Some Democratic Senators raise red flag on Medicare expansion idea

The possibility of allowing some 55-64 year olds to buy-in to Medicare is in the news today.

Roll Call: "Twelve Democratic Senators sent a letter to Majority Leader Harry Reid (D-Nev.) Friday evening to express their concerns with rumored plans to expand Medicare in the chamber's health care reform bill. Democratic Sens. Jeff Merkley (Ore.), Amy Klobuchar (Minn.), Maria Cantwell (Wash.), Russ Feingold (Wis.), Al Franken (Minn.), Tim Johnson (S.D.), Patrick Leahy (Vt.), Jeanne Shaheen (N.H.), Tom Udall (N.M.), Ron Wyden (Ore.), Mark Udall (Colo.) and Byron Dorgan (N.D.) told Reid in the letter that the Senate should address disparities in the Medicare reimbursement rate if it is going to include a provision allowing seniors aged 55 to 64 to buy Medicare coverage. ... 'Unfortunately, the current Medicare payment structure penalizes those who provide efficient care, while rewarding those who order unnecessary tests and services,' the Senators wrote. 'Creating a Medicare buy-in program will exacerbate the existing funding inequity'" (Pierce, 12/11).

Bloomberg: "The Medicare expansion, or buy-in, was meant to draw moderate support. It is part of a compromise to replace a government-run insurance plan that drew so much opposition it threatened to derail the legislation. Both Republicans and centrist Democrats said a public plan would provide unfair competition to insurers ... Democratic leaders refused to share details of the compromise plan until the Congressional Budget Office has offered a cost estimate. They suggest there may be a fix for Medicare reimbursement rates in the larger proposal. .... Senator Charles Schumer of New York told reporters that he didn't think the budget-office 'numbers will be so out of the ballpark we will have to start all over again'" (Gaouette and Rowley, 12/12).

The New York Times notes that "Senator Olympia J. Snowe, Republican of Maine, said Democrats were moving to expand Medicare 'without really understanding the ramifications. I just don't think it's a policy we should embrace,' said Ms. Snowe, who discussed health care with President Obama in two private White House meetings in the last week. The No. 2 Democrat in the Senate, Richard J. Durbin of Illinois, said Friday that he did not know details of the proposal put together by Mr. Reid in an effort to break an impasse over the legislation" (Pear and Herszenhorn, 12/11).

Meanwhile, Reuters reports that "U.S. healthcare spending would rise by about $234 billion over the next decade under the Senate Democrats' overhaul bill and some of the proposed savings might never be achieved, a U.S. agency said in a report released Friday. It was the latest in a series of reports issued by the agency that oversees Medicare that cast doubt on some of the savings claims made by Democrats about one of President Barack Obama's top domestic priorities."

Republican opponents Friday seized on the report to underscore their message the sweeping healthcare reform will raise costs and hurt Medicare benefits. ... But Democrats said many of the potential cost savings in the bill were hard to estimate and that the bill would extend the financial life of the Medicare health program for the elderly and result in lower premiums and out-of-pocket expenses" (Smith, 12/12).

The Washington Post: "Rick Foster, chief actuary for the Centers for Medicare and Medicaid Services, questioned the sustainability of many of the proposed cuts, the major source of funding in a plan to extend insurance to more than 30 million additional Americans. The proposal to reduce payments to hospitals and other providers, to force them to adopt more efficient practices, could prove particularly problematic for institutions that serve large numbers of Medicare patients, Foster wrote. He warned that many institutions might drop Medicare, 'possibly jeopardizing access to care for beneficiaries.' Moreover, he wrote, simulations by his office suggest that 20 percent of institutional medical providers would become unprofitable within a decade" (Montgomery, 12/12).

The Hill: "Foster found the bill 'includes numerous provisions that would reduce Medicare costs,' while raising a hospital payroll tax rate for wealthier patients. In all, Foster said the bill would extend the financial life of Medicare by nine years, from its current estimated bankruptcy date of 2017 to 2026. Foster also estimated a lower federal deficit ... Republicans assailed the analysis, however, focusing on the increased spending of $234 billion from 2010 to 2019 that Foster noted, as well as various conclusions in his analysis that access to Medicare services could be jeopardized as the system grows to accomodate more Americans."  

"White House spokeswoman Linda Douglass, who heads the Obama administration's healthcare publicity effort, issued a statement accusing the GOP of distorting Foster's analysis" (Rushing, 12/11).

The Associated Press has a feature exploring Medicare expansion, saying, for beneficiaries, the program is "far from free. Seniors now on Medicare pay an average of $4,400 a year of their own money for supplemental insurance, premiums, prescription copays, and deductibles for inpatient care and doctor visits. That's even after taxpayers pick up most of the cost of covering the elderly. Under one scenario Democrats are considering, people age 55 to 64 would have to pay full freight to join Medicare. Private insurance plans could well be a better deal for them."

"'It's more complicated than just saying, 'Open Medicare up to people 55-64,'' said health economist Marilyn Moon, co-author of a 1999 proposal to expand the program. 'In theory, it's not a bad idea because you're taking an existing program that works very well for an elderly population and extending it to the next group of people. But the structure of Medicare is different from private insurance'" (Alonso-Zaldivar, 12/12).

Related KHN story: Democrats' Ideas To Expand Medicare Raise Hackles Of Doctors, Hospitals, Insurers (Appleby and Carey, 12/9).