Wait, I thought Obamacare was supposed to solve the problem of access to affordable health coverage—especially for older Americans! Are Democrats now saying their signature legislation has made the problem worse? Senator Debbie Stabenow (D-Mich.) has introduced the “Medicare at 55 Act” to allow Americans aged 55-64 to buy into the Medicare health insurance program. Seven other Democrats are original co-sponsors of the legislation. Stabenow introduced her bill because she says many older Michiganders are “burdened by high insurance premiums, unaffordable deductibles and limited options.” Actually, Stabenow’s claim is also true for everyone these days—and especially for those who buy their own coverage in the individual health insurance market. In the House of Representatives, Rep. Joe Courtney (D-Conn.) has introduced the “Medicare Buy-In and Health Care Stabilization Act,” claiming it provides “relief for the higher cost, older population in the individual and small business market.” So apparently both Stabenow and Courtney agree that Obamacare is unaffordable for those nearing retirement age. At least when Vice President Al Gore proposed a Medicare buy-in as part of his 2000 presidential campaign, those aged 55 to 64 with preexisting conditions could be denied coverage in most states, and there were no taxpayer-backed subsidies. So one could make the case that a Medicare buy-in option would help some older Americans obtain coverage. But Democrats assured us that Obamacare would fix those problems by increasing competition, lowering premiums, protecting individuals with pre-existing conditions, and providing income-based subsidies that would make policies affordable. No honest person believes that anymore. Now Democrats assure us that creating a Medicare buy-in—which is essentially the “public option” they always wanted but failed to include in Obamacare—is the answer to a problem their law has exacerbated greatly. Courtney says, “Participants could buy into Medicare, including Part A, B and D, for an annual premium potentially as low as $8,212. By comparison, a 60 year-old purchasing a Gold [Obamacare] health care plan on the exchange would pay approximately $13,308 (before subsidies).” Of course, “buy-in” is a little misleading. Most people in the 50-to-64 age range who are uninsured tend to be lower or middle income, so taxpayers would be doing the “buying in.” And don’t believe Courtney’s low-ball numbers. Medicare spent about $11,000 per beneficiary in 2014. And last year total health care spending averaged out to about $10,345 for every man, woman and child in the country. Health care has never been so expensive since Democrats promised to make it “affordable.” And private coverage would only become more expensive if a buy-in option becomes law because it would continue shifting health care costs to private sector insurance. Private sector coverage subsidizes Medicare’s and Medicaid’s lower reimbursement rates and government-imposed price controls. That means health care providers charge private insurers more to offset the lower Medicare and Medicaid reimbursements, driving up private sector premiums. The actuarial firm Milliman, Inc., estimated a decade ago that private insurance premiums were nearly 10% higher due to cost shifting from Medicare and Medicaid. Those programs’ price controls, along with the Obamacare’s Medicaid expansion to some 14 million people, have surely played a role in private sector premium increases. Expanding government-provided coverage under the Medicare buy-in would mean a shrinking population of the privately insured would have to bear even more Medicare cost shifting—until the private sector collapsed. Once private sector insurance collapses, the only real option would be Senator Bernie Sanders’s Medicare-for-all proposal—essentially, a single-payer system. Some claim that’s the result Democrats really wanted all along. Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow at twitter.com/MerrillMatthews
Wait, I thought Debbie Stabenow was supposed to solve the problem of access to affordable health coverage—especially for older Americans! Are Democrats now saying their signature legislation has made the problem worse?