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Hillary Clinton wants to let people "buy in" to Medicare

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Campaigning in Virginia this week, Hillary Clinton revived an idea that was once a staple of liberal thinking about how to improve the Affordable Care Act — letting older Americans "buy in" to Medicare rather than to a private insurance company.

A brief history of the Medicare buy-in

A version of this idea was floated way back in Bill Clinton's 1998 State of the Union address, in which he said that "millions of Americans between the ages of 55 and 65 have lost their health insurance … after a lifetime of work, they are left with nowhere to turn. So I ask the Congress, let these hardworking Americans buy into the Medicare system."

It then kicked around for years as a Democratic Party health care idea before being sidelined in favor of the more ambitious concept of creating a system of universal mandatory subsidized insurance. Early versions of that proposal, including legislation that passed the House of Representatives, features a "public option" on the health care exchanges. An insurance program run by the government, in other words, with payment rates that were tied to Medicare.

But centrist Democrats in the United States Senate killed the public option, at which point Medicare buy-in was briefly revived as a possible alternative before it in turn was killed by Joe Lieberman.

Facing pressure on her left flank from Bernie Sanders, Clinton reendorsed the public option idea and now is reendorsing the Medicare buy-in as well.

Both ideas save patients money the same way

In the context of an existing Affordable Care Act, both the public option and the Medicare buy-in operate in essentially the same way.

People who don't get health insurance through their job and earn too much to qualify for Medicaid could buy insurance from the government rather than from a private company. In the public option scenario, the government insurer would have a new name and would be open to people of all ages. In the Medicare buy-in scenario, the government insurer would be called "Medicare" and access to it would be limited by age. Clinton spoke specifically of "people 55 or 50 and up," which is broader than the 55 and up that was considered by the Senate back in 2009.

Either way, however, the appeal would be the same.

Medicare uses its enormous size as a purchaser of health care services to pay lower fees to hospitals, doctors, and other health care providers than are paid by private insurance companies. In either the context of a buy-in or a Medicare-linked public option, those lower rates could be passed on to consumers in the form of lower premiums.

A 2009 CBO analysis of Medicare buy-in suggested that premiums of about $600 per month would be appropriate, a figure that will be somewhat out of date but should still offer a ballpark estimate.

The challenge in terms of practical politics is that precisely because these ideas save money by cutting payments to health care providers, health care providers hate them. And the interests of doctors and hospitals speak loudly on Capitol Hill.

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