Monday, December 7, 2009

Medicare buy-in

So the new healthcare compromise coming from the Senate would be lowering the age of Medicare buy-in to 55 from the current 65.

Sounds like a good idea to me. If we're not getting a public option out of the Senate (and we're not) then I like this as part of a compromise. It sets the precedent to lower the bar more in the future and lays the ground work for a Medicare-for-almost-all in the future. Which is exactly what a lot of us lefties wanted in the first place.

Anyway, devil is in the details and I reserve the right to be horrified by some aspect of the compromise at a future date but on the surface this isn't too bad.

1 comment:

Andrew Oh-Willeke said...

I agree that Medicare buy-in sounds like a good part of the plan. For one, the systems that work well for the 65 plus population are also likely to work well for the 55 plus population, which has similar health care needs and often the same providers. When age 65 comes, the transition to Medicare is at that point seamless.

Second, those 55 plus have the highest probability of needing care, the highest average cost of care, and the highest probability of needing uber-expensive catastrophic care. None of these facts work well with a traditional insurance model of health care. So long as insurance companies can set rates based on age, there is pressure on employers to discriminate on older workers and that increases as health insurance becomes a mandatory benefit. Similarly, the need to subsidize health insurance premiums for those age 55 or more who must get their own health insurance is highest because the cost of carying for them is so much greater. If insurers can't set rates based on age, it is in their interest to make their plans unfriendly in subtle red tape ways to older insureds.

Finally, the number of people age fifty-five or more who have disabilities or an opportunity to retire is greatest of the under age sixty-five population. Yet, it is hard for people not in the workforce to get health insurance. Do we really want incentives for people who can otherwise afford to retire to work at King Soopers or Starbucks until age sixty-five because it is a more affordable way to get health insurance? Allowing people who are only working to get health insurance to retire with a Medicare buy-in may free up jobs for those hardest hit by unemployment these days.

Notably, a Medicare buy-in also takes pressure of state Medicaid budgets, providing some crucial stimulus to states.