The dogged Phil Klein takes a look at the Medicare “buy in” proposal:
Expanding Medicare would go further to advance the original aims of liberals than the watered down version of the public option. By definition, the Medicare option (which would eventually be offered on the exchange to those over 55) would set reimbursement rates at Medicare levels, thus putting the squeeze on doctors and offering lower premiums that would make it more difficult for private insurers to compete. As with the public option, liberals will try to argue that the Medicare expansion will be funded by the premiums it collects, but it will benefit from the taxpayer-funded infastructure that is already in place to support Medicare — not to mention potential subsidies down the road.
Which is why doctors, hospitals, and insurers do not like the proposal, and why single-payer advocate Rep. Anthony Weiner does. In other Medicare news, Ed Morrissey points out that the CBO looked at something similar to the buy-in last year and concluded:
A disadvantage of this option is that the ability to buy Medicare coverage at age 62 would encourage some people to retire earlier than they otherwise would have. Some of those early retirees could face financial hardship in later years because many people underestimate the financial resources needed for retirement. In addition, because the cost of the coverage would not be subsidized, many low-income near-elderly people would continue to be uninsured. A potential problem with this option is that the amount of adverse selection that the program experienced could be greater than anticipated, which would put upward pressure on premiums and in turn reduce participation. (The potential for adverse selection would be limited in that the program would be offered only to individuals ages 62 to 64, who are more similar to each other in their health status and attitudes toward insurance than are individuals in the general population.)
Thus Reid’s “compromise” would be a costly lurch toward further dependence on government health insurance, would create incentives to early retirement, and would lead to adverse selection, resulting in low participation and high premiums. This is progress?
