Medicare at 55? Why the latest health care proposal is a gift to insurers

As the health care debate continues to grind on, the public option seems to be, once again, on the way out. Supporters have hailed the proposal as a way to introduce competition into the marketplace, while opponents have attacked it as socialized medicine and the first step toward rationed health care. Critics have also raised fears that it would invite so-called "death panels" that would euthanize unprofitable patients.

Some further muddied the water with the specter of publicly funded abortions and the argument that governmental leaders and their staffs should be forced to use the same health care plan that they develop for the rest of the country.

One of the latest options, which President Obama has endorsed, would extend Medicare benefits to people aged 55 to 64, in addition to the 65-and-over crowd that it currently assists. While this could be helpful for the millions of new Medicare enrollees, it's unclear how, exactly, it would benefit the rest of the country.

The first problem is that it seems to help the group that needs help the least, while ignoring the group that needs help the most. While just over 16% of people aged 55 to 64 are uninsured, 38% of those aged 19 to 24 are uninsured, as are almost 32% of those aged 25 to 29.

In fact, young adults aged 19 to 29 comprise 30% of the nation's uninsured and are the largest single age-defined cadre of uninsured. Often engaged in jobs that are low-paying and lacking in benefits, roughly 23% live in households that are below the poverty line, which means that paying out of pocket for insurance, much less health care, is a low priority.

Ironically, younger people are also the cheapest to insure, which means that, for insurance companies, the 55-and-over Medicare option would be a massive gift. After all, as policy holders grow older, they require more care, yet continue to make the same insurance payments that they always have. Thus, on a price-versus-earnings basis, they become far less cost-effective.

By shifting responsibility for older, pricier patients to Medicare, the current proposal would, effectively, stick taxpayers with the cost of caring for society's most expensive members, while giving insurers free rein to profit from younger, more cost-effective customers. And with fewer public healthcare options available, young consumers would be driven to buy insurance from private companies.

The bright light at the end of this particular dark tunnel is the possibility of a national, non-profit insurance program that would be administered by the Office of Personnel Management. Given that the OPM runs the health care plan that is used by members of Congress and federal employees, this could be a promising option.

At the very least, it would address complaints that members of Congress get a better deal on health care than the people who voted them in. And, while the term "public option" seems to be, once again, on the way out, this could inject a similar level of competition into the health care market. In fact, liberal stalwart Howard Dean has enthusiastically endorsed this alternative.

Taken in concert, the extension of Medicare and the OPM healthcare option could offer something for everybody. However, given the continued intransigence of the health care lobby and its allies in Congress, it is still far too early to count on a happy ending.

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