Expanding Medicare Would Punish Health Care Providers, Raise Taxes, Critics Say

Senate Majority Leader Harry Reid, D-Nev., surrounded with doctors, speaks at a health care news conference on Capitol Hill in Washington, Thursday, Dec. 10, 2009. (AP)

Senate Democrats' plan to expand Medicare -- a program careening toward bankruptcy -- likely would hasten the demise of the health care safety net for seniors and spell financial disaster for consumers and health care providers who already are getting shortchanged by the program, critics say.

Under the plan, uninsured individuals ages 55 to 64 could purchase coverage under Medicare. The expansion is part of a compromise for dropping a full-blown national government-run insurance plan from the legislation that Democrats and the White House hope to push through the Senate by Christmas.

But hospital and doctor groups criticized the idea, with the director of the Mayo Clinic saying it would accelerate "the financial ruin of hospitals and doctors across the country" because, he argues, Medicare underpays them.

And analysts say the expansion would lead to higher taxes and a government takeover of the health care system.

"Enrollees would likely be higher users of medical services which would be reflected in higher premiums," according to an analysis by the conservative Heritage Foundation. "To address this, the government may likely subsidize these enrollees, adding more cost to the taxpayers."

The expansion would also likely "create a crowd-out effect, where the government buy-in option squeezes out the availability of private coverage, including retiree coverage from a former employer," the analysis said.

"Finally, Medicare is already fiscally unsustainable," the analysis added. "This solution would only accelerate its doom."

Even some Democratic senators aren't confident that the proposed expansion could work.

"I'm lukewarm on it because I think when we get the score back from the CBO that it's going to be too costly and I think to the individual -- remember, these are uninsured folks that you're trying to get insured -- and for them to buy into this Medicare I think would be expensive for them," Sen. Bill Nelson of Florida told Fox News.

"So at the end of the day, I think it's going to be a nonstarter."

Republicans have savaged the idea.

"The Mayo Clinic won't even take new Medicare patients, and yet our friends on the other side of the aisle are trying to throw a whole new decade -- a decade of seniors into the plan," Sen. Bob Corker, R-Tenn. Said. "What that means is less and less seniors are going to have access to care."

A senior GOP aide on the Senate Finance Committee told Fox News that the Congressional Budget Office told members earlier this year that a similar proposed expansion would "cause an immediate, fatal, death spiral from Day One" to Medicare.

Some Republican senators couldn't explain how the proposed expansion could be taken seriously.

"That's millions more on a system that's due to go bankrupt in 2018," Sen. Lindsey Graham told Fox News. "It doesn't make any sense to take a system that's already going into bankruptcy and adding more people to it."

"Now Medicare is already broke, by the way," Sen. Judd Gregg, R-N.H., said. "It's got a $38 trillion unfunded liability and we're going to add another 10 million people into Medicare? That makes no sense at all."

But one Democratic senator says it will look better when lawmakers see the details.

"They're going to be pretty happy," Sen. Chuck Schumer, D-N.Y., said. "Many of the concerns that have been voiced when we get a CBO score will by allayed."

Some believe the proposal is a way to give liberal Democrats what they really want: a government takeover of the health system.

"The problem with this alleged compromise is it is really is a Trojan horse," former political media consultant Pete Snyder told Fox News. "The expansion of Medicare is going to mean a single payer. It's going to mean a government takeover of health care and Americans need to divorce themselves of this process."

Some liberals didn't hide their hopes for the proposal when it was announced this week.

"Expanding Medicare is an unvarnished, complete victory for people like me," Rep. Anthony Weiner, D-N.Y., told the Los Angeles Times. "It's the mother of all public options. We've taken something people know and expanded it."

In an interview with Fox News, Weiner did not repeat that statement but did say an expansion of Medicare would simply extend something that's already begun.

"This would not be the first step toward a single-payer system," he said. "Right now, 47 percent of all of our health care financing in the whole country is in a single-payer system. It's in Medicare."

Fox News' Jim Angle and Trish Turner contributed to this report.