Who Would Have Really Won With A Medicare Buy-In? The Young

Last week, the Democrats and Republicans waged a fierce, albeit brief, war over the Medicare buy-in, a possible concession to liberals for dropping the public option. The full details of the plan never emerged, and, with Lieberman's insistence that the Democrats kill it, there's a good chance they never will. But the general idea would be allowing 55- to 64-year-olds to opt in to the government plan for the elderly. Depending on where you are coming from, Medicare buy-in is either a promising step toward the holy grail of a single-payer system or just the beginning of a downward spiral into socialized, rationed medicine.

You could argue endlessly about the philosophical benefits and drawbacks of a Medicare buy-in and its possible implications. But it's unclear that if we gave 55- to 64-year-olds the chance to buy in to Medicare, they would have actually wanted to or would benefit from doing so. The idea behind expanding Medicare is that, much like the original public option, it would cost less than private insurance because it pays lower rates for medical services. But when you actually play the situation out, it becomes more complicated.

Unlike a public option, which was crafted in the context of the nonelderly population, Medicare would enroll a population older than rest of America. They would have more health issues and thus cost more to insure. So Medicare would likely need to charge higher premiums to those opting to enroll. A Congressional Budget Report from last December examined the possibility of Medicare giving 62- to-64-year-olds the option to buy in to Medicare. They found their premiums would be about $630 per month. On average, the same age group pays under half that—$312—in the private, individual market. (One caveat: insurance costs under the newly proposed Medicare buy-in, which would stretch down to 55, would likely be a little bit lower than that CBO number because of the younger subscribers included.) These significant price differences beg the question, could Medicare's preferential rates lower the premiums enough to compete with plans with healthier subscribers?

The clearest beneficiaries of a Medicare buy-in would have been those not buying in at all: the 54 and under population. If the higher-cost patients move into a different insurance pool, insurance companies are paying less in claims and thus can afford to lower their premiums. They shift the burden of covering high-cost patients from the private insurance companies back onto those expensive patients or to the government. So with the Medicare buy-in dead, this group can expect to pay slightly higher premiums than they would have otherwise.

The hardest part of trying to predict the outcome of Medicare buy-ins is that we're working with so many unknowns. "We never saw the real language, so it's hard to know what exactly it would have done," says Michael Miller, policy director at Community Catalyst, a health-care think tank in Boston. If the government were to subsidize the premiums for Medicare buy-ins, for example, to the point that they were competitive with private plans, that would vastly change the landscape. Miller wonders whether Medicare could be made more affordable by creating a pool specific to the buy-ins, sheltering them from the high cost of insuring the 65-and-up population but giving them the benefit of lower Medicare rates. Just like the philosophical debate over Medicare buy-ins, we can do all the guesswork we want, but without specifics or a CBO report the practical outcome of a Medicare buy-in is all but impossible to predict.