A "Team of Ten" senators-- split between public option supporters and opponents-- is considering a Medicare buy in for those 55 to 64 (limited, apparently to those who'd qualify for the future insurance exchange).
Even if it were open to all ages, the trouble with a Medicare buy-in is you'd have to pay 3 or 4 premiums a month for adequate coverage. For current Medicare beneficiaries, Part A hospital coverage is funded by payroll taxes. you'd also have to buy-in to Part B provider coverage and Part D drug coverage (the premiums for both are currently subsidized by general revenue). Even after paying full freight for all three Parts, there's no "out of pocket cost" cap, you'd have to buy-in to an additional Medigap policy to cover catastrophic costs. A better idea is to look at the public option plan that Congress created in 2005 for military reservists, Tricare Reserve Select (TRS), which covers hospitals, providers, drugs and catastrophic costs with one affordable premium.
http://www.tricare.mil/...
TRS splits the cost 28% to the reservist, 72% to the government. There's open enrollment with no waiting period or pre-existing condition clause, so a National Guardsman who wants to join simply sends in his first $47 premium with his application, if he wishes to cover his family as well, the premium rises to $180 a month. Even with zero government subsidy, the total premium cost would be less than $200 a month for an individual and around $750 a month for a family. Because reservists are healthier and younger than the average population, the acturial cost of a civilian buy-in would move those premiums numbers up, but still less than comparable private insurance plans.
Tricare is managed by contractors (the country is divided into three regional contracts) but it uses the same hospital and provider rates as Medicare (30% less than private insurers). What's more, unlike Medicare, Tricare is allowed to use the rock bottom VA-negotiated drug price schedule (as much as 50% less than private insurers). Its difficult to imagine any private insurer could underprice a Tricare buy-in policy, but they're certainly welcome to try.
I'd make two suggestions (that aren't required for a straight buy-in) to reduce individual premium costs:
- fold Medicare and SCHIP into TRS-- children have much lower healthcare costs, on average, than adults. So the more children that are in a risk pool, the lower the average premiums are for everyone else.
- Automatically enroll everyone into TRS and at least partially fund it through a payroll tax. If an employer can document for the IRS they provide health coverage, both employer and employee could take a tax credit for the TRS payroll taxes they've paid. Of course, aren't we all deficit hawks at heart? It wouldn't have to be a 100% tax credit. Fair is fair, so we should give the full tax credit to the military personnel, reservists and retirees who've already paid for Tricare coverage with their service.
If Congress allowed civilians to join the Tricare Reserve Select program, there'd be no need for any of the insurance market reforms Congress has been considering. The beauty of using a taxpayer funded system is you solve the adverse selection issue-- everyone can receive health coverage since everyone receives a tax bill. As consequence, Congress wouldn't have to impose a mandate on citizens or guaranteed issue rules on insurers. To give every American the right to use this existing public option plan is simply a matter of adjusting government spending and taxes. Which means there's no reason to insist on 60 Senate votes or wait 4 years. The 1997 bill which created SCHIP was passed via Reconciliation and we didn't waste any time. President Clinton signed the bill on August 5, the program started enrollment on October 1.
Since Americans already get drinking water and hydro power from Army Corps of Engineers reservoirs and use the GPS network for driving directions and geocoding courtesy of Air Force Space Command, why not let them buy health insurance from the Pentagon as well?