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Obama upbeat about Senate health care negotiations

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President Obama on Wednesday was upbeat about the progress the Senate was making on health care legislation. He praised the "creative framework" that may let a deal be cut.

With the public option health insurance plan not going anywhere, a group of Senate moderates and liberals are proposing to open up Medicare to uninsured Americans beginning at age 55--to be in effect in 2011. Note: this is for 55 year olds with no insurance, not to replace existing insurance.

Obama, at an event for local health centers commented on the Senate debate.

"Let me just end by -- by saying a little bit about this broader effort. I know it's been a long road. (Laughter.) I know it's been a tough fight. But I also know the reason we've taken up this cause is the very same reason why so many members from both parties are here today -- because no matter what our politics are, we know that when it comes to health care, the people we serve deserve better. The legislation in Congress today contains both Democratic ideas and Republican ideas, and plenty of compromises in between. The Senate made critical progress last night with a creative new framework that I believe will help pave the way for final passage and a historic achievement on behalf of the American people.

I support this effort, especially since it's aimed at increasing choice and competition, and lowering cost. So I want to thank all of you for sticking with it -- for all those late nights, all the long weekends that you -- you guys have put in. With so much at stake, this is well worth all of our efforts.

It is now my pleasure to sign the memo that will direct Secretary Sebelius to get started on that medical home demonstration. So let's do that."

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A Senate working group is considering a Medicare buy-in option as an alternative to the hotly contested public option, which would provide an alternative insurance exchange in competition with the private insurers. Although full details aren’t available yet, it appears that it would allow people aged 55 and over to buy-in to Medicare at reasonable cost.

That sounds good at first, until you consider how many people might actually be able to use the new benefit and why the public option was needed. It looks suspiciously like a “feel-good” provision that will be largely useless at fixing the problems with the current system. Remember that half of the population is covered by private plans, a third by government run plans, and one sixth (around 44 million) have no health insurance.

Let’s look at the demographics a bit closer. The over-55s who might become eligible for the new option can be broken into various groups:

a) Single individuals over 55.
b) Couples, both over 55, with no dependent children.
c) Couples with one partner over 55, with no dependent children. d) Couples, both over 55, with dependent children.
e) Couples with one parter over 55, with dependent children.
The new option would be available to eligible (we’ll come back to that) individuals in groups a) and b). Couples in group c) would see a slight advantage as one person would be covered, but they might still be better off with a family plan, which generally costs not much more than covering two people. Couples in group d) would have to insure their dependent children. With only one child they’d have to consider the price of two Medicare plans plus a private one for the child versus a family plan. Unless the Medicare option costs substantially less than half of a private plan, families with more than one child would be better off with a family plan. Couples in group e) would still need a family plan for one adult and the children, so they wouldn’t want to buy-in to the Medicare option because that person would be covered by the family plan.

So, the new option would only benefit some of the over-55s. Most of the people in groups a) and b) above will probably be close to age 65, which is when they’d qualify for Medicare anyway. There may be other caveats too, such as how soon you could drop private coverage and opt for the Medicare coverage. A Kaiser Family Foundation study of various flavors of Medicare buy-in concluded that, regardless of the above factors, only about four million currently uninsured Americans would be eligible for the new Medicare option, so Medicaid eligibility needs to be looked at too and we’ve heard no mention of that. If only four million can become covered (and who knows how many will be able to afford the new option) there will still be over 40 million uninsured Americans. That would drop the number of uninsured Americans who die every day from 122 (on average) to 111. I’m sorry, but that doesn’t make me feel any better about the situation.

Initial reports say that the health insurers are over the moon about the anticipated defeat of the public option and this new proposal. If that’s the case, we know for sure that it’s not in America’s interest to accept this compromise. We also don’t know the status of the consumer protections that were considered for the House bill, such as requiring insurers to provide coverage after people with pre-existing conditions change jobs. So far, we’re not impressed by the Senate’s work. Even worse, the more we look at this situation, the more obvious it is that the Senate is a seriously broken governmental mechanism. It needs a complete overhaul.

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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This page contains a single entry by Lynn Sweet published on December 9, 2009 12:47 PM.

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