It never rains that it doesn’t pour. Mere days after socialist Sen. Bernie Sanders, I-Vermont, convened a hearing on his proposal for a single-payer system of socialized medicine, the Congressional Budget Office (CBO) issued a report analyzing one among the left’s supposedly “moderate” proposals to expand government-run health care: Lowering the age of Medicare eligibility to 60.
Most of these “incremental” reforms try to achieve a move to single payer via the installment plan, regularly expanding government-run care—and choking out private medical health insurance—until only the federal government “option” stays. However the CBO report illustrated several ways during which this proposal would inflict further harm on American health care.
Would Speed up Medicare’s Insolvency
For starters, the plan CBO analyzed would formalize Medicare’s insolvency virtually overnight. As I even have previously noted, Medicare is already functionally insolvent.
The yr before Obamacare’s enactment, this system’s trustees estimated the Medicare Part A Trust Fund would reach insolvency in 2017—five years ago. Only the financial gimmickry of Obamacare, which claimed that the federal government could use the identical Medicare savings each to fund Obamacare and to increase Medicare’s solvency, has kept this system afloat—but only on paper.
The CBO report said that the budget office “has not analyzed how the policy would affect the financial operations of the Hospital Insurance Trust Fund.” But it surely doesn’t take a rocket scientist to quantify the results.
CBO estimated that “outlays for Part A would increase by $146 billion” from 2026, the date the budget office assumed the policy would take effect, through 2031. With Part A spending rising by roughly $20-30 billion per yr, and virtually no latest payroll tax revenue coming in, the Trust Fund—which had only $134.1 billion available as of December 2020—would grow to be insolvent inside months as a substitute of years.
The underside-line numbers for the expansion of Medicare look none too appealing, either. CBO estimated that lowering the Medicare eligibility age to 60 would increase federal deficits by $155 billion over six years (2026-2031), while reducing the variety of uninsured Americans by a mere 400,000—not nearly enough to warrant such a rise in spending, let alone more turmoil inside the health care system.
Lowering the Medicare eligibility age would also create other logistical issues, making implementation tougher. For starters, lowering the Medicare eligibility age to 60 implies that for the primary time, individuals who don’t qualify for Social Security (either disability or retirement advantages) could enter this system. Without Social Security robotically enrolling people in Medicare, they might should hunt down this system, and the federal government would should use one other method to receive premium payments aside from by deducting them from Social Security checks.
Moreover, lowering the eligibility age increases the potential for split coverage inside a household. If a parent qualifies for Medicare, but a spouse or children don’t, families could find yourself getting insurance coverage from two separate sources.
One other, somewhat surprising, logistical obstacle comes from the effect that lowering the Medicare eligibility age could have on insurance premiums. Progressives have often claimed that shifting people within the age 60-64 would create a “win-win” premium scenario: Adding individuals who have lower health costs than “older” seniors will reduce average costs in Medicare, while removing them from the exchanges will lower average premiums for the non-Medicare insurance market.
In its evaluation, the budget office contradicts the second prong of this theory:
CBO and [the Joint Committee on Taxation]’s evaluation suggests that though older enrollees spend more, on average, on health care, their premium payments (including individual premium contributions and any applicable PTCs [premium tax credits, i.e., federal insurance subsidies]) would exceed insurers’ claims and administrative spending under current law. Since those older enrollees would go away the nongroup market under the policy, premiums would increase.
To place it one other way: CBO believes that the “pre-retirees” buying exchange coverage before they grow to be eligible for Medicare are relatively healthy. On average, these individuals’ health costs don’t exceed their premObamaciums—in reality, they’re subsidizing other, less healthy individuals, such that removing these healthy 60-64-year-olds would raise average premium levels.
This fact demonstrates the extent to which the exchanges have in lots of states grow to be de facto high-risk pools, where only the sickest individuals, or the individuals who qualify for the most important subsidies, hassle to enroll in coverage.
Some on the left might claim that the hypothetical scenario CBO analyzed doesn’t properly replicate what an expanded Medicare program might seem like. CBO assumed that existing federal Medicare subsidies for the over-65 population would get prolonged to the 60-64 population, as an illustration, relatively than examining a program during which those aged 60-64 could buy into Medicare with their very own money.
But that kind of “Medicare buy-in” would face similar, if not greater, logistical obstacles. For example, would policy-makers separate the present Medicare program from the “buy-in” for the under-65 population—and the way would that get achieved in an actuarially fair manner? Could the 60-64 population use Obamacare exchange subsidies for the Medicare “buy-in” program, and if that’s the case, how would those subsidies get calculated and applied?
Engaging in these kind of cumbersome logistical exercises for a program that may do practically nothing to extend the variety of Americans with health coverage—and at a time Medicare already faces insolvency—represents greater than just tilting at progressive windmills. It also demonstrates the extent of the left’s obsession with taking control of the health care system.
Chris Jacobs is founder and CEO of Juniper Research Group, and writer of the book, “The Case Against Single Payer.” He’s on Twitter: @chrisjacobsHC. Previously he was a senior health policy analyst for the Texas Public Policy Foundation, a senior policy analyst in The Heritage Foundation’s Center for Health Policy Studies, and a senior policy analyst with the Joint Economic Committee’s Senate Republican staff. Through the debate over the Patient Protection and Inexpensive Care Act, popularly often known as Obamacare, Jacobs was a policy adviser for the House Republican Conference under then-Chairman Mike Pence. In the primary two years of the law’s implementation, he was a health policy analyst for the Senate Republican Policy Committee. Jacobs got his start on Capitol Hill as an intern for then-Rep. Pat Toomey (R-Pa.). He holds a bachelor’s degree in political science and history from American University, where he’s a part-time teacher of health policy. He currently resides in Washington, D.C.