I — speaking only on behalf of myself — suggested one possible idea could be that instead of creating an entirely new government bureaucracy to administer a public option, Medicare could be offered as a choice to compete alongside private insurers for those Americans eligible to enter the national health insurance exchange, but at a reimbursement rate much greater than current Medicare rates.
The last sentence is key: reimbursing providers who treat the new enrollees at market rates (which are, on average, about 20-30% higher than Medicare rates) satisfies the provider community and conservative politicians from rural states who argue that their hospitals would close if they were reimbursed at Medicare rates. This scheme preserves the integrity of a single national program and takes advantage of Medicare’s administrative efficiencies to lower costs and spearhead delivery reforms. Still, Ross’ solution will likely save less money than a robust public option that uses Medicare-like rates and leverage.
Health reformers have long advocated opening Medicare to select populations. The Congressional Budget Office has concluded that allowing uninsured Americans 62 to 64 to buy into the Medicare program and charging the buy-in population a regular premium plus a 5 percent administrative fee, would not add to long-term Medicare outlays. Dick Gephardt and John Edwards both offered a buy-in option during the 2004 presidential campaign and, in November 2008, Sen. Max Baucus (D-MT) proposed expanding Medicare in the short term and phasing it out once the Exchange became operable (in 2013):
The Baucus plan would make health care coverage immediately available to Americans aged 55 to 64 through a Medicare buy-in. People in this age group face greater risk of illness than their younger counterparts. And while they may require increased access to medical care, they continue to have fewer and fewer affordable insurance options as retiree health care coverage erodes and pre-existing conditions make private insurance prohibitively expensive or impossible to obtain altogether. […]
To fill this gap in coverage, the Baucus plan would allow individuals aged 55 to 64 to buy Medicare coverage. The option would be available to any individual in this age group who otherwise did not have access to health coverage through a public plan or a group health plan. The benefits would be the same as those available to current Medicare beneficiaries.
This idea is also very popular. Sen. Jay Rockefeller (D-WV) introduced a buy-in amendment for the Baucus bill and, according to a Kaiser Health Poll from April 2009, 79 percent of Americans support a buy-in. A recent Robert Wood Johnson Foundation poll has also concluded that a majority of physicians (58%) also support expanding Medicare eligibility to those between the ages of 55 and 64.
After cutting a deal with Energy and Commerce Committee Chairman Henry Waxman to increase the public option’s reimbursement rates in August, Ross announced last month that “he will vote against health care legislation if it includes a public option.” “I have been skeptical about the public health insurance option from the beginning and used August to get feedback from you, my constituents,” Ross wrote in a newsletter to constituents. “An overwhelming number of you oppose a government-run health insurance option and it is your feedback that has led me to oppose the public option as well.”