Clinton’s ‘Medicare for More’ Not Such an Easy Cure

Adverse selection, other problems may hinder the presumptive Democratic candidate’s proposal to let people buy into Medicare in their 50s.

Bernie Sanders’ erstwhile presidential bid has been credited—or blamed, depending on your perspective—with making Hillary Clinton tack to the left on some issues, most notably health care.

And it may have worked—at least in the primary season. While Sanders made “Medicare for All” a centerpiece of his campaign, Clinton has shifted to the left somewhat by supporting a “public option”—it appears in quote marks on her website—and building on the ACA. She would let states set up their own public option choices, and her campaign has also floated the idea of letting Americans “55 or 50 and up” buy into Medicare.

These talking points have made for a good story line in preaching to the Democratic choir, but turning them into reality if she wins the White House will be quite another story.

Hillary Clinton’s Medicare buy-in plan may play well in the general election, says UNC professor Jonathan Oberlander.

While the Medicare idea is a bit vague at this point, and it hasn’t made it onto her campaign website yet, Jonathan Oberlander, chair of social medicine at the University of North Carolina, thinks it was a smart move on Clinton’s part to reach out to Sanders’ supporters, who proposed the liberal dream of a federally administered single-payer system that would foot the country’s entire health care bill.

Medicare for more not all

Oberlander dubs Clinton’s idea “Medicare for more,” and he believes it was Clinton’s way of offering something to liberal Democrats who want something more than just a to-be-continued ACA.

What works in primary season often gets jettisoned in the summer and fall of an election year as candidates attempt to gain supporters beyond their base. “It remains to be seen in a general election how much she emphasizes this issue, but I don’t think the politics in the general election are bad either, necessarily,” says Oberlander. “The public likes Medicare.”

But the politics of “Medicare for more” are daunting. Not only will Clinton have to defeat Donald Trump in November (as we went to press, she was favored in most polls), she will need to pull enough Democrats into the House and Senate with her—and they will have to be the kind of Democrats who are willing to take on the political risks of health care reform. The lumps that President Obama took to get the ACA passed may scare them off, although the Medicare-for-more proposal is the kind of incremental change to health care coverage that has gone over well in the past. Think Part D prescription coverage and before that, the Children’s Health Insurance Program.

One of the important story lines this year that hasn’t gotten enough attention in the press is that Congress is also up for grabs, says Nicholas Bagley, a health law specialist at the University of Michigan Law School. Of course every member of the House is up for re-election and a third of the Senate. But depending on how the partisan composition of both houses of Congress shift, it’s going to either open or close the windows of political opportunity when it comes to health care, says Bagley.

Consider this: It has been six years since the ACA was signed into law, and Republican opposition has not relented. Clinton would likely need the full-throated support of every Democrat in Congress to get something like a Medicare buy-in passed, says Bagley. That’s a tough proposition, unless health care becomes a priority in the early days of a Clinton administration, when the “wind is at her back,” as Bagley says. “A president can only put the full weight of her office behind a small number of major legislative initiatives,” he adds.

Yet many Sanders supporters will say that a Medicare-for-more doesn’t go nearly far enough. Physicians for a National Health Plan is a nonpartisan organization, but the single-payer plan that Sanders called for falls in line with the organization’s goals. Adam Gaffney, MD, a critical care physician at Massachusetts General Hospital and the group’s president, sees problems with the Medicare buy-in.

On the surface, extending Medicare might look like a way to move higher-risk people out of the exchanges and help moderate premiums there, but that could spell adverse selection problems for Medicare, in Gaffney’s opinion. “If you have a Medicare buy-in program that’s optional, what could wind up happening is that the better risk population will be covered by the private insurance industry and many of the worst risks could get relegated into the public system,” he says.

Bagley says the risk profile of the individual purchasers of Medicare would depend on the structure of the buy-in. “It’s too soon to model the economic consequences of all this,” he says. “Older people, as a general rule, are more expensive than younger people in terms of insurance, but sicker people are much more expensive than healthy people, and there are sick people at every step of the age hierarchy. A lot would depend on whether the Medicare buy-in is attractive to sick people or whether it’s attractive to healthy people.”

Three ACA complications

The Committee for a Responsible Federal Budget has analyzed how each candidate’s plans would impact the federal budget, but this “Medicare for more” idea throws a curveball into its calculations. Marc Goldwein, senior vice president of the group, recalls earlier proposals for a Medicare buy-in that would be “pretty close” to budget neutral. “Before ACA, the idea was rather simplistic: People younger than age 65 would be charged the average premium of everyone who bought in, and Medicare would adjust rates in the next year to cover losses or account for surpluses.”

There are three ACA-related problems that might hamper Medicare expansion, says Marc Goldwein of the Committee for a Responsible Federal Budget.

Now Goldwein sees three ACA-related problems with Medicare expansion. The first is the ACA subsidies for anyone with income up to 400% of the poverty rate. “Would that buy-in also have that subsidy?” Goldwein asks. “If it does, is the subsidy scaled up or down to adjust for Medicare or is it exactly the same subsidy you would get in the exchanges? Depending on the answer, this could end up costing us money in subsidies.”

The second complication: Who’s going to want to buy into Medicare rather than buy a plan on the exchanges? The ACA places age bands on premiums for exchange plans that limit the age differential to a 3-to-1 ratio. “For that reason, it’s hard for me to imagine a Medicare premium that’s going to do better than that,” says Goldwein. “I don’t know how Medicare is going to be competitive for most people compared to the exchanges.” And the third: How would the Medicare buy-in work with the employer and individual mandates? That’s a huge unknown, Goldwein says.

What’s realistic?

Clinton has other ideas to build on the ACA that would, as she sees it, move the country closer to universal coverage. She would extend tax credits to offset out-of-pocket costs, boost tax credits for health exchange premiums, and fix the “family glitch,” so people can get coverage when their employer’s family plans are too expensive. She would offer federal support to states that expand Medicaid to cover the full costs for the first three years and spend up to $500 million a year on navigators to draw in the 16 million Medicaid-eligible people who have not enrolled. Clinton has also talked about reining in drug spending, but she hasn’t offered any specifics.

“She could try to implement some of these changes on her own administratively. But those efforts are less likely to prove effective in the absence of new legislation,” says Bagley.

Still, she has levers to pull, notes Bagley. Those levers might be a salve for the lumps a truculent Congress could inflict, but first she has to get them within her reach.