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Buying back in to Medicare buy-in

Since the moment seems to have opened back up for idle policy speculation, it's worth saying that it probably makes more sense to put Medicare buy-in into the reconciliation process than the public option.

For one thing, the public option might survive a parliamentary challenge. Medicare buy-in is probably immune to one. For another, Medicare buy-in is a lot less controversial and unfamiliar than the public option, and that's true both inside Congress and outside of it. Finally, one of the GOP's strongest attacks against the health-care reform plan is that it weakens Medicare. That's not really true, but even if it was, the Congressional Budget Office has assessed Medicare buy-in proposals in the past and said that they actually strengthen Medicare by bringing healthier, younger people into the risk pool.

I don't want to go too far with this. I don't think we're going to see the public option or Medicare buy-in in the final bills. The hard lift for the bill is in the House, and the hard lift in the House is with the moderate and conservative Democrats. Bart Stupak's 14 votes are probably gone, and there's little evidence that making the compromise bill more liberal will bring them back. Of course, holding the liberals in the absence of a public option or any of its variants will also be difficult. In conclusion, I wouldn't want to be Nancy Pelosi.

But so long as we're playing fantasy health-care reform, if I were looking for a smart, safe and important priority to restore, I'd probably choose Medicare buy-in. It's just a smoother fit given the political, policy and process challenges.

By Ezra Klein  |  February 19, 2010; 4:21 PM ET
Categories:  Health Reform  
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Next: The strange politics of the public option revival


Indeed. The public option, to me, was always a compromised alternative to just extending Medicare.

If we're not compromising anymore, Medicare Buy-In definitely seems the way to go. As does relaxing Medicare eligibility requirements. Sure Republicans will squeal, but what are they going to do? Double-secret not vote for the bill?

Posted by: zosima | February 19, 2010 4:42 PM | Report abuse

What would the cost be for a part A&B buy in? About $13000/yr?

Posted by: staticvars | February 19, 2010 4:44 PM | Report abuse

If we wanted to make Medicare more solvent, shouldn't we allow anyone to buy-in, not just those from 55-64? That would bring people of all ages, especially the young, into the risk pool, making it younger and healthier. Right now, Medicare is insuring the oldest and likely the sickest.

Posted by: mschonholz | February 19, 2010 4:45 PM | Report abuse

Any word on the "president's plan?"

Is he just slapping his name on whatever compromise comes from the House/Senate, or will it be something completely different?

Posted by: Chris_ | February 19, 2010 4:52 PM | Report abuse

"For another, Medicare buy-in is a lot less controversial and unfamiliar than the public option, and that's true both inside Congress and outside of it."

That is true. But for those concerned about "government health care" its also unquestionable that Medicare buy-in is much closer to that than the public option, which is really just a FEHBP-overseen private plan. So Medicare buy-in SHOULD be more controversial. The fact that its not is due in part to the fact that no one in Congress had the time to think it through before Lieberman quashed the concept.

That said, I was always looking forward to the CBO scoring of the cost of Medicare buy-in which I suspect will be similar or more expensive than a similar private option for folks 55-65. That would be written off due to the "healthier younger population" point you mention above, but would give another interesting dimension to the debate. Most on the left would automatically assume Medicare would be cheaper. On a per patient basis, that is far from clear.

Posted by: wisewon | February 19, 2010 4:56 PM | Report abuse


Dame question here.

It has always seemed to me that what transpires before the summit (i.e. whether Democrats have a plan to take into Blair House that actually has the necessary votes for final passage) is ultimately more important than anything that happens in the summit. The Dems don't need any Republican support to pass a bill, they just need consensus among themselves about how best to resolve the differences in the House & Senate versions of the bills that have already passed.

And since the plan is to be published on Monday, it feels downright weird to me that we are hearing almost no reporting right now about the final efforts for a Democratic consensus around a reconciliation package.

One would fairly assume that today the majority whips in the House and Senate would be going through constant headcounts over new language, and we'd be hearing news leaking out about the status of some of the sticking points between the two chambers, like the "Cadillac Plan" tax and the Stupak abortion provisions.

If they do have a deal they can put in writing on Monday, they will certainly have done a great a job of keeping the talks below journalistic radar.


Posted by: Patrick_M | February 19, 2010 4:56 PM | Report abuse

should have typed:

SAME question here.


Posted by: Patrick_M | February 19, 2010 4:57 PM | Report abuse

Ezra - Medicare buy-in is still DOA. I've said it before and will say it again: docs and hospitals vehemently oppose the Medicare buy in because it reduces their fee for service by 20-30% in the 55-64 category.

Unless you can make a credible argument that 50 Dems in the Senate and a majority in the House are willing to anger these 2 powerful constituencies, you haven't made a credible case for it.

Public option is still more likely, albeit maybe 3% vs 0%.

Posted by: mbp3 | February 19, 2010 5:01 PM | Report abuse

I don't understand how Medicare buy-in as an option for the elderly won't suffer from horrible adverse selection. What stops insurers from creating plans designed to cherry pick the good risks (i.e. the healthy older people) and dump the bad ones on Medicare? Plans in the exchange wouldn't be able to directly underwrite by age, but they could design their benefits such that sick elderly folks wouldn't want them (e.g. limits on numbers of hospital admissions or doctor visits, or just a formulary that has no drugs that are common for the elderly). Similarly, they could market to active elderly folks (senior homes, vacation cruises, etc.), or include things like silver sneakers gym membership programs. Given that Medicare serves a large population and has relatively generous benefits, it would presumably suffer from the adverse selection.

Posted by: GrandArch | February 19, 2010 5:01 PM | Report abuse

"Bart Stupak's 14 votes are probably gone, and there's little evidence that making the compromise bill more liberal will bring them back."

Well, there were only 220 to begin with, including Cao, and I'd bet he won't make that mistake again. Wexler's gone, and even though Murtha was a Democrat he probably won't be voting anymore now that he's dead. That's 217 *before* you lose any of Stupak's coalition. So even if you kept all of them, you'd still need at least one Blue Dog you didn't have before.

But while we're on Stupak, remind me -- didn't that amendment get passed with the help of "obstructionist" Republicans, who basically facilitated passage of the House bill? I just wanted to be sure we all understood where the partisanship is. Or when obstructionist Olympia Snowe helped get the Senate bill out of committee?

Posted by: cpurick | February 19, 2010 5:03 PM | Report abuse

"...though Murtha was a Democrat he probably won't be voting anymore now that he's dead."

Gee that's really funny, cpurick. Hardy har har.

Posted by: Patrick_M | February 19, 2010 5:12 PM | Report abuse

Which one of the underlying problems of our dysfunctional health financing model does the Medicare 55 buy-in address?

How would it help us end the bankrupting spiral of health spending? Does it change the trajectory for the cost of care? Does it reduce overtreatment? Does it reduce the proportion government expenditure on health care?

To me, this looks like another attempt by the middle-class to avoid dealing with the fundamental problems of our non-system. This isn't about reform; it's about looking for ways to buy more of what hasn't worked.

FWIW, the last I read, Medicare 55 buy-in would run about $7600/yr. Considerable subsidies would be required to make a significant dent in the number of uninsured 55-65 year-olds. And since private policies run considerably less, the program would probably be subject to adverse selection.

Posted by: Athena_news | February 19, 2010 5:49 PM | Report abuse

I'd like to see the level of subsidies before buying in to this proposal, but it does have some attractions.

First of all, introducing the notion that some people ought to pay for their Part A premiums is a significant breach in the wall surrounding fixing Medicare. People are living longer and demanding far more expensive care than they did when they first started contributing to Medicare, and those who can afford to contribute towards that increased cost should be expected to do so.

Secondly, it avoids the creation of a whole new bureaucracy.

The downside is, Medicare is still far too gold plated a benefit for my taste. I'd be really happy if a more modest level of benefits were defined for the youngsters of 55 who buy in.

Posted by: bgmma50 | February 19, 2010 6:08 PM | Report abuse

It is worth remembering that the Medicare buy-in, during the brief time it was on the table was not really a "public option" for all 55-64 year olds. It would not be available for anyone currently covered through an employer. So the number of new self-paying and subsidized enrollees would be a realtively small slice of the total population.

It would be make an interesting test case to see the results of what happens when Medicare absorbs some younger participants into the risk pool and (in agreement with bgmma50) it means no new agency, just scaling up the existing structure.

But I don't believe that this (or any other) public option will make into the plan that is published by the White House on Monday.

Posted by: Patrick_M | February 19, 2010 6:33 PM | Report abuse

I'm in agreement with Athena and bgmma50; Medicare buy-in will suffer from adverse selection, with the possible exception of those states which disallow consideration of pre-existing conditions for purchasing individual coverage (eg New York). The effect will be to accelerate the impending bankruptcy of the Medicare program.

Another problem is actually getting care once on Medicare. From my experience with my elderly in-laws in rural Oregon, this can be problematic. Many physicians limit the number of Medicare patients which they allow in their practice. Expanding the number of patients on Medicare will only exacerbate this problem.

Posted by: Beagle1 | February 19, 2010 6:34 PM | Report abuse

I think you're underestimating how much lifting needs to go into getting the House liberals onboard with the Senate program-- and whatever is being tossed over to keep Stupak happy.

Posted by: adamiani | February 19, 2010 7:31 PM | Report abuse

"I'm in agreement with Athena and bgmma50; Medicare buy-in will suffer from adverse selection,"

I think that you are in agreement with what Athena said. I didn't say it, but would agree that it's an issue. I believe that the adverse selection issue is dealt with in the group market through the requirement of maintaining continuous creditable coverage in return for acceptance of individuals with preexisting conditions. A Medicare buy in could incorporate similar requirements to avoid adverse selection.

Posted by: bgmma50 | February 19, 2010 8:43 PM | Report abuse

I don't see how they could possibly offer it for $7600/yr. Just the government subsidy portion of Medicare is more than that, per person, without even including the premiums.

Posted by: staticvars | February 20, 2010 1:31 AM | Report abuse

oue i forgot about that short lived idea. yes yes, i agree, they should pursue that instead if they are going to pursue one of the two.

Posted by: schaffermommy | February 20, 2010 3:04 AM | Report abuse

If the President is going to kill the public option and Medicare buy-in, he needs to come clean and say so and why -- and urge, really urge, the Congress to continue efforts to examine and build public support for the public option concept, expressly calling out the state opt-out concept as one that certainly seems fair to everyone. He needs to point out that it can be added before the exchanges and the mandate (assuming he keeps that) go into effect.

He also needs to sell the alternatives intended to keep premiums cost down, including the 85% rule, the national non-profit built into the bill and the ability of the states to form compacts for additional non-profit insurance with a larger pool and stronger bargaining power. He can reinforce this possibility by noting such compacts can serve bigger populations than many European countries that spend much less on heathcare than we do.

As to why he is shelving it for now, most Americans will accept a statement that it has become such a divisive part of reform -- unjustly so, and that's why he's encouraging continued effort -- that he cannot throw everything out or stall the whole bill for it. Given the cost-minimization critique from the left against dropping the public option -- which is hardly an ideological objection -- he can cite the letter from the most prominent economists with an interest in healthcare, most of whom also probably think the public option or a Medicare buy-in would help still more, praising the various efforts in the current bill to contain and start reducing costs.

Above all, he must take the 15-20 minutes required -- "it is critical that the American people have an accurate picture" -- to explain with the perfect balance of detail and avoiding overload exactly what is in the bill and why it is there, and what is not in the bill and why not. It may take more than one speech to mollify the progressives and the moderate independents, but his can be a huge start that has been missing so far.

Posted by: urbanlegend | February 20, 2010 4:39 PM | Report abuse

I believe that Hospitals and Doctors have been trying to get Medicare rates increased
it seems to me this could be added to negotiations and in exchange for more medicare patience the doctors and hospitals will get a larger reimbursement

Posted by: tintin2000 | February 22, 2010 5:12 PM | Report abuse

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