Medicare Buy-in Plan Runs Into Strong Opposition

Mark Crane

December 14, 2009

December 14, 2009 — If you're confused about the healthcare reform proposal in the US Senate to allow citizens aged 55 and 64 years to buy in to the Medicare program, you're in good company.

The details of the plan, first announced last week by Senate Majority Leader Harry Reid, D-Nevada, as part of a compromise to win over senators opposed to a "public option" — a federal health insurance plan to compete with private insurers — are shrouded in secrecy.

Reid is waiting for the Congressional Budget Office to complete a cost analysis of the measure before providing specifics. Even the No. 2 Democrat in the Senate, Richard J. Durbin of Illinois, said he was "in the dark" about aspects of the plan.

What is known about the measure has engendered rapid and fierce opposition from healthcare providers, including the American Medical Association, the American Hospital Association, and America's Health Insurance Plans, mainly because Medicare reimbursement rates are inadequate.

In broad strokes, Reid's compromise would expand Medicare eligibility to people aged 55 to 64 years who are uninsured or paying high premiums in the individual market. Most of those with employer-provided coverage would not be eligible.

Buy-in Plan Condemned

The American Medical Association, which had supported the bill passed by the House of Representatives that would create a public option, was quick to condemn the Medicare buy-in idea.

"The AMA has longstanding policy opposing the expansion of Medicare given the fiscal projections for the future," AMA president J. James Rohack, MD, said in a statement. "Currently, the flawed Medicare physician payment formula will cause a drastic 21% cut to physicians caring for Medicare patients in January, and 22% of Medicare patients looking for a new primary care doctor are having trouble finding one."

The Mayo Clinic, often cited by Obama as a model of what healthcare reform might look like, condemned the buy-in proposal in stark terms. "The current Medicare payment system is financially unsustainable," the group said in a statement posted on the Mayo Clinic Health Policy Blog last week. "Any plan to expand Medicare, which is the government's largest public plan, beyond its current scope does not solve the nation's health care crisis, but compounds it.

"Expanding this system to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country. A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare. As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices."

Writing in Monday's USA Today, American Hospital Association President Richard J. Umbdenstock described the buy-in plan this way: "Imagine living in a house with a crumbling foundation and trying to repair it by adding more bedrooms."

"Making millions of non-seniors eligible for Medicare, at the same time that millions more Baby Boomers are reaching retirement age, will further weaken the program and put many hospitals at tremendous risk," Umbdenstock said. "Their ability to provide other critical services their communities need — such as trauma care, emergency care, disaster readiness and more — would be jeopardized. And, one key reason health care costs are higher for everyone is that Medicare does not pay its fair share of the cost of care. Reform should end this 'cost shift,' not make it worse."

Health insurers, who opposed the House bill because of its inclusion of a government-run public option plan, quickly opposed the Senate buy-in idea. "This would add millions of new people to a program everyone agrees is going broke," a spokesman for America's Health Insurance Plans said in a statement.

Legislators Weigh In

Several legislators weighed in on the proposal on the Sunday talk shows yesterday.

Some potential supporters of the buy-in proposal have been reticent in their endorsements because so few details are known. "The whole reason we're doing this bill is to bring down cost, first for the American people in healthcare, and secondly for the deficit," Democratic Sen. Claire McCaskill of Missouri said on Fox News Sunday. "So until we get the numbers back from the Congressional Budget Office, we're all on hold."

If the Congressional Budget Office finds the bill would increase the national debt of patients' out-of-pocket expenses, she would "absolutely" vote against it, she said.

A few were enthusiastic about the idea. Rep. Anthony Weiner, D-NY, called it "the mother of all public options.... Expanding Medicare is an unvarnished, complete victory for people like me who support a single-payer system. Never mind the camel's nose — we got his head and neck in the tent," he told the New York Times last week.

That sentiment was what disturbed Sen. Ben Nelson, D-Nebraska, about the buy-in. "I'm concerned that it's the forerunner of single-payer — the ultimate single-payer plan, maybe even more directly than the public option," he said yesterday on CBS' Face the Nation. Nelson previously said he won't support the bill unless fellow Democrats establish a firewall to ensure no public money goes toward abortion coverage.

Sen. Judd Gregg, R-Vermont, said the plan could push patients out of private insurance. "The sickest 55-year-olds will seek to join Medicare and no one knows what it will ultimately cost."

Speaking on Fox News Sunday, Gregg cited a new study released December 11 by the Centers for Medicare and Medicaid Services. It found that national health spending from 2010 to 2019 would total $35.5 trillion. That is $234 billion more than the amount projected under current law. To pay for coverage of the uninsured, the bill would impose new fees on health plans, drug manufacturers, and medical device companies, Chief Actuary Richard S. Foster said. The fees would "generally be passed through to consumers in the form of higher drug and device prices and higher insurance premiums."

Republicans have been staunch in their opposition to a public option or buy-in. "If the Titanic is sinking, the last thing you want to do is to put Grandma and more of your family on the boat," said Charles E. Grassley, Republican Senator of Iowa, in the New York Times last week.

Yet Reid's hopes that the Medicare buy-in might win over some moderates, such as Joseph Lieberman, appear to be sinking. The independent Connecticut senator, whose vote would be needed to block a Republican filibuster of healthcare reform, said he is staunchly opposed to the proposal.

"It has some of the same infirmities that the public option did," Lieberman said yesterday on CBS' Face the Nation. "It will add taxpayer costs. It will add to the deficit. It's unnecessary. The basic bill, which has a lot of good things in it, provides a generous new system of subsidies for people between ages 55 and 65, and choice and competition."

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