Here Comes Another Democratic Proposal To Let More Americans Buy Into Medicare

The calls for government-run insurance of some kind are getting louder.

Two more Democratic senators are introducing a bill that would create a version of Medicare for some working-age Americans, offering yet another sign that government-run insurance will figure prominently into the Democratic Party’s health care agenda going forward.

Sens. Jeff Merkley (Ore.) and Chris Murphy (Conn.) plan on Wednesday to introduce the “Choose Medicare Act,” which would launch a new, enhanced version of traditional Medicare. It would be available both to individual consumers buying their own coverage and employers who offer coverage to employees.

It’s possible to imagine Medicare Part E, as Merkley and Murphy propose to call the new program, someday absorbing most working-age people who don’t qualify for Medicaid. If that happened, the American health care system would more closely resemble the kind of “single-payer” system that exists in some countries abroad and many progressives would prefer to have in the United States.

Of course, whether Medicare Part E would really prove as attractive as Merkley and Murphy say ― and precisely what trade-offs the full legislation would entail ― remain very much open questions.

Medicare Part E would include two features of commercial insurance that traditional Medicare, which serves seniors, does not: a limit on out-of-pocket spending and coverage of pediatric services.

It would have to finance itself, with premiums from beneficiaries covering outlays, just like a private insurance plan would. Medicare Part E would benefit from some of Medicare’s efficiencies ― among other things, by paying less for services than commercial insurance typically does. Merkley and Murphy are counting on that differential to make Medicare Part E competitive on price and coverage.

Consumers who buy coverage on their own could get Medicare Part E through or one of the state-run exchanges, using federal tax credits if they qualify. The tax credits would actually be more generous, and available to people at higher incomes, than they are under the current law.

The legislation wouldn’t only help people who opt into Medicare E. People who buy coverage on the exchanges but prefer to stick with private insurance would also be eligible for the bigger, more widely available tax credits.

Seniors would also get something. The Merkley-Murphy bill gives traditional Medicare a cap on out-of-pocket expenses, something it currently lacks.

Bolstering the subsidies and traditional Medicare would require additional funds. And if history is any guide, making all of these numbers add up would prove difficult once the legislation is subject to more detailed analysis. As details of the plan became more clear, it would likely generate political opposition.

Sen. Jeff Merkley (D-Ore.) says he is seeking a path to some kind of Medicare-for-all system.
Sen. Jeff Merkley (D-Ore.) says he is seeking a path to some kind of Medicare-for-all system.
Mark Wilson via Getty Images

Doctors, hospitals, drugmakers and other health care industry actors would inevitably warn, rightly or wrongly, that less revenue will mean closures, layoffs and waits for services.

But the specifics of the proposal probably matter less than what they signal about the Democratic Party’s thinking these days, as leaders in the party talk less about defending the Affordable Care Act’s coverage gains and more about improving on them.

Back in 2009 and 2010, when President Barack Obama and his congressional allies wrote the law, the question was whether to include a public insurance plan as an option exclusively for people buying coverage on their own. Even an exceedingly modest version of the idea couldn’t get through the Senate.

But now, virtually all Democrats talk about creating new government-run insurance programs or expanding existing ones. The only question is how big they will be and what role they will play.

The most ambitious idea for these programs comes from Sen. Bernie Sanders, the Vermont independent who caucuses with Democrats. He is a long-time advocate for creating a new, more comprehensive version of Medicare that would, within a few years, enroll everybody.

Merkley was among the 16 Democrats who co-sponsored the bill Sanders introduced this past September. “I am very supportive of the vision for Medicare-for-all and I want us to find a path to get there,” he said during a conference call with reporters on Tuesday.

Murphy, by contrast, did not co-sponsor the Sanders bill. He said on Tuesday that he preferred to make enrollment voluntary, although he fully expects a lot of volunteers.

“I think this is a way for the market to decide whether a Medicare plan or private sector plans are better for businesses and families,” Murphy said, adding that he expects most Americans “would choose to buy a Medicare plan” in the end.

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