into supporting the legislation, since he had been so outspoken about not supporting a bill that didn't include the public option, and progressives listen to him. But he didn't have all the facts, and wasn't entirely convinced that the bill was good enough, so he kind of wavered. That's my take.

Posted by: obrier2 | December 9, 2009 1:55 PM | Report abuse

I thought Dean said a health care bill had to have a public option to be real "reform." Being able to buy into Medicare between ages 55 and 64 will be useless for most people if the premiums are too expensive.

Posted by: Aprogressiveindependent | December 9, 2009 2:07 PM | Report abuse

Yeah but are you surprised? This is the kind of concession the insurance industry routinely asks for -- remember the SCHIP bs where low-income people would have to prove they'd been entirely uninsured for a full year before their kids could qualify? Giving insurance companies a right of first refusal over low income people unfortunately has a long and proud history in our legislature.

Posted by: NS12345 | December 10, 2009 12:35 AM | Report abuse

aren't the subsidies for people based on how far from the poverty line they are? (and not a percentage of how much the plan they chose is.)

Posted by: schaffermommy | December 10, 2009 3:58 AM | Report abuse

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