Why Not Open Up Medicare to Everyone?

In the latest effort to get a “public option” in the health care reform bill, 10 senators are negotiating to open Medicare up to some people who are 55-64, but require them to “buy-in” to the system.  In this proposal, certain people from the ages of 55-64 would be able to purchase insurance through the Medicare system that currently insures our seniors.  (It is unclear if this program would be available to all people ages 55 to 64 or only those who cannot get insurance now).  This will give all of the benefits of Medicare to a larger pool of people without the government having to set-up a whole new “public” insurance program.  This will alleviate the federal government from having to set-up a new public insurance program because the infrastructure already exists.  And from all of the polling data, Medicare seems to be extremely popular with its beneficiaries.

If Medicare is opened up to all people over the age of 55, Medicare should actually get stronger because the insurance pool would get younger and (statistically) healthier than the current over-65 pool.  But why not open Medicare up as option to people of all ages?  This would greatly improve the insurance pool by lowering the age of those which it insures.  Actuarially, younger people are cheaper to insure because they are generally healthier and, therefore, require less medical care.  However, for this proposal to work, it can’t be limited to only those people who cannot currently get health insurance because of pre-existing conditions.  If that were the case, Medicare would only be adding the sicker, more expensive beneficiaries.

Because Medicare is so much cheaper than private insurance, many people would flock to it, forcing private insurers to offer better benefits at lower prices.  This is exactly the competition that the insurance market needs.  And if you think you can get better insurance elsewhere, you will still be free to get it in the private market.  This proposal simply allows those who are not satisfied with the status quo, a cost-effective alternative.  And if the benefit package of Medicare is inadequate, consumers can do what seniors do, and buy supplementary policies covering extra services.


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3 Responses to “Why Not Open Up Medicare to Everyone?”

  1. stan Says:

    Sounds like a good idea. So why has it taken so long, and why is it suddenly being proposed now. It seems like it should have been incorporated into our current system long ago.

    • mschonholz Says:

      It was actually proposed by Governor Dean in 2004 campaign and was included in Sen. Baucus’ white paper earlier this year. It is only being proposed now as an alternative to giving everyone a publicly run health insurance option (something I advocate above). And my proposal was not included earlier, say in the original Medicare legislation in the 1960s, because LBJ knew he did not have the votes for it. As with Social Security, which covered just 50% of seniors when it was enacted and now covers almost everyone, Medicare with slowly be expanded until it is option for everyone.

  2. Susan Says:

    It sounds like an interesting concept to me too.

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