Stabenow: Medicare at 55 plan a ‘win-win’

Jonathan Oosting
Detroit News Lansing Bureau

Eaton Rapids — A proposal that would allow older Americans to buy in to Medicare at age 55 would also be a “win-win” for the government health insurance program and private insurance markets, sponsoring Sen. Debbie Stabenow said Tuesday.

The third-term Michigan Democrat introduced the Medicare at 55 Act last week, as lawmakers left Washington for an August break. Her proposal follows the high-profile collapse of Republican plans to repeal a federal health care law that has not controlled premium increases as originally intended.

The new legislation would provide an option for people between the age of 55 and 64 to purchase coverage under Medicare, a public insurance program currently available for Americans age 65 and older, as well as certain younger people with disabilities or permanent kidney failure.

Stabenow said the option could reduce health care costs for older Americans who don’t yet qualify for Medicare but can face higher rates because of their age.

“I’ve had so many people saying to me, ‘I’m just holding my breath to be able to get to 65 and be able to be on Medicare,’” she told The Detroit News during a small business tour in Eaton Rapids.

“I think for people who need insurance that’s affordable, we should provide the option of buying in at 55.”

It’s not yet clear how much that buy-in would cost an individual. Stabenow’s legislation would direct federal officials to determine premiums each year based on per-capita benefits and administrative expenses. The new Medicare enrollees would qualify for the same type of income-based tax credits they do today under the existing federal health care law.

“The way we’ve structured it actually both helps Medicare by having younger people in that pool, and it helps private insurance by taking higher cost individuals out of their pool,” Stabenow said. “So it’s really a win-win.”

Medicare generally has lower payment rates and lower administrative costs than private insurers, according to a 2016 report from the Urban Institute, which concluded that a potential buy-in option for older adults could be one way to address high premiums.

But Stabenow’s proposal is “make believe stuff,” said Tom Miller, a health care policy fellow at the conservative American Enterprise Institute think tank. He called the legislation a “press release” gesture that would not actually reduce overall costs in the health care system.

“It’s just pushing things from one place to another and saying everybody comes out ahead,” Miller said Tuesday. “There’s no magic in this. The magic is the harder work of actually having a system that delivers care more effectively and efficiently at a lower cost.”

In this year’s government report, the trust fund that pays Medicare’s hospital expenses is estimated to run out of money in 2029.

Under Stabenow’s proposal, an individual who buys into Medicare would be entitled to traditional program benefits and, like other participants, could pay extra to enroll in a privately offered Medicare Advantage or prescription drug plan.

Stabenow, who lives in Lansing, is up for re-election next year and is an early target for Republicans as one of 10 Democratic incumbents running in states that GOP President Donald Trump won last year.

Declared Republican candidates include Bloomfield Hills businesswoman Lena Epstein, who co-chaired Trump’s state campaign, and recently retired Michigan Supreme Court Justice Bob Young of Laingsburg, who has criticized Stabenow’s new Medicare proposal as a “typical” attempt to “expand the federal government.”

Stabenow’s Medicare bill is co-sponsored by Democratic Sens. Sherrod Brown of Ohio, Tammy Baldwin of Wisconsin, Sheldon Whitehouse of Rhode Island, Patrick Leahy of Vermont, Jeff Merkley or Oregon, Jack Reed or Rhode Island and Al Franken of Minnesota.

The legislation faces an unlikely future this session in the Republican-controlled Congress, but it is consistent with Democrats’ continued interest in providing health care buyers with a “public option” to compete with private policies sold under the federal health care law.

Stabenow supports a broad public option but said her proposal is, in a way, a public option for anyone over the age of 55.

Vermont Sen. Bernie Sanders, who ran for the Democratic presidential nomination in 2016, continues to advocate for a more aggressive “Medicare for all” plan that would create a national single-payer or government-run health care system in the United States.

A majority of House Democrats have signed on as co-sponsors of the latest universal health care proposal from U.S. Rep. John Conyers, a Detroit Democrat who has introduced the legislation each session since 2003.

“I’m glad that colleagues are putting out an aspirational goal for the future,” Stabenow said. “For me, I want to focus on those things that right now I think I can achieve to lower costs and increase coverage. And I think the options of 55 years old, being able to purchase Medicare, is something we could actually get done.”

Stabenow’s Medicare proposal is not an entirely new idea. Democratic presidential nominee Hillary Clinton last year floated a similar plan to let anyone over the age of 50 to buy in to Medicare. Her husband, former President Bill Clinton, proposed a similar Medicare expansion in 1998.

The devil is in the details, according to AEI’s Miller, who said past Medicare buy-in plans only got “messier” when they were fleshed out.

“What this proposal shows us is… congressional Republicans do not have a monopoly on old, bad ideas,” he said. “Democrats are capable of coming up with ones, as well.”

While congressional Republicans could still take another stab at repealing the Affordable Care Act, they appear likely to set aside health care and pursue tax reform when they return from break.

Details are still being negotiated, but the Trump administration and Republican leadership last month released a joint statement reiterating a shared commitment to fix America’s “broken tax code.”

The broad outline calls for tax relief for American families, lower tax rates for small businesses and lower rates for larger companies “so they can compete with foreign ones.”

Asked if there was room for bipartisan consensus on tax reform, Stabenow said she hopes Republicans colleagues consider her efforts focused on small businesses. Legislation she introduced last month would provide a 25-percent tax credit for a new firm’s first commercial construction facility and equipment.

“When we talk about who needs tax cuts, it’s small business, it’s middle-class families, it’s people working hard every day who need a break,” she said, “and that’s the kind of tax reform that I’m focused on.”