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Flip-Flop on Affordable Health Insurance? Lieberman Initially For Medicare Buy-In

Armen Hareyan's picture

Democrats in the Senate have proposed a compromise on healthcare reform that intends to split the difference between the liberal and moderate wings of the party. The public option open to most Americans is a lost cause, but 10 senators agreed to allow individuals between the ages of 55 and 64 join Medicare. Medicare offers affordable health insurance to senior citizens over the age of 65. Unlike seniors, however, the newly eligible enrolees will have to pay a monthly premium into the system. People in this age group have had it especially rough in this recession; rampant layoffs (at least some of which are related to ageism) have left them without employer-sponsored health insurance, and affordable health insurance is extremely difficult for them to find in the individual market - especially for the significant portion of middle-aged individuals with pre-existing conditions. Although annual premiums are predicted to be almost doubly expensive as the average employer's plan, supporters of the compromise believe that allowing such individuals to join Medicare is a viable option that would decrease the uninsured population.

Independent Senator Joe Lieberman put a wrench in that plan, however. He told CBS News' Face the Nation that such an expansion of Medicare coverage would result in Medicare becoming insolvent even sooner than the predicted 2017 date. The former Democratic party member is worried about the impact it will have on existing Medicare patients: it may result in budget cuts that are detrimental to their quality of care. Warnings abound regarding the influx of patients causing a shortage of medical providers, some of whom are unwilling to tolerate more patients with the lower Medicare reimbursement rates. That undercutting of doctor and hospital patients is part of the reason that the actual costs of treatment under Medicare are more inexpensive; but it may also lead to less affordable health insurance, due to doctors charging their remaining patients under private plans higher rates to recoup costs.

Some predict that despite the fact that the expansion would not be a true entitlement program for adults too young to benefit from traditional Medicare, it would still cause the federal government to lose money. Given the potentially higher prices, those most likely to sign up are those with existing or potential health problems that will be expensive to treat. Therefore, the increased risk pool would not result in much cost savings, as opposed to a pool that also contained younger, healthier 20-somethings to spread the risk. Not only will the younger demographics be ineligible for this program, they will also gravitate towards the more affordable health insurance options available to them (but closed to the targeted age group).

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Lieberman's opposition to the Medicare buy-in has forced Democrats to return to the negotiation table: he is one member of the fragile Democratic caucus, so his vote is essential to a filibuster-proof majority. Meanwhile, an earlier interview has leaked, in which Lieberman expresses support to the exact same program. The video, taped September 2009, has Lieberman telling his local Connecticut Post newspaper that he believes that current, successful public options for affordable health insurance--e.g. Medicare and Medicaid--should be expanded, instead of creating an entirely new public option. He specifically promoted changing the laws to allow individuals over the age of 50 or 55 who have lost their private insurance to buy into Medicare.

What changed his mind? According to Lieberman, that video was recorded prior to the most recent revisions to the Senate's healthcare reform bill. According to Lieberman, provisions inserted by the Senate Finance Committee that provide subsidies for affordable health insurance in the private market have nullified the need for the Medicare buy-in. New reforms that limit the ability of health insurance companies to practice age rating--insurers are now only allowed to charge older individuals twice as much in premiums as they do the youngest, as opposed to multiple times the youngest policyholders' premium--also cause Lieberman to deem the buy-in unnecessary.

Lieberman's tactics appear to have been successful so far. In a statement, he stressed that he does want healthcare reform to pass, and is especially concerned with increasing access to affordable health insurance for the 55-and-over age group not yet eligible for Medicare. Several Democratic party leaders are no doubt leery of going too far to placate a senator who infamously campaigned for Republican presidential candidate John McCain last fall. Regardless, his voice continues to play a role in the debate nonetheless.

Written by Alexander D. Conroy
Internet Marketing and Information Technology Manager
VitalOne Health Plans Direct, LLC.