Medicare Expansion Done Right and Horribly Wrong

I remain skeptical of the new Medicare expansion “compromise” on both political and policy grounds. Politically, I will remain doubtful that the idea has traction until I start hearing statements of actual support from the more conservative Democrats. On the policy front, so far, all I know is that there is a vague idea to give some people below 65 access to Medicare by possibly “buying in.” While the idea does sound nice depending how it is structured it could be a big progressive victory or purely a fig leaf that helps almost no one.

Done Right

Early Medicare expansion done “right” in a progressive sense would be to simply change the Medicare eligibility age from 65 to a lower number like 50. That would give 50-year-olds the exact same access Medicare that we currently give to 65 year olds. This would give millions of Americans access to our great Medicare program. I would consider this to be a win for progressives, and it should be their goal.

My understanding is that the proposal currently being debated is nowhere near as progressive an idea or victory. It would only expand Medicare to a small segment of older Americans just below 65. The best upper end of the talks seems to be the option of giving access to Medicare to people 50 and above who are currently uninsured, self insured, have small business insurance, or in early retirement programs as soon the bill is signed. This group would be treated just like people above 65, and would pay the same premiums. This would still help a few million Americans in need.

Done Bad

From this point there are many restrictions which rapidly make the idea less progressive and less helpful for working class Americans. For starters, the opening of access to Medicare could be pushed back from right away to 2014 when the exchanges and tax credits start. The people eligible for this Medicare expansion could also be made to pay higher premiums (up to the full actuarial cost of Medicare insurance). This would make the program a true Medicare buy in. Politico reports a full actuarial buy in would be roughly $600 a month. That amount is high and could easily put Medicare buy in out of reach for a large majority of the already small segment of Americans the program is intended to help. Providing some sliding scale of subsidies or allowing people who would qualify for affordability tax credits on the new exchange to use them to help pay for Medicare buy-in would provide some help, depending on how generous they are.

Very tight restrictions could be placed on who is eligible for the program. If it were limited to only people without insurance or self-insured individuals, that would be a very small group. Setting the age at only 60 would further restrict its access. Finally, creating the program as only a temporary stopgap between now and 2014 would make the program meaningless long term.

The worst case scenario would be a "Medicare buy-in" in name only. For example, it could be a stopgap program restricted to Americans who are 60-64, have been uninsured for more than six months, and who must pay full actuarial value premiums. That makes for a Medicare expansion program so thoroughly hamstrung, it probably would not even help 20,000 people nationwide over the life of the program.

The general idea of Medicare expansion or early Medicare buy-in should appeal to progressives, but those are just meaningless names without the details. Simply dropping the age for Medicare eligibility from 65 to 50 would help tens of millions of Americans, and be a win for progressives. Conversely, I can imagine a convoluted set of restrictions that would prevent the proposal from helping basically anybody. Currently, it sounds like the negotiations are much closer to the latter than the former. (MSNBC is reporting that it is likely to only be an expensive temporary stopgap measure that helps basically no one and is simply a fig leaf to trick progressives.) Remember the three most important things in health care policy? Details, details, and more details. Unfortunately, that is what gives the health care lobbyist so much power to win huge victories quietly with seemingly minute changes.

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