Expanding Medicare a Bad Idea


During the presidential campaign last year, all we heard about was Medicare for All. Vermont Senator Bernie Sanders proposed this idea and it was the talk of the town – until it wasn’t. Initial positive polling bottomed out when people realized it meant eliminating their private health insurance. In fact, the main reason Sanders fell from the lead in the nomination battle was because the Democratic Party realized he couldn’t win with that agenda. Joe Biden was supposed to be “the moderate” who wouldn’t take away your health insurance.

Now that Biden is president and the progressive wing of the Democratic Party is ascendant, talk of changing Medicare eligibility is back on the agenda. Former Louisiana Governor and presidential candidate, Bobby Jindal, says moderate Democrats used to promote raising the eligibility age of Medicare as a way to ensure its solvency. Today, progressives want to lower the eligibility age as a step toward a single-payer healthcare system – which is socialized medicine.

Jindal says the Democrats’ $3.5 Trillion Senate budget plan allows the final legislation to lower the eligibility age. President Biden’s budget also endorses the plan, which would cost $200 billion over 10 years and add more than 20 million younger sexagenarians to the 63 million seniors and disabled beneficiaries who already rely on the program. This is a reversal from Biden’s campaign pledge to leave Medicare alone, but expand ObamaCare by adding a “public option.” That was always a slow path to socialized medicine, but emboldened by the progressive caucus, Biden now wants a faster approach.

The Medicare Part A trust fund, which pays for hospital benefits, is already projected to be insolvent by 2026 – that was the reason “moderates” used to promote raising the eligibility age. Even without expansion Medicare spending is projected to nearly double over the next 10 years with the increasing age of the population. Jindal says Congress’s first priority should be to strengthen the program’s finances so that vulnerable seniors can continue to access life-saving health care.

Democrats make the argument that expanding Medicare is necessary to reduce the number of uninsured Americans. But lowering Medicare’s eligibility age is an inefficient way to accomplish that. Two thirds of Americans age 60 to 64 already have private coverage through an employer or the individual market. The eligibility for subsidies on the individual market were increased by the American Rescue Plan, passed by Congress earlier this year.

Moving these individuals from private coverage to Medicare will simply shift the cost from private individuals or employers to the taxpayers. Only 8% of the newly eligible population, or 1.6 million people, are currently uninsured. Two-thirds are already eligible for Medicaid or exchange subsidies, 15% have access to employer-provided coverage, and 7% are illegal aliens who are ineligible for Medicare.

This move will also lower payments to hospitals and physician providers who make up for losses on Medicare through private insurance. Shifting patients from private coverage to Medicare will negatively impact these providers. The only way for providers to recover these losses is to raise prices on the privately insured. Failing that, providers will go out of business either by bankruptcy or early retirement.

For years, employees and employers have been paying payroll taxes that support Medicare, expecting Medicare to be there to provide the healthcare they need when they reach 65. These plans by Democrats threaten that support system in the name of providing more healthcare coverage to more people, when in fact, it will provide less.