Expansion of Medicare – Bad Public Policy — Real Health Care Reform Healthshare

Expansion of Medicare – Bad Public Policy

 

In the health care debate in the Senate, they are considering letting people age 55 to 64 years old to buy into Medicare. This is being called a “compromise” that would be done in exchange for dropping the so-called “public option”. But in fact, this provision would likely accelerate the move towards government-run health care.

 

As I’ve discussed previously, Medicare is already on course towards bankruptcy. Medicare already pays less to doctors and hospitals than private insurance, thus transferring costs to those of us not on Medicare. So the idea here is that this would enable people to buy into Medicare to pay lower premiums than if they purchased private coverage.

 

The Mayo Clinic, which has been praised by the Obama administration, blasted this proposal in their Health Policy Blog. They report that an expansion of Medicare will not solve the nation’s health care crisis, but would actually compound it. The main reason is that most Medicare providers lose money.

 

If providers are paid less by Medicare, there will certainly be a response on their part. One is that they will continue to transfer costs to private insurers. Another is that, as many doctors already do, they will quit accepting Medicare patients. And it is inevitable that tax payers will ultimately be subsidizing the costs for the 55 year-olds who do sign up.

 

So the net result will be increased government spending, access problems for those already on Medicare, and cost shifting that will raise premiums for those that are privately insured.

 

But… the fact that this dramatic proposal was laid out just days before Reid wants to have a final bill indicates that the Democrats are scrambling, and that the likelihood of any of this passing are falling quickly.

 

It’s high time our government considers a market based solution like Health Savings Accounts. These HSA plans would do far more to reduce healthcare costs than what is currently going through congress.

 

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