Madness Piled on Top of Insanity

The lust to score a political win on health care is making Tiger Woods look like a saint. Congressional Democrats are willing to throw all common sense overboard in their frenzy for a conquest.

Of all the desperate ideas in the current health care proposals before Congress, the absolute worst is the "Medicare buy-in" slipped in by Harry Reid at the last minute.

This has long been a dream of the left: Expand Medicaid to ever-higher income levels and Medicare to ever-lower age groups, and pretty soon the two populations will meet in the middle. Voila! Single Payer Nirvana!

There are a few problems with this idea, however, starting with its effects on the health care system, on patients, and on the federal budget and the country as a whole.

In a recent report, Richard Foster, chief actuary for the federal government, concluded 20 percent of all U.S. hospitals and nursing homes could go out of business under the reform proposals-even before the Medicare buy-in was proposed. Medicare and Medicaid already don't pay these facilities enough to cover their costs.

According to the actuarial consulting firm Milliman, Medicare pays hospitals $34.8 billion less than their costs and physicians $14.1 billion less than what it costs to provide services. Medicaid underpays hospitals $16 billion and doctors $23.7 billion. The only way doctors and hospitals can absorb such underpayments is by overcharging people with private insurance $89 billion a year.

Even before the Medicare buy-in proposal, the health reforms were going to cut Medicare spending by $50 billion a year, making it even harder for providers to stay in business. The Medicare buy-in makes this problem much worse by removing a large portion of the privately insured population that currently subsidizes Medicare and Medicaid, putting them into a program that pays far less than it costs. Moreover, this is a population of high users of health care services, so their impact on costs will be even greater.

The effect on health care services will be profound. Many more providers will go out of business or stop seeing people on Medicare, which will make access to services much more difficult.

In addition to decreased access to health care services, it is not clear that the millions of new Medicare users will save any money or get improved health insurance. The population of ages 55-64 is the segment most likely to be insured today. According to the Census Bureau only about 12 percent of this age group is uninsured, compared to about 26 percent of people aged 25 to 34, 18.5 percent of those aged 35 to 44 and 15.6 percent of people aged 45 to 54.

Regarding quality, Medicare wouldn't even qualify as "creditable coverage" under the current proposals. The core program doesn't cover prescription drugs or preventive care, and it has no limit on out-of-pocket spending. People who signed up for Medicare would have to buy a supplemental policy to cover the gaps.

Finally, Medicare is already headed for bankruptcy. The federal government reports it will be spending more money than it takes in by 2017, and that is before most of the Baby Boom generation becomes eligible. The system is on the hook for $89 trillion in spending, and not a penny of that is actually funded.

Extending Medicare is madness piled on top of insanity. And all of this is just to give the Congressional Democrats and President Barac k Obama a political "win" to hang on the wall.

GREG SCANDLEN (GSCANDLEN@HEARTLAND.ORG) IS DIRECTOR OF CONSUMERS FOR HEALTH CARE CHOICES AT THE HEARTLAND INSTITUTE.