The NY Times reported that Secretary Clinton is on board with a Medicare buy-in proposal, and a valued commenter asked a good question via e-mail:
whats your guess on the age they pick, 62? Maybe an even 60 ?
As for the age proposed for a Medicare buy-in, I think there are a couple of things in play here. First, is this an offer for just people who don’t have employer sponsored coverage or is it an open buy-in for everyone? I would prefer an open buy-in but that is technically much harder to do on a risk adjustment basis as Giant Evil MegaCorp would love to dump its cancer patients and keep its senior triathletes on their own coverage. So let’s assume the first step is just for people on the individual market where their options are a Qualified Health Plan (QHP) or nothing. Nothing is being chosen by some people because a QHP is a combination of too expensive even after subsidy and not valuable enough in benefit design (too high deductible/co-insurance/co-pays etc) . Medicare buy-in is an attempt to lower the premium cost of a QHP because Medicare pays less than most Exchange plans (some of the Medicaid narrow network based plans might pay providers less).
That make sense?
So the question is what age does it make sense to allow buy-in to Medicare? Ideally from a cost control perspective Age 21. That is not going to happen. At this point it becomes a political decision. 55 is what Rep. Weiner offered and liberals were on board with in 2009 when Lieberman quashed that. I am not a political genius. I would open my bid at age 55 and let “fiscal” hawk Democrats dial the age up by a couple of years just so that they can say they kept the super liberal Clinton from doing something super liberally.
If Medicare buy-in was reconfigured to be a QHP for Age 55 or Age 59.5 (IRA withdrawal age etc) or 62(Social Security early collection age etc) and then the benefits tweaked a bit using Medicare specific actuarial factors it could be placed onto the Exchanges as just another product from another insurer (Uncle Sam). People who had already chosen the super low cost Medicaid based plans would be no worse off. People who are currently choosing a Silver plan that is not Medicaid based and is paying Medicare +15 or higher to providers are probably going to move to the Medicare plan base as it will be a wide(r) network at roughly the same price point. People who are on plans that pay providers between Medicare +5 and Medicare +15 are in a gray zone, they may or may not be better off.
The regional issues are going to be significant where there is a single very low cost Silver plan with a large gap between #1 Silver and the #2 Silver and the new Medicare based plan sits closer to the #1 Silver than the old #2 Silver. That configuration allows a lot of people to get the #1 Silver for very little cash out of pocket. Shrinking the gap means they would having to pay more cash out of pocket as the subsidy calculation point moves much closer to the #1 Silver. Someone making $18,000 per year (155% FPL) where there is a $63 dollar gap between the #1 and #2 Silver can get the #1 Silver with full CSR for $1 per month as a de minimas payment. If the Medicare based plan was only $25 more per month than the #1 Silver, that person would be paying $38 per month.
One way of working through that issue would allow Medicare buy-in to be subsidized as if it is a QHP but to exclude it from the subsidy calculations. But again that is a political question. Excluding it from subsidy calculation will increase the CBO score.
But I digress, the ideal buy-in would be aimed at moving a significant proportion of the sicker people in the Exchange risk pool from insurers that pay providers Medicare +25 or Medicare +50 or Medicare +80 over to a plan that pays Medicare +0 with a good network. Probably that means a target age of 58 to 64 with a stretch goal of starting at 55.
Kay
Just a reminder of who killed Medicare buy-in in the original health care law:
I thought it was a shame because I think it would have made the health care law much more popular and maybe even have limited election losses in 2010.
aimai
@Kay: A shame is putting it mildly. But you know what? I think the purity police on the left would still have sabotaged the midterms. You are forgetting how angry people were that there were delays in implementation and that everything hadn’t been easy and how single payer was the only way to go. The complete hysteria from the left at the time was focused on one or two single issues, but the real problem was that Obama was refusing to somehow make everything happen all at once and slay the dragons of big pharma and the insurance companies. The firedoglakies and other lunatics would never have been satisfied with something that they would have imiediatly dismissed as a “token.” Even if they had been howling for it just a few minutes before.
Marc
The left did not sabotage the midterms. The right turned out, and the party in power usually loses seats in a bad economy.
This sort of shift by Clinton is why I’m glad that Sanders is running.
Kay
@aimai:
I’m not convinced that the purity police killed the midterms, but I know we disagree on that. Republicans ran on Medicare in Ohio- they said Obamacare gave Medicare money to the health care funding. It was directed not at college students but at older people and people who are closer to retirement age and economically insecure.
I made canvass calls for Ted Strickland. I was calling registered Democrats with landlines. The people who were freaking out about Obamacare were people on Medicare or close to being eligible for Medicare. They saw Obamacare as a loss– threatening something they have and need. It was just disastrous, because they’re NOT wealthy libertarians or wing nuts or feckless young people who believe they will never get sick. They’re terrified people who value security because they can’t afford risk. It’s hard to blame them. They should be scared.
Kay
@Marc:
I disagree with that theory too. Republicans weren’t scaring young people. They were scaring older people.
rikyrah
@Kay:
Oh Kay..
I never forgot.
Spiteful azzhole.
I wish Medicare’s age was 55.
aimai
@Kay: So: they straight up lied. What makes you think they wouldn’t have lied about the Medicare buy in?
aimai
@Marc: You are right that the left (such as it is) is not the cause of the loss at midterms. Young voters didn’t turn out in record numbers while older, white, republican voters did. They turn out in midterms to assuage the rage they feel at losing to the black guy/Democrats during the presidential election. And, as Kay points out, older white republican voters turned out after a massive demagogiing of the electorate by the republican party which opposed the ACA entirely. That any single element of the bill could have saved it from that kind of savaging is absurd. If there hadn’t been one thing there would have been another. The Republicans had been running against health care since Hillarycare and they were locked and loaded. And their stupid fucking turkeys of voters (with apologies to Kay who is more sympathetic than I am) were also prepped and ready for the carving knife.
WarMunchkin
@aimai: Again with this zombie lie.
MomSense
@aimai:
I made a lot of phone calls for those 2010 midterms and I heard a lot of “disappointed” “sell out” stuff from Dems. It was terrible and so frustrating.
Kay
@aimai:
They definitely would have demonized anything – I agree there.
But. Offering benefits- an upside- to everyone is just Democrats 101, aimai. They didn’t see any benefits for them in the health care law and they saw a lot of risk. This isn’t that complicated- the answer to “how do we get broad support for our new law?” is “offer broad benefits”. Democrats have always known this. If you want to protect a benefit for the person who makes 15k a year offer the same benefit to the person who makes 40k a year. You don’t divide those 2 groups into have-nots and haves. They’ll beat each other to death and they’ll both lose.
It’s much easier than appealing to their generosity or sense of community and it has the added plus of actually working :)
Lee
I’ve got a question about this actual post.
Is there any reason why they couldn’t set the price for buy-in such that they might be able to offset part of the cost of the traditional Medicare?
Any gut feeling how what that rate would look like assuming a buy-in age of 50?
I would assume that the lower the buy-in age the easier it would be to begin to offset the cost?
Chris
@Kay:
No hole in hell hot enough for Joe Lieberman.
gene108
@aimai:
It technically was not a lie. Obamacare reduced money for Medicare Advantage and other Medicare give aways to for profit businesses Bush & Co engineered.
Therefore right-wingers ran ads stating Obamacare was cutting $500 million from Medicare, which technically was not untrue, as subsidies to for profit businesses were reduced.
The actual impact on seniors would be negligible to non-existent.
I think some of the funds were used to reduce the donut hole in Medicare Part D.
But that got drowned out by the $500 million’s been cut.
Kay
@Chris:
They beat him anyway. IMO the real “revolution” in the health care law is the expansion of Medicaid. I wholeheartedly supported the law based on that alone and I think liberals should have too.
I regularly talk to lower wage people who tell me Medicaid is the best health insurance plan they ever had. They don’t want to go back to the private system (even though a big chunk of Medicaid is privatized, which a lot of them don’t realize). Leiberman denied the benefit to people who are just above “low wage” because he’s a horrible asshole but there will be a huge group of lower wage people who love “government health insurance”.
MomSense
@gene108:
They used that money to expand the services covered by Medicare without co-pays. This includes mammograms, bone density testing, yearly physicals, prostate testing, etc.
Chris
@Kay:
I agree completely (my only real objection to the ACA isn’t something that was originally in the law, it’s the fact that the Nine made state governments free to reject the Medicaid expansion). But that’s not to say the law couldn’t have been even better without the limits imposed by a few people like Lieberman.
And given the state he’s from, his approval rating towards the end, and the fact that he was replaced by a more liberal Democrat, the traditional defense for such people – “he has to be more conservative on some things, or he won’t get reelected!” – doesn’t even seem to apply in his particular case. He’s just a colossal asshole.
Richard Mayhew
@Lee: Yep, using the youngs to pay for the olds could work.
I am excluding it from consideration as it is another layer of complexity to a fairly simple plumbing problem but complex political/policy problem, but it could be done…..
rikyrah
@Chris:
Never ever forget…
Obamacare was the first expansion of the American Social Safety Net..
Which DID NOT have in its original design..
The EXCLUSION of huge swaths of the American populace.
It took the John Roberts Court to do that.
Can never be said enough.
pseudonymous in nc
@aimai:
We sometimes forget about the Crazy Teabagger Summer of 2010, where True Patriot Murkins were showing up at town hall meetings with their semi-automatic rifles shouting ‘Keep Government out of my Medicare’.
I don’t think anything in ACA could have prevented the apotheosis of the Dole Strategy, which is to piss over the workings of government, then say ‘hey, government isn’t working, blame the other people, they’re the ones who believe in government.’ That is the structural challenge that Dems face now.
Lieberman was and is an asshole, and his wife was and is a walking conflict of interest, multiplied by the healthcare and insurance industry’s influence in Connecticut. Again, though, that’s a structural challenge to Democrats as long as states have large interests in specific corporate — we can see that in the way Sens. Franken and Klobuchar are willing to bend over backwards for Medtronic, legal HQ Dublin (for tax purposes), operational headquarters Minnesota.
Hoodie
@Richard Mayhew: What do you think the effect of Medicare buy-in for 55-65 might be on providers? Seems that could throw a hefty chunk of utilization into a more stringently cost-controlled bin and leave providers with smaller pool of customers that (1) use a lot of services and (2) have insurance that pays better than Medicare.
Barbara
When there is buy-in to Medicare it will come as a shock to many people just how expensive Medicare is on an adjusted PMPM basis. Beneficiaries like to pretend that they have already paid for Medicare. They have not. The stakeholders who will oppose the public option with everything they have are providers. It removes additional people from the pool that they are used to gouging by something they call “cost shifting” because, according to them, Medicare doesn’t pay them enough.
Keith P.
I went on Medicare at 37 (disability…Parts A & B). It’s a pretty nice setup, to be honest, as you get a pretty solid health plan (that’s largely already taken out of my paycheck, plus another $133/month for Part B). Then, with a job, you can get on a group plan as a supplemental and improve coverage even more. From my perspective, it’s a good model to allow for an acceptable minimum coverage (that has the pull to force cost savings from health providers) while still providing a means for getting better coverage via supplemental, with the benefit of it being group coverage. Now, someone else may have reasons why it’s a bad deal, but for me, it’s been quite a comfort.
Thoroughly Pizzled
Hey Richard, apologies if you’ve discussed this before or if this question doesn’t make sense, but if you wanted to achieve universal healthcare, would it be better to expand Medicare or Medicaid? Assume that those are your only options.
Richard Mayhew
@Hoodie: @Barbara: Yep, Medicare buy-in 55+ removes quite a bit of hookers and blow from the provider side as those are the patients who are most likely to have insurance that pays significantly above Medicare rates and use a comparatively high number of services
Medicare buy-in is a massive pay-cut for some providers.
@Thoroughly Pizzled: Opening bid is Medicaid (lowest cost) with Medicare as completely acceptable as long as it is modified to increase the actuarial value of the coverage. So most likely Medicaid like benefit design with Medicare like payment structure.
Fair Economist
@Marc: It’s hard to attribute Clinton’s support for a Medicare buyout to Sanders’ campaign, given that she was pushing for it in 2008.
Fair Economist
@Chris:
Only the Five did that. Four of the nine continue to resist the call of the Dark Masters (and will probably continue to do so indefinitely, although there are indications Breyer is willing to legalize bribery.)
TriassicSands
I don’t think Medicare is a good foundation for a single payer universal health care system. As a stand-alone program it is at best mediocre health insurance. In order to make it a good (or better) plan people have to buy supplemental plans, not to mention the poorly designed Plan D prescription medication plan. Low income people would not be adequately covered with Medicare only and the plan shouldn’t be to have a system with unnecessary complexity, but to streamline the system and get rid of for-profit insurance companies altogether.
In my experience, people who aren’t enrolled in Medicare are probably not aware of its serious shortcomings.
PJ
@aimai: How would these mythical “purity police” have sabotaged anything? As you know, Republicans took control of the House, and gained 6 gubernatorial seats in the states. This was after the ACA was passed. What would have expanded Medicare – something Democrats, as a whole, were in favor of, and which would likely have been available to millions of people much quicker than the health exchanges – would have caused these purity police to do which would somehow render the election worse for Democrats?
PJ
@MomSense: I made calls to, and there were a significant percentage of people who had been hurt in the crash (lost jobs, lost homes) and whose lives had not improved economically, and they were angry.
PJ
@Fair Economist: So why is she only mentioning it now, when her campaign officially started over a year ago?
Geoff Arnold
@PJ: Dan Savage just skewered this line of criticism (in a slightly different context):
Tom
@rikyrah: You and me both. My own ideal plan would be buy-in starts at 26 (when you go off your parent’s insurance) and goes until 55 which becomes the new Medicare retirement age.
As someone who had to leave a well-paid, full-time job in my fifties to care for my wheelchair-bound spouse, I have a special place in Hell for those who keep talking about raising the retirement age.
Prescott Cactus
Thanks again Richard.
O-Care has helped millions. Having a Buy In Medicare become primary and having a decent to golden HCP as a back up would be awesome.
What it didn’t do is control or limit drug costs. My HCP has less than 2000 participants (around 1000 active / working) and it’s the drug costs that are killing us. Way over inflation rate. This is the biggest concern for our Plan Administrator.
goblue72
@aimai: Show your math. Show your math that self-identified far-left/socialist/whatever you want to call whatever is to the left of tote baggers was the reason for midterm loses. Otherwise its just fantasy in your head.
You know who didn’t turnout in 2014? Minority voters and younger voters (and there is an increasing overlap between the two). You know who showed up in 2014? Whites and older voters (and there is an increasing overlap between the two). Democrats didn’t always do poorly with older voters, – Bill Clinton did fine with older voters – but now they do. Democrats didn’t always do poorly with whites, but now they do.
And that’s why they lose the midterms and can’t hold onto Congress to save their life. The voter blocks Democrats increasingly rely on to win national elections in Presidential years just doesn’t show up for midterms.
Older white liberals – those “purity pony” voters everyone likes to bitch about – show up – just like other older whites. Its just that older whites in general skew Republican. Other parts of the Democratic coalition – not so much.
dollared
@aimai: The left wing purity police sabotaged the 2010 midterms? Please, show me the case for that assertion. Please include voting statistics, as well as your causation model.
dollared
@goblue72: Beat me to it. What a bunch of hippie punching crap. Talk about your self hating Democrats….
Thoroughly Pizzled
@Richard Mayhew: Alright, thank you for answering!