Loss of Medicare Buy-In Not the Major Setback Some Assume — Center on Budget and Policy Priorities

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By Paul N. Van de Water

A recent proposal to allow people aged 55 to 64 to “buy in” to Medicare would have done relatively little to increase competition in the market for health insurance, and health reformers should not greatly mourn its removal from the legislation that the Senate is considering. In the absence of a robust public health insurance plan, legislators should instead focus on establishing strong market reforms, or “rules of the road,” to assure that insurers compete to lower prices and improve the quality of health care.

The pending health reform legislation would create a system of health insurance marketplaces, called exchanges, that would offer a range of competing private health insurance plans to individuals who lack access to employer-sponsored insurance as well as to small businesses. Plans would not be allowed to turn people away, charge higher rates because of their health status, or deny coverage for pre-existing conditions. Plans would have to meet certain minimum benefit standards, including a limit on the maximum out-of-pocket charges that an enrollee would have to pay in any year. Low-income people would receive a tax credit that would allow them to purchase a plan at an affordable price and cost-sharing subsidies to hold down their out-of-pocket costs.

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