By Amy Goldstein
Washington Post Staff Writer
Friday, December 11, 2009

House Speaker Nancy Pelosi endorsed a proposal Thursday that would allow people in late middle age to buy insurance through Medicare, helping to sustain an idea that sprang unexpectedly from the Senate this week.

But the California Democrat reiterated that she would prefer to create government-sponsored coverage for Americans of all ages, and questions linger in the Senate about the politics and policy of expanding Medicare by allowing people ages 55 to 64 to buy into the federal insurance program for the elderly.

The speaker stopped short of embracing the broader contours of a fragile compromise worked out by liberal and moderate Senate negotiators in an effort to nudge forward broad changes to the health-care system. Still, she said: "There's certainly a great deal of appeal" to expanding Medicare.

Such an expansion is an old idea among Democrats, but one that was largely absent from this year's congressional health-care debate before it made a Phoenix-like appearance in recent days. The "buy-in," as the idea is known, is intended to help 6.5 million Americans who lack health insurance or purchase expensive policies on their own. They are in an age group in which medical problems become more common and coverage is particularly expensive.

But how many of those people could afford to sign up -- and how many would prefer the option over other avenues to insurance that lawmakers are contemplating -- hinge on critical details that even the senators embracing the idea have not resolved. The team of senators that proposed the Medicare expansion is declining to disclose the proposal's fine print until congressional budget analysts examine the impact for patients and the federal budget.

The idea has met with a wall of opposition to the idea from hospitals and physicians, whose lobbyists contend that Medicare pays them too little for treating patients. Sen. Olympia J. Snowe (Maine), a crucial vote as one of the chamber's few Republican moderates, sided firmly with those constituencies, telling reporters that the buy-in "is the wrong direction to take. . . . I am talking to a lot of my [health-care] providers . . . and I know they are mighty unhappy."

At the same time, leading advocates for patients and for older Americans, who have in the past favored letting younger people buy insurance through Medicare, predict that the current version of the idea could prove relatively unattractive to the people it is meant to help.

"I just don't see it being that popular," said John Rother, executive vice president for policy and strategy for AARP, an enormous lobby for people 50 and older.

He and others said it remains unclear whether the program would be designed with the same health benefits, co-payments by patients, or access to private health plans and supplemental coverage as the rest of Medicare. Depending on such details, Rother said, "it's not even Medicare, but that's a brand name everyone likes."

Still, he said, AARP always has favored the creation of a buy-in, as long as it would not worsen the Medicare system's already shaky finances.

The 10 moderate and liberal Democratic senators who negotiated the tentative agreement regarded the buy-in as a compromise. They dropped the idea, central to the health-care bill adopted by the House, of a government-sponsored insurance system. Instead, the buy-in would provide a new public alternative to people within a 10-year age span.

Some critics characterize this approach as disingenuous. "This was in the context of an alternative to a public program, when [Medicare] is . . . perhaps the biggest public program in health care in the universe," said Richard J. Pollack, executive vice president for advocacy and public policy for the American Hospital Association, which sent out an alert urging hospitals nationwide to complain to their members of Congress.

Drew E. Altman, president of the Kaiser Family Foundation, a health policy organization, said that "this is less about the outside groups and the public, and it's more about the clock ticking. . . . They are trying to nail down a few swing votes."

Kaiser has for years conducted public opinion polls about expanding Medicare to younger Americans, and the idea is consistently popular, supported by three-fourths of those surveyed most recently, in September.

The idea made its first serious recent appearance in 1998, when President Bill Clinton proposed it. Chris Jennings, a consultant who was Clinton's main White House health-care adviser, said that then, as now, there was pressure for the expansion not to increase federal spending. That proposal included no subsidies and would have required people who took part to pay extra for Medicare once they reached the usual eligibility age of 65.

At a time when Congress was in Republican control, bills to create a buy-in gained little traction. Some critics, Jennings recalled, said the premiums would have been too expensive, and others said that employers might drop coverage for older workers or that people might retire early, creating fiscal ripple effects for the Social Security system.

With Congress and the White House now led by Democrats, the politics are different, but policy experts said that substantial questions remain about how the buy-in would work -- and how it would relate to other health-care changes Congress is considering. A central question, they said, is the extent to which the government would subsidize Medicare premiums for younger participants.

According to Census data analyzed by Kaiser, nearly two-thirds of people age 55 to 64 who are uninsured or buy individual coverage -- the groups that probably would be eligible -- have incomes that would qualify for at least some federal health-care subsidy, under the main bills before Congress.

But some of their subsidies would be small, policy experts note, and Medicare premiums could prove much more expensive than those of other insurance plans available under "health exchanges" lawmakers are contemplating, because rates for other plans would be aided by the inclusion of younger patients who use fewer medical services.