How stupid is the Medicare buy-in idea?
Considering that Medicare is already in huge trouble financially, this really is a pretty dumb idea, as a Washington Post editorial points out:
The details of how the buy-in would work are still sketchy and still being fleshed out, but the basic notion is that uninsured individuals 55 to 64 who would be eligible to participate in the newly created insurance exchanges could choose instead to purchase coverage through Medicare. In theory, this would not add to Medicare costs because the coverage would have to be paid for -- either out of pocket or with the subsidies that would be provided to those at lower income levels to purchase insurance on the exchanges. The notion is that, because Medicare pays lower rates to health-care providers than do private insurers, the coverage would tend to cost less than a private plan. The complication is understanding what effect the buy-in option would have on the new insurance exchanges and, more important, on the larger health-care system.
Currently, Medicare benefits are less generous in significant ways than the plans to be offered on the exchanges. For instance, there is no cap on out-of-pocket expenses. So would near-seniors who buy in to Medicare get Medicare-level benefits? If so, who would tend to purchase that coverage? Sicker near-seniors might be better off purchasing private insurance on the an exchange. But the educated guessing -- and that's a generous description -- is that sicker near-seniors might tend to place more trust in a government-run program; they might assume, with good reason, that the government will be more accommodating in approving treatments, and they might flock to Medicare. That would raise premium costs and, correspondingly, the pressure to dip into federal funds for extra help.
Some "compromise," huh? This has always been the biggest risk with trying to pass health care reform; that the Democrats would do something monumentally stupid that makes no sense policy wise but helps politically by getting the bill passed.
Chalk this one up in the "monumentally stupid" category.
As the Post points out, the chances are very good that adding millions to the Medicare rolls will probably increase premiums which means more federal tax dollars will be used to subsidize those who sit as much as 133% above the poverty line. But don't worry. I'm sure by the time the bill hits Obama's desk, the Democrats will have it all figured out.
When pigs fly.
Hat Tip: Ed Lasky