Sen. Bernie Sanders (I-Vt.) is reportedly willing to settle for half a loaf.
He doesn’t have enough support to pass his “Medicare for All” bill – i.e., the whole loaf – which would put every person in the country under a government-run, single-payer health care system. So he will settle for expanding Medicare from the current enrollment age of 65 to age 55 or 60 — at least for now. Call it “Medicare for More.”
And he’ll find a lot of support for Medicare expansion, especially from President Joe Biden.
“Medicare buy-in” proposals have been pushed by Democrats for years. Those proposals would allow individuals age 55 or 60 to buy into the Medicare program, paying the added cost out of their own pockets, perhaps supplemented with federal subsidies.
Biden’s Medicare expansion plan is different. He simply wants to lower Medicare’s eligibility age from 65 to 60. There is no buy-in requirement.
As Biden said on the presidential campaign trail, “Any new Federal cost associated with this option would be financed out of general revenues to protect the Medicare Trust Fund.”
In short, taxpayers, not the Medicare recipient, would pay for the expansion.
And it appears Sanders is fully on board with that approach, since he doesn’t think people should have to spend any money out of pocket on health care.
Ditto for most Democrats, who see the change as taking the country one step closer to a government-run health care system — which is most Democrats’ real goal.
A recent Kaiser Family Foundation survey found that nearly 80 percent of Democrats support a single-payer health plan like “Medicare for All.” Only 20 percent of Republicans do. But a 2019 Kaiser poll found that 69 percent of Republicans favor letting people as young as 50 buy into Medicare.
But there’s at least one itty-bitty, teeny-weeny problem with this plan: It will be very expensive.
All workers have deducted from their paychecks a 2.9 percent Medicare payroll tax — split equally between the employer and employee. But those funds only pay for Medicare Part A, which covers hospital expenses.
Retirees must pay out of their own pockets Part B and Part D premiums — which cover physicians’ fees and prescription drug costs, respectively. But those premiums cover only about 25 percent of the cost of the programs. Taxpayers foot the other 75 percent.
And those costs add up quickly.
Eugene Steuerle and Erald Kolasi of the Urban Institute track the average amount of money workers at various income levels pay into Social Security and Medicare and how much they can expect on average to receive in benefits.
A male worker who made the median income his entire working career and retired at age 65 in 2020 can expect to receive from Social Security just about what he paid in. However, while he paid $81,000 in Medicare (Part A) payroll taxes, he is likely to receive $240,000 (net of premiums) in lifetime Medicare benefits.
Lowering the enrollment age to 60 adds perhaps another $25,000 to $30,000 to that deficit.
And that’s just for a single person. Consider a married couple with only one low-wage earner. That worker retiring at age 65 in 2020 paid about $36,000 in Medicare taxes, which qualifies both of them to participate in Medicare. But the couple can expect to receive about $522,000 in Medicare benefits.
Sanders says not to worry. He wants to extract Medicare expansion’s additional cost from the prescription drug companies. That would be the same companies that began pouring their own capital into developing a COVID-19 vaccine before the federal government even recognized that the coronavirus would be a problem.
Sanders’s real goal is for the government to oversee, if not completely control, the drug companies. Just imagine how long it might have taken to develop a vaccine if drug companies had to wait on Congress to decide what it wanted to do and provide the funds.
The irony is that if the Affordable Care Act – i.e., ObamaCare – had worked as well as Democrats promised, there would be no need to expand Medicare. People age 60 and older would be able to buy quality health insurance at very affordable rates with no fear of being denied coverage because of a preexisting condition.
The health insurance system that nearly every Democrat denounces as a high-cost failure is Obamacare.
If Biden and Sanders are successful in lowering the Medicare enrollment age to 60, you can expect many employers who are currently covering those workers to encourage them to shift to Medicare
To make ends meet, Congress will lower provider reimbursement rates even more than they currently are.
Physicians, many of whom may limit the number of Medicare patients in their practice, may reduce their Medicare patient load even more, making it harder for seniors to find a doctor who will take them. And you can expect hospitals, which oppose the expansion, and other health care providers to find ways to game the system to maximize the lower reimbursement rates.
And once more, Democrats will decry the failures of a system that they themselves created.