Fact-Checking Hillary Clinton's Medicare Buy-In Proposal

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Hillary Clinton is floating a proposal to let people over the age of 50 "buy in" to Medicare, the federal government's health insurance for those 65 and older.

The Democratic presidential contender mentioned the idea earlier this week at a campaign event in Stone Ridge, Va. She was responding to a woman who said her health insurance premiums — which she bought on the individual market — rose more than $500 last year.

"What you're saying is one of the real worries that we're facing with the cost of health insurance," Clinton said. "The costs are going up in many markets."

Clinton suggested that removing older people from the market would lower costs. And their own costs wouldn't necessarily go up, she said, because they'd be part of such a big group.

"If you were able to let people 55 or 50 [years old] and up who are the biggest users of health care into the Medicare program — they would have to buy in, but they would be buying into such a big program that the costs would be more distributed," Clinton said.

Clinton's campaign hasn't offered any more details.

But the mention has raised the possibility that Clinton may use the idea of a Medicare buy-in to rekindle the debate over the so-called public option — having a government health insurance plan compete with private companies.

The idea could help control health care spending, advocates say.

Jacob Hacker, director of the Institution for Social and Policy Studies at Yale University, says Clinton's idea could slow down health care inflation because Medicare is very efficient.

"While Medicare is often criticized as not being effective enough at cost control, in fact Medicare has done a better job than private plans in restraining prices," Hacker says.

Hacker became known as the "father of the public option" during the 2010 debate over the Affordable Care Act because he was an early proponent of the idea. He says Medicare, or another government plan, is in the best position to lower overall costs because the government can best negotiate lower payments for doctor visits, tests and medications.

"Dealing with our health care costs crisis, and it is a crisis — it's the No. 1 threat to our budget — is going to require putting significant pressure on the medical industrial complex," he says.

The public option died in 2010 when Republicans and some Democrats opposed the idea of having the government compete with the medical insurance industry.

But Clinton, in her campaign materials, says she wants to bring it back.

Letting people buy in to Medicare could be a first step, Hacker says.

"If you go into the health insurance exchange, you could conceivably choose between a range of private plans and the Medicare program," he says.

Reaching Out To Sanders Supporters

Clinton may also be broaching the idea to appeal to Bernie Sanders supporters who like his proposal to offer a government health insurance plan to everyone — which he calls Medicare for All.

Sanders' plan has been criticized because of its potential cost. He says the plan will cost about $1.38 trillion a year and would be paid for by tax increases on individuals and employers.

Many economists dispute his estimates. A new analysis by the Urban Institute says it would cost more than twice that amount.

Linda Blumberg, a senior fellow in the Health Policy Center at the Urban Institute, says a Medicare buy-in may not be as simple as it sounds.

Putting people ages 50 to 65 in a pool with the elderly could end up costing them more because they're associated with the biggest and most expensive health care consumers.

And Medicare is more fragmented than regular insurance, with separate programs to pay for hospitals, doctors and prescriptions. So Clinton would have to decide whether to leave Medicare as is or create something more like traditional insurance for these younger customers.

"If we're going to provide something that looks like a cohesive package for the non-elderly through Medicare, then I think we need to be thinking about why we're not doing that for the elderly as well," Blumberg says.

Tom Miller, a resident fellow at the American Enterprise Institute, also sees unintended consequences in moving people from private insurance into Medicare.

Doctors and hospitals charge private insurers more to make up for the low payments from Medicare, he says, and Clinton's idea just moves more of the costs from one group to another.

"It's like saying, 'Let's move this pothole over to another place where you're not driving and someone else will run into it,' " Miller says. "You can't hide the problem — you can move it around to a different set of pockets."

Miller says health care for people over 50 just costs a lot of money. If Clinton wants to reduce those costs, he suspects people will end up with fewer benefits, or taxpayers will end up subsidizing their insurance even more.