With No Public Option, Lowering the Medicare Age to 55 Will Make Our Problems Worse

There is talk in the Senate of lowering the enrollment age for Medicare. This would be a great idea... if the enrollment age were lowered to zero. But to lower the enrollment age to 55 -- especially at the expense of the public option -- would likely hurt our medical care system more than it helps it.

Let's be clear that there are two distinct problems with the American medical care system that we need to solve:

• A whole bunch of people don't have insurance, and can't therefore get the range of medical services they need; and
  


• We spend way too much - twice as much as most of the rest of the industrialized world- for healthcare that's not as good as what they get.

The focus of the debate has been often on the uninsured, but the problem of costs has more profound long-term impacts on our country. And what the Senate is talking about doing will help with the first but likely make the second a whole lot worse.

The reason we pay too much for not enough is that we underinvest in routine and preventative care, and end up paying through the nose for catastrophic and chronic care because of it.

The United States spends roughly 16% of its GDP on healthcare. Most of the rest of the industrialized world pays between 8% and 11%. Nobody else pays more than 11%. And those countries nearly all get better results than we do. At 16% of GDP and growing, the costs of healthcare are destroying our businesses and families - and we're not healthier because of it!

If you don't do the things that will keep people healthy, you end up having to pay when they get really sick.

There are many ways we can cut health costs. For instance, we can nibble around the edges by making better use of technology. But to really solve our health cost dilemma, we need to change the misguided incentive system that has brought on the crisis we now face.

Why do we underinvest in routine and preventative care? Because insurance companies won't pay for it, or have a policy of under-reimbursing for it. Why? Because they calculate that by the time the real bill comes due, they will no longer be insuring the patient. Maybe the patient will have changed jobs -- an increasingly common pattern in our modern economy. Or, more likely, maybe the person will be covered by Medicare, and it will be up to the taxpayers to cover the costs.

So lowering the enrollment age of Medicare to 55, just makes the problem worse. It just makes the insurance companies more likely to defer treatment, because it becomes even less likely that the insurance company will have to pay the piper.

If doctors cannot be properly reimbursed for preventative care, they will not emphasize it. If doctors do not emphasize it, individuals will be less aware of it. If we are less aware of it, we will continue to sicken as a society.

This leads to some pretty dumb outcomes. For instance, I'm at high risk for type 2 diabetes: my dad has it, my uncles have it, my grandfather has it... you get the idea. So it would make sense for me to be monitoring for early indicators. Total cost of an annual blood test? About $15. And if we catch problems very early, we can change diet and exercise (cheap) rather than wait until there's organ damage and a need for insulin injections and kidney dialysis, which would cost tens to hundreds of thousands of dollars. But there were years when my insurance company wouldn't pay for the test. By their calculations, they're unlikely to be the ones insuring me when things finally go south and I need really, really expensive care. So why should they invest even $15 in fending off such an outcome?

We can only solve this problem by having a health delivery system that calculates the return-on-investment for specific procedures over the entire lifetime of the patient. If a dollar spent today saves $100 in ten years, the incentive needs to be to spend that dollar.

This is why we need the public option. A cradle-to-grave insurance plan will have the correct incentives to calculate the real return on a preventative procedure. Rather than externalizing costs to Medicare, it is likely that the public option will serve as a forcing function to change how care is delivered in order to keep people healthier.

So to me, while lowering the Medicare enrollment age to 55 is a lovely idea, it's not sufficient and it's not a substitute for the public option. It's likely to raise the total cost of healthcare in this country rather than lower it. It will be even less risky for insurance companies to refuse to invest in keeping people healthy, since the odds are even greater that the expensive catastrophic and chronic care costs would be borne by the government rather than private insurers.

If we're going to open enrollment in Medicare, let's do it right: open it to everyone. Or find a way to fix the problem so that insurers stop having incentives to make Americans sicker.

 

Follow Darcy Burner on Twitter: www.twitter.com/DarcyGBurner

Comments

[Weehawk]

09:05 PM on 12/21/2009

Dental care is one of those little things that isn't covered by most medical insurance, a seemingly innocuous little benefit that could greatly improve overall wellness. And I assume that is being ignored also by this bill.

PUBLIC OPTION PUBLIC OPTION PUBLIC OPTION PUBLIC OPTION PUBLIC OPTION

[kirazmazzone]

01:05 PM on 12/14/2009

Whatever happened to Universal coverage? We discuss Public options and expanding Medicare but in their current forms neither option is acceptable and will end up unaffordab­le for most of us. How can this or any bill force the public to buy in without giving us real choice?

[redgeek]

07:33 PM on 12/09/2009

Darcy,
Medicare at 55 in trade for the public option is a good deal because the current public option is garbage.

As passed by the House, the current public option pays at current market insurance rates and will cost those few who are eligible an exorbitant amount. For those who are middle class or lower, the public option will create a siphon of government subsidies into the health industrial complex. This public option will do nothing to control costs. It creates more insurance bureaucrac­y, not less.

If Medicare at 55 works just like regular Medicare it would be expanding the part of our health insurance system that works best (not perfect, but best amongst many bad choices.) Medicare sets the rates instead of letting the health industrial complex pick our pockets when we can't say no. It costs less and has less overhead compared to the House's public option.

Of all the "increment­al" reforms that we've been offered instead of single-pay­er Medicare for All,. this is the only one that seems to actually work toward our goal of universal affordable coverage.

[huffreader101]

03:13 PM on 12/09/2009

There is one other extremely important reason for a public option. The cost of private insurance in this country includes 15-18% administra­tive overhead. Of the other industrial­ized countries which Darcy mentions, some have public plans, some a combinatio­n of public and private systems. NONE, however, carry anything close to this administra­tive burden. A public option will force the private sector to face it's inefficien­cy.
All of the other systems are imperfect and face cost pressures, but overall, in every case, they provide better results at significan­tly lower costs. We should learn from those examples and a strong public option is a step, but only a step, in the right direction. Anything short of that is simply diddling around the edges of a truly broken system.

[UKOH]

02:39 PM on 12/09/2009

Darcy, while your analysis is spot on, it does not go far enough. I have experience­d health care for many years in the UK, Germany and Denmark. In every other country I have lived in, even including Saudi Arabia, I experience­d far better health care than here in the USA.

The UK has genuine "socialize­d medicine" with hospitals being owned by the government and doctors are government employees. Far from the horror stories the GOP would have you believe the UK has some of the best preventati­ve medicine in the world - because it is in the government­'s interests to not have their people get sick!

The fundamenta­l difference between the USA and the rest of the civilized world when it comes to health care is that the rest of the world believes in two guiding principles­:
(1) Access to basic health care is a right
(2) It is immoral to profit from people's misfortune and sickness

Germany has a public / private system which works great - it is highly regulated and not "for-profi­t". it is proof that it is not necessary to have a "public option"; what IS necessary - and is the common denominato­r of all well run models around the world - is intense regulation to take the profit motive out of basic health care.

It is the "for-profi­t" that causes the majority of the problems of our current system!

[Zamilama]

01:51 AM on 12/09/2009

Dear Darcy,
Thanks for your perspectiv­e on this issue. The rationale for denying coverage of your annual blood test finally suggests the reason why - 40 years after the US Surgeon General revealed (in no uncertain terms) that tobacco use is detrimenta­l to our health - medical insurance companies have never (in my experience­) covered smoking cessation programs and products such as nicotine patches and gum that enable tobacco users to reduce - and ultimately cease - the use of tobacco products.
In short, you suggest an elegant explanatio­n for why insurance companies don't appear to care whether we live or die. It's not that they don't care, they just don't want to have to foot the bill if-and-whe­n any major health issues hit the fan. And who can blame them for that, eh?
Alas, the vehemence of those who oppose a Public Option appears to merely spotlight the insurance industry's lack of faith in their ability to offer as much return for our health insurance premium dollars as a well-run non-profit organizati­on can. Poor babies...
Thanks for sharing your point of view, Darcy.

[Bryce A]

01:19 AM on 12/09/2009

There is no public option when a private insurance company is involved. Am I wrong, a percent of the premiums I would be forced to pay end up in the hands of investors in Leibermans state, possibly supplement­ed by other taxpayers money. The poor lose again. The rich always win.

[jscope]

10:10 PM on 12/08/2009

There is no way to seriously create real competitio­n and lower costs until the 1,300 insurance companies, health insurance consultant­s and multi-mill­ionaire bean counters are taken out of the business. They don't compete and don't exist to compete. There is no reason for all these companies to exist. They are in the business of making money from money. They are like arbitrager­s. Since Congress is looking for an alternativ­e to the so called public option now, as a smart business practice let's have the insurance companies who have the size to do so bid on the right for one of them to handle collection of insurance premiums and pay the medical bills for a fixed management fee under a 4 year contract, with no right to make decisions, withhold payment or deny coverage. The cost of premiums is spread over the entire population of payers. Big businesses spread their costs over a wide distributi­on network. How do you get real competitio­n? First, consumers can switch doctors and hospitals at the drop of a hat so providers will compete for your business. Second, set up an independen­t private commission of "roll up your sleeve" members -- doctors, nurses, accountant­s, financial analysts and other profession­als -- not political appointees or VIP types, and, like Walmart does, let them hire employees to act as buyers who negotiate bulk prices with vendors, suppliers and providers, forcing them to compete against each other in the marketplac­e by lowering prices to get the business.

[Factonfact]

12:43 AM on 12/09/2009

Some of you folks obviously do not live in areas where large numbers of doctors REFUSE to take Medicare patients at all and choose instead to deal only with those whose insurance provider will pay them the costs of their service as they define it.

Doctors demanding outrageous fees for their services are an underlying reason for higher and higher costs of health care in this country.

As far as doctor remunerati­on in other countries, study after study has shown that relatively few demand or get the inflated fees charged by American doctors and still do quite well. In Great Britain, for example, national health doctors drive BMWs, live in expensive apartments or other housing, vacation at luxury resorts, etc., in spite of the lower fees that they charge in comparison with American doctors.

Do you folks know that right now, an American student enrolled in medical school can run up student loans in excess of $250,000 -- which they can then pay back, thanks to the excessive fees they and their schoolmate­s charge after graduation­, in a matter of two or three years with no trouble at all? Do you folks know that new doctors in America today look to build their McMansions in as little as five years after graduation­? I could go on but surely you get the picture.

We yell and scream about the big money Wall Streeters make, but ignore the fat cats with the stethoscop­es around their necks.

C'mon.

[Liselotte Kragh]

10:02 PM on 12/08/2009

Dear Darcy Burner,

I read a letter to the editor at Seattle Times or the Pi some time ago,which proposed than we introduce a better healthcare system by gradually lowering the eligible age for Medicare. Who says we have to stop at 55 years? What about lowering it, as the writer suggested by 2-3-5 years every single year, until we are all on medicare. This will give the public and private systems time to adjust gradually without changing things dramatical­ly and that might be a really good thing. Yes it may take some time, but for the 21 years I have been in the US nothing has happened- nothing at all! At least with such proposal we would be moving ......slow­ly..... in the right direction. Well that is better than not moving at all.

[PuffDragon]

09:52 PM on 12/08/2009

Pull the insurance companies out of the picture. They are getting rich by letting people die.

The American "Healthcar­e-by-Priva­te-Insuran­ce (for-profi­t) System" is the stupidest in the entire world.

[DUSAA-1775]

09:48 PM on 12/08/2009

The author mentions being in a risk group that should have $15.00 blood tests every year...but that there were years that her insurance did not cover the test. Are you telling me that you had to pay $15.00 out of pocket or did you just not get the tests because the insurance wouldn't cover them? I guess that proves we need the public option.

[gfs5541]

09:12 PM on 12/08/2009

I'm for Medicare for 18-21 years old and up. With it, who needs a Public Option?

[LiberalA]

08:44 PM on 12/08/2009

Medicare for All is clearly the way to go. But, and it's a big BUT (no pun intended), we need to make Medicare more efficient AND we need to raise taxes to pay for it. As a current Medicare recipient, I have no problem with either of these, nor with my payment for Parts B and D or my supplement­al coverage. Americans need to understand that health care is not and cannot be free, but it needs to be reasonable and available to all.

[Samalabear]

09:37 AM on 12/09/2009

At the very least we need to roll back the Bush tax cuts for the wealthy, maybe even go back to the rates under Reagan, at least. But this kind of talk seems off the table. Bernie Sanders was on The Colbert Report and he was, as usual, excellent in regards to this issue of income disparity and why he is a Democratic Socialist.

I've heard what some people pay for Medicare and I still can't even afford that and I'm certainly not eligible for Medicaid. That is my biggest problem for not creating a Medicare for All system. To lower your rate and everybody'­s rate closer to what is paid in say Canada (about $100 a month for a family of four, I've heard from Canadian posters) you have to have this giant pool, as well as cut out the waste and fraud, stop Pharma from using U.S. citizens as their cash cow, etc.

And, of course, the big one would be stopping the wars. Canada does not have an issue with imperialis­m. We can no longer afford to be an imperialis­t nation.

[giggles09]

08:41 PM on 12/08/2009

I like you Darcy (I donated to your campaign) but you're wrong on this one.

The reason health care is so expensive in this country is that we pay much more than any other nation for every individual medical procedure and medication­. See this article by Ezra Klien http://voi­ces.washin­gtonpost.c­om/ezra-kl­ein/2009/1­1/an_insur­ance_indus­try_ceo_ex­pl.html

We pay 2x more for a doctors visit. 5x more for a CT scan. Medicare payments are significan­tly lower than the overall US rates. That's why we tried to have the public option rates based on medicare. When that failed in the House the public option no longer had the same value.

[tompoe]

09:04 PM on 12/08/2009

That's right, giggles09. Enlarging the Single Payer pool does one thing: it brings more healthy people into the pool to spread the cost. That's why 36 nations use some form of Single Payer. That's why they pay a fraction of what we pay. That's why they provide universal coverage for their citizens that is superior ot what we have. That's why Darcy is an idiot, and should be viewed with slanted eyes and furrowed foreheads. Based on her ludicrous statements­, I have to wonder whether her organizati­on is a front for an insurance company. Is it?

[heiko]

08:38 PM on 12/08/2009

Medicare for all. If not that, then a strong public option to ensure REAL competitio­n for the insurance companies. Legislator­s should give back the money they've received and do the right thing for the nation.