A report issued by the Congressional Budget Office comparing health care reform options found that a plan to allow Americans to buy into Medicare before turning 65 would lead to more people with health coverage and lower costs than private insurance coverage.
"The report emphasizes an important point for policy makers to keep in mind as they grapple with fixing our nation's health care: Medicare provides more affordable coverage because it eliminates the waste and profiteering of the private market," said Jerry Flanagan of Consumer Watchdog.
The CBO studied a limited Medicare buy-in option for those between 62 and 64 years old. The CBO estimates that the annual premium for single coverage in 2011 would be about $7,600 including drug coverage. In comparison, a private insurance policy premium for a 64-year-old can easily cost $12,000-$16,000 a year not including copays and deductibles and after excluding coverage for those with even minor health problems. In 2006, Medicare spent about $10,200 on average per beneficiary, which currently includes an older and sicker population than that envisioned by the buy-in program.
"Polls show that seniors are also happier with their coverage than those of us with private insurance policies because they have better access to health care," said Flanagan.
The report did find that the Medicare buy-in program would lead to higher than expected Social Security payments because, due to the program, more Americans over 62 would retire earlier than without the program.
Consumer Watchdog said those expenditures, which the CBO found would be "minimal" over the long term, could be erased if the program were expanded to allow any American to buy-in to Medicare regardless of age.
If Medicare also covered the young, the estimated cost per person would plummet. Children in federally subsidized plans cost about $2,300 a year (including dental), and younger adults fall in the middle.
According to reports, 34.7 percent of Americans (89 million people) under the age of 65 did not have insurance for some part of the year during 2006. Currently, 10-14 million people purchase individual insurance policies.
The CBO says that these 100 million Americans would benefit from a low-cost, high quality public option to the private market, no matter what the level of subsidy. Allowing employer groups to purchasing pool over time would further maximize cost savings.