Worse Than the Public Option
Harry Reid's Medicare gambit.
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It's hard to imagine a better illustration of the panic and recklessness
stringing ObamaCare along in the Senate than the putative deal that
Harry Reid announced this week. The Majority Leader is claiming that a
Medicare "buy-in" for people from ages 55 to 64 has overcome the
liberal-moderate impasse over the "public option." But if anything, this
gambit is an even faster road to government-run health care.
The public option---an insurance program open to everyone, financed by
taxpayers and run like Medicare---is intended as a veiled substitute for
"single-payer" Canada-style insurance. Under the cover of "choice" and
"competition," the entitlement would quickly squeeze out private
insurance as people gravitated to "free" coverage and the government
held down costs via price controls the way Medicare does now.
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Mr. Reid's buy-in simply cuts out the middle man. Why go to the trouble
of creating a new plan like Medicare when Medicare itself is already
handy? A buy-in is an old chestnut of single-payer advocate Pete Stark,
and it's the political strategy liberals have tried since the Great
Society: Ratchet down the enrollment age for Medicare, boost the income
limits to qualify for Medicaid, and soon health care for the entire
middle class becomes a taxpayer commitment.
In the case of Medicare, this means expanding a program that is already
going broke. Medicare reimburses doctors and hospitals at rates 70% to
80% below those of private insurers, which means below the actual
treatment costs in many cities and regions. Providers either eat these
losses---about half of U.S. hospitals are running a deficit or close to
it---or they raise prices for private payers. This cost-shifting isn't
dollar for dollar, but all empirical research shows that it adds tens of
billions of dollars to consumer health bills, and this will accelerate
if several million new patients are added to Medicare. That means higher
prices for health insurance.
Adverse selection will also be a big problem, as the people who choose
to join will inevitably be higher risk or in poorer health. Mr. Reid
hasn't released any details on his plan, if they even exist, but would
the sub-65 uninsured who join Medicare be subsidized? If so, in what
sense is this one-hand-subsidizes-the-other taxpayer self-dealing a
"buy-in"? It sounds simply like a huge Medicare expansion, especially if
employers decide to drop coverage for anyone older than 55.
As for costs, how does adding new beneficiaries square with Democratic
promises that they will cut Medicare spending on paper by two percentage
points a year for the next two decades---just as the baby boomers retire
and health costs continue to climb?
This last-minute, back-room ploy shows again that Democrats are simply
winging it as they rush to pass something---anything---that can get 60
votes by Christmas. President Obama praised the proposal as "a creative
new framework," while Finance Chairman Max Baucus told the Washington
Post, "If there's 60 Senators who can reach agreement, I'm for it." Now
/there's/ a model standard to use for reordering 17% of the U.S. economy.
The latest polls show public support for the Senate plan falling into
the mid-30%-range. The remaining supporters must not be paying attention.
Printed in The Wall Street Journal, page A20
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