The original public option would have been open to uninsured and self-employed Americans of all ages, plus many who work for a small business. The gang of 10′s “solution” narrows the pool to 55-65 year-olds. These are folks who need – and use – medical care. If you suffer from a chronic disease like diabetes, depression, or heart disease, it will probably begin to catch up with you in your 50s and 60s. About 77 percent of all cancers are diagnosed in people age 55 and older.
But when you isolate this group, insurance premiums become very expensive. Granted, Medicare’s lower administrative costs should reduce premiums by about $1,000 per person (or by $2,000 for a family plan according to Commonwealth Fund estimates), but even after factoring in those savings, an estimate that it would cost Medicare $10,000 per person to cover Americans 55 to 64 seems reasonable.
Medicare cannot afford to subsidize 55-64 year-olds who opt into the system. While the compromise proposal would let them buy in to Medicare in 2011, it does not provide any subsidies until 2014. Howard Dean has said that if the Medicare buy-in for people 55-64 does not include subsidies, this could be a deal-breaker in conference negotiations. But Joe Lieberman says he’s not happy with the Medicare buy-in at any cost.
But even if the buy-in did include subsidies, a couple with income over $58,200 would not be eligible for government help. At the same time, it’s hard to imagine where that couple would find $20,000 annually to buy insurance. Of course, legislators could raise subsidy levels-but that probably would mean hiking someone’s taxes. I doubt Joe Lieberman would approve.
The critical flaw in this proposal is that the Medicare buy-in covers such a shallow pool of older people. Without help from Americans under the age of 55, the insurance will be prohibitively expensive. It’s worth noting that in the past, proposals to open up Medicare suggested allowing a cohort of very young Americans to join the plan, along with 55 to 64 year-olds.
Who then will be helped by the Medicare expansion? The most affluent middle-aged Americans. One-fifth of households in this age group show joint income of more than $100,000. Some of them could no doubt afford $20,000 to purchase insurance for two-though many in that cohort already have good employer-based insurance.
The neediest middle-aged middle-class Americans-those who don’t have employer-based insurance, and can’t afford the high price of individual insurance in the private sector-will be left out in the cold.
Adapted from the original here.
